PRC Pike River Coal

[Oiler]

Read a forecast that said that PRC will produce coal by March 2008.

Balance, the great leveller :D or is it the great cynic ;)

[dsurf]

Read a forecast that said that PRC will produce coal by March 2008.

I think the forecaster I read was probably better at forecasting than PRC! The question is of course how much will PRC produce in Q4 2010. I am an optimistic option holder so am thinking about 50K tonnes. This would equal gross revenue at NZ$=0.71 US$, US$250 tonne of 17.6 mill. Probably enough to be cashflow neutral and a trend of increasing production! Can't wait I can hear the nighty ripping from hear!

[Bixbite]

dsurf’s location is ,,.; where must be a fantasyland.

[Balance]

So PRC issued 11.36m new shares to selected institutions (some new ones) and NZO & GS today at 88 cents for the placement.

They can sell today in the market at $1.13 - 28.5% instant profit.

So why the preferential treatment? Why not add on the $10m and pro-rata to existing shareholders who have suffered from 2.5 years of failed deliveries and several capital raisings?

What is so special about the selected new institutions that they can make such instant profits?

Mouse? You want to ask the hard question?

[mouse]

So PRC issued 11.36m new shares to selected institutions (some new ones) and NZO & GS today at 88 cents for the placement.

They can sell today in the market at $1.13 - 28.5% instant profit.

So why the preferential treatment? Why not add on the $10m and pro-rata to existing shareholders who have suffered from 2.5 years of failed deliveries and several capital raisings?

What is so special about the selected new institutions that they can make such instant profits?

Mouse? You want to ask the hard question?

Exactly Balance. We have now got to a situation in the NZ sharemarket market where things are, bluntly, a racket. With an IPO they want our cash. To be fair Pike has in the past treated us all more or less equally. But Pyne Gould, NZWindfarms, etc, have all been given under the counter deals. Now it is Pike. If I was in Wellington I would raise the matter at their meeting. Hopefully someone will. I am very surprised the Securities Commission do not raise the matter and legislate if required.
Bluntly we are going back to the Wild West. And Insider Deals.:t_down::t_down::t_down:

[macduffy]

So PRC issued 11m odd shares - about 3% of issued capital.

Do you expect them to offer all shareholders an entitlement offer of 3 for 100 shares held?

I think mouse had it right when he said PRC plays fair. The rules allow minor capital raisings such as this and we shouldn't over-react. Save it for the blatant excesses!

[blockhead]

I know what you are saying Balance, but to be fair to Pike etc, the fish hook in the deal is, NZO and GS have to put their hands very deeply into their pockets, you could look at it as a bulk buy (and bulkier risk) discount. Doesnt make it fair perhaps but gives a different slant on it.

[Dr_Who]

PRC is looking good. Welldone to those that bought at 90 cents. With coking prices at these level, I cant see the sp coming down too much.

disc: I have no holding in PRC

[digger]

I know what you are saying Balance, but to be fair to Pike etc, the fish hook in the deal is, NZO and GS have to put their hands very deeply into their pockets, you could look at it as a bulk buy (and bulkier risk) discount. Doesnt make it fair perhaps but gives a different slant on it.

I would say the average small holder should be thanking NZO and GS for doing what they did. It is there taking part that got the whole ball rolling.Without there action pIKE would be looking at a much more depressed situation. Maybe way down to 50 cents with GPG looking to buy in at 25.So Balance you are looking at this unbalanced and backwards. You have to ask what was it like just before NZO and GS got involved.Then it was very different than now.
NZO is in an unwinnable situation. Just a few weeks ago it was throwing more money into PRC ,now it is ripping off the little guy because they got in soooo cheap.
Balance can you make some effort to show some balance in your postings.

[Balance]

I would say the average small holder should be thanking NZO and GS for doing what they did. It is there taking part that got the whole ball rolling.Without there action pIKE would be looking at a much more depressed situation. Maybe way down to 50 cents with GPG looking to buy in at 25.So Balance you are looking at this unbalanced and backwards. You have to ask what was it like just before NZO and GS got involved.Then it was very different than now.
NZO is in an unwinnable situation. Just a few weeks ago it was throwing more money into PRC ,now it is ripping off the little guy because they got in soooo cheap.
Balance can you make some effort to show some balance in your postings.

Digger - can you read my posting carefully before you write the rubbish you have just posted?

I wrote : "They can sell today in the market at $1.13 - 28.5% instant profit. So why the preferential treatment? Why not add on the $10m and pro-rata to existing shareholders who have suffered from 2.5 years of failed deliveries and several capital raisings?

What is so special about the selected new institutions that they can make such instant profits?"

What's unbalanced about questioning why selected new institutions are allowed to get in at a 30% discount to long suffering shareholders?

Why couldn't PRC make the issue 1 for 6 at 88c for everyone to raise the $50m? That's surely much fairer to all rather than this freebie to selected new institutions.

No wonder PRC treats shareholders like mushrooms.

[Balance]

PRC is looking good. Welldone to those that bought at 90 cents. With coking prices at these level, I cant see the sp coming down too much.

LOL - looks like Dr Who wants to jump back in. You all know what that means, of course!

[Dr_Who]

I think some posters in here should disclose their position in PRC for credibility. You know you are full of **** when you dont disclose your position.

[Dr_Who]

China May Import 29 Million Tons of Coking Coal, Citigroup Says

http://www.businessweek.com/news/2010-04-22/china-may-import-29-million-tons-of-coking-coal-citigroup-says.html

[Balance]

China May Import 29 Million Tons of Coking Coal, Citigroup Says

http://www.businessweek.com/news/2010-04-22/china-may-import-29-million-tons-of-coking-coal-citigroup-says.html

Dr Who has definitely jumped back in.

LOL - all the sins of mgmt are forgiven.

Well, you all know what that means, right?

Has made my day!

[Balance]

There will be no management changes - they are too entrenched.

Can't blame management for acting the way they do - too many shareholders and market prepared to give them the benefit of the doubt and believe their spin.

Any capital raising will be on very very good terms to interested parties.

As predicted in Sept 2009.

[digger]

Digger - can you read my posting carefully before you write the rubbish you have just posted?

I wrote : "They can sell today in the market at $1.13 - 28.5% instant profit. So why the preferential treatment? Why not add on the $10m and pro-rata to existing shareholders who have suffered from 2.5 years of failed deliveries and several capital raisings?

What is so special about the selected new institutions that they can make such instant profits?"

What's unbalanced about questioning why selected new institutions are allowed to get in at a 30% discount to long suffering shareholders?

Why couldn't PRC make the issue 1 for 6 at 88c for everyone to raise the $50m? That's surely much fairer to all rather than this freebie to selected new institutions.

No wonder PRC treats shareholders like mushrooms.

Just one more try to get past your nose ,doubt it will work but by others who read here at least my point will get heard.
Balance asks why the preferental treatment.
The answer is because at the time of settlement [maybe 6 weeks ago] it was not preferential,but at a slight discount to the prevailing market at the time.Again it is NZO and GS that have come forward to support the then price which now is seen as prefential. Balance might ask him or herself why they did not buy back at 85 cents and now be enjoying extra prefential treatment.And if anyone had bought at the time NZO decided to take up the bond and was sitting in the arrangment for the present cash issue would be getting a better deal thanNZO plus GS.Simple as that.
I directly own only 30,000 shares in pRC,the rest indirectly from a NZO holding.

[Balance]

Just one more try to get past your nose ,doubt it will work but by others who read here at least my point will get heard.
Balance asks why the preferental treatment.
The answer is because at the time of settlement [maybe 6 weeks ago] it was not preferential,but at a slight discount to the prevailing market at the time.Again it is NZO and GS that have come forward to support the then price which now is seen as prefential. Balance might ask him or herself why they did not buy back at 85 cents and now be enjoying extra prefential treatment.And if anyone had bought at the time NZO decided to take up the bond and was sitting in the arrangment for the present cash issue would be getting a better deal thanNZO plus GS.Simple as that.
I directly own only 30,000 shares in pRC,the rest indirectly from a NZO holding.

Digger, you need glasses. We are not talking about NZO and GS.

Read again.

[Bixbite]

Rights issue will have to be 50 cents to 60 cents to get underwriters.

..................................

PRC will be a buy one day. That day looks a long long way away.

It was not long; on 05-Feb-2010 post #4386 Balance posted “Rights issue will have to be 50 cents to 60 cents to get underwriters.”

In about two months time the company found some instituters willing to pay 88 cents, 47% ~ 76% higher than Balance’s expectations, but balance is not happy.

[brucey09]

senors
the price is only as good as the last man bought today - no more - no less

[root]

Hey Balance, I'm not sure if you're aware of this, but sometimes your posts on this thread come across as a little bit negative.

[Baddarcy]

Hey Balance, I'm not sure if you're aware of this, but sometimes your posts on this thread come across as a little bit negative.

Now that made me laugh :-)




Disc : Owns lots of PRCOA and soon some PRC at 88c and very happy about it too

[macduffy]

Hey Balance, I'm not sure if you're aware of this, but sometimes your posts on this thread come across as a little bit negative.

And I'm sure we all know the reason for that!

Disc: Not holding PRC, neither long nor short.

[Balance]

Hey Balance, I'm not sure if you're aware of this, but sometimes your posts on this thread come across as a little bit negative.

Really?

OMG!

You have made my morning!

[digger]

Digger, you need glasses. We are not talking about NZO and GS.

Read again.

For others wanting a balanced view i want to fully clear up another point.Balance the poster comes to this subject intending to give a fixed negative view of PIKE for whatever agenda he is operating under.If anyone is still in doubt about the sudden increase in profit balance claims the institutions are making at the small shareholders expense,please read on.As i said in my last post balance has put it all backward.The only ones immediately making a profit are the small shareholders who before the institutions entry were looking at 82 cents a share and falling.The institutions coming in at 88 have suported the price and sent it up to 1-14.
Now today or in the next week or so only the small shareholders can realize this profit. The large institutions can not for now as the market will not support it.In fact if they all decided to drop there shares on monday they would with the small shareholder face not the 28% profit balance claims but a loss.For sure the institutions intend to make a profit but they can only do so after there investment allowing the development and production of PIKE to be achieved.
Balance also asks why did the company not allow all the shareholders to have all this 88 cent cash issue.Had they tried we would now be reading posts from balance saying how pIKE could not get any institutions on board so are loading it all on the small shareholder.
So Balance is talking a lot of backward rubbish to achieve what ever agenda he has in mind when he or she post here about PIKE.His post are not informative but preagenda orientated.

[Balance]

For others wanting a balanced view i want to fully clear up another point.Balance the poster comes to this subject intending to give a fixed negative view of PIKE for whatever agenda he is operating under.If anyone is still in doubt about the sudden increase in profit balance claims the institutions are making at the small shareholders expense,please read on.As i said in my last post balance has put it all backward.The only ones immediately making a profit are the small shareholders who before the institutions entry were looking at 82 cents a share and falling.The institutions coming in at 88 have suported the price and sent it up to 1-14.
Now today or in the next week or so only the small shareholders can realize this profit. The large institutions can not for now as the market will not support it.In fact if they all decided to drop there shares on monday they would with the small shareholder face not the 28% profit balance claims but a loss.For sure the institutions intend to make a profit but they can only do so after there investment allowing the development and production of PIKE to be achieved.
Balance also asks why did the company not allow all the shareholders to have all this 88 cent cash issue.Had they tried we would now be reading posts from balance saying how pIKE could not get any institutions on board so are loading it all on the small shareholder.
So Balance is talking a lot of backward rubbish to achieve what ever agenda he has in mind when he or she post here about PIKE.His post are not informative but preagenda orientated.

Ah ... I see you are changing tack. Try harder.

If another company does a placement to NEW shareholders at a 30% discount, what would be your reaction?

By all means give the 30% discount to NZO and GS - no one has any issue.

Without NZO, PRC would be long gone.

[Wiremu]

Digger

You are 100% correct. Most Sharetraders see Balance's postings for what they are. His irrational postings are not worth recognition or acjnowledgement, let alone responses. I am sure you have met his type in the farming world.

[Sehnsucht888]

Digger

You are 100% correct. Most Sharetraders see Balance's postings for what they are. His irrational postings are not worth recognition or acjnowledgement, let alone responses. I am sure you have met his type in the farming world.

Balance does not post irrationally. As digger commented, they are to support his agenda.

This can be seen if you read his historical postings, (assuming he hasn't deleted them.). The one time he was quiet recently was when PRC was starting to move up again from the low around 90 (Buy time). It now seems to have reached an upper trading range, so time to be critical again (sell for 25c or there abouts profit per share). Time to encourage another drop for re-entry, by criticising heavily again.

Well, I gues that is what a sceptic to Balance might suspect. He even suggests it himself:
http://www.sharetrader.co.nz/showthread.php?4603-PRC-Pike-River-Coal&p=300721&viewfull=1#post300721


PRC has risen a lot in just over a month, and so the placement does seem favourable at todays price - but certainly wasn't as favourable when being negotiated one would expect. Agree with you totally here digger.

[Flogs]

I note from PRC's notice of dates that Rights Trading was to commence on the ASX yesterday, 23 April. I can't seem to trace it. Does anyone know if it happened & if so at what price?

[Sehnsucht888]

I note from PRC's notice of dates that Rights Trading was to commence on the ASX yesterday, 23 April. I can't seem to trace it. Does anyone know if it happened & if so at what price?

PRCRC.ASX - Pike River Coal - Rights - Applications Close 19-May-2010 Deferred

Looks like no trading acutally occured - some light depth though:
BIDS:
Quantity No. Price
10,000 1 14.5
150,000 1 5

Asks:
Price No. Quantity
25 1 25,632
30 1 27,000

[Flogs]

Thanks 888

[Bixbite]

If another company does a placement to NEW shareholders at a 30% discount, what would be your reaction?



To compare with the current share prices, the placement 88 cents is about a 30% discount. However about one to two months ago the share prices’ range was $0.85 ~ $0.89, if the placement was negotiated during that period, there was no discount could be found. Were those NEW shareholders just farmed in last week? I doubt!

But I wonder the frequency of Balance's posts on PRC's forum ......!!!????.

[777]

Simple thing to do is go to settings and put an ignore on balance's postings.. Then the only time they appear is if they are included in a quote by a poster.

[percy]

Simple thing to do is go to settings and put an ignore on balance's postings.. Then the only time they appear is if they are included in a quote by a poster.

I have followed Balances ' posts in companies that I follow.I have found his posts on PGC,NZO,TEL,Huljich Wealth Mismanagement,and RPI+PGG+NZS+PGC+SCF=?! well informed and allways on the money.May pay to think about what he posts as he certainly has.

[the machine]

I have followed Balances ' posts in companies that I follow.I have found his posts on PGC,NZO,TEL,Huljich Wealth Mismanagement,and RPI+PGG+NZS+PGC+SCF=?! well informed and allways on the money.May pay to think about what he posts as he certainly has.

buy when the downramping stops

M

[777]

I have followed Balances ' posts in companies that I follow.I have found his posts on PGC,NZO,TEL,Huljich Wealth Mismanagement,and RPI+PGG+NZS+PGC+SCF=?! well informed and allways on the money.May pay to think about what he posts as he certainly has.


