PRC Pike River Coal

[Baddarcy]

I am still trying to work out the significance in PRC's announcement today that they may be able to mine elsewhere. Is it that they despair of ever getting much coal from where they are and so are contemplating spreading the net wider?
Probably Balance is best placed to provide an inciteful response to this

If PRC can get their act together this year, they are going to take in $80m when the options are exercised in April next year. Given they essentially have no debt (assuming the Liberty Harbor now NZO bonds will turn into shares) what are they going to do with the $80m? They can either expand or pay a special dividend and to me the special dividend doesn't make any sense, why issue 64m new shares just to give the money back? My guess is the plan was to expand, hence PRC's interest in the governments mining proposals.

[Baddarcy]

And two sellers now become two buyers and one seller.

Well, I am siting there to buy.

LOL - come and sock it to me.

Thats you trying to buy 500 at 80c isn't it :-)

[dsurf]

Nope. On a bad day in the next few days, some Pikers are finally going to lose all nerves and cut.

You can just feel the anxiety day by day ratcheting higher and higher about the July coal shipment.

Based upon this company's track record to date, one must hand it to the patience and fortitude of some of the Pikers however.

Almost as inspirational as those PNG natives still waiting for the 'gods' to rain food from the sky. You know, the parachute drop during WW2?

Not quite - coal is worth NZ $350 a tonne

[patrick]

Surely someone can inform us whether there is abig pile of coal at the mine or at the rail at Ikamatua?
Please.

[Balance]

Surely someone can inform us whether there is abig pile of coal at the mine or at the rail at Ikamatua?
Please.

Just give PRC a call.

http://www.pike.co.nz/contact_us.php

[mouse]

Surely someone can inform us whether there is abig pile of coal at the mine or at the rail at Ikamatua?
Please.
I said Please, Please, Please on a recent comment. NO ANSWER.
Pike, are you there?

[swissboy]

Would'nt it be just like PRC to release their Q4 on this very day when the American Market is up 2 %. If there were further delays, the price would not drop too badly and if there is actually some good news then they could say that the increase in S/P shows that shareholders were crying too much wolf, as would be prooved by a considerable increase in shareprice.!!!!!

[rainey]

Piro berthed at 9am today and is scheduled to be there for 3 days, surely after 5 months, they have more than 20000 tons to go. I dont recall Pike saying their next shipment would be limited to 20000 tons. Heres hoping.

[Mr Tommy]

Piro berthed at 9am today and is scheduled to be there for 3 days, surely after 5 months, they have more than 20000 tons to go. I dont recall Pike saying their next shipment would be limited to 20000 tons. Heres hoping.

The last quarterly report on 30 April:

The next export 20,000 tonnes is scheduled for July 2010. Once hydro-mining
is underway in the July-September 2010 quarter, the typical export shipment
size of premium hard coking coal will be approximately 60,000 tonnes,
although several early shipments may be contracted at lesser tonnages to
assist with company cashflows and also customer requirements.

[rainey]

Thanks for that Tommy

[peat]

the receptionist told me

I have forwarded this on to our communications manager for a response. I am unsure if she is in the office today, therefore it may be Monday before you do receive a response.

[patrick]

PEAT
Be reasonable mate.Friday is stoat catching around the mine.

[Balance]

PEAT
Be reasonable mate.Friday is stoat catching around the mine.

Hi - you are talking about the hard-working folks at PRC here!

They are all busy shoving coal into the train wagons today. GW is still busy with his coal buckets - running in and out of the tunnel. The stoats went on strike two days ago to protest at the new employment laws.

[peat]

hah yeh I guess I'm unreasonable expecting anything on a Friday.
just tryin my luck I guess
I'm bored with the text book today even though its described as "authoritative and scholarly, while at the same time highlighting the dynamic, exciting and global nature of financial institutions, instruments and markets"

as an update on my previous chart while not much has happened it is showing signs of forming a pennant which, being a continuation pattern wouldnt be contrary to the idea of further gains.
http://i.investopedia.com/inv/dictionary/terms/Pennant.gif

[Baddarcy]

New Zealand:

Pike River Coal Ltd. (PRC NZ), which operates a mine on New Zealand’s South Island, rose 2.2 percent to 95 New Zealand cents. The stock was raised to “outperform” from “neutral” at Macquarie Research.

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aR1HkEBy2arI

[the machine]

the receptionist told me

I have forwarded this on to our communications manager for a response. I am unsure if she is in the office today, therefore it may be Monday before you do receive a response.

very lame duck comment implying that if not in the office then unable to cummunicate

M

[corporateraider]

One has to wonder from the general lack of communications whether she is ever in the office.

[corporateraider]

Further musings: if she can't even communicate that she is going to be in the office or not, how good is she likely to be in her function?

[corporateraider]

And yet further thoughts: maybe the secretary didn't know whether she was in office because she wasn't herself. As someone alluded to earlier, maybe its unreasonable for us to expect anyone to be in the office when there's not much going on in the company.

[percy]

Cann't find the communications officer.
Cann't find 20 tons of coal.
Time someone grabbed the bull by the horns and spoke directly to the tea lady !!! Then we may have some real information.

[the machine]

where is cloud nine when you need him

M

[Sideshow Bob]

I would like to see the communication manager posting here in a similar manner as Chris Roberts for NZO, which is very much appreciated. All they need to do is set the record straight now and then - as speculation tends to run a bit wild around here at times!!

After all, apart from the extremely important news in the past week about minining on DOC land, the last news was May!!

[the machine]

balance gave us insight yesterday about playing coaltrains, maybe next week they will be playing coalship - then the communication manager resumes work

M

[mouse]

I have been told Percy saw a Coal Train last week. Was it one of ours?
The Piro, in port now, appears to me from the web-cam to be far larger than what is required for 20,000 tonnes of coal. So maybe it is not one of ours, maybe the ship, or bird, has flown. Maybe no export of coal this month? Seems that way to me. Have a look yourself, and then contact Pike.

[the machine]

I have been told Percy saw a Coal Train last week. Was it one of ours?
The Piro, in port now, appears to me from the web-cam to be far larger than what is required for 20,000 tonnes of coal. So maybe it is not one of ours, maybe the ship, or bird, has flown. Maybe no export of coal this month? Seems that way to me. Have a look yourself, and then contact Pike.

if pike only have 20,000t then it would be a part load - with solid energy making up the marjority IMO

m

[mouse]

I have been told Percy saw a Coal Train last week. Was it one of ours?

Was it one of ours? was the question asked in UK, and here, if a plane was seen overhead during the Second World War. The common answer, both UK and here, was 'Do we have any?'
Which is appropriate for our coal ships.

[mouse]

Was it one of ours? was the question asked in UK, and here, if a plane was seen overhead. The common answer, both UK and here, was 'Do we have any?'
Which is appropriate for our coal ships.
I have checked with the shipping agents, NO, it was not one of ours. Do we have any? More importantly, do we have any coal?

[Baddarcy]

I have checked with the shipping agents, NO, it was not one of ours. Do we have any? More importantly, do we have any coal?

Have to admit i was beginning to think that a shipment isn't being made, it all seems to quiet from the mine for a shipment to have been made.

But i don't really mind too much as long as there is 20,000 tonnes of coal in the mine yard and the reason no shipment was made was because the client wanted to wait for more and more importantly that they are on track to begin hydro in September.

[Ian]

Yes tend to agree with you - it's the progress being made rather than a small shipment that's important.