I don't read his posts as I wrote him off a long time ago. Follow him at your own peril.

[mouse]

I don't read his posts as I wrote him off a long time ago. Follow him at your own peril.

Make sure you get all the information you can, positive and negative, then make up your own mind. I find Balance really useful. Plus I did put in a 'buy' for Pike when they were going South to 85 cents. And got rubbished for it. I even took my own recommendations and bought at 89 cents. Should have got more!

[digger]

Make sure you get all the information you can, positive and negative, then make up your own mind. I find Balance really useful. Plus I did put in a 'buy' for Pike when they were going South to 85 cents. And got rubbished for it. I even took my own recommendations and bought at 89 cents. Should have got more!

Mouse i found your past posts very informative and thought provoking at time, however this one seems out of character.Balance is either always rubushing PIKE or he is silent like when it is rising,so how is you buying at 85 and 89 got anything to do Balance?

[mouse]

Mouse i found your past posts very informative and thought provoking at time, however this one seems out of character.Balance is either always rubushing PIKE or he is silent like when it is rising,so how is you buying at 85 and 89 got anything to do Balance?

I listen to Balance, but it does not mean I agree with him, or that he agrees with me. Balance has been very good at pointing out the problems with Pike. We need to evaluate our holdings frequently. Balance helps in that operation. I have made cash out of Pike. And Balance has contributed to that I am sure. Every idea counts, we have to make our own minds up and hopefully make a bit of a profit. Plus, in the case of Pike, help an NZ Company succeed. I bought at 89cents recently. Should have got more.

[macduffy]

Plus, in the case of Pike, help an NZ Company succeed.

Hi, mouse.

I'd be very careful with this!

If you want to help a NZ company succeed then by all means send them a donation. But try not to let sentiment interfere with your investment decisions. Just IMO.

[winner69]

Hi, mouse.

I'd be very careful with this!

If you want to help a NZ company succeed then by all means send them a donation. But try not to let sentiment interfere with your investment decisions. Just IMO.

At least with Pike some of your cash ends up going to the company seeing they always have their hand out for more

Having shares in most companies is not supporting them ... they never see your money ... you are only in it to get some of the company cash by way of dividends .... or when bored hope there is another punter to take your shares off your hand

With the idea of supporting NZ business mouse should be looking around for some interesting start ups that need cash

[Balance]

I listen to Balance, but it does not mean I agree with him, or that he agrees with me. Balance has been very good at pointing out the problems with Pike. We need to evaluate our holdings frequently. Balance helps in that operation. I have made cash out of Pike. And Balance has contributed to that I am sure. Every idea counts, we have to make our own minds up and hopefully make a bit of a profit. Plus, in the case of Pike, help an NZ Company succeed. I bought at 89cents recently. Should have got more.

As I wrote before when you first joined, Mouse - you will go a long long way.

You see the forum for what it is - a critical exchange of ideas, thoughts and motivations. And you are not afraid to ring up companies and tackle them with the hard questions.

Well done.

[Balance]

With the idea of supporting NZ business mouse should be looking around for some interesting start ups that need cash

Hitting the nail bang on the spot again, W69!

[freddy]

Hey Balance, I'm not sure if you're aware of this, but sometimes your posts on this thread come across as a little bit negative.

This thread need balance and Balance provides it.

[Dr_Who]

With the idea of supporting NZ business mouse should be looking around for some interesting start ups that need cash

Only a very small percentage of start up succeed. Very high risk. Most of incubator strat up go belly up. Best leave start up to habitual investors or instos who have alot of cash to burn.

[winner69]

Mouse wants to help NZ businesses succeed .... buying shares in most (except Pike) is not doing that .... they will never see his money

[Monkey Poms]

What I can't understand is the market cap of PRC has more than doubled since listing? Have the fundamentals of the company really improved by that much?

At July 2007 IPO:
# shares 200m x $1.00 issue price = $200m market cap

Post this lot of capital raising:
# shares 404m x $1.10 share price say = $440m cap

Things have changed since July 2007, PRC moving from a market cap of $200m to $440m. I had an interesting discussion in the office over your post, Catalyst. My son is an Apple fanatic. He has all the toys, as I do, you know - i-pod, i-phone, computer etc, all the gizmos. My desk is full of them. Fantastic products, the best on the market.
Our accountant knows the ins and outs of the coal scene, as we have been involved in it for many years. We all see the situation as it is today and view the following as if you were starting from August 2010.

A comparison between Apple & Pike River Coal
Apple:
Have first class electronics in their portfolio of gadgets.

PRC:
Have one of the finest premium coking coals in the world, due to be mined.

Apple:
Have a colossal budget to promote its products & share price, such as advertising on T.V. around the
world - cinema, magazines, billboard exposure etc.

PRC:
Have a smaller advertising budget to promote its coking coal & share price, (& have GORDON).

Apple:
Have a P/E ratio of 26.38/1. This means it would take 26.38 years of annual profit to match the market cap of the company. Apple have so many shares on issue, I don't think this page is wide
enough to give you the exact figure! My son has held Apple shares for a number of years & never
received a dividend.

PRC:
I can't really give you a P/E rating as they are just about to start the first year's full production.
However, with the current information available to us for the period of 12 months January 2011 to
January 2012 we 'll take an estimate of future profit for this period. The period between August 2010
to January 2011 will be used as ramp up time.

Let's look at the good points PRC have at the start of full production.
For a cost of $400m invested in this project's infrastructure we have value for money.
The market price for coal is moving upwards in PRC's favour. I heard last week that the prime coking coal price reached US$272 fob with the trend towards a further upward movement.
The view of the market is that prices will be sustained above the US$240 level for the foreseeable future. ( PRC are due some luck).

Using the maths on the information we have today we can attempt to guess the future P/E rating.
Working on a middle range of US$250 per tonne fob, this sum converted to NZ$ using the exchange rate of 0.7174 = NZ$348.48 per tonne. Take off NZ$40 for onward transport costs - should give somewhere near a pit head price of NZ$308.
PRC have recently stated running costs of NZ$5.4m per month ( I think that this figure is high at the moment, the investment being spent on steel & roof bolts supporting the three access tunnels through the graben, a one-off expense).

Revenue 1,000,000 tonnes x NZ$ 308.48 = NZ$308,480,000
Costs NZ$5,400,000 x 12 months = NZ$ 64,800,000
Profit = NZ$243,680,000
In theory, the profit could equate to .61 cents per share. PRC will not pay shareholders this amount, as they will have to build some cash reserves. This may not be the case if the share price picks up before April 2011, as it may well do.Option holders could buy 64m shares at NZ$1.25 = NZ$ 80m in the bank for PRC as a reserve.

PRC market cap NZ$440,000,000 divided by profit of NZ$243,680,000. This will give PRC a P/E
rating of 1.80/1.

I have not checked all companies quoted on the NZX, but I think PRC would come out top. The numbers we used will change on a daily basis. However, the fundamentals are correct.

1m tonnes of coal seems to frighten some people. With the equipment Pike have at their disposal, they should be able to mine 2,740 tonnes of coal per day, the figure required to reach the target of
1m tonnes per annum.
Catalyst - given a sum of money today, who would you put your money on?
Apple: present share price US$270, P/E rating 26.38/1, no dividend.
Pike River Coal: share price NZ$1.13, P/E rating 1.80/1,downside is past, upside is due with a big dividend.
After our office discussion the accountant used all of his remaining cash in his pension fund to buy Pike shares to qualify for the 2 for 19 offer to support PRC. Another party listening in on the discussion sold part of his BP shareholdings,as well as part of his NZO shares,to buy PRC shares even though NZO own 30% of PRC. My son has a number of PRC shares, but HE gave some support to Apple in our discussion ( A TOTAL MONKEY ).

I hope you guys reading this post try to take it to bits - it's in all our interests if someone could find a
substantial hole in it.
I think foreign investment in New Zealand is a good thing, up to a point. I write this post from 12,000 miles away, so you will regard me as a foreign investor!
So many of your N.Z. companies are totally under foreign control. The financial analysts are behind on this one. By the time the lights register with them and they report it to you, it will be too late - so
many of you will have SOLD YOURSELVES SHORT.

Monkey Poms

[dsurf]

dsurf’s location is ,,.; where must be a fantasyland.

What is your projection for Q4 2010 coal production. Mine is 50K for 3 months. Am I in fantasy land for being to high or low? Lets get your pick on record & lets review when the quarterly comes out. Slagging is easy , how about some verifiable opinion!

[JoeBlogs]

Nothing fantastic about 50K in Q4 - if that's all they achieve the year to 30 June target becomes impossible. If they don't achieve at least 50K it will mean big problems I would think.

[the machine]

thanks monkey poms

pike is certainly looking like a very robust project and i will be taking up my entitlement

as regards production Q4 2010 oct-dec, My guess is 100,000t - just the roadways will produce 30-40,000t

M

[Bixbite]

Can't wait I can hear the nighty ripping from hear!

dsurf, PRC is mining 24 hours a day. “Can’t wait I can hear the nighty ripping from hear!” Annoy or enjoy !!!???

[winner69]

Only a very small percentage of start up succeed. Very high risk. Most of incubator strat up go belly up. Best leave start up to habitual investors or instos who have alot of cash to burn.

Perhaps mouse should have had a talk to this joker
http://www.nbr.co.nz/article/nextwindow-shunned-local-investors-goes-offshore-buyer-122059

[dsurf]

Bixbite - The nighty comment was a rweply to Balance's post suggesting that PRC will be a working mine with production increasing. So what is your pick for Q4 production? Obviously less than 50K?

[Balance]

Things have changed since July 2007, PRC moving from a market cap of $200m to $440m. I had an interesting discussion in the office over your post, Catalyst. My son is an Apple fanatic. He has all the toys, as I do, you know - i-pod, i-phone, computer etc, all the gizmos. My desk is full of them. Fantastic products, the best on the market.
Our accountant knows the ins and outs of the coal scene, as we have been involved in it for many years. We all see the situation as it is today and view the following as if you were starting from August 2010.

A comparison between Apple & Pike River Coal

Monkey Poms

You are assuming that PRC is going to achieve full production and there are no further hiccups ahead.

Brave call.

Apple keeps producing the goods and PRC produces bugger all but production delays and problems.

[Bixbite]

Bixbite - So what is your pick for Q4 production? Obviously less than 50K?

dsurf, far more than that, based on PRC’s conservative reforecast on production, re: –

“PIKE RIVER ACCESS ROADWAY THROUGH GRABEN INTO COAL” 20th April 2010

My pick is 150,000 tonnes.

P.s. Thanks Monkey Poms

Bixbite

[macduffy]

I don't hold PRC and the main reason is my experience a few years ago as a shareholder in the (then) Australian miner, Austral Coal. They were a one mine company mining high grade coking coal in NSW. They suffered one problem after another, from roof collapses to mechanical breakdowns to unexpected "thin seams" and so on. Succesive cash issues kept the company going although the SP gradually declined. Happily, along came Centennial Coal (CEY) who wanted to add Austral's coking coal to their large portfolio of thermal coal mines, a large proportion of whose output was under contract to NSW power stations at relatively low prices.

CEY took the Austral shareholders out at quite an attractive price but I'm not game to take my chances again on a one-mine company.

[mouse]

Hi, mouse.

I'd be very careful with this!

If you want to help a NZ company succeed then by all means send them a donation. But try not to let sentiment interfere with your investment decisions. Just IMO.

Good one MacDuff. Pike is still in start up stage. they have 4 billion tonnes of coal earmarked, plus I believe another 6 billion tons of mineable coal.
Just concentrating on the 4 billion tonnes.
We have 4 miliion shares. So 4 billion divided by 4 million gives us 10 tonnes per share. Now this is all hypothetical, keeping figures simple. Assume profit is $20 per tonne. We then have a $200 per share profit. With a dividend of $100 per share.
Now you can all shout 'Show us the Money", but the sharemarket is bluntly a gambling track. Not every share is a winner or will even finish. But Pike has done pretty well as far as I am concerned.

A very good book on Money, that Holy Grail, is 'The Puritan Gift' by Kenneth Hopper and William Hopper. Publisher Taurus & Co. They discuss management by accountants. Fatal. Pike is a classic 'good company'. Run by Mining Engineers who are finding out about the mine. It is very important Pike succeeds, it is our future NZ coal mining industry.

Next, consider NZ Farming Systems, Uruguay. I sold all my shares after reading MacDunk, returns 3 to 5% plus 'snouts in troughs' reduces that even more. Then NZ Windfarms. A total lack of serious information and they want more money. They havent got any of mine.

Sentiment should always interfere with investment decisions. If it had with Fisher & Paykel the shareholders would be much better off today and lots of Kiwis would have jobs! I knew the accountants would fail going overseas to make the stuff and keeping design in NZ. Sheer madness. Why did not the shareholders either complain or sell?

[boysy]

Pike has done pritty well at exceeding my expecations for getting money out of long suffering shareholders. They have done even better at keeping shareholders in the dark promising them the world while they keep digging. Come on guys have they managed to provide a adequate return for shareholders over the years ?. Still so much risk involved sure there will be reward but is the opportunity cost of tying up money in PRC a good investment decision ?. i hope it all does work out for current shareholders you do deserve a bit of good news after all of the bad that has come your way so far.

[JoeBlogs]

they have 4 billion tonnes of coal earmarked, plus I believe another 6 billion tons of mineable coal

You've lost me their mouse.

Last I counted it was about 18 million tonnes and (soon) 400 million shares? I wouldn't think there's even 10 billion tonnes of HCC in the world?

[bung5]

Good one MacDuff. Pike is still in start up stage. they have 4 billion tonnes of coal earmarked, plus I believe another 6 billion tons of mineable coal.
Just concentrating on the 4 billion tonnes.
We have 4 miliion shares. So 4 billion divided by 4 million gives us 10 tonnes per share.



Might want to re check your numbers. Then get buy order for PRC




Next, consider NZ Farming Systems, Uruguay. I sold all my shares after reading MacDunk, returns 3 to 5% plus 'snouts in troughs' reduces that even more. Then NZ Windfarms. A total lack of serious information and they want more money. They havent got any of mine.



Nothing new about what MacDunk has said about NZFSU and nothing anyone would disagree with.. but only if it is trading at its value, which its not ( 97c compared to 39c today) and located in NZ.

[Lion]

You've lost me their mouse.

Last I counted it was about 18 million tonnes and (soon) 400 million shares? I wouldn't think there's even 10 billion tonnes of HCC in the world?

Yes, sorry mouse, maybe you want to check your arithmetic. There's not 4 billion tons of HCC there (let alone 10 billion - wish there was!) but if there was, that divided by 4 million shares is 1000 tonnes per share, not 10, and with half the profit paid in divs (as you assume) that would be $10,000 per share. Hmm, yes, I wish. Even Balance might have to agree it was a good deal at that - but nah, he still wouldn't.

Still, with 18 million tonnes there, that's 4.5 tonnes per share or around $45 per share, over 20 odd years.

[Unicorn]

Still, with 18 million tonnes there, that's 4.5 tonnes per share or around $45 per share, over 20 odd years.

Oops again.

18 million tonnes of coal divided by 400 million shares is 0.045 tonnes per share.
Assuming the (totally unsupported) $20 per tonne profit and (also totally unsupported) $10 per tonne dividend gives 90c per share earnings and 45c per share in dividends over 20 years!

Pulling unsupported figures out of the air is not really helpful!

[Lion]

Oops again.

18 million tonnes of coal divided by 400 million shares is 0.045 tonnes per share.
Assuming the (totally unsupported) $20 per tonne profit and (also totally unsupported) $10 per tonne dividend gives 90c per share earnings and 45c per share in dividends over 20 years!

Pulling unsupported figures out of the air is not really helpful!

Oops indeed, sorry folks.

Ed. But I was only out by a factor of 100.

Balance . . . your cue?

[bung5]

Not sure on the profit of $20 per tonne figure thats going around. 1 million tonnes a year making for argument sake $300 nzd per tonne = 300 million NZD per year. operating costs at 60 million a year?

= $240 profit per tonne

[Lion]

But . . . don't you think those profit and div figures are very conservative still?
Wasn't PRC originally calculated to be profitable at $90 a tonne? Yes, it was.
And what is it now? $200 and climbing?
Div rate of 50% profit seems very low given those figures.
I would think a div of $50 per tonne is not unreasonable, times 0.045 tonne per share = about $2 per share, over the mine life.
Maybe the div could be more, maybe the total tonnage could be more with the extra seam.
OK unicorn, I'm making guestimates here, but so is everyone, to some degree.

Ed. I composed my post before yours, bung, but didn't post it till after yours was up.
Yep, $240 per tonne doesn't seem too bad a guess, but who really knows.

"Forecasting is difficult - especially about the future"

[mouse]

Oops again.

18 million tonnes of coal divided by 400 million shares is 0.045 tonnes per share.
Assuming the (totally unsupported) $20 per tonne profit and (also totally unsupported) $10 per tonne dividend gives 90c per share earnings and 45c per share in dividends over 20 years!

Pulling unsupported figures out of the air is not really helpful!

Terrible mistake on my part. You are right. I am sure your figures are also correct. We do however have to make totally unsupported guesses on profit. Best to use $20 per tonne. Which is the bottom figure. Hopefully. And then we get 90cents profit and 45 cents dividend.
Now consider making a profit of $100 per tonne. Which is maybe the top figure. Multiply all figures by 5. We get $4.50 profit and $2.25 dividend.
How on earth I got the other figures in my head I have no idea. The stupidity of old age!

These are the sort of calculations we should do to calculate the share price.
Again, I cannot even think of why I made the mistake. Was it $4 billion worth of coal? Maybe.
Certainly the question must be the dividend payout over the life of the mine.

[percy]

[QUOTE=mouse;302030]. As my brother in Canada wrote to me on the IPO, 'tell me when they are actually producing coal!' Not so far, except for small amounts.
Is it at all possible to have an updated view from your brother?

[Catalyst]

[QUOTE=Monkey Poms;302346]PRC market cap NZ$440,000,000 divided by profit of NZ$243,680,000. This will give PRC a P/E
rating of 1.80/1[QUOTE]

Hello Monkey Poms

I nearly choked on my cornflakes this morning when I saw that PRC had a PE of 1.8! I beg to differ and this is why:

What we know:
PRC aims to mine 17.6m tonnes of good quality coking coal. They aim to get it out over a period of about 18 years (1m tonnes pa on avg). This hasn't changed since the 2007 IPO.

The key thing we don't know:
What price will they sell the coal for? ie What will be the price of coking coal over the next 18-odd years and what will be the NZ/US x-rate over that period. The 2007 IPO Prospectus assumed coking coal prices will avg US$90/tonne and the NZ/US rate will avg 59c during the main production period ie. NZ$158/tonne. This has certainly changed since the 2007 IPO. Current coking coal prices are say US$270/tonne and the NZ/US rate is 72c ie NZ$375/tonne. PRC may get US$250-odd for anything it manages to extract over the next couple of years but beyond that I'm assuming the price will settle down a bit. I don't know what the experts are assuming for coking coal prices over the next 20-years but for the sake of my numbers I would guess US$150/tonne on avg and NZ/US of 65c on avg during PRC's main production period ie NZD$231/tonne.

Revenue:
I think they're still a couple of years away from reaching a steady state of 1m tonnes pa. So in 2 years time they could be earning 1m tonnes x $231/tonne = $231m pa

Costs:
The 2007 IPO Prospectus assumed operating mining and transport costs of $80/tonne combined. I'll go with this. Costs = 1m x $80/tonne = $80m pa

=> EBITDA = $231m - $80m = $151m

Dep'n and Amort'n:
Who knows and who cares as its non-cash but say $10m pa.

Interest expense:
From memory they will have debt of about $50m at say 10% = $5m pa.

Royalty Charge:
PRC have to pay a royalty charge each year to the NZ Govt of the higher of a) 1% of revenue, or b) 5% of profits. 5% of profits should be higher once in full production. So 5% of ($151m - $10m - $5m) = $7m pa.

Profit before tax:
$151m - $10m - $5m - $7m = $129m

Tax:
30% x $129m = $39m

NPAT, Profit after tax:
$129m - $39m = NZ$90m

PE ratio in 2 years time assuming full prodcution is reached by then = Market Cap/NPAT = $406m/$90m = 4.5x

Incidently, I wouldn't value PRC based on a PE ratio simply because it is a single-project company with a finite life of about 18 years. Apple should be around a lot longer than 18 years so PE ratios are acceptable for them.

I would value PRC on a simple DCF as follows (using the same assumptions as above):

Annual average cash flow = $90m pa (assuming Dep'n & Amort'n = CapEx each year) starting from year 2 and going to year 19 (18 years).
Assume net cash flows in year 0 (now) and year 1 next year will be zero (ie any revenue cancels expenses and capex)
The net present value of those cash flows is NZ$583m using a discount rate of 12%.

My indicative valuation is therefore NZ$583m/404m shares = $1.44.

Obviously this is very sensitive on the US$ price of coal and the NZ/US x-rate over the term of the project (and the discount rate used).

So, looking at PRC more closely, I can now see that the fundamentals have certainly improved for PRC since the 2007 IPO simply based on a much better outlook for coking coal prices (despite all the cost over-runs and delays in the project so far).

Would I invest in PRC or Apple? Don't know. Don't know what Apple's fundamentals look like.

[mouse]

[QUOTE=mouse;302030]. As my brother in Canada wrote to me on the IPO, 'tell me when they are actually producing coal!' Not so far, except for small amounts.
Is it at all possible to have an updated view from your brother?

No word from my Canadian brother, except mirth. The 4 billion came from page 3/ of the last six monthly report. "Recoverable coal over the total life of the mine is valued at around NZ$4 billion. We have around 400 million shares issued. What does NZ$4billion come to if divided by 400 million. My maths are not up to tackling the figure!

[777]

Ten or 10.

4,000,000,000/400,000,000=10

[percy]

[QUOTE=mouse;302478][QUOTE=percy;302469]

No word from my Canadian brother, except mirth.
More mirth.I once gave money to company called Coal and Energy.Beautiful prospectus,great projections,the works.Open cast coal mine on the West Coast.The trucks got bogged down in the mud as it sometime rains there.Problems really started when the bulldozers they were using to tow the truck out also got bogged down.I never did hear whether it stopped raining long enough for them to recover the truck and bulldozers.I think the chairman Jim Wakefield was making positive comments right up to the end.

[JoeBlogs]

Speaking of rain...

[Balance]

[QUOTE=percy;302469]

No word from my Canadian brother, except mirth. The 4 billion came from page 3/ of the last six monthly report. "Recoverable coal over the total life of the mine is valued at around NZ$4 billion. We have around 400 million shares issued. What does NZ$4billion come to if divided by 400 million. My maths are not up to tackling the figure!

It's profit that counts - not revenues.

It's real production which matters - not forecast production (especially from PRC!).

Bit like saying India has 1 billion people so must be the richest country in the world.

Quality, not quantity.

[Balance]

One little minnow trying to jump out and is offering his stock at $1.12.

Will the big boys with cheap stocks at 88c overtake him and offer theirs at $1.10?

PS. He managed to get out.

[Sehnsucht888]

One little minnow trying to jump out and is offering his stock at $1.12.

Will the big boys with cheap stocks at 88c overtake him and offer theirs at $1.10?

PS. He managed to get out.

Man look at the carnage..
30,498 heads traded at $1.14
1,236 options at $0.205

oh wait, no, its business as usual.. (Looks like Balance is looking for a re-entry)

[Hoop]

Man look at the carnage..
30,498 heads traded at $1.14
1,236 options at $0.205

oh wait, no, its business as usual.. (Looks like Balance is looking for a re-entry)

Oh Dear... more bad news.... the share price went up 1cent to $1.15....:scared:

[Balance]

Oh Dear... more bad news.... the share price went up 1cent to $1.15....:scared:

I am happy. Hope you guys are too.

[Zito]

I am happy. Hope you guys are too.

Sounds alot like a David Bowie song. And you know what happened to Major Tom, don't you?

[Hoop]

I am happy. Hope you guys are too.

Yeah happy Balance ...Pike is my best preforming stock in my portfolio so far this month (+20%)....

Have a good day..Balance
Hoop

[Balance]

Yeah happy Balance ...Pike is my best preforming stock in my portfolio so far this month (+20%)....

Have a good day..Balance
Hoop

Great stuff, guys. Let's all just enjoy the day and the week. Life is good.

[mouse]

Great stuff, guys. Let's all just enjoy the day and the week. Life is good.

Maybe I should sell now?

[mouse]

[QUOTE=mouse;302478][QUOTE=percy;302469]

No word from my Canadian brother, except mirth.
More mirth.I once gave money to company called Coal and Energy.Beautiful prospectus,great projections,the works.Open cast coal mine on the West Coast.The trucks got bogged down in the mud as it sometime rains there.Problems really started when the bulldozers they were using to tow the truck out also got bogged down.I never did hear whether it stopped raining long enough for them to recover the truck and bulldozers.I think the chairman Jim Wakefield was making positive comments right up to the end.

Hope it was not too much cash. At least you helped the economy of the Coast. If the trucks and bulldozers are still there then by now they are 'protected' by DOC as part of our industrial heritage!

[percy]

[QUOTE=percy;302505][QUOTE=mouse;302478]

Hope it was not too much cash. At least you helped the economy of the Coast. If the trucks and bulldozers are still there then by now they are 'protected' by DOC as part of our industrial heritage!

Not a lot because I did not have much money at the time.But was a lesson to watch out for projections on a start up.Allways takes more money and longer time.Sage advice is to wait for a few years,then you can work out the companies profit and prospects.
I never heard whether they got the trucks and bulldozers out.
You have got me thinking of money losing companies there have been on the coast.There have been plenty.I was in Northland a couple of weeks ago and I remembering there was a company that was going to try and gather Kauri gum out of the swamps.Only thing I can remember was that great destroyer of wealth one George Chapman was chairman.His rise to fame was president of the National Party.Least with him you knew when the company was going to go broke, George allways had a reason why he had had to sell before the market knew.Perry Dines was another of his dead ducks.

[blockhead]

Hell Percy, you are going back to the times when the "Kiwi Bear" Co was floated, if I remember correctly it was going to make it all out of possum fur. Can't remember how long it lasted, bit longer than an Eric Watson Swiss ski break I think but not much !

[Monkey Poms]

[QUOTE = Catalyst: for the sake of my numbersI would guess US$150/tonne on avg and NZ/US of 65c on avg during PRC's main production period ie NZD$231/tonne.]

Hello Catalyst
Thanks for coming back with your post. In many ways your "guesstimate" on the future P/E rating for Pike runs parallel. If we could split the difference between our estimates I would take that result now!

PRC published a figure of NZ$ 5.4m per month running costs.
Neither you nor I know whether or not this includes any interest, dep'n / amort'n. We haven't seen the books. The 5.4 may include some of this.

In the years up to and around IPO Prospectus 2007 the buyers of steam coal, coking coal and pet coke would tell the producers how much they would be prepared to pay, together with the date the buyer wanted it to be shipped. Now the situation is reversed. The producer has the upper hand - they tell you how much you have to pay and when you can have it shipped. On a number of occasions I have said to producers' agents that I wouldn't pay their price, then having to go back with my tail between my legs. They would tell me it was no longer available ie sold, or the price had risen 5 dollars + 6 shipping .You would expect in or near a recession in Europe this would n't be the case.

In the past, buyers would bring their number-crunchers to the negotiating table, having worked out the costs of the producer, then apply a small profit to his quote for the producer. Those days have gone. The Americans have led the way with their marketing methods for pet coke. Now the Australians are going the same way, 3 month contracts or spot pricing (they're not prepared to work for cherry bobs anymore)!

This will work as long as, in the case of coking coal, it remains in short supply. There's plenty of poor quality coals available, but Pike's premium coking coal stands head and shoulders above the rest ( if the quality can be maintained).
There are no coking coal mines left in the U.K. It's becoming as rare as rocking horse s--t. Unless China and Japan discover massive amounts of coking coal that can be mined quickly, ( or God decides to make more ), I will stick with the predictions on my "guesstimate".

My P/E guess will be assessed on more than one cargo. Whatever the price of Pike's coal once shipped, whether it's up or down, we need to take an average price of each cargo.

Based on 1m tonnes production per year: 1 share = 0.0025 tonnes of coal mined.
Using my guess of the profits ÷ number of shareholders = 0.60 cents per share profit.

Catalyst, if you could tell me the price of a bottle of Monteith's Summer Ale, as sold 10 years ago against today's price, I will be able to work the percentage out and apply it to the future price of coal projected a decade from now!

In a way, Monkey Poms would be happier if the low estimate of future coking coal prices you forecast were to be correct, I would make far more money than a hike in Pike's share price!

Cheers, Monkey Poms

[Dr_Who]

Coking Coal Set for Further Price Increases

http://agmetalminer.com/2010/04/27/coking-coal-set-for-further-price-increases/

[Balance]

Doesn't really matter where coking coal prices go to - could be $1,000 or $5,000 a tonne - PRC needs to prove it can dig the stuff out of the ground.

[blockhead]

Simple maths tells me (un) Balanced it does make a difference where the prices go, PRC needs to get less out for the same money if prices rise,...I like that !

[JoeBlogs]

Balance, I think that's an over simplistic argument. Difficult to mine resources become more viable as prices rise (obviously) - look at oil sands. There's good coal in the ground, if PRC can't mine it efficiently and the price warrants it, someone will. I've still got no good reason to believe PRC will have any long term problem, so I'm happy to hear about price rises in the comodity.