[mouse]

Yes tend to agree with you - it's the progress being made rather than a small shipment that's important.
But what progress is being made? If we do have 20,000 tonnes in the yard then we should be told. Maybe we have it, maybe less. Maybe the customer wants a larger shipment. The coal ship at the wharf was obviously able to take far more than 20,000 tonnes. So where is our coal? Pike, are you reading? The End of the Month Draws Near. Doom, not Zoom.

[JoeBlogs]

Yip that's the point mouse, I don't see the point in shipping 20 kt either if they can afford to wait for a larger shipment - but they need to tell us if they are making changes to what we have been told previously. This is not rocket surgery. Sheesh.

[Baddarcy]

But what progress is being made? If we do have 20,000 tonnes in the yard then we should be told. Maybe we have it, maybe less. Maybe the customer wants a larger shipment. The coal ship at the wharf was obviously able to take far more than 20,000 tonnes. So where is our coal? Pike, are you reading? The End of the Month Draws Near. Doom, not Zoom.

I wouldn't go that far Mouse :-)

Given the share price really hasn't made any dramatic gains or losses in the last few days i don't think our impending quartly report will hold anything startling positive or negaive. Especailly given in the past whenever Pike has had news to share the share price has started reacting several days before the announcment was made.

As an asside the Pike share price has had 3 weeks in a row now of weekly gains thou!!

[peat]

nothing new here
I've been told by the receptionist (who knows she might do tea as well) that
the Pike River Coal Limited Quarterly Report is due to be released very shortly and this will contain a current update regarding the shipment.

[neopoleII]

now i know why prc hasnt disclosed any material knowledge to the market regarding "wheres the coal?" talk.
there is no material....... so nothing to disclose

[Logen Ninefingers]

now i know why prc hasnt disclosed any material knowledge to the market regarding "wheres the coal?" talk.
there is no material....... so nothing to disclose

Whate are trying to say? That there's no coal?

[JoeBlogs]

Materiality doesn't necessarily depend on large amounts of money being involved, it is a qualitative consideration as well - i.e. it is critical that PRC prove their ability to meet production targets as this is the major concern of many market participants - if they don't meet targets, and don't ship an amount of coal when they say they will, that is material - there are simply no two ways about it. They are in breach of listing rules, again.

[BigBob]

They are in breach of listing rules, again.

That sounds pretty serious.... When were they last found to be in breach of listing rules?

[JoeBlogs]

I don't think they've ever been 'found' to be in breach, but it's no secret that they took forever to inform the market of the ventilation shaft collaps.

[dsurf]

The release of updates / news regarding the quantity of coal or shipments has a lot to do with market credibility. PRC need to demonstrate that they do meet there targets. They cannot just have no targets so therefore they never have to meet them. Typical of this is Hydro mining - after two? years of planning we have a 3 month window??

[JoeBlogs]

That's dead right re credibility. The three month window was alright back months ago, but they really should have narrowed it by now. I can't wait to see what's in store for us this week....

[BigBob]

The release of updates / news regarding the quantity of coal or shipments has a lot to do with market credibility. PRC need to demonstrate that they do meet there targets. They cannot just have no targets so therefore they never have to meet them. Typical of this is Hydro mining - after two? years of planning we have a 3 month window??


That's dead right re credibility. The three month window was alright back months ago, but they really should have narrowed it by now. I can't wait to see what's in store for us this week....

Isn't there an update expected with the quarterly this week....? Why don't you all chill out a bit and wait for that... If that update is not adequate or disappointing, then maybe talk of non-compliance or non-performance is warranted....

[brucey09]

well said snr. Big

[JoeBlogs]

*sigh* This week is already far too late, but if you're happy to accept that, that's your prerogative.

[BigBob]

*sigh* This week is already far too late, but if you're happy to accept that, that's your prerogative.

It's only "far too late" if you assume that everything has turned to custard.... as I said, maybe wait for the update and make a judgment then...

[JoeBlogs]

I'm not expecting that anything has turned to custard, in fact I'm expecting the opposite.

I'm just commenting on the fact that any material changes to the plan need to be disclosed immediately they are known, not just whenever the next quarterly release is scheduled. And in my opinion, delaying the second shipment for whatever reason, is material.

Anyway, it's a moot point, I'm just frustrated with what I perceive to be flagrant disregard for disclosure requirements. I'm aware I sound overly pedantic, but it's the principle that concerns me - if we continue to set a precedent of turning a blind eye to lack of information, we only have ourselves to blame when it bites us in the arse.

You clearly see it differently, and you're entitled to your opinion. I'm not going to judge you for being more laid back than me in your expectations.

[Logen Ninefingers]

It's only "far too late" if you assume that everything has turned to custard.... as I said, maybe wait for the update and make a judgment then...

Oh dear, they said there was going to be a 2nd shipment in July, so we should all wait for an update at the end of July. It's pretty obvious already that there was no July shipment, so that's yet another milestone not met on time. No doubt if they say hydro-mining will be all go in September/October, you'll be happy to wait til the last day of October to be told it's been delayed.
I think that PRC are beholden to the big 3 shareholders, who will definitely know what is going on, and the rest out there are just the rats and mice who don't figure in the big picture. Just along for the ride.

[Beagle]

Oh dear, they said there was going to be a 2nd shipment in July, so we should all wait for an update at the end of July. It's pretty obvious already that there was no July shipment, so that's yet another milestone not met on time. No doubt if they say hydro-mining will be all go in September/October, you'll be happy to wait til the last day of October to be told it's been delayed.
I think that PRC are beholden to the big 3 shareholders, who will definitely know what is going on, and the rest out there are just the rats and mice who don't figure in the big picture. Just along for the ride.

And what a ride its been. Those of us sitting on the sidelines with this stock could easily be forgiven for thinking the only thing PRC are good at mining is investor pockets. I'll be happy to be proven wrong, but won't be holding my breath.

[Baddarcy]

Well the market seems to be expecting that the news will be positive, up 4c so far today, but not great volume so it is just the little guys buying, but better than the little guy selling :-)

[Arbitrage]

PRC don't seem to give out much regular information. When they were building the tunnel there were progress updates on the website. Now there is nothing to say how the mine is going apart from a presentation about a month ago, unless I am looking in the wrong place.

[Beagle]

PRC don't seem to give out much regular information. When they were building the tunnel there were progress updates on the website. Now there is nothing to say how the mine is going apart from a presentation about a month ago, unless I am looking in the wrong place.

It would be relativly easy for a cynic to form the view that they just don't care. One set of projections after another busted. One milestone after another not met in a timely or meaningful manner, one excuse after another... They've got their money from their latest rights issue...how many times are investors prepared to forgive them ?

[Dr_Who]

It would be relativly easy for a cynic to form the view that they just don't care. One set of projections after another busted. One milestone after another not met in a timely or meaningful manner, one excuse after another... They've got their money from their latest rights issue...how many times are investors prepared to forgive them ?

It is in the best interest for NZO to make sure PRC is up and running generating revenue.

[Arbitrage]

That is a good point Doc, and I have been wondering for awhile now how long NZO will hold on to PRC. Do they take the cashflow or sell the cash cow early while it still has a maximum value? If I was NZO CEO it would be an early sale and return to my core activities.

[JoeBlogs]

They wouldn't get much for it at the moment, if they could sell it that is. Hopefull things will be on track soon....