[mouse]

Pike half year report, 31 December, 2009, signed off 23 March 2010, Overview page 3 said we have NZ4 billion worth of coal in the mine.
A/. $4 billion divided by 400 million shares gives us a total value of $10 per share.
B/. I think that price is FOB Lyttelton.
C/. Deduct $2 for transport costs.
D/. Total value now $8 per share.
E/. Deduct mining costs at, say $4 to get coal out.
F/. Profit for us shareholders, over the life of the mine, is then $4.
G/. Pay tax on your $4.
H/. You must then work out the price that you value the shares at. :confused:
J/. I think it is a 'buy' at under 90 cents and a 'sell' at $1.50
K/. Comments please.:)

[Balance]

Pike half year report, 31 December, 2009, signed off 23 March 2010, Overview page 3 said we have NZ4 billion worth of coal in the mine.
A/. $4 billion divided by 400 million shares gives us a total value of $10 per share.
B/. I think that price is FOB Lyttelton.
C/. Deduct $2 for transport costs.
D/. Total value now $8 per share.
E/. Deduct mining costs at, say $4 to get coal out.
F/. Profit for us shareholders, over the life of the mine, is then $4.
G/. Pay tax on your $4.
H/. You must then work out the price that you value the shares at. :confused:
J/. I think it is a 'buy' at under 90 cents and a 'sell' at $1.50
K/. Comments please.:)

And if PRC cannot get the coal out of the ground?

[Dr_Who]

Abit like undeveloped mining stocks, the long term value is in its reserves, while the short term psychological value is in the ability to mine it. Short term fluctuation is an opportunity for those that have guts. Your position in PRC will mitigate your attitude towards the stock. I currently have no holding, but would still like to see PRC succeed and management to deliver on their deadline.

Dont you just love how posters talk their own book? LOL

[glennj]

IMO it is too early to be giving Pike's forecasts much credence. Balance made an obvious point about the ability to get the required volume of coal out.
I don't think they've finished the third roadway or started hydro mining yet so they are drifting further behind schedule?

When/if they show they can mine, transport & ship a million tonnes pa I'll look at buying back in if the other numbers stack up.
Risks will still abound but I see overcoming the above as critical.

Am an interested spectator who would love the mine to be a success for the sake of the Coasts economy.
Also have an interest via NZO & am happy they are going to replace Liberty Harbor but wonder about the wisdom of the size of their exposure to PRC.

[JoeBlogs]

Agree with what you're saying glennj, but for me there's going to be bugger-all growth potential left in the stock if/when they get to full production, and I think you'd run the risk of the SP being overcooked, and in need of a correction at that point. At the moment, looking at all the information, I see this stock as substantially undervalued - but of course still high risk. I guess the value placed on PRC depends on each investors risk profile - we all know the potential if everything goes to plan.

[Balance]

Agree with what you're saying glennj, but for me there's going to be bugger-all growth potential left in the stock if/when they get to full production, and I think you'd run the risk of the SP being overcooked, and in need of a correction at that point. At the moment, looking at all the information, I see this stock as substantially undervalued - but of course still high risk. I guess the value placed on PRC depends on each investors risk profile - we all know the potential if everything goes to plan.

You are so wrong there. If PRC can get to full production, they will then have money to buy up other coal mines in the West Coast to expand. Also, they would have the infrastructure and expertise in place. The market will get itself very excited.

It's now all about them being able to prove that they can get the coal out of the ground - in volume and within reasonable costs.

I am skeptical. The ventilation shaft collapse and graben were not surprises to old timers in the West Coast. Huge shock to PRC. Why?

Both those two events should not have happened with the few hundred years of mining experience on the board and in the management?

[Balance]

Would you guys believe any thing that comes out of PRC management?

Anything that comes out of PRC management's mouth is worthless.

Interesting post.

Like a moth to fire.

[root]

2.11 No Change in Business Risk

Completion of the Proposed Transaction between NZOG and Pike River will not change the underlying business risk profile of the Company. Pike River remains a mining company developing a single underground coal mine on the West Coast of New Zealand. The recent first export shipment of 20,000 tonnes to an Indian customer is a sign of its long term potential.

Some key risks remain and include:

- Developing the necessary underground infrastructure and capability to mine 1,000,000 tonnes per annum • (tpa);
- Understanding the in situ geology, coal seam dynamics and mine planning to ensure large scale hydro • mining is sustainable; and
- Ensuring the Company has adequate funding available until it achieves positive cash-flow from ongoing coal • revenues.

As a single coal mine operation Pike River is not without a significant level of business risk although some of these business risks are expected to decline as the mine moves from development phase to full production.
----------------------------------------------------------------------- quote from PRC SPECIAL MEETING NOTICE

The current discount SP is a result of the aforementioned risks, as these risks diminish the SP will ramp up accordingly. When you have only got one mine in one geographical area there will always be some level of risk even after production targets start to be met. IMHO.

Disc: New Coal Miner

[LJB]

Was the graben a huge shock to management or more a huge disappointment that one of the main risks came true so soon after the huge shock of the ventilation shaft collapse. A bit like surfin big waves. You manage the risks as best you can but sometimes you just get slammed....sometimes twice in a row. Management copping a fair bit of unjustified vitriol at times methinks.

On the issue of growth potential of the share price we'd hope that once coal is being sold at forecast volumes and good prices, the dividend yield should be the biggest draw card. Institutions will pile in solidifying a given share price (hopefully well in excess of where it is now). I nice reliable buy and hold for non traders.

[root]

Record Date for Rights Entitlement has just passed.

[JoeBlogs]

You are so wrong there. If PRC can get to full production, they will then have money to buy up other coal mines in the West Coast to expand. Also, they would have the infrastructure and expertise in place. The market will get itself very excited.


Time will tell. When have you known a sharemarket to wait for something to happen BEFORE getting excited. Of course there will be growth in the long term if production targets are met, but I expect to see the market move on the way up to those targets, when investors become conviced they will actually be achieved. Anyway, it's pointless arguing about it, see you in a year or so.

[777]

Record Date for Rights Entitlement has just passed.


Actually the record date is 30/4/10

[mouse]

:)I think that we have to price things on the basis of say 750,000 tonnes of coal annually. It must take some time to get to one million tons of coal annually.:) If we ever do.
Actually 250,000 tonnes of coal by the end of this year would make me pretty happy!:confused:
Disclosure. Hold PRC, but not many. Not much spare cash.:):):)

[root]

Actually the record date is 30/4/10

Thanks for that, I hadn't read the amendment.

[Monkey Poms]

Pike half year report, 31 December, 2009, signed off 23 March 2010, Overview page 3 said we have NZ4 billion worth of coal in the mine.
A/. $4 billion divided by 400 million shares gives us a total value of $10 per share.
B/. I think that price is FOB Lyttelton.
C/. Deduct $2 for transport costs.
D/. Total value now $8 per share.
E/. Deduct mining costs at, say $4 to get coal out.
F/. Profit for us shareholders, over the life of the mine, is then $4.
G/. Pay tax on your $4.
H/. You must then work out the price that you value the shares at. :confused:
J/. I think it is a 'buy' at under 90 cents and a 'sell' at $1.50
K/. Comments please.:)


Hello Mouse.
Monkeys updated value of coal in the ground, ref 4 billion estimate pikes report signed off march 2010.

Recent report coking coal spot US$272 tonne ÷ o.729 = NZ$ 373 - transport to port NZ$ 40 = NZ$ 333 = value of coal in the ground per tonne.
NZ$333 x 18000000 estimated tonnage. = NZ$ 5.994.000.000 value of coal in the ground [ as it is today it will more than likely change tomorrow ]

A couple of years ago i took the opinion that the Uk was going down the pan under a mountain of debt.
My bank whose shares traded at the time around £7 per share in my eyes i thought were wobbly,
On a visit from the bank manager who had been given shares in the bank over a period of years. I told him half jokingly to sell his shares in the bank get out quick, as the bank looked dodgy.( do not try this at home as it does not go down to well ] his organisation I questioned were not a fit and proper place to handle surplus company funds.
I started to look around on a personal basis somewhere to park some of my funds the criteria being shares in ventures i knew something about with a currency hedge against the
pound together with the shares having some excitement and being relatively safe
Mouse guess what i came up with ( Balance will spit his coffee out when he reads this one in the morning he will think Monkey has completely lost his marbles )
yes you guessed it PRC together with NZO.
I purchased the majority of the the shares with the exchange rate at the time of purchase £ 1 - NZ$ 2.64 a gain of 23.5% on the ex rate alone.
Mouse you say that you are out of Pike when the share price reaches $1.50 you will have done well at that. For me i will stay, UK interest from the bank for instant access pay 0.25%. I still think the UK is heading down the pan under even more debt.
the Bank Managers shares have improved a little Down from £7 to .28 then up to 0.54

cheers Monkey Poms.

[mouse]

Hello Mouse.
Monkeys updated value of coal in the ground, ref 4 billion estimate pikes report signed off march 2010.

Recent report coking coal spot US$272 tonne ÷ o.729 = NZ$ 373 - transport to port NZ$ 40 = NZ$ 333 = value of coal in the ground per tonne.
NZ$333 x 18000000 estimated tonnage. = NZ$ 5.994.000.000 value of coal in the ground [ as it is today it will more than likely change tomorrow ]

A couple of years ago i took the opinion that the Uk was going down the pan under a mountain of debt.
My bank whose shares traded at the time around £7 per share in my eyes i thought were wobbly,
On a visit from the bank manager who had been given shares in the bank over a period of years. I told him half jokingly to sell his shares in the bank get out quick, as the bank looked dodgy.( do not try this at home as it does not go down to well ] his organisation I questioned were not a fit and proper place to handle surplus company funds.
I started to look around on a personal basis somewhere to park some of my funds the criteria being shares in ventures i knew something about with a currency hedge against the
pound together with the shares having some excitement and being relatively safe
Mouse guess what i came up with ( Balance will spit his coffee out when he reads this one in the morning he will think Monkey has completely lost his marbles )
yes you guessed it PRC together with NZO.
I purchased the majority of the the shares with the exchange rate at the time of purchase £ 1 - NZ$ 2.64 a gain of 23.5% on the ex rate alone.
Mouse you say that you are out of Pike when the share price reaches $1.50 you will have done well at that. For me i will stay, UK interest from the bank for instant access pay 0.25%. I still think the UK is heading down the pan under even more debt.
the Bank Managers shares have improved a little Down from £7 to .28 then up to 0.54

cheers Monkey Poms.

Brilliant. I would have done the same. You can even make profit on the UK foreign exchange rate if Pike collapses. Is it better to have shares in a collapsing Pike, or a collapsing Pound? Actualy, I think Pike is brilliant. All patriotic Kiwis should buy. At under 90 cents. Some time ago I suggested to one of my UK friends she should transfer cash, she had lots, out of UK and into Oz or even NZ. She didnt! Has lost easily 30% of her buying power, with more losses coming. Money has to be watched carefully. Particularly when down a mine.

[Baddarcy]

Am a bit surprised by the weakness of PRC and PRCOA today. Would have thought it would be a bit stronger today with buyers wanting to participate in the rights issue.

Seems to be fairly balanced (dare i use that term ????:-) between buys and sellers at the moment.

[geezy]

Might have something to do with the reports that are out today. The amount of meters thats left on the graben isnt particularly good but the in seam drilling shows no signs of graben? So i guess PRC is wising up, IMO

[Hoop]

Why did the NZX or the broker not inform the buyer of 2700 share purchase through at 9.59am this morning at 114c that the shares had gone ex-rights. I can't imagine this purchaser paying 4cents above the market price knowing full well the PRC share had gone ex-rights
This announcement announced at 11.15am this morning (https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=2501223) by M. Weldon Chief Executive Officer NZX Limited

This announcement seems a little late..shouldv'e been at close on Friday don't you think?. Did NZX get caught out this morning? ...is this chap going to be reinbursed?

[Balance]

Why did the NZX or the broker not inform the buyer of 2700 share purchase through at 9.59am this morning at 114c that the shares had gone ex-rights. I can't imagine this purchaser paying 4cents above the market price knowing full well the PRC share had gone ex-rights
This announcement announced at 11.15am this morning (https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=2501223) by M. Weldon Chief Executive Officer NZX Limited

This announcement seems a little late..shouldv'e been at close on Friday don't you think?. Did NZX get caught out this morning? ...is this chap going to be reinbursed?

Why? It is a known fact that PRC went ex-rights today.

Use a discount broker and get a discount service?

[Hoop]

2700 shares purchased = small time lazy investor or a newbie.

If its a newbie then welcome to NZ share investing.....screwed from day 1

[mouse]

2700 shares purchased = small time lazy investor or a newbie.

If its a newbie then welcome to NZ share investing.....screwed from day 1
Could be a quite cheap lesson. Only cost $108.00 The broker cost $80.00 or so.

[Jonathan]

could have been much worse, the price stabilized a we bit in the arvo anyway. I brought at 90c, so i myself wasn't to worried, many of you buys going to take up the offer???

[Hoop]

Could be a quite cheap lesson. Only cost $108.00 The broker cost $80.00 or so.
And the average kiwi Joe Public view is ,,,, if you want to lose money put it into the sharemarket ,,,,

[Hoop]

could have been much worse, the price stabilized a we bit in the arvo anyway. I brought at 90c, so i myself wasn't to worried, many of you buys going to take up the offer???

Most definitely....unless the heads fall below 88c (unlikely)

Heads dropping in price can be due to the rights in play....If you can afford buying up heaps of rights rights + application fee (88c/right) playing the rights game can be fun or tearful. I'll probably enter the sandbox with my bucket and plastic spade if an opportunity arises.

[777]

It was also in the opening phase. There may have been a seller at a lower price who withdrew at the last minute and therefore he paid the next price up. The opening and closing phases can be a good time to trade but you need to be watching it closely. Also his brokerage may only have been $30 odd not the $80 mentioned.

[Balance]

Is this why Liberty Harbor decided to walk away from its convertible notes? Sounds like it's more grabens ahead. They are like cockroaches - you find one, there's inevitably more around.

"We believe that geological risk due to localised faulting impacting upon mine development will be an ongoing challenge for the project," the executive summary of the RDCL report said.

However there was no material change to the PRC resource over that reflected in the 2006 resource estimate, it said.

http://www.stuff.co.nz/business/industries/3652924/Pike-River-Coal-allowed-for-faults

The part I like the best though is the Chairman saying that PRC has allowed for the faulting!

Questions - If they allowed for the faulting, why did they not engineer a better ventilation shaft and anticipate the graben? Why did they persist with a production schedule which was a best case scenario?

""We believe that geological risk due to localised faulting impacting upon mine development will be an ongoing challenge for the project," the executive summary of the RDCL report said. The high resolution geological data such as the underground mapping and inseam drilling that is now routinely being acquired on site indicates the Brunner seam does have significant faulting in the current development area, with both partial seam and full seam offsets encountered within the mine," the summary said.

[blockhead]

This part of the article obviously escaped your attention (un) balanced

PRC chairman John Dow said the miner had always realised the extent of faulting within West Coast geography, and this was partly why it had chosen to extract coal with hydro-mining rather than the longwall mining method that was often used in Australia.

"The mining method is quite flexible so we can easily deal with it [faulting] ... ," he said.

"Once we get away from the Hawera fault, which has caused all the issues, ... the expectation is it should be much more straightforward. That's not to say there won't be some small offsets."

[boysy]

and you trust the word of John Dow over an independent report ? Lets be honest PRC aint going to win any awards for correctly predicting the outcome of any event. There forcasts have been just as bad lets just hope for holders sake that once the hydro mining starts up they will produce what they say they will.