[blockhead]

That is a good point Doc, and I have been wondering for awhile now how long NZO will hold on to PRC. Do they take the cashflow or sell the cash cow early while it still has a maximum value? If I was NZO CEO it would be an early sale and return to my core activities.

Well if Blockhead was running NZO and PRC was running well he would keep it and the income stream that goes with it.

I guess thats why I still have NZO, I'm waiting for the income it should (will in my view) produce.

[Beagle]

Well if Blockhead was running NZO and PRC was running well he would keep it and the income stream that goes with it.

I guess thats why I still have NZO, I'm waiting for the income it should (will in my view) produce.

I reckon its not too hard to imagine NZO are far from happy campers...as soon as they can up-sticks, they'll be off like a shot.

[Baddarcy]

I reckon its not too hard to imagine NZO are far from happy campers...as soon as they can up-sticks, they'll be off like a shot.

Most commentators don't agree at all, infact saying the complete oposite. the below is from todays' Stocls to Watch on stuff.co.nz

"New Zealand Oil and Gas (NZO): The oil explorer’s bad luck continues, with three wells being dry, costing about three cents a share, Forsyth Barr analyst Andrew Harvey-Green said in ShareChat.

Share price falls due to declining oil prices and its unsuccessful drilling campaign have been overstated he said.

The company’s 29.4 percent stake in Pike River Coal is a healthy exposure. Its shares lifted two cents yesterday to $1.24. "

[Arbitrage]

Exactly Roger. It has been a drag on NZO and I reckon once the cash starts flowing NZO's shares in PRC will be on the market. Can someone tell me what every cent increase in PRC should do to the NZO share price?

[Sideshow Bob]

Pike has 404,971,067 share, so if NZO own 29.4% = 119,061,494. So if the share price increases by 1c, the value to NZO increases by $1,190,615

Given NZO has 389,092,572 shares, so each 1c price increase by Pike increases the value to each NZO share by 0.30599787445955149202899715083741 cents.........

[corporateraider]

Share price up a couple of cents today. Maybe the stoat kill has reached sufficient volume to make the canning of them as pet food commercially viabile?

[Lion]

Share price up a couple of cents today. And up 5c in Aus. Is that significant, I wonder? Not huge volume, yet some are prepared to pay the higher price.

I reckon all will be sweet by year's end, hydromining screaming along, options in the money, NZO happy with their investment and current uncertainties forgotten.

But I could be wrong.

[patrick]

WHY ALL THE QUESTIONS?
We were told there would be a 20000 tonne shipment in July.
No ships due from port this month, or August, for coal unless Pike is exporting in containers!
How many shareholders are watching the Port?
Wait for the report we are told.
CONTINUOUS DISCLOSURE places an obligation on Directors to IMMEDIATELY inform the market as soon as they are aware of ANY event, which, if known, would alter the Share Price.
No July export WILL alter S/P and news in the upcoming report of a larger shipment later( which, if happening, the Directors will be aware of now) will alter S/P so clearly Directors have FAILED to advise the market.
IF this is not correct please be good enough to enlighten me... a holder of over 350,000 shares and options.

A FIGHTING Fund??

[Dr_Who]

I reckon its not too hard to imagine NZO are far from happy campers...as soon as they can up-sticks, they'll be off like a shot.

It would be positive for PRC if NZO does find a buyer for their stake. If NZO sells to one buyer it will trigger a full T/O of PRC and crystalise its value. I doubt NZO will sell until PRC is in full production. NZO is not desperate for cash.

[Mr Tommy]

PRC don't seem to give out much regular information. When they were building the tunnel there were progress updates on the website. Now there is nothing to say how the mine is going apart from a presentation about a month ago, unless I am looking in the wrong place.

I guess the bare minimum they must give is a quarterly report, but the tunnel progress was updated every week by the tea lady so we got to expect regular communication. NZO dont give a report every time a tanker of crude is on its way. The next quarterly will be out this week, so that should answer all our questions.
But just reading last quarterly again, it says :
The next export 20,000 tonnes is scheduled for July 2010.

So its just a schedule, not a definite date, things slip, especially in Pike land.

Anyway, how about a web cam installed in the Pike coal yard?

[dsurf]

After 10? years NOG will be patient with PRC - It has been one of the 3 cornerstone (millstone?) projects and will see it through to full production.

Of course anything is for sale at the right price but scale & geography work against a takeover

[Arbitrage]

Pike has 404,971,067 share, so if NZO own 29.4% = 119,061,494. So if the share price increases by 1c, the value to NZO increases by $1,190,615

Given NZO has 389,092,572 shares, so each 1c price increase by Pike increases the value to each NZO share by 0.30599787445955149202899715083741 cents.........

Thanks for that. Always good to get a few numbers to compare with the market reaction.

[rainey]

A web cam pointed at the stockpile at Ikamatua would be ideal

[blockhead]

Good things down the mine ????

Increased buyer interest today

[BigBob]

Good things down the mine ????

Increased buyer interest today

It's probably just because the end of July is nigh and as per previous announcements a shipment is due soon... ;o)

[Casa del Energia]

Good things down the mine ????

Increased buyer interest today

You gotta wonder - sp is now $1 even. Never thought I'd be pleased to see pike at a dollar. But these haven't been great times anywhere - - A gulp of muddy water always tastes great when dying of thirst.

... but where's that coal? We're all playing spot the coal train-boat with not much luck. I think they are still hiding it from public view inside the mine. .. and there's a grave implication in that.

[Rabbi]

Some of PRC's historic announcements are-in hindsight- comical.
This from from 2008


During its production ramp-up phase, Pike River is scheduled to produce its
first 100,000 tonnes by March 2009 and another 100,000 tonnes by June 2009.
From mid 2009 onwards the mine is scheduled to achieve its "steady state"
production rates of approximately one million tonnes a year.


:D

[Beagle]

Most commentators don't agree at all, infact saying the complete oposite. the below is from todays' Stocls to Watch on stuff.co.nz

"New Zealand Oil and Gas (NZO): The oil explorer’s bad luck continues, with three wells being dry, costing about three cents a share, Forsyth Barr analyst Andrew Harvey-Green said in ShareChat.

Share price falls due to declining oil prices and its unsuccessful drilling campaign have been overstated he said.

The company’s 29.4 percent stake in Pike River Coal is a healthy exposure. Its shares lifted two cents yesterday to $1.24. "

Forsyth Barr wouldn't know preferred stock from livestock. They've been picking PRC for ages and its disappointed all along the way.
This is the firm that warmly recommended Feltex, Credit Sails and quite a number of other flea ridden dogs.


During its production ramp-up phase, Pike River is scheduled to produce its
first 100,000 tonnes by March 2009 and another 100,000 tonnes by June 2009.
From mid 2009 onwards the mine is scheduled to achieve its "steady state"
production rates of approximately one million tonnes a year.

Classic case in point, just look at the B.S. the company has put out, does anyone believe this rubbish anymore, well obviously some people do, otherwise why would it be at $1.00 ?

[mouse]

By keeping our coal down the mine we are saving on processing costs and transport costs. Which amount to a considerable sum. We can continue to raise cash as WE HAVE THE COAL. It reminds me of some office buildings in London during the 1960's? where they remained empty as it was, with soaring rents, more economic not to have tenants. Far more profitable. We may be one of the first in the world to use that business model with a coal mine. We are always ready to produce coal. But not yet. Meanwhile we can concentrate on Stoat and Rat eradication programmes which will help us obtain permission for more coal mines. On the Pike River Model. It could, in the event of a serious shortage of coking coal, be a stroke of genius.

[Mr Tommy]

From NZOG quarterly out this morning ...


NZOG formed Pike River Coal in 1988,
retained a 30% shareholding when it was
floated in 2007, and has continued to
support the mine through development
and into initial production.
NZOG has contributed a total of NZ$85m in
equity to PRC. At 30 June 2010, NZOG’s
shareholding in PRC had a market value of
approximately NZ$105m. NZOG also has 17.3
million options in PRC and holds US$29m of
debt through convertible bonds. NZOG earns
an interest rate of 10% pa. on these bonds,
which are repayable by March 2012, or can
be converted to additional shares.
Pike River’s construction and commissioning
delays reflect a higher degree of project
complexity than was originally anticipated.
However, NZOG has commissioned its own
technical and management reviews and
believes that, despite a two year delay in the
Pike River mine reaching full production, the
fundamental value of the project remains
intact. With the mine now almost fully
developed, the key success factor is
operational performance.
The original coal resource, reserves and
production levels have not significantly
changed. The forecast annual production
rates of approximately 1 million tonnes per
annum remain achievable and the coal
remains a highly attractive product in the
global market.
Costs for the Pike mine have increased
above those listed in PRC’s 2007
Prospectus. However, metallurgical coal
prices have doubled over the same period.
Accordingly, NZOG’s expectation is that
PRC’s future net cash flows will be higher
than originally projected.
NZOG considers that these anticipated cash
flows and gross margins have not yet been
fully priced into PRC’s market capitalisation.
While the Pike River mine faces some further
operational challenges before it achieves its
potential, NZOG considers that it has a
positive long term outlook.
NZOG has previously stated that when it is
judged to be in the best interests of NZOG
shareholders, NZOG will look to divest itself
of its holding in PRC and redeploy the capital
in its core business in the oil and gas sector.
At this point no decision to sell has been
made and any sales process, if initiated, is
likely to take up to 9 months.
In the meantime, NZOG is committed to its
investment in PRC and believes that PRC is
taking the operational decisions necessary to
get the mine operating at full production.
Further details on Pike River Coal are
available at

[Baddarcy]

Well NZO released their Quarterly Report today, whats the bet PRC will too?

[manxman]

By keeping our coal down the mine we are saving on processing costs and transport costs. Which amount to a considerable sum. We can continue to raise cash as WE HAVE THE COAL. It reminds me of some office buildings in London during the 1960's? where they remained empty as it was, with soaring rents, more economic not to have tenants. Far more profitable.

Ah yes. The Barbican ploy. You're a genius Mouse.

[Bilo]

By keeping our coal down the mine we are saving on processing costs and transport costs. Which amount to a considerable sum. We can continue to raise cash as WE HAVE THE COAL. It reminds me of some office buildings in London during the 1960's? where they remained empty as it was, with soaring rents, more economic not to have tenants. Far more profitable. We may be one of the first in the world to use that business model with a coal mine. We are always ready to produce coal. But not yet. Meanwhile we can concentrate on Stoat and Rat eradication programmes which will help us obtain permission for more coal mines. On the Pike River Model. It could, in the event of a serious shortage of coking coal, be a stroke of genius.
Mouse as I remember London, a good few years after the 1960's, London properties that were without paying tenants had squatters that lived in these houses for free and did nothing to enhance the asset, when it did come time to rent them, it was difficult and expensive for the owners to remove the squatters. Let's hope that Pike River doesn't suffer from this severe lack of income for much longer, and I don't like to think of our 'workforce" as squatters....

[blockhead]

[QUOTE=

... but where's that coal? We're all playing spot the coal train-boat with not much luck. I think they are still hiding it from public view inside the mine. .. and there's a grave implication in that.[/QUOTE]

There may not be as much as they hoped, may have sent it to India via Post Haste

[darksentinel]

The coal is a lie!

[Robomo]

From NZOG quarterly out this morning ...

NZOG has previously stated that when it is
judged to be in the best interests of NZOG
shareholders, NZOG will look to divest itself
of its holding in PRC and redeploy the capital
in its core business in the oil and gas sector.
At this point no decision to sell has been
made and any sales process, if initiated, is
likely to take up to 9 months.


With this in mind there is an interesting and informative article in the Asset Magazine about the Merger and Acquisition struggle going on with Gloucester Coal in Australia. What is most interesting is the Noble Group bid for Gloucester at a price that values the company at 3 times what it was worth 5 years ago.
PRC is different in that NZOG only has a minority stake, nevertheless the Noble Group bid does indicate what the 'big players' are willing to pay in order to corner the market for high quality goods.
If someone offered PRC x3 what it is worth now I'll be at the head of the queue to sell, they can even have my share of the stoats for nothing!

Check http://www.theasset.com/article/18222.html

[Silverlight]

Quarterly Update:

https://www.i-search.nzx.com/blobs/NZXPRC/2010/333243/NZXPRC-123433.pdf

[boysy]

shipment pushed back another month to end august have they ever actually stuck to a target so far ?

[Baddarcy]

Well the shipment is delayed slightly to August, but given that August is 2 days away, not really concerned.

Very very very very (get the point??) happy that Hydro is still on track thou. Updated map looks like they have made good progress.

I like the proactive approach of hiring athoer machine to speed things up too!!

[fabs]

Re. Shipments of Coal.
Has anybody checked with the local UFO watchers, regarding recent reported sightings on the West coast?

[Baddarcy]

shipment pushed back another month to end august have they ever actually stuck to a target so far ?

To answer your question, no they haven't, but do i care right now? Nope, as Hydro is all that matters really and that is still on target.

[boysy]

They have yet to prove they cant stick to any schedule why believe what they say about hydro mining come on how long do sh have to be kept like mushrooms before they wake up

[Dr_Who]

This is a milestone for PRC. Their first shipment, even thou only one month late.

[Beagle]

A rumour has surfaced that a human / animal ? chain of stoats has been seen lining up outside the mine. The theory appears to be that if each stoat hands one peice of coal to another down the chain on a continuous basis, the mine will be seen to be extremly busy and they will look to raise another $90 million from hapless investors. Also there are rumours of feight savings by training stoats to swim and carry said peices all the way to China on their backs.
The Chinese are rumoured to be prepared to pay twice the price for coal swum in such an environmentally friendly way meaning they can claim enormous credits off their carbon tax bill. Greenies are said to be lining up outside the mine to congratulate all concerned on such a wonderful environmental handling methodology.

[LJB]

This is a milestone for PRC. Their first shipment, even thou only one month late.

Second shipment.

[peat]

well actually its the second shipment



and dont forget 13 stoats and 88 rats eradicated - this is major stuff

its a shame they couldnt have made this second shipment in time for the quarterly report because now it will presumably be another 3 months before we even get confirmation of that actually occurring. but assuming thats almost a dead certainty for those optimists the next targets are really :
Export shipments from September 2010 onwards are expected to be approximately 20-30,000 tonnes per month with production building to around 40,000 tonnes per month by December 2010.

[Dr_Who]

Stand corrected on the number of shipments.

Looks like the bad times are behind us and PRC can move forward from here. If PRC can meet forecast, there should be a small profit. PRC will have many years of tax lost claims and strong coking coal price to look forward. Unless China falls apart, we can hope to see coking coal prices stay around these levels.