[digger]

Is this why Liberty Harbor decided to walk away from its convertible notes? Sounds like it's more grabens ahead. They are like cockroaches - you find one, there's inevitably more around.

"We believe that geological risk due to localised faulting impacting upon mine development will be an ongoing challenge for the project," the executive summary of the RDCL report said.

However there was no material change to the PRC resource over that reflected in the 2006 resource estimate, it said.

http://www.stuff.co.nz/business/industries/3652924/Pike-River-Coal-allowed-for-faults

The part I like the best though is the Chairman saying that PRC has allowed for the faulting!

Questions - If they allowed for the faulting, why did they not engineer a better ventilation shaft and anticipate the graben? Why did they persist with a production schedule which was a best case scenario?

""We believe that geological risk due to localised faulting impacting upon mine development will be an ongoing challenge for the project," the executive summary of the RDCL report said. The high resolution geological data such as the underground mapping and inseam drilling that is now routinely being acquired on site indicates the Brunner seam does have significant faulting in the current development area, with both partial seam and full seam offsets encountered within the mine," the summary said.

Good try [un]balance,that should get the SP down a little for a cheaper balanced entry.
Can you tell me where you get the info that LH walked away from the bonds and convertable notes. As i understand it the notes were for a three year term and PRC had the right to pay them back.You seems to be saying that LH had the right to renew but have decided to walk away instead. Big difference here.

[root]

• Understanding the in situ geology, coal seam dynamics and mine planning to ensure large scale hydro mining is sustainable;

This is one of the risks that Pike has just recently told you about. They readily admit that successful hydro mining is not a foregone conclusion. That's pretty up front. I understand the risks, it could all go pear shaped. Pike is arguably the riskiest stock I hold.

I can understand why someone who held Pike at the $2.50 - $2.00 SP may it a bit jaded listening to some of the reports now. I still think it's good value, at some stage someone thought it was worth $2.50.

[Dr_Who]

Good try [un]balance,that should get the SP down a little for a cheaper balanced entry.
Can you tell me where you get the info that LH walked away from the bonds and convertable notes. As i understand it the notes were for a three year term and PRC had the right to pay them back.You seems to be saying that LH had the right to renew but have decided to walk away instead. Big difference here.

You are onto it Digger. At least you can see through all the smokes and mirrors to blind the younger posters in here.

China Ignites Global Coal Market

http://online.wsj.com/article/SB10001424052748703612804575222212477812190.html?m od=WSJ_WorldMarkets_LeadStory

[Balance]

You are onto it Digger. At least you can see through all the smokes and mirrors to blind the younger posters in here.

China Ignites Global Coal Market

http://online.wsj.com/article/SB10001424052748703612804575222212477812190.html?m od=WSJ_WorldMarkets_LeadStory

Yawn - tell us again about how management of PRC are not to be trusted according to your assessment?

[Bixbite]

Yesterday I emailed PRC a simple yes / no question on the rights issue if we can over subscript. Until now my email still like a sunk stone at the bottom of the sea.

However, no matter how management of PRC are, PRC has been ensured that it will get its funding from this rights issue. Take your rights or leave them for those underwriters, that is!

[Balance]

Yesterday I emailed PRC a simple yes / no question on the rights issue if we can over subscript. Until now my email still like a sunk stone at the bottom of the sea.

However, no matter how management of PRC are, PRC has been ensured that it will get its funding from this rights issue. Take your rights or leave them for those underwriters, that is!

Or sell them on market.

[macduffy]

The rights have traded today at 12c.

Oversubscription not an option here.

[JoeBlogs]

The rights have traded today at 12c

I think you're mistaken macduffy

Todays range so far is 17.1 to 19.5c (VWAP 18.7)

[macduffy]

I think you're mistaken macduffy

Todays range so far is 17.1 to 19.5c (VWAP 18.7)

Thanks, Joe and apologies all!

Seems I was looking at an old code!

[zorba]

Centennial Says Supply of Steelmaking Coal ‘Fragile’

May 4 (Bloomberg) -- Centennial Coal Co., an Australian producer of coal used in steelmaking, says global supply remains “fragile” and predicted contract prices will rise in the second quarter.

Japanese steel mills in March agreed to pay BHP Billiton Ltd., Rio Tinto Group and Teck Resources Ltd. about $200 a metric ton for a three-month coking coal contract starting April 1. That’s a 55 percent increase on the contract for the year ending March 31, UBS AG said in a March 18 note.

Demand for steelmaking coal is rising as the global industry recovers, Tony Macko, Centennial’s general manager of corporate affairs, said in a presentation filed to the Australian stock exchange today. Supplies of thermal coal, burned by power stations, remain “tight,” he said.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

[Balance]

Good try [un]balance,that should get the SP down a little for a cheaper balanced entry.
Can you tell me where you get the info that LH walked away from the bonds and convertable notes. As i understand it the notes were for a three year term and PRC had the right to pay them back.You seems to be saying that LH had the right to renew but have decided to walk away instead. Big difference here.

Digger, do not assume that everyone is like you lot with your one-eyed myopic obsession with getting PRC's sp higher. Who has been correct so far about PRC?

Tell me where you read about PRC's ability to repay early? The last I read was that PRC was asking LH to extend - as they did last year.

[the machine]

to me its a good sign to buy into pike when a certain poster is downramping them

I have funds ready to take up all of my entitlement

now have to wait for meeting on 7th to approve the corporate action

m

[Balance]

I have just come back from the PRC meeting in Hamilton. In responce to a question they assure us that there will be no further capital raising.Production will be up to full speed in Sept or Oct.The ventilation shaft should be completed in May and current production that was interruped will be able to restart.Abooklet was available that covers all that was said at the meeting.

Enuf said.

[digger]

Digger, do not assume that everyone is like you lot with your one-eyed myopic obsession with getting PRC's sp higher. Who has been correct so far about PRC?

Tell me where you read about PRC's ability to repay early? The last I read was that PRC was asking LH to extend - as they did last year.

I ckecked it out directly with a very reliable source,and it conflicks with what you keep saying that Liberty Harbor walked away.Now you have stated clearly several times that LH decided against rolling the deal over.Where did you get that info from?

[digger]

Enuf said.

The garbon and delays are well documented by now.Thoses teething problems are behind us now, we now have to deal with the future and it is the coming events that will determine the success of investing in this cash issue.Little point in going over previous delays and failures they are well known by investers.

[Jonathan]

After reading some of these posts, one has to assume that there are a whole bunch of you guys working down at the mine! Seriously, I invested in PRC to make some serious money, its a risk, some would say based on history a very big risk, indeed, no matter how positive one can be, it only takes one cave in and all my 20,000 shares go down the drain, I accept that, its the risk I am willing to take, so hopefully it works out and I can pay of my student loan off...or take a holiday to Belize!

[Jonathan]

After doing the maths, I might as well sell my entitlement shares, i only make an extra couple hundred at the current ordinary share price! and that will likely head down due to the number of factors, that one must add have been discussed to death..

[Balance]

The garbon and delays are well documented by now.Thoses teething problems are behind us now, we now have to deal with the future and it is the coming events that will determine the success of investing in this cash issue.Little point in going over previous delays and failures they are well known by investers.

So easy to say 'teething problems' and 'the past is the past'. This is where objectivity goes out the door with the one-eyed myopic PRC scared shareholders.

Who has been right and who has been wrong so far about PRC?

[Baddarcy]

I ckecked it out directly with a very reliable source,and it conflicks with what you keep saying that Liberty Harbor walked away.Now you have stated clearly several times that LH decided against rolling the deal over.Where did you get that info from?

Actually it says that Liberty made an offer to PRC to roll over the bonds in the meeting papers for the meeting of the 7th, but they commented that the NZO offer was better so they went with that.

[mouse]

So easy to say 'teething problems' and 'the past is the past'. This is where objectivity goes out the door with the one-eyed myopic PRC scared shareholders.

Who has been right and who has been wrong so far about PRC?
I was right!

[Balance]

I was right!

And yes, you are!

Well done. Mouse.

[digger]

Actually it says that Liberty made an offer to PRC to roll over the bonds in the meeting papers for the meeting of the 7th, but they commented that the NZO offer was better so they went with that.

You have blown it Baddarcy.I wanted Balance to put forward his evidence in support of his often claimed theory that LH walked away from the bonds.Was aware of this but asked Chris Roberts if Pike had the right to pay back the bonds as it is a normal practice to be able to do so,and it is in the bond contract that PIKE clearly has this right. It would be a very unusal contract for the bondee to not be able to repay the debt.
I would guess that LH would never have been involved if back in 2008 NZO had the cash pile it now has. Must now be touching 200 million kiwi,and the monies put into PIKE will do a lot better than waisting away in US dollars.

[Logen Ninefingers]

When the share price picked up, seems a lot of people were shocked and thinking Balance got it wrong, then they thought a little harder & had a eureka moment and came back and said all Balance's posts are part of some masterful strategy to drive down the share post so he can get in at the right price. Clearly the guy has some sycophantic followers out there. But the main thrust of what Balance has said is that - aside from one small shipment worth around $3 mill - there has been nothing out of this mine so far and time continues to slide by. That's just stating a fact.
I find human pyschology interesting when you have a 'cult of personality' around one poster to the extent that whatever they post is dissected and hidden agendas are divined from even the most innocuous post.

[Balance]

When the share price picked up, seems a lot of people were shocked and thinking Balance got it wrong, then they thought a little harder & had a eureka moment and came back and said all Balance's posts are part of some masterful strategy to drive down the share post so he can get in at the right price. Clearly the guy has some sycophantic followers out there. But the main thrust of what Balance has said is that - aside from one small shipment worth around $3 mill - there has been nothing out of this mine so far and time continues to slide by. That's just stating a fact.
I find human pyschology interesting when you have a 'cult of personality' around one poster to the extent that whatever they post is dissected and hidden agendas are divined from even the most innocuous post.

Some of the posters here would like investors and PRC shareholders to be mushrooms. They happily convey (as Digger does) whatever PRC tells them - so desperate are they to believe - but objects violently to another point of view.

[Sehnsucht888]

When the share price picked up, seems a lot of people were shocked and thinking Balance got it wrong, then they thought a little harder & had a eureka moment and came back and said all Balance's posts are part of some masterful strategy to drive down the share post so he can get in at the right price. Clearly the guy has some sycophantic followers out there. But the main thrust of what Balance has said is that - aside from one small shipment worth around $3 mill - there has been nothing out of this mine so far and time continues to slide by. That's just stating a fact.
I find human pyschology interesting when you have a 'cult of personality' around one poster to the extent that whatever they post is dissected and hidden agendas are divined from even the most innocuous post.

They aren't hidden agendas.. He clearly admits to it.

What can be conceeded though is that PRC have given ample opportunities to exploit their short comings. Should things have gone smoothly for PRC, this thread would be much shorter and no one would pay a lot of attention to it. With Bad News there is opportunity. Just look at the GFC and how big money was made with correct entry and exit.

[mouse]

Some of the posters here would like investors and PRC shareholders to be mushrooms. They happily convey (as Digger does) whatever PRC tells them - so desperate are they to believe - but objects violently to another point of view.
I really value the alternative opinions of Balance, Percy, etc. At the same time, we must remember that Pike is attempting to unlock the conservation estate for mining. Doing it bit by bit. The fact that the mine has not produced much coal is of small worth to the experience that Pike is gaining in coal mining. The fact that we may even make a profit, or more possibly a dividend, is extra. The vision of Pike, from what I can gather, is for more access to coal mining on the Coast. Which is why we are only scheduled to get 50% of profit as dividends. Pike is a long term hold. Which does not mean we should not go in and out as the sp peaks and dives. Investors need to chat to Pike staff. They are most helpful. Plus chat to the miners and the Blackball Hilton Pub. All good places for information. Hope you have all put in your ideas for the Govt unlocking the Conservation Estate. It is very important to do so. Money is involved! Disclosure. I have shares now in Pike bought at 89 cents. I am fairly pleased.

[johndeyell]

It is just me who hasn't received their rights entitlement notice then??! Or is there anybody else out there that is also waiting....

Maybe a call to Computershare tomorrow might be in order????

[Hoop]

It is just me who hasn't received their rights entitlement notice then??! Or is there anybody else out there that is also waiting....

Maybe a call to Computershare tomorrow might be in order????

Got mine today..

[johndeyell]

Got mine today..

Okay will see if it comes in the mail tomorrow. Cheers.

[digger]

Some of the posters here would like investors and PRC shareholders to be mushrooms. They happily convey (as Digger does) whatever PRC tells them - so desperate are they to believe - but objects violently to another point of view.

Your using smoke and mirrors here Balance to hide from the simple fact that you just made up the story that LH walked away from the convertable bonds,when in fact they had there offer to roll it over turned down by PIKE in favor of NZO.
I will make no more comments on this subject but let other investers decide for themselves if Balance should deliver evidence to support his much and loud claims against PIKE regarding this manner.Amen

[Balance]

Your using smoke and mirrors here Balance to hide from the simple fact that you just made up the story that LH walked away from the convertable bonds,when in fact they had there offer to roll it over turned down by PIKE in favor of NZO.
I will make no more comments on this subject but let other investers decide for themselves if Balance should deliver evidence to support his much and loud claims against PIKE regarding this manner.Amen

You choose to accept PRC's management words all the time. I do not. I draw my own conclusions.

Who has been right to date to question the management's assertions?

Act like a mushroom and you will get treated like a mushroom.

[Balance]

April 2009
I have just come back from the PRC meeting in Hamilton. In responce to a question they assure us that there will be no further capital raising.Production will be up to full speed in Sept or Oct.The ventilation shaft should be completed in May and current production that was interruped will be able to restart.Abooklet was available that covers all that was said at the meeting.

Let's revisit this posting from Digger. Not an iota of doubt at all from Digger - this is gospel truth.

And what happened?

Yet another capital raising.

Production will now be up to full speed (you hope!) in Sept or Oct - but not 2009! 2010 instead!

Sp of PRC actually went up to a 12 month high after the PRC meeting and after said assurance. Should those who bought have listened to PRC and you?

[Baddarcy]

I really value the alternative opinions of Balance, Percy, etc. At the same time, we must remember that Pike is attempting to unlock the conservation estate for mining. Doing it bit by bit. The fact that the mine has not produced much coal is of small worth to the experience that Pike is gaining in coal mining. The fact that we may even make a profit, or more possibly a dividend, is extra. The vision of Pike, from what I can gather, is for more access to coal mining on the Coast. Which is why we are only scheduled to get 50% of profit as dividends. Pike is a long term hold. Which does not mean we should not go in and out as the sp peaks and dives. Investors need to chat to Pike staff. They are most helpful. Plus chat to the miners and the Blackball Hilton Pub. All good places for information. Hope you have all put in your ideas for the Govt unlocking the Conservation Estate. It is very important to do so. Money is involved! Disclosure. I have shares now in Pike bought at 89 cents. I am fairly pleased.

Just a small correction Mouse, they said dividends will be 50% of "Free Cash Flows" not 50% of Profits. I would expect for a business like PRC for free cash flow to be a fair bit higher than the profit.

[mouse]

Just a small correction Mouse, they said dividends will be 50% of "Free Cash Flows" not 50% of Profits. I would expect for a business like PRC for free cash flow to be a fair bit higher than the profit.
Many thanks for the comment. Appreciated.

[Balance]

Actually it says that Liberty made an offer to PRC to roll over the bonds in the meeting papers for the meeting of the 7th, but they commented that the NZO offer was better so they went with that.

Really?????

Any one (especially Digger, PRC's mouthpiece) care to compare the two side by side?

Mushrooms get treated as mushrooms.

[Bixbite]

Mushrooms get treated as mushrooms.

You are not a mushroom, how do you know mushrooms not happy to get treated as mushrooms?

A fool (like me) might be happier than a wise one.


Bixbite

[dsurf]

Really?????

Any one (especially Digger, PRC's mouthpiece) care to compare the two side by side?

Mushrooms get treated as mushrooms.

Intersting comparison (hold nzo,prcoa) that we cannot make fairly without knowing the full penalty payments due Liberty should PRC not perform. On the face of it PRC pay a little less interest. NZO get any advantage of selling at spot vs contract? or a slice of that differential. Seems Liberty harbour was the better for PRC should the spot vs contractual gap be significant which it certainly was during last commodities spike.

[Balance]

Intersting comparison (hold nzo,prcoa) that we cannot make fairly without knowing the full penalty payments due Liberty should PRC not perform. On the face of it PRC pay a little less interest. NZO get any advantage of selling at spot vs contract? or a slice of that differential. Seems Liberty harbour was the better for PRC should the spot vs contractual gap be significant which it certainly was during last commodities spike.

Ah. Have you calculated what the penalty cost is for PRC - it has to issue penalty options to LH.

I will leave to the Diggers of the world to dig themselves out of their (yet again) unquestioning propagating of PRC's assertions.

NZO deal better than LH - more horse manure for the mushrooms?

[Balance]

You are not a mushroom, how do you know mushrooms not happy to get treated as mushrooms?

A fool (like me) might be happier than a wise one.


Bixbite

Ignorance is bliss - until reality strikes.

Ask those who invested in Bridgecorp and Nathan Finance how happy they are now.

[bung5]

dam everyone must of had 30 years on me at the special meeting on friday.

[mouse]

dam everyone must of had 30 years on me at the special meeting on friday.
Including Gordon Ward?

[RRR]

When i attended PRC shareholder meeting last year in Sth Island, i had similar thoughts!! Ditto with NZOG meeting..In the NZOG AGM here, the much senior shareholder who was sitting next to me sighed at the mention of PRC and then muttered some words of dislike..The senior(and much experienced investors)dont have time to wait patiently before the company can make profits and pay dividends and that frustration was evident in the meeting and here in this forum..Some investors just dont have time in the market..I dont have such strong feeling since i have the time on my side and very patient(so far). I would have very different opinion if i was 75!!

[RRR]

40% mining tax in Oz. Investors might aim at NZ miners(PRC)...Who knows...Just a thought.

[Balance]

When i attended PRC shareholder meeting last year in Sth Island, i had similar thoughts!! Ditto with NZOG meeting..In the NZOG AGM here, the much senior shareholder who was sitting next to me sighed at the mention of PRC and then muttered some words of dislike..The senior(and much experienced investors)dont have time to wait patiently before the company can make profits and pay dividends and that frustration was evident in the meeting and here in this forum..Some investors just dont have time in the market..I dont have such strong feeling since i have the time on my side and very patient(so far). I would have very different opinion if i was 75!!

There are no fools like old fools. You don't invest in high risk mining shares when you are 75 years old for income.

Sp gains should be what they are looking for - they can always sell a few shares to live on if they need the money.

[JoeBlogs]

Hi all

I would appreciate (rational and constructive) comments on the latest McDouall Stuart report (http://nzresources.com/attachments/960/McDouallonPike.pdf) giving PRC a DCF value of $1.95

Clearly this is a more optomistic figure than many would use at this point. How do their assumptions stack up for other people here?

Cheers
JB

[root]

Hi all

I would appreciate (rational and constructive) comments on the latest McDouall Stuart report (http://nzresources.com/attachments/960/McDouallonPike.pdf) giving PRC a DCF value of $1.95

Clearly this is a more optomistic figure than many would use at this point. How do their assumptions stack up for other people here?

Cheers
JB

The 40,000t for FY2010 looks achievable, it all hinges on the 600,000t for FY2011 and 850,000t for FY2012. The current SP factors in the risk of not reaching those projected production rates. The fact that they are underwriting the rights issue means they are believers I suppose.

PS. Thanks for the link I hadn't read it.

[dsurf]

M cDoull Stuart have made a lot of money raising cash for PRC & will have a lot of clients in PRC so will paint a good picture.

[Balance]

M cDoull Stuart have made a lot of money raising cash for PRC & will have a lot of clients in PRC so will paint a good picture.

Agreed.

Same broker who had a valuation of $3.00 plus ($3.70 from memory) a couple of years ago.

Thing is that MStuart is partly underwriting the issue so they just want to clip the ticket. I thought there is a rule that there cannot be research when a capital raising is in progress.

[JoeBlogs]

Thing is that MStuart is partly underwriting the issue

That was my concern, and why I'm interested in viewpoints regarding their assumptions, which are well disclosed in the document. I am aware these guys have tended to be at the top end of valuations for PRC, so had grain of salt on hand while reading the report.

For anyone who's interested, I find Google Finance a good way to keep up with any related news pieces.

Cheers

[Sehnsucht888]

........... Delete ...............

[rainey]

Ten years ago, when Hoschetter proved dry, I bought into NOG at 25c. Things draged along so slowly, I always wondered if I would live long enough to get a divi. Subsequently, I have done very well out of NOG. Now, I have held Pike for two years or so and Im really starting to wonder if a divi will come before its too late. I can see Pikes production in the 5 to 600000 ton range when they are in full swing???

[MPC]

That is a quite a large production range you have estimated rainey. Covering your bases there..

[rainey]

500000 to 600000

[Baddarcy]

Pike River upbeat on quality of coal

Pike River Coal (PRC) has found excellent quality coal and mining conditions at the coal face area that follows tunnelling in a faulted rock graben area, chief executive Gordon Ward says.

The quality of hard coking coal was exceptional, according to the mining team working the West Coast mine's Brunner seam, Ward said yesterday after the miner notified the New Zealand stock exchange of the results of a special meeting.

Shareholders voted in favour of the issue of up to US$28.6 million convertible bonds to major shareholder New Zealand Oil & Gas.

Ward said the West Coast coal miner would repay United States investment fund Liberty Harbor a similar amount in the period after new rights issue shares were allotted on May 21 and when NZOG subscribed for the replacement bonds.

Shareholders at Pike River's meeting on Friday had been told by mines general manager Peter Whittall that coal conditions were among the best he had seen during a long career in the industry, Ward said.

"We've got that first of the two roadway tunnels into coal. We've been mining there for a couple of weeks now ... there's very pleasing conditions – what we were expecting to see, and better than anything he (Peter) has seen in his mining career," Ward said.

The very thick coal seam varied around nine to 10 metres, and was standing up well within the seam, he said.

The company planned to start hydromining – high-pressure water cutting – in the July to September quarter.

"It's very [easily cut]. The roof's very firm and in very good condition ... it cuts down how much roof and side support you have to put in with these rock bolts," Ward said.

"The better the conditions are the less support you need which helps you in terms of the advance rate."

The latest spot prices in the market for coking coal were in the range of US$250 to US$270 a tonne.

A MinAxis monthly coal report dated April 2010, reports a rumoured US$270 a tonne sale by Glencore/Xstrata to Indian customers for around one million tonnes of coal.

Ward said that for coking coal spot prices in the July to September quarter, expectations were above the US$200 mark, possibly around US$230.

When asked about potential risks to the economies of China and India that could slow demand for coking coal, he said: "All you can do is look at history and in the middle of the global financial collapse last year, coal prices still achieved their second highest price on record – US$128 [a tonne]."

Pike River Coal shares closed steady at 103c yesterday.

[Monkey Poms]

"The latest spot prices in the market for coking coal were in the range of US$250 to US$270 a tonne.

A MinAxis monthly coal report dated April 2010, reports a rumoured US$270 a tonne sale by Glencore/Xstrata to Indian customers for around one million tonnes of coal.

Ward said that for coking coal spot prices in the July to September quarter, expectations were above the US$200 mark, possibly around US$230. "


Gordon's pessimistic view on the price of coking coal for the July to September quarter of around US$230 per tonne, I would respect him more if he could go back to his old
self on this one by being (optimistic). $260 tonne in the quarter described is slowly becoming the conservative view on the pricing of prime coking coal of the quality Pike produces and not the $230 expectation producers could achieve for mid quality coking coal. The difference could equate to NZ$2.500,000 per cargo on the bottom line. The extra would help pay off pikes debt quickly.
Thread members should propose someone from their ranks to represent the interests of the loyal small shareholder to be nominated and voted in as a member of the board to
make sure shareholders receive the best value for shareholders regarding this matter.

Monkey Poms.

[Baddarcy]

[QUOTE=Monkey Poms;304371

The extra would help pay off pikes debt quickly. Monkey Poms.[/QUOTE]

All going even slightly to plan, Pike is unlikely to have any debt. The new NZO Bonds will be converted to shares when they fall due and in April 2011 Pike will receive $80m in cash from the 2011 options being redeemed.

As far as i can tell Pike only has $15-$25m (sorry can't remember exact amount) in overdrafts with BNZ as debt. The $80m from the Options will clear that and some.

Any extra income is going to be dividends :-)

[Balance]

"The latest spot prices in the market for coking coal were in the range of US$250 to US$270 a tonne.

A MinAxis monthly coal report dated April 2010, reports a rumoured US$270 a tonne sale by Glencore/Xstrata to Indian customers for around one million tonnes of coal.

Ward said that for coking coal spot prices in the July to September quarter, expectations were above the US$200 mark, possibly around US$230. "


Gordon's pessimistic view on the price of coking coal for the July to September quarter of around US$230 per tonne, I would respect him more if he could go back to his old
self on this one by being (optimistic). $260 tonne in the quarter described is slowly becoming the conservative view on the pricing of prime coking coal of the quality Pike produces and not the $230 expectation producers could achieve for mid quality coking coal. The difference could equate to NZ$2.500,000 per cargo on the bottom line. The extra would help pay off pikes debt quickly.
Thread members should propose someone from their ranks to represent the interests of the loyal small shareholder to be nominated and voted in as a member of the board to
make sure shareholders receive the best value for shareholders regarding this matter.

Monkey Poms.

He is being realistic! How amazing!

Did I just see a coal-laden wagon going by my window?

[mouse]

:) Things seem to be looking up. Even Balance is Happy! :) From reports, particularly the comments of Peter, 'have not seen such good coal as this' or similar comments, we should be on track in six months time to be getting one 60,000 tonne ship load of coal exported every month. Happy Days are Here Again.:):):):):):)
The point about coal mines is quite simple. Accountants cannot fiddle figures. The simple maths is, how much coal has been exported from Lyttelton? And that figure tells us everyting we need to know.:):):):):)

[swissboy]

Confidence returns???
Somebody spent $ 50000 before opening of market and over $300000 in last few minutes

[Monkey Poms]

He is being realistic! How amazing!

Did I just see a coal-laden wagon going by my window?

Dont get too excited yet Balance remember i said August.

[Balance]

Dont get too excited yet Balance remember i said August.

I should have written - did I see a wagon load of coal flying by my window. Or should it be pigs in pink suits flying by?

[Dr_Who]

All going even slightly to plan, Pike is unlikely to have any debt. The new NZO Bonds will be converted to shares when they fall due and in April 2011 Pike will receive $80m in cash from the 2011 options being redeemed.

As far as i can tell Pike only has $15-$25m (sorry can't remember exact amount) in overdrafts with BNZ as debt. The $80m from the Options will clear that and some.

Any extra income is going to be dividends :-)


Also very interesting to see the Indians now taking up their rights this time round. :)

Raspadskaya Faces Huge Costs From Blast-Damaged Mine -Vedomosti

Analysts agreed that the disaster is likely to cause a shortage in Russia of coking coal, which is used as a fuel and to produce steel. The Raspadskaya mine accounts for 13%-14% of the country's output, according to Citigroup Inc.
Newspaper website: www.vedomosti.ru

http://www.easybourse.com/bourse/actualite/news/831423/raspadskaya-faces-huge-costs-from-blast-damaged-mine-vedomosti.html

[Balance]

Do you believe what comes out of the directors mouth?

I dont, hence I had sold out all my shares in PRC.

For the record - 22 Nov 2009.

[Monkey Poms]

I should have written - did I see a wagon load of coal flying by my window. Or should it be pigs in pink suits flying by?

WOW Balance you must be desperate for pike shares to fall with all the time and effort you have put in to downgrade pike.
I don't know your circumstances however if you need to pick up a bargain you may be lucky over the next couple of days as day traders offload small levels
of shares during the 2 for 19 offer.
August is not too far away (ramp up time.) Then as a member of the Pike thread once superbly described an upward movement of shares. Pike may be in line for a speeding ticket.
Australian 40% tax on mining profits. Pike will prove itself in the near future. where will Australian investors place their money.

Monkey Poms.

[Balance]

WOW Balance you must be desperate for pike shares to fall with all the time and effort you have put in to downgrade pike.
I don't know your circumstances however if you need to pick up a bargain you may be lucky over the next couple of days as day traders offload small levels
of shares during the 2 for 19 offer.
August is not too far away (ramp up time.) Then as a member of the Pike thread once superbly described an upward movement of shares. Pike may be in line for a speeding ticket.
Australian 40% tax on mining profits. Pike will prove itself in the near future. where will Australian investors place their money.

Monkey Poms.

You have convinced me, MP. I will load up on PRC today - I will bid Saurashtra for their rights. What do you think?

It's a pity we do not live in the dark ages. Otherwise there will be a mob, ably led by some of the one-eyed PRC-can-do-no-wrong-it's-going-to-be-a -$5-stock posters here, to burn me at the stake.

Would not that be a sight to behold?

[dsurf]

You have convinced me, MP. I will load up on PRC today - I will bid Saurashtra for their rights. What do you think?

It's a pity we do not live in the dark ages. Otherwise there will be a mob, ably led by some of the one-eyed PRC-can-do-no-wrong-it's-going-to-be-a -$5-stock posters here, to burn me at the stake.

Would not that be a sight to behold?

How much for the signed rights to the utube video, movie & guy fawkes toys? Also can I book Erickson or do you think there would not be enough capacity? Maybe we could do it before a Warriors game?

[Baddarcy]

You have convinced me, MP. I will load up on PRC today - I will bid Saurashtra for their rights. What do you think?


I think your probably too late. I noticed a trade for approx 2.3m rights the other day, if you do the maths it means you would need to own about 22m shares to get that many rights. Want to guess how many shares Saurashtra has?

[Baddarcy]

I should have written - did I see a wagon load of coal flying by my window. Or should it be pigs in pink suits flying by?