[JoeBlogs]

Pleased to see they've added a scale to the indicative mine plan. Looks like about 765 m planned over the next couple of months - 12 m/day, (17 m/day for 5 day week) all in coal. Incidentally 3 machines from early August each doing 8 m/day = 17 m/day (5 day week). They're gonna have to nail the budgeted advance rate for this to happen.

BTW, average progress since the June 2 mine plan looks to have been about 9 m/day vs the 12 m/day planned.


The average daily advance for both the roadheader and continuous miner has more than doubled since the April 2010, and are still behind budget but improving.

Behind budget? No surprises there, but good to hear the rates have improved significantly.

Interesting they hope to achieve 80,000 tonnes/month by May - $80 m capital injection anyone?

[Baddarcy]

Pike River Coal Ltd said it is on track to start hydro-mining at its West Coast coal mine by mid-September, while shareholder New Zealand Oil and Gas Ltd (NZOG) said separately it has not decided when it will sell out of the company.

Pike River Coal said in its quarterly operating report that roadways to access the first area of hydro-mining are currently being driven in excellent conditions and are expected to be completed in August.

Water storage areas are now in place, sumps are being installed for coal storage and hydro-pumps are now being installed underground ready for use in mining operations.

Two of the mine's three coal cutting machines are now being used at the coal face. The third machine was not used as expected because of insufficient faces to mine and some mechanical issues. Three machines are planned to be cutting coal from early August, increasing to four in early 2011.

The company will lease a large continuous mining machine at the cost of $4 million for a 12 month lease.

This machine cuts the full roadway width in a single pass, whereas existing machines require two passes to complete the 5.5 metre wide roadway. The leased machine also has simultaneous cutting and roof-bolting abilities. It is expected to achieve better roadway development advance rates. Hydro-mining is dependent upon roadway advance rates.

Pike River Coal is preparing for its second export shipment of 20,000 tonnes of hard coking coal in August, one month behind plan. Worth approximately $6 million, this shipment will again go to Gujarat NR, a life-of-mine customer. This shipment is of development coal and is discounted because of a high ash content.

Shareholder NZOG said separately today that its total equity investment in Pike River Coal has been $85 million. The market value of this investment is now $120m.

NZOG said that when it is in the best interests of NZOG shareholders it will sell out of Pike River Coal.

"But no decision has been made".

NZOG owns 29.4 percent of Pike River Coal and has 17.3 million options.

NZOG believes that future cash flows from the mine has not been fully priced in by the market.

It also noted that Pike River Coal was addressing operational challenges.

"Really what it is about is getting the coal out of the ground, which sounds very simple, but that is operational risk, and we're very pleased to see that Pike is making some progress in addressing its operational performance, and that should enhance the rate at which the coal is extracted from the mine, and so we watch with interest to see the rate at which the production is increased with the start of hydro mining," said NZOG chief executive David Salisbury.

[Baddarcy]

Also just noticed the picture on page 3 of the report showing coal being loaded onto a truck titled "Coal being loaded for second export shipment". So am guessing if you drive past the rail loading facility you will see a pile of coal building.

[peat]

Also just noticed the picture on page 3 of the report showing coal being loaded onto a truck titled "Coal being loaded for second export shipment". So am guessing if you drive past the rail loading facility you will see a pile of coal building.

yeh I was wondering why someone hadnt spotted that black pile. or is it photoshopped? (j/k)

[Monkey Poms]

Now Pike are getting serious! If this machine does half of what it says on the tin (record advance rates of 56 - 72 meters per shift have been sucessfully achieved), Pike will still have a problem shifting that amount of coal production to the washer through the flumes. This machine is cheap at twice the price! Picture attached below (its a beast of a machine).

Monkey Poms

"The Alpine Bolter Miner ABM 20 is designed for rapid entry roadway development.
It is basically a widehead continuous miner incorporating special design features for coal cutting and loading.
The outstanding feature of the ABM 20 is its proven ability to simultaneously cut and bolt and so dramatically lift development
rates. It is the first such production machine, available to coal miners anywhere in the world.
VOEST-ALPINE’s emphasis has been on integration of well proven technology into one machine which gives better advance
rates. All of our experience as a leading mining machine manufacturer has been put into this innovative concept.
Bolting rigs are an integrated part of the ABM 20, and up to four roof bolters and two rib bolters can be fitted. Roof bolters are
mounted tiltable to the stationary frame of the machine. Bolts can be installed within 1.9 m of the face.
Record advance rates of 56 - 72 meters per shift have been sucessfully achieved".

GENERAL:
Total weight approx. 80t
Overall length 11.0m
Total installed power 492 kW at 1000 V, 50Hz
Overall width in operation 4.9/5.2m
Overall height in operation 2.15/2.35/3.00m
Cutting Profile:
Shape of profile rectangular
Working height 2.3-3.2/2.6-3.6/3.3-4.5m
Working width 4.9/5.2m
Retraction facilities
(hydraulically operated) 2 x 0.25m
Drum diameter 1.15m
Drum speed 25rpm
(1.5m/s)
Sumping speed 0.02–0.05m/s
variable (20–50mm/s)
Max. vertical cutting (shearing) force 300kN
Installed cutting power 270kW
Sumping aid longitudinal hydraulic slide
Bolting system:
Distance roof support to face approx. 1.20m
Distance drill rig face (center) 1.9m
No. of bolts/W.strap up to 8
Bolt length (single pass
at 2.2 m cutting height) 1.8mBolt length (single pass
at 2.5 m cutting height) 2.1m
Rib bolter left and right
Loading System:
Loading device 2 x conventional spinners
Loading capacity 20–25to/min
Loading width 4.2–5.1m
Installed power (electric) 2 x 36kW
Conveyor System:
Chain width 760mm
Chain speed 2.1m/s
Conveyor capacity 20–25to/min
Tramming:
Tramming speed 5.5/11.0/22.0m/min
variable
Ground clearance 230mm
Ground pressure 20N/cm2
Dust Suppression:
Dust collection integrated
Scrubber system and fan (optionally)

KEY FEATURES:
Faster development due to simultaneous
cutting and bolting.
I Support canopy behind the cutter drum
provides operator safety and stability.
I Low pick tip speed reduces dust generation.
I High pressure water sprays.
I Ventilation at the face, removes gas and dust.
I Sumping by slide frame, so no crawler
movement or floor destruction.
I Capacity for four roof bolters and two rib
bolters.
I Bolt installation close to face, single pass
length 2.1 m (roadway height minus 0.5m).
I PLC control interlocks all machine functions,
including sump and shear control.
I Electronic level and cutting height control.
I Health monitoring.
I Fully radio remote controlled, with display.
I In outburst conditions, can be operated with
aid of video monitors at safe position.

[blockhead]

Blockhead is reasonably happy with where things are at, sure we would like to be ahead of where we are but it seems a ****load of work has been done in recent times.

The new machine on lease is obviously getting the job done, makes you wonder why it wasn't there from the start.

A good number of rats weasles and stoats were nailed (shame Finance Co Execs not on the same list) although I suspect most of them were skittled as the workers drove the hiluxes to and fro from the tunnel entrance

I give them 7.5 out of ten for the recent efforts !!

[manxman]

he new machine on lease is obviously getting the job done, makes you wonder why it wasn't there from the start.