Mate if i was you i would be looking for a new house if i saw either..... not posting about it in here!!

[Balance]

How much for the signed rights to the utube video, movie & guy fawkes toys? Also can I book Erickson or do you think there would not be enough capacity? Maybe we could do it before a Warriors game?

LOL - maybe we just need each PRC poster here to pay 10% of their shares in PRC for the privilege.

[Balance]

Mate if i was you i would be looking for a new house if i saw either..... not posting about it in here!!

Talking of which - do I see another graben ahead?

[digger]

Talking of which - do I see another graben ahead?


No you do not as we are assured that PIKE have drilled ahead and find no more Grabens.Now my since of humor got the better of me here balance and i just had to comment.
To save you the effort i will reply to my own post and point out how Digger believes everything the MAN says and is therefor a mushroom,etc,etc

[mouse]

Talking of which - do I see another graben ahead?
The problem with our present graben is it is very close to the mine bottom. Now, as far as I am aware, a graben further ahead is not as great a problem since we can dive below or above the block. Coal will still be capable of being mined. Or the delay will not be so long as with our First Graben.:):)

Now, it is a mine. My observation is my own and I have not checked it with Pike. A mine is a high risk venture. If you dont want the risk, drive a taxi.:):):)

[Monkey Poms]

You have convinced me, MP. I will load up on PRC today - I will bid Saurashtra for their rights. What do you think?

It's a pity we do not live in the dark ages. Otherwise there will be a mob, ably led by some of the one-eyed PRC-can-do-no-wrong-it's-going-to-be-a -$5-stock posters here, to burn me at the stake.

Would not that be a sight to behold?

Balance To burn you at the stake that would be a great loss to this thread it is good to have opposing opinions but ( Did i see see a wagon load of coal flying by my window or should it be
pigs in pink suits flying by ) Balance you are better than that.

Monkey Poms

[Balance]

No you do not as we are assured that PIKE have drilled ahead and find no more Grabens.Now my since of humor got the better of me here balance and i just had to comment.
To save you the effort i will reply to my own post and point out how Digger believes everything the MAN says and is therefor a mushroom,etc,etc

Er .. same assurance that there will be no more capital raising like they gave you early last year?

Sorry, Digger but like a moth to fire, some people keep flying at the flames.

Have a look at Dr Who - he has been churned inside out by PRC several times but he's back for another burn!

[root]

The problem with our present graben is it is very close to the mine bottom. Now, as far as I am aware, a graben further ahead is not as great a problem since we can dive below or above the block. Coal will still be capable of being mined. Or the delay will not be so long as with our First Graben.:):)

Now, it is a mine. My observation is my own and I have not checked it with Pike. A mine is a high risk venture. If you dont want the risk, drive a taxi.:):):)

There would be more risks driving a Taxi these days Mouse, than holding Pike shares.

[Dr_Who]

People in glass houses shouldnt throw stones.

A certain poster in here makes alot of assumptions about others making him look like a complete fool. The word "assumption" is emphasis. That certain poster must be hurting from covering a short position in PRC prior to it going ex rights at a premium? He has also been burnt on PVO, DPC, ALF etc. But then he wouldnt tell you the loses, only the wins... and he likes to follow posters around like a bully at the school grounds.

[JoeBlogs]

Further to Dr Who's post, I think it's fairly reasonable for investors to adjust their views on a company based on (their perception of) its performance and positioning.

[mouse]

There would be more risks driving a Taxi these days Mouse, than holding Pike shares.
I think holding Pike shares is more risky than driving a taxi. Since it is a black hole. Down which cash is stuffed. I am very happy to take the risk. Far better returns than putting cash in the bank. I think we can get a lot better return than 10% on our cash plus capital gains by owning another few coal mines. In NZ. Within a few years. So it is a risk, but crossing the road is a risk. I am very happy to hold around 10,000 Pike. But a few months ago I only owned 500 shares in Pike. We should see production doing well by Christmas. Only six months away.

[troyvdh]

mmmmmmmmmmmmm

[digger]

Do you know this as a fact, or is this yet another wind up?

That is potentially price sensitive information (unless previously advised by PRC announcements)

Care to state your source?

BTW, lets keep the thread on topic without playing the man, not the ball

I get grumpy when i have to intervene

The source is crap straight out of balances mouth and readily available for whoever wishes to believe.A few years ago under another alias the story was that PIKE was done for because it had a large rock overhang. To me it was the joke of the year as all underground mines have rock overhangs. Still Balance in his former alias spread it out over a year and did scare a few fokes.Interesting people study really.It is all a bit like religion --you believe what you want to believe and collect the facts afterwards.
Anyone wanting into PIKE should pull fi---- this week as it is all over next wednesday.

[peat]

i think I will have to buy some PRC just so I can post in this thread!
The webmaster should also buy an odd lot or two - this mine keeps his site alive.

I would've thought it was pretty obvious balance was only stirring with his graben comment. Not to be taken seriously, although I guess that said, its a sensitive topic around here.

What about this for a play???
Short the options while holding the shares. (In Oz of course you'd write calls) If the shares dont go anywhere you've made on the options, if they do you'll break even. And time is on your side as the options slowly decay.
If you manage the balance (sorry to use his name again) right the trade would have a high risk reward ratio because there is would be no risk.

[Balance]

Do you know this as a fact, or is this yet another wind up?

That is potentially price sensitive information (unless previously advised by PRC announcements)

Care to state your source?

BTW, lets keep the thread on topic without playing the man, not the ball

I get grumpy when i have to intervene

Just a ribbing.

But with a message - PRC is a high risk mining stock which has disappointed time and again. Another graben imho is likely in the future - that's the geological make-up of the West Coast.

[Balance]

There would be more risks driving a Taxi these days Mouse, than holding Pike shares.

Indeed! More taxi-drivers have been killed and assaulted than PRC shareholders. Mind you, PRC has come cap in hand several times to shareholders for money to keep going - that could be classified as an assault?

[Lion]

If you manage the balance (sorry to use his name again) right the trade would have a high risk reward ratio because there is would be no risk.

Don't you perhaps mean high reward/risk ratio?

"no risk" =0
0 over anything = 0
So no risk/any reward = 0

Sorry, I'm a pedantic mathematician

[Lion]

mmmmmmmmmmmmm

Ummm, troy, what did you have to edit about mmmmmmmmmmmmmm ??

Maybe delete some expletives?

(Anyone else remember the notorious "tricky Dicky" Nixon tapes full of expletive deleted??)



P.S. - Balance, I put you on ignore. Why am I still bothered by your tedious drivel?

[the machine]

sent off my $ today for allof my new shares.

although it always causes me some anguish that have to go to the bank, pay them $15 for the NZ cheque for the privlige of being ripped off with the exchange rate.
or course always 2 sides to a story, otherside being when the bank pays me a dividend twice a year

M

[mr.needs]

Don't you perhaps mean high reward/risk ratio?

"no risk" =0
0 over anything = 0
So no risk/any reward = 0

Sorry, I'm a pedantic mathematician

If we want to be pedantic, the risk reward ratio in this case would not only be very high, it would be infinite.

Any reward / no risk = x / 0 = ∞

I also apologise for the unnecessary mathematics, but perhaps it is still more useful than all this talk on grabens that may or may not be there!!



BUT more importantly peat, the option strategy you describe by going long on the stock and short on the call option is most definitely NOT low risk!

The risk of this is now unlimited, meaning the losses from this trading strategy are potentially infinite. As the share price increases above $1.25, the losses on the options you short are unbounded. If the share price at expiry is $1.50 you lose $0.25, if the share price is $2.00 you lose $0.75 etc etc.

If on the other hand you are only trading in the head share, your losses are limited to your original investment.

The option strategy you describe is similar to the short call synthetic straddle. http://www.theoptionsguide.com/short-call-synthetic-straddle.aspx

I made up a quick spreadsheet to calculate the pay-off from the strategy you described and compare it to the benefit of investing in the stock solely. I have attached it so check it out if you're interested. You can see that with the share and option prices as they currently are, and regardless of the ratio of long shares to short options, you are only better off when the future share price is below $1.52.

In summary, this is a good strategy if you expect the price to remain roughly unchanged. It is definitely worth remembering that this strategy is most definitely risk free.

Disc: this is not investment advice. for that you will have to go see a professional investment adviser!

[Monkey Poms]

The following is taken from an international coal report (January 2010)

“SAIL forced to take $300FOB”

“As earlier indicated, India’s SAIL has been in the forefront of the push to attract extra tonnage with carryover pricing. After months of negotiation, SAIL is understood to be asking for around 0.9mt of extra hard coking coal for Q1 delivery at carryover pricing of around $300/t FOB.

The bid, understood to have been made to most of SAIL’s contract suppliers remains ‘subject to availability,’ but the steel maker is understood to be confident of netting supplies from BHP Billiton, Peabody and probably New Zealand’s Solid Energy. The offers are being made to suppliers who have already (or are close to) completing their contract deliveries for the year to March 2010. It’s understood SAIL’s other major contract supplier, Anglo, is not yet in this position, and there are some doubts about Solid Energy.

So the bulk of the extra supply, probably around 0.7mt, is expected to come from BHPB and Peabody, despite the latter company’s recent strike problems – now resolved – at its North Goonyella mine in Queensland.

The extra Q1 supplies will be ‘pre-poned’ from future year contract commitments. This is consistent with SAIL’s earlier-negotiated deal to stagger its carryover obligations over three years, notionally ending in 2012-3. The latest Q1 deal had been under discussion for some months and follows several unsuccessful tenders by SAIL in 2009, plus one EOI which also failed to source extra tonnage.”

... Good for Pike, not so good for Monkey Poms

Monkey poms

[JoeBlogs]

Balance, why don't you take a hint mate. I've grown tired of your one sided arguments, no, not because I don't want to hear both sides of the story, but because I can't be bothered with the petty bull**** that comes out of your mouth. If you're not interested in PRC, stop wasting so much of your time on it!!! You may notice that most of the posters on this forum are not interested in shorting PRC, perhaps you could find some like-minded folk elsewhere. I'm sick of having to wade through the crap you post, which by the way like most on here, I pay absolutely no credence too. GIVE US A BREAK!!!!!

[Balance]

I'm quite sure those investing/trading in PRC know the risks, & don't require a constant daily reminder from you.

Is there a full moon tonight, sheesh!

Disagree with you there.

Look at some of the postings and one gets a sense (from some of the posters) all the way from 2 years ago that it was all going to be a walk in the park. Would you like me to post you some examples?

[peat]

really appreciate your input mr.needs... I will look at that spreadsheet today and play around with it, might make more comment later.

[Wilkins_Micawber]

You dont want to take the hint & leave it, so enjoy your holiday!

Hurrah !!!!!

Any bets for what name "Balance" will pop up under next (by the way, isn't balance a bit of a mis-nomer for this person) - no prizes for spotting him when he does as the banter is all too easy to pick.

[digger]

Disagree with you there.

Look at some of the postings and one gets a sense (from some of the posters) all the way from 2 years ago that it was all going to be a walk in the park. Would you like me to post you some examples?

There is clear past evidence to support the negative arguements that Balance puts forward about PIKE.The ventalation shaft collapse showed too much reliance on theory personal and not enought on experienced miners so could have been avoided.I am still at a lose to understand why more small predrilling could not have tahen place prior to suddenly running into the garben.Again lack of depth experience miners running the show. Over promising on delivery time tables shows lack of management skills.For the records always underpromise then overdeliver.
This however is as far as it goes for Balance,with the rest showing either an unbalance personality or a deliberate attempt to be negative for his own reasons.Anyone wanting to invest in PIKE has to see all sides.The positives are the value of the product has so shot up through the roof that it will exceed cost overruns.The management have gained experience in the running of the mine and are unlikely to have many more greenhorn stuffups.The company PIKE has positioned itself well for future additional mine developments. This IMHO is most important for investers to consider as it means the company will have a very long producing future,which far outweight the initial inexperience problems.
It is important for investers to focus beyond this tempararly startup phase and asked where do they think the company will be once income starts pouring in. There are many similiar companies in NZ that have startup problems that all seem to be forgotten once things turn.So i say forget the past stuffups and ask where do you think this company will be in a year or two years.What is the future---we all know the past.And above all if you want a balanced view you will have to create it yourself because you will not get it from the poster that calles himself BALANCE

[Lion]

I am out-pedanted, mr.needs

P.S. no, actually I've got you.

You said "If we want to be pedantic, the risk reward ratio in this case would not only be very high, it would be infinite."

The risk reward ratio is surely the ratio of risk to reward, which is zero in the case under discussion.

Isn't this more fun than arguing pointlessly with balance?

[geezy]

hi guys,

when do i need to send in the forms for the Rights (Yes i m participating) and M i entitled for more if i do apply more?

Does anyone know?

Cheers

[777]

hi guys,

when do i need to send in the forms for the Rights (Yes i m participating) and M i entitled for more if i do apply more?

Does anyone know?


Cheers

5pm next Wednesday. Late and you miss out. As to any extra I don't know.

[mr.needs]

I am out-pedanted, mr.needs

P.S. no, actually I've got you.

I stand corrected! That should teach me for staying up too late at night.

Definitely constructive, albeit totally irrelevant:D

[the machine]

hi guys,

when do i need to send in the forms for the Rights (Yes i m participating) and M i entitled for more if i do apply more?

Does anyone know?

Cheers

I don't think you can apply for more because the rights were traded

M

[Dr_Who]

What about this for a play???
Short the options while holding the shares. (In Oz of course you'd write calls) If the shares dont go anywhere you've made on the options, if they do you'll break even. And time is on your side as the options slowly decay.
If you manage the balance (sorry to use his name again) right the trade would have a high risk reward ratio because there is would be no risk.

That is a good strategy and I have done that with some of my larger holdings in Aussie. The problem with PRC options is liquidity. There doesnt seem to be enough liquidity in the options to play with. Other hedging alternative is a short position using CFD?

Whats is more interesting with PRC this time round is that one of the Indian shareholders are taking up their rights and the other Indian holders rights have been placed to a buyer/buyers on the market at around 18 cents. Noticed how there are very few rights being traded on the market so far?

[h2so4]

Yes indeed! I use this strategy. Selling covered calls, but only when I think the markets are at a peak. In effect it reduces your share purchase price.

[mr.needs]

Yes indeed! I use this strategy. Selling covered calls, but only when I think the markets are at a peak. In effect it reduces your share purchase price.

Yes you can think of this as effectively reducing your purchase price, thus partially covering any downside losses, but it does put a limit on gains you will make if the share price appreciates. This means the maximum profit is limited while the maximum loss is still substantial. You can still loose up to 100% of your investment. In the case of PRC this would be the share purchase price minus the sale price, $1.05 - $0.182 = $0.868.

If you thought the market was at a peak why would you not just short the head share directly? Or if you believe there may still be some upside but are concerned about the downside, purchase a put option as insurance against any decrease in the share price. This maximum profit is unlimited, while the maximum loss is limited to the share price minus the strike price plus the put option purchase price.

Are you even able to short PRCOA on the NZX?