I don't think that the ABM 20 was available at the time of the prospectus. The specs indicate that it is suited to big simple straightforward coal seams, so it probably would have just sat in the way until they were well clear of the graben. An interesting job just getting it to the coal.

And a big digital chocolate fish to Monkey Poms for posting the info.

[mouse]

:)Five metres wide, nine metres high, 50 metres cut in one 12? hour shift. That gives us 2,000 tonnes of coal per shift, 4,000 tonnes a day. 100,000 tonnes a month. I dont believe it. But where are my maths wrong? Note however, I have taken the machine to cut 9 metres height at one go. What is the cut height to be? I have no idea. :mellow:
:ohmy: The point is, we got the wrong machines to start with, but it was a reasonable choice. We did not know that we have a good coal stack in front of us. I think it is reported as 400 metres or so. This machine will cut that in a week!!!! Or am I wrong?:mellow:
:):t_down:We bought machines to cut the coal out of the chamber arrangements, and cut the roadways as an added feature. They did not cut roadways fast enough and have delayed the production targets.
:)So my concern about the problems of actually making the coal mining machinery work at Pike may have been shown to be correct. Thankfully we have corrected the problem. Or may have corrected it. We wait to see. What we do need to do as small shareholders is insist that Pike give us monthly production output. Actual coal mined. We need to put a motion in for the AGM. :p

[Robomo]

AGM: Monthly production and updates would be much more preferable than quarterly. Coal pricing volatility is much greater than what is used to be and this is reflected in the change to 3 monthly supply contracts rather than yearly and quite big swings in spot prices on a week to week basis. Once in full production the income / profit to PRC is going to change substantially month to month and this of course will influence SP significantly once steady state production is achieved and (hopefully) maintained.
Any idea when the AGM will be and where it will be held?

[temuk]

[QUOTE=mouse;313496]:) That gives us 2,000 tonnes of coal per shift, 4,000 tonnes a day. 100,000 tonnes a month.

Who needs hydro mining ????

[Dr_Who]

I think the most telling with PRC is NZO announcement of its intentions. Is NZO signaling to the market and testing the waters for a buyer for its PRC stake?

One would assume that PRC is now a potential T/O target if the sp continues to languish below $1.

[Casa del Energia]

Riddle me this, Batman,

Ok - so I thought I understood how all worked. In the recent 'dark ages' where the shareholders, public and the various secret service agencies were met with a wall of silence and in such darkness that even the mushrooms were starting to get nervous - the share price naturally drifted down.
Then the great book of revelations - all is revealed, super mining machine straight out of a Peter Jackson movie, able to completely riddle entire planets in a single afternoon, Coal on it's way to coking ovens at a 'discount' rate of $300 per tonne (did it have stoat poo in it?), not to mention the little brothers of that monstrous behemoth all nibbling away in the mountains interior . . .
… and the share price drops some more….
So tell me, please tell me - is this really planet Earth or have I wandered into a Lewis Carrol story set on a different planet. Please reply by entangled quantum particles - just to keep the bizarreness going; I wouldn't want it all to start making sense.

[Dr_Who]

Casa, PRC is a very illiquid stock and can be easily push up and down. Interesting someone came in and bought everything at 99 cents end of market match up.

[manxman]

:)Five metres wide, nine metres high, 50 metres cut in one 12? hour shift. That gives us 2,000 tonnes of coal per shift, 4,000 tonnes a day.

The specs for the ABM 20 http://www.sandvik.com/sandvik/9082/Internet/S002630.nsf/Alldocs/Products*5CContinuous*2Dmining*and*tunneling*machi nes*5CContinuous*bolter*miners*2AAlpine*Bolter*Min er*ABM*20/$file/ABM_20.pdf list a maximum cutting height of 4.5 metres but that is probably for a multipass operation. The machine dimensions indicate a maximum height of 2.3 metres without adjustment. You would probably want to mine the top of the seam first and set the roof bolts. After that you could get down and dirty just chewing out coal from the floor in multiple passes. With a nine metre high seam, you might do six passes so the 56-72 metres/day would start to look a bit on the high side. But it would still be capable of 22+ tonnes/minute cutting and loading, which could give the rest of the coal fluming system conniptions. At that it would be producing 1300+ tonnes/hour compared with the prospectus 1000 tonnes/shift. This is a serious game changing beast and if they ever get it going properly the faithful are going to make a bob or two.

[mouse]

AGM: Monthly production and updates would be much more preferable than quarterly. Coal pricing volatility is much greater than what is used to be and this is reflected in the change to 3 monthly supply contracts rather than yearly and quite big swings in spot prices on a week to week basis. Once in full production the income / profit to PRC is going to change substantially month to month and this of course will influence SP significantly once steady state production is achieved and (hopefully) maintained.
Any idea when the AGM will be and where it will be held?
AGM is scheduled, according to Catriona, to be 15 November. I think it is to again be at the mine, but not underground, in a tent. A lot of people book into the Blackball Hilton, a sort of pub, old but good food, in Blackball. It is then a 20 minute drive to the mine. Turn left and follow the stoats plus power poles, to the mine. No other instructions are needed. Look up Blackball Hilton on the internet. Blackball has 300 people and 3 pubs. But they do not have a drinking problem!

[manxman]

AGM is scheduled, according to Catriona, to be 15 November. I think it is to again be at the mine, but not underground, in a tent. A lot of people book into the Blackball Hilton, a sort of pub, old but good food, in Blackball. It is then a 20 minute drive to the mine. Turn left and follow the stoats plus power poles, to the mine. No other instructions are needed. Look up Blackball Hilton on the internet. Blackball has 300 people and 3 pubs. But they do not have a drinking problem!

That's "Formerly the Blackball Hilton". The heavy lawyers threaten to sue the bejasus out of them for trading on the Hilton name. I believe they are on Hilton Street. The food is good and the hospitality somewhere beyond. You ask for a drink, they give you a drink - no drinking problem - no problem drinking - drinking no problem - but never problem no drinking. Book early, there's not a lot of room.

[blockhead]

Don't think the AGM is likely to be at the mine, what shareholder would want to stop that big new coal chewer ? no Siree, rather be down the Hilton listening to the coal going by with my calculator

[manxman]

I forgot. The sausages are rather special.

[mouse]

I forgot. The sausages are rather special.
And the rest of the food. Of course, there is nowhere else to eat at Blackball, but it is pretty good food. The problem is the other investors are all there, drinking. Somehow the figures do not compute after a couple. But great fun. We could maybe get a Mine Workers Union Delegate to talk to us, but a mine manager would be better. Ask the Blackball Hilton. If enough ask, it may happen.

[the machine]

[QUOTE=mouse;313496]:) That gives us 2,000 tonnes of coal per shift, 4,000 tonnes a day. 100,000 tonnes a month.

Who needs hydro mining ????

but uses a heck of a lot of roof bolts whereas hydro will not use any

M

[Monkey Poms]

I think I may have been out by a couple of weeks on my estimate of August for the start of hydro mining. I think that I can live with that.
Should Mouse, who lives close to the port of Lyttleton coal export terminal, be woken up early one morning by the sound of bagpipes from a pipe band based in Dunedin, ( hired by Pike
to advertise to the nation their second export shipment ), that would be hard to take.

Pike - take a leaf out of Coal Corporation. Load the ships, cut the c**p out and save yourselves some of our money.

Monkey Poms

[mouse]

But at least tell us long suffering shareholders when the shipment is and how much coal is being exported. Plus give us a monthly update of coal extraction.

[Grimy]

I think the most telling with PRC is NZO announcement of its intentions. Is NZO signaling to the market and testing the waters for a buyer for its PRC stake?

Haven't NZO always said they want out at some stage? They have been consistant with that for years now. It's not exactly something out of the blue.

[Baddarcy]

Found the news item below on nzresources.com. There is nothing new in there, so don't know where they got the Aug 10 date from?

The LPC site is down so can't check it for ships just now.

-----------------------------------------------------------
August 10 deadline for Pike River’s second shipment
Ross Louthean — 30 July 2010


The second export shipment of coal by Pike River Coal Ltd (NZX: PRC) has been re-set for August – a month later than originally planned.

The company’s June quarter report said the shipment of 20,000 tonnes of hard coking coal would be worth about $6 million and would go to one of the company’s life-of-mine customers Gujarat NRE.

“This second shipment of development coal will attract a slightly higher discount due to higher ash levels and it being a non-specification shipment,” the company said.

On the development side two roadway tunnels are now being driven in the first hydro-mining panel, where the thick coal seam varies between 9-10 metres, and should be completed in August.

Two of Pike River’s three coal cutting machines are now deployed at the coal face. With the slower pit-bottom excavation work being completed in June, one of those machines, the roadheader, was deployed in the west to join a continuous miner.

The performance of these machines has continued to improve due to a combination of good cutting conditions, reduced roof-bolting and extension of the flumes which carry coal, to close behind the machines.

The third machine was scheduled to cut at the face during the June quarter, but this was not possible due to insufficient faces to mine and some mechanical issues.

The company has taken steps to improve the mine’s ability to achieve the current year’s production target of about 620,000 tonnes of saleable coal, by contracting additional mining equipment and contract labour and hiring additional mining staff. Achievement of this target will be dependent upon roadway advance rates.

Pike River is leasing a large re-conditioned ABM20 continuous mining machine which, together with some additional related equipment and several contract staff for the machine, will cost around $4 million for the 12 month lease period.

The start date for this machine has been brought forward five months to enable the electric drives on each of the company’s two continuous miners to be replaced by hydraulic drives. The hydraulic drives are expected to further improve performance of the continuous miners by eliminating time delays caused by electric component failures.

Three machines are planned to be cutting coal from early August, increasing to four in early 2011. Heavier wear and tear on the haulage machines while working through the graben added extra costs of about $1 M over the past quarter. Additional haulage machines have also been contracted for the next 6 months for a planned non-critical path stone drive for ventilation.

Additional mining and in-seam drilling costs have added about $1.5 M per month to Pike River’s outlays for the financial year just ended.

First hydro-mining remains on track to begin in the current quarter, expected to be mid September 2010.

Pike River remains the only coal mining company in New Zealand using in-seam drilling technology which “continues to pay dividends as a critical mine planning tool.”

A fan of in-seam drill holes has been drilled covering the area west of the graben and has confirmed the geological model as expected.

The coal seam in the current area is a good 9-10m thick and the level of roof-bolting is now back to expectations.

[Odd Fellow]

There is no Coal Transporter on the Shipping Forcast List
in Lyttelton yet for the whole Month of August,
maybe a late booking still coming?

Cheers

[Baddarcy]

Pleased to see they've added a scale to the indicative mine plan. Looks like about 765 m planned over the next couple of months - 12 m/day, (17 m/day for 5 day week) all in coal. Incidentally 3 machines from early August each doing 8 m/day = 17 m/day (5 day week). They're gonna have to nail the budgeted advance rate for this to happen.

BTW, average progress since the June 2 mine plan looks to have been about 9 m/day vs the 12 m/day planned.

Following the lead of JB i got my plastic ruler and solar powered calculator out and please correct me if i am worng, but they only have 290m to go until they are ready to start hydro mining. Given that they are currently progressing at 40m per week they should be all done in 3 and a half weeks.

Given that the map provided was as at 23 July (i.e. a week old) they should be done with the road building by about the 18th of August. So getting hydro up and running by "mid September" shouldn't prove too difficult.

[JoeBlogs]

I've thown away my pic, but that sounds about right if you're just referring to the roads associated with the first hydro panel. I was including all the other roading planned for the quarter - not sure how they plan to sequence it? Although 290 m/40 m/week = more like 7 weeks. But if you used their forecast rate of 120 m/week then 2.5 weeks is the go!

[Baddarcy]

I've thown away my pic, but that sounds about right if you're just referring to the roads associated with the first hydro panel. I was including all the other roading planned for the quarter - not sure how they plan to sequence it? Although 290 m/40 m/week = more like 7 weeks. But if you used their forecast rate of 120 m/week then 2.5 weeks is the go!

Yes your right i forgot to add that they are averaging 40m per week per machine, so with 2 machines going they are actually making 80m per week which is where i got my 3.5 weeks from :-)

[mouse]

Yes your right i forgot to add that they are averaging 40m per week per machine, so with 2 machines going they are actually making 80m per week which is where i got my 3.5 weeks from :-)
But note that the machines are scheduled to be changed from electric drive to hydraulic drive due to the maintenance problems associated with keeping the machines working. Allow at least a month for that. Per Machine? Whatever, it demonstrates the difficulties of mining at Pike River. To my view, using hydraulics to power the miners is not stupid. They already have the water in the mine for hydro-mining.
Consider for one minute. Your TV. Who controls the remote? Twenty different people or you? The more people who fiddle, the worse things get.
Next, consider a car. Is a One Owner Car better than a fleet car with 20 drivers? Of course, it is the one owner car.
Exactly the same with machines. People get to know their machine. But we cannot have each miners having his own mining machine. That was OK with pick and shovel mining, but not any more. Hence things break down. Down a deep hole!
Next, we have to put in a new ventilation shaft. It all makes Work for the Working Man to Do. As Flanders & Swann sang.

[blockhead]

Mouse ???? I presume you are being sarcastic, the hydraulic part of "hydraulic drive" will be oil (the stuff NZO looks for) not aqua pura (the stuff to add sparingly to whisky when NZO finds the other stuff I refer to)

[Baddarcy]

But note that the machines are scheduled to be changed from electric drive to hydraulic drive due to the maintenance problems associated with keeping the machines working. Allow at least a month for that.

Yes that was noted, but remember they are not going to start doing that until the after the new beast arrives, which funnily enough is also mid August. Probably timed for when the two machines have finished drilling the first hydro out. Thus allowing one of them to be replaced by "the beast" while it is being upgraded. Thus there should be no delay to actual drilling progress while it is being done

[dsurf]

I do not want to rain on the party and the new machine sounds fantastic& PRC should buy at least two. However I remeber well the "commissioning delays" "training delays" "equipment failures" " optimisation" etc etc associated with the other machines so IMO a month or two will be required to get the new machine running. Hopefully no parts will be required from Germany either. Definitely a move in the right direction though no matter how long it takes to get it up & running.

[Ian]

Quote
as an update on my previous chart while not much has happened it is showing signs of forming a pennant which, being a continuation pattern wouldnt be contrary to the idea of further gains.
http://i.investopedia.com/inv/dictionary/terms/Pennant.gif[/QUOTE]

Peat is it looking more like an Ascending triangle now ? with a possible breakout to 1.10 as long as is breaks though 1.00 soon

[Baddarcy]

I do not want to rain on the party and the new machine sounds fantastic& PRC should buy at least two. However I remeber well the "commissioning delays" "training delays" "equipment failures" " optimisation" etc etc associated with the other machines so IMO a month or two will be required to get the new machine running. Hopefully no parts will be required from Germany either. Definitely a move in the right direction though no matter how long it takes to get it up & running.