[mr.needs]

These links explain what I'm saying a bit better. As they say, a picture is worth 1000 words eh!

http://www.optionseducation.org/strategy/covered_call.jsp
http://www.optionseducation.org/strategy/protective_put.jsp

[h2so4]

Yes you can think of this as effectively reducing your purchase price, thus partially covering any downside losses, but it does put a limit on gains you will make if the share price appreciates. This means the maximum profit is limited while the maximum loss is still substantial. You can still loose up to 100% of your investment. In the case of PRC this would be the share purchase price minus the sale price, $1.05 - $0.182 = $0.868.

If you thought the market was at a peak why would you not just short the head share directly? Or if you believe there may still be some upside but are concerned about the downside, purchase a put option as insurance against any decrease in the share price. This maximum profit is unlimited, while the maximum loss is limited to the share price minus the strike price plus the put option purchase price.

Are you even able to short PRCOA on the NZX?

I sell covered calls therefore I retain the fee for the option. I cant loose 100% even if the share price goes to zero. If I thought the share was going to appreciate then I can buy back the covered call or simply repurchase the share once the option has been exercised.

This is the only strategy I use for option trading.

Not all shares are available for option trading.

[mr.needs]

I sell covered calls therefore I retain the fee for the option. I cant loose 100% even if the share price goes to zero.

I disagree with this. While you may not lose 100% of today's share price, can still lose 100% of your investment (which is what really matters isn't it!)

Here's an example.

Today you simultaneously purchase 100 PRC shares @ $1.05 each, and sell 100 call options with a strike price of $1.25 that expire on the 24th of April 2011 for $0.182 each.

Your net investment is $1.05 x 100 - $0.182 x 100 = $86.80

Something happens before expiry and the price drops to $0.00 per share. The head shares are now worthless.

April 24 rolls around and as the options are not exercised as they aren't in the money. They expire worthless.

Your investment is now worth $0.00 x 100 - $0.00 x 100 = $0.00

And the net profit of your investment is (0.00 - 86.8) / 86.8 = -100%

Sure you keep the fee from the sale of the options, but that's really just used to purchase more of the (now worthless) shares isn't it.


If I thought the share was going to appreciate then I can buy back the covered call

Lets say the share price starts to appreciate. The option price will have also appreciated and covering your short position will result in a loss (a loss that is most probably greater than the relative gain in the head share). Sure you can cover your position before the share price starts to appreciate, but that requires you to pick up on the uptrend before the rest of the market does.


or simply repurchase the share once the option has been exercised.

This can also be at an effective loss.

It goes back to what I said originally. If you think the market is at a peak, you are better off limiting your downside while leaving the potential upside unlimited. Your net loss is limited as once the share price drops below the put option strike price, any losses on the head share are completely offset by the gains in the option.

Your choice is to limit any upside gains the share may have (once the call option strike price is met, any gains to the share price are completely offset by the losses on the options you have shorted), while your downside losses are still unlimited (up to your net initial investment).

[bermuda]

That is a good strategy and I have done that with some of my larger holdings in Aussie. The problem with PRC options is liquidity. There doesnt seem to be enough liquidity in the options to play with. Other hedging alternative is a short position using CFD?

Whats is more interesting with PRC this time round is that one of the Indian shareholders are taking up their rights and the other Indian holders rights have been placed to a buyer/buyers on the market at around 18 cents. Noticed how there are very few rights being traded on the market so far?

Thanks Dr Who. That was a very good post. The very fact that the Indians are in is a simply fantastic plus for PRC.

I can sense a turnaround. The Indians are not stupid. Good luck to all holders. You deserve the rewards which may shortly be forthcoming. Valuation $1.95.

[peat]

Using the spreadsheet with 1000 shares and 1000 options I interpret the results like this

There is a profit of $405 or 47.9% if the share price goes anywhere over 1.25. Profit will not increase if the share price goes higher it will stay the same (as the gains from the shares are perfectly matched by the losses on the options).
If the share price goes below 1.25 then profit will reduce slowly until it hits zero at share price of $0.85c. Below that there are losses but they are reduced by the money received from the selling of the options
So you're limiting the upside by reducing the downside
and its an asymetric risk in that you're potentially missing out on the big win. One might try this if one thought the price is going nowhere before option expiry date but if you were a true believer then you wouldnt want to limit your upside in this way.

Good spreadsheet mr.needs.

[peat]

And heres my pretty picture of the option price using the Ichimoku 'one glance system'
There is a purple bullish gartley and the fib levels of that are shown so the gartleys proportions are quite true
I've used Heiken-Ashi candles to smooth out the jumpy price movement.
I'd say that price being right in the cloud now it is looking for direction. Gartley says up but ichi says maybe up in the future but cloud resistance needs to be broken first. Chiku (its difficult to see the black line but it starts in the bottom and follow price 26 periods behind) has been above price for a while but isnt right now confirming the mixed signals.
Gartleys arent that reliable really but they are sometimes the precursor to a significant price move.

[h2so4]

[
QUOTE=mr.needs;304785]I disagree with this. While you may not lose 100% of today's share price, can still lose 100% of your investment (which is what really matters isn't it!)

Well for a start I focus on short term options, one or two months but I will use your example

Here's an example.

Today you simultaneously purchase 100 PRC shares @ $1.05 each, and sell 100 call options with a strike price of $1.25 that expire on the 24th of April 2011 for $0.182 each.

Best case scenario: PRC does not hit $1.25 by the 24th of April 2011; I still owns my shares and I keep the premium. No I did not reinvest it.

Worst case scenario: PRC hits $1.43 by the 24th April 2011; I deliver PRC shares that I bought at a net price of $0.868 each; I earn a 44.1% return in 48 weeks (47.8% annualized).

The risk: PRC goes well above $1.43 and I miss substantial gains.


Lets say the share price starts to appreciate.

Then I have two options either repurchase PRC or move onto another opportunity. Many years from now I dont intend to judge my success by how much I made or missed on a particular stock.


It goes back to what I said originally. If you think the market is at a peak, you are better off limiting your downside while leaving the potential upside unlimited. Your net loss is limited as once the share price drops below the put option strike price, any losses on the head share are completely offset by the gains in the option.

Your strategy tells me to buy puts at a pre determined price. If the PRC share price declines, the market will offer me a chance to buy at a lower price, but I have already contracted to sell PRC at the pre determined strike price. If PRC never hits that mark, then I have wasted the option fee. If it does hit that price then my shares are taken.

I am not an options trader looking to profit from every movement in the market. I am simply trying to capitalize on peoples fear and greed. I am not concerned with price drops. Price drops present opportunities and I see no reason to protect a portfolio against opportunities.

[the machine]

always a good sign when a director buys on market

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01064262

M

[Dr_Who]

The drop in NZD will benefit PRC.

[mouse]

Where is Balance? Where is the voice of the Sceptic? Do we all have to be Believers to post comments?
In case you are thinking of excommunicating me, or burning me at the stake, I AM A BELIEVER!
But where is Balance? Can we not restore a Penitent Sinner, even if he is not penitent?
Also, does anyone know when our next lot of coal is being exported?

[Hoop]

Where is Balance? Where is the voice of the Sceptic? Do we all have to be Believers to post comments?
In case you are thinking of excommunicating me, or burning me at the stake, I AM A BELIEVER!
But where is Balance? Can we not restore a Penitent Sinner, even if he is not penitent?
Also, does anyone know when our next lot of coal is being exported?
Mouse... read post #5003.

[JoeBlogs]

does anyone know when our next lot of coal is being exported?

Last I heard it was 20 kt scheduled for July

[percy]

Last I heard it was 20 kt scheduled for July

What year?

[JoeBlogs]

Hence the word scheduled. Here's hoping OTP is a bit better than 0% this time! It's my new favourite game at the casino - Pike Roulette ;)

[percy]

Hence the word scheduled. Here's hoping OTP is a bit better than 0% this time! It's my new favourite game at the casino - Pike Roulette ;)

Do you bet with Coal Chips?

[Dr_Who]

No relief in sight for coking coal users
http://www.business-standard.com/commodities/storypage.php?autono=395346

[mouse]

Mouse... read post #5003.
Well, I think Balance should have just been given a good spanking.

[JoeBlogs]

percy, I'm still waiting for those.......

[percy]

percy, I'm still waiting for those.......

Joe Blogs
thanks for taking my posts in good humour they were meant.I think if you play the black a bit longer you will be a big winner.Not long to pay day now, I think.

[mouse]

Joe Blogs
thanks for taking my posts in good humour they were meant.I think if you play the black a bit longer you will be a big winner.Not long to pay day now, I think.
I think that Pike is a quite brilliant stock to hold. We can laugh about the coal exports, and who would not, but we have a total measure of the output, and thus profit, of Pike by just watching the tonnage loaded. We then guess the operating costs and can extrapolate a profit or loss figure. We almost do not need accountants! Plus the cash we are putting in is producing two ways, first getting the existing mine working, second by building expertise and contacts with Govt., and others, on mining on the West Coast. Of course it is a very risky venture. The returns should equal the risk.
We are also producing jobs on the West Coast. Pretty important really.

[mouse]

An important notice from Pike. We need to make submissions on the mining of Conservation Land. Since the Greenies are submitting big time. Our voice must be heard. Link,
http://www.pike.co.nz/news.php&news_id=242
Also look at estimates of production. Now 850,000 tonnes for 2012.

[percy]

I think that Pike is a quite brilliant stock to hold. We can laugh about the coal exports, and who would not, but we have a total measure of the output, and thus profit, of Pike by just watching the tonnage loaded. We then guess the operating costs and can extrapolate a profit or loss figure. We almost do not need accountants! Plus the cash we are putting in is producing two ways, first getting the existing mine working, second by building expertise and contacts with Govt., and others, on mining on the West Coast. Of course it is a very risky venture. The returns should equal the risk.
We are also producing jobs on the West Coast. Pretty important really.
And they are real jobs!!!And also returns should be real.

[JoeBlogs]

Also look at estimates of production. Now 850,000 tonnes for 2012.

Interesting - it's not a PRC forecast as such (extracted from latest McDouall Stuart report), but it does send mixed messages. I would prefer if PRC want to use a 'conservative estimate' in a PR release they would do the same in production planning!

[Monkey Poms]

There is clear past evidence to support the negative arguements that Balance puts forward about PIKE.The ventalation shaft collapse showed too much reliance on theory personal and not enought on experienced miners so could have been avoided.I am still at a lose to understand why more small predrilling could not have tahen place prior to suddenly running into the garben.Again lack of depth experience miners running the show. Over promising on delivery time tables shows lack of management skills.For the records always underpromise then overdeliver.
This however is as far as it goes for Balance,with the rest showing either an unbalance personality or a deliberate attempt to be negative for his own reasons.Anyone wanting to invest in PIKE has to see all sides.The positives are the value of the product has so shot up through the roof that it will exceed cost overruns.The management have gained experience in the running of the mine and are unlikely to have many more greenhorn stuffups.The company PIKE has positioned itself well for future additional mine developments. This IMHO is most important for investers to consider as it means the company will have a very long producing future,which far outweight the initial inexperience problems.
It is important for investers to focus beyond this tempararly startup phase and asked where do they think the company will be once income starts pouring in. There are many similiar companies in NZ that have startup problems that all seem to be forgotten once things turn.So i say forget the past stuffups and ask where do you think this company will be in a year or two years.What is the future---we all know the past.And above all if you want a balanced view you will have to create it yourself because you will not get it from the poster that calles himself BALANCE

Hi Digger.
Excellent post you see both sides of the coin in fact it was so precise i think you have persuaded Balance to see the light he could now be in pike with the rest
of us. ( Don't expect to hear from Balance until he bails out at $1.30 )

Monkey Poms.

[Dr_Who]

All we need now is for management to delivery on their promises before the coking coal prices consolidate. If they can deliver PRC sp can go to $2, if they cant deliver then sp will be 60 cents.

[JoeBlogs]

Comodities softening is a real threat in the near term, but thankfully the dollar will offset some of that (0.676 c as I type). Lets hope the budget dosn't provide any strength in the kiwi!

[Baddarcy]

The dollar is dropping like a stone too V USD, just a rough estimate but on a million tonnes a year at $USD200 per tonne, each drop of 1c in the dollar means +$NZD5m in revenue for PRC.

So the 5c drop in the last week just added a potential $NZD25m to PRC's bottom line.

Go the dollar !!!

Just as an aside, i haven't been in PRC (PRCOA to more precise) all that long, i got in the last half of last year believing that PRC was about to ramp up to full production, so the last 10 months or so have been a bit of a dissappointment for me and probably all of you too. But i believed in the company when i invested and i believe in it now.

Posts from idiots like Balance & Tisha didn't alter my faith at all, Balance's posts never contained any facts or figures, everything he said was based on the premise that because delays had happened in the past they were 100% certain to happen again, Tisha just plain made stuff up and posted it as if it was a fact.

Back to the positive, i believe that PRC today is where i thought they were 10 months ago. There is currently no issues outstanding for them, the Graben is dealt with mostly, the tracks on the contin miners are good, the ventilation shaft is fine, the company is fully funded for the moment, coal prices are great and getting greater, the dollar is falling.

I expect an announcement either today or tommorrow letting us know how many people took up the rights (98%-99% i expect) and hopefully an update on how the mining is going at the same time.

I might live to regret this post but right now i beleive we are at the start of the good times ;)

[JoeBlogs]

My thinking exactly Baddarcy!

I'm expecting things to start taking off once the rights issue is tied up and people have a bit more clarity. The problem I have had with some people's views on PRC is that they are not considering one of the most basic and fundamental economic priciples - sunk costs. Things that have happened in the past are being over factored as indicators of potential future problems. Sure, one could argue that past events would alter an investor's view on the geology of the mine, or management's ability to forcast advance rates accurately, but by and large the problems have been due to the unpredictible nature of a startup venture of this type - and the risks are well and truely priced in! Not to mention the fact that delays have actually increased the potential total earnings over the life of the mine by a material amount.

To me, this is exactly the type of stock I like to invest in - where I believe the market has an overly negative view of the stock which is not completely justified. A similar situation occured with FPA over a year ago, and many of us doubled our money overnight, even though it seemed so obvious the market had been unjustifiably pessimistic of the stock.

I hold only PRCOA only as I believe the potential returns here are phenominal and more than justify the risks.

[Baddarcy]

I hold only PRCOA only as I believe the potential returns here are phenominal and more than justify the risks.

I'm with you there JB.

Am a bit surprised by the lack of reaction from the markets about the corporate tax rate dropping 2%. It basically just increased PRC's net profit by 2% (when we get there anyway)

[dsurf]

Anyone know how long balance is on holiday for?

[mouse]

Anyone know how long balance is on holiday for?
He was expelled, when a good spanking would have been in order. It demonstrates the problems once corporal punishment options are removed.
I prefer not to invest in options as I think they are much more of a gamble than holding the actual shares.

[JoeBlogs]

Fair enough about the options mouse, it all comes down to risk tolerance, and I certainly don't think they're for everyone!

I think balance will be allowed out to play again in a couple of weeks. Can't wait, I'm sure he's chomping at the bit to shoot holes in everything some of us have had to say. I will wait with baited breath to pay him absolutely no attention.