Yes i can see your point :-) I am hopeful that the fact they are leasing the machine and it comes with 4 staff members as well as the machine that they will be able to get it up and running very quickly.

[Dr_Who]

Keep an eye on the Indians now that PRC is producing.

[Phaedrus]

This is an update of the chart posted on page 345 of this thread. The RSI (using the default setting of 14 days) continues to provide excellent entry and exit signals for those wanting to actively trade this stock.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/PRC82.gif

[winner69]

Another month passes by and the OAs are priced for an even bigger miracle to happen than when I mentioned this earlier .... bear in mind that time (in theory) erodes about 1 cent of the OAs price each month.

At 14 cents probabality of being in the money next April is getting pretty small .... implied volatility is about 80% and all that will be needed.

You guys are talking of miraculous happenings ,,,,, hope so for those who bought the OAs ... I am just glad I sold my free ones for more than 20 cents

[Ian]

Implied volatility just under 70% by my calculations .. I could be wrong.. (sp 97c and options 14c) and thats about what they have been sitting around for a while now

[mouse]

:)I sent a note to Pike to find out the state of play of the ABM 20 miner. The reply is brilliant and has made my day. It is almost ready to get to work. Allow a little time for testing etc, but this looks brilliant.:)

:cool:The ABM20 has to been broken down into smaller components being being driven into the mine. It went underground up to within a couple of hundred metres of the face without any problems and it now being put back together.
This will take the rest of this week and is expected to cut at the start of next week. The rebuild is going well with no problems identified.:)
Peter:D

[Hoop]

Thxs Mouse for your time and effort to inform the rest of us on ST.
Much appreciated..:)

[Monkey Poms]

Good news Mouse.
When I take things to bits and put them back together again I always seem to have a few parts left over. ( Boeing would never employ me ) Hope Pike won't have the same problem!

Monkey Poms

[Baddarcy]

:)I sent a note to Pike to find out the state of play of the ABM 20 miner. The reply is brilliant and has made my day. It is almost ready to get to work. Allow a little time for testing etc, but this looks brilliant.:)

:cool:The ABM20 has to been broken down into smaller components being being driven into the mine. It went underground up to within a couple of hundred metres of the face without any problems and it now being put back together.
This will take the rest of this week and is expected to cut at the start of next week. The rebuild is going well with no problems identified.:)
Peter:D

Thanks Mouse, that does clear a few things up for me too. There was a comment in the Quarterly report that said they would have 3 machines working in early August. Given one machine was beign upgraded i thought it was just a typo. It didn't occur to me that the beast was already on site. Also unfortunately probably means the guy that died in the car crash was one of the beasts handlers.

[Baddarcy]

Another month passes by and the OAs are priced for an even bigger miracle to happen than when I mentioned this earlier .... bear in mind that time (in theory) erodes about 1 cent of the OAs price each month.

At 14 cents probabality of being in the money next April is getting pretty small .... implied volatility is about 80% and all that will be needed.

You guys are talking of miraculous happenings ,,,,, hope so for those who bought the OAs ... I am just glad I sold my free ones for more than 20 cents

Not sure i agree, i think the value of the options are linked to what the price of the heads will be on 24th April 2011. For the heads to not be worth $1.40 in 8 and half months time, then something serious would to have had to gone wrong at the mine.

Given recent news it seems to me that finally the plan seems to be coming together.

[digger]

Not sure i agree, i think the value of the options are linked to what the price of the heads will be on 24th April 2011. For the heads to not be worth $1.40 in 8 and half months time, then something serious would to have had to gone wrong at the mine.

Given recent news it seems to me that finally the plan seems to be coming together.

I would not write off the OA,s yet. It would be negative for the OA,s to be out of the money on 24/4/11 so if that looks like it could happen PIKE could well issue a new option that the OA,s held the right to take part in IMHO. NZO did this once and the second option was successful.No garantees this will happen but the idea needs to be kept somewhere in the background.
Pike is slowly coming together.If i were NZO i certainly would take my time about selling as i still say it will be PIKE in the next few years that will be NZX big winner as the problems slowly get behind us. Most of the future success will come about from the gaining experience of mining.

[mouse]

Thanks Mouse, that does clear a few things up for me too. There was a comment in the Quarterly report that said they would have 3 machines working in early August. Given one machine was beign upgraded i thought it was just a typo. It didn't occur to me that the beast was already on site. Also unfortunately probably means the guy that died in the car crash was one of the beasts handlers.
We should of course be pretty happy about the ABM 20. It should change the output in a quite dramatic manner. However, it has to be assembled and then start work. There will be some teething problems so it must be at least a month, and maybe two or three months before it is fully doing its stuff. I am very happy with the way things are going at the coal face. We have new equipment and are modifying old stuff, for example the hydraulic drives, to get better production. The new managers they have at the mine seem to now be in charge and getting production up. With the right equipment.

[Hoop]

No I wouldn't write off the OA's either ..Digger...quiet the contrary.

The OA.s are governed by mathematical formula with the main variables being the PRC share price Time and volatility(markets perception of possible shareprice movement). Time is an ordered variable but the other two variables can move freely in any direction and suddenly.

The risk and reward effects the volatility variable from here on until 24/4/2011....an example...if the share price flat lines around say 97c for the next 3 months but investors can see PRC up and running and producing heaps of coal by year end and they all perceive that the market will re-rate PRC shareprice before the exercise date then the volatity figure will increase to 83% to keep the OA's price around that 14c level by November 2010.

However...as Winner has said the high volatility is a high risk.

At the moment the volatility is 67% been at this level for a while now so the risk is not too bad (I agree with Ian here).

Another example...If the PRC share price stays the same and the volatility stays the same the OA's will lose about 1.5c a month ..the time is the enemy here.

The reward side to the OA risk is when the market re-rates the PRC share price before exercise date...two factors will change the volatity figure. Share price Momentum and share price increase. A rise in PRC share price will drop the Volatility figure because the market perception of that shareprice has been realised but if there is extra momentum which propells the shareprice beyond market perception the volatily will not drop as much.
An example if the PRC share price is at 135c by the 24th of November then the OA's at today's volatility rate of 67% will be worth 28cents (double),..... but if the market perception is that the PRC of 135 is near its full value for now the market may re-rate the volatility back to say 50% and the options will be worth 23c.

so as you can see from these examples.......if the PRC share price breaks out ...an options play party commences, and Hoop will be there :).

[JoeBlogs]

I don't think probability based calculations are that helpful here - it's more of a hit or miss thing - if we get 80,000 tonnes per month by May, S.P. should be $1.75-$2.25, if not, the options will more than likely close out of the money. I'm banking on the former, but I'm aware of the substantial risk.

Just read Baddarcy's last post, and that's exactily how I see things too.

[Ian]

Yes agree Joeblogs- I hold both heads and options and in my opinion there is a lot more upside potential than there is downsize risk. There is still risk but given the current SP for me it’s worth the risk.

[winner69]

The volatility of the heads is currently <35% (and the zonks the OAs were priced at 30-40% implied volatility) so with the OAs priced with an implied volatility of 70% or whatever it is the holders are expecting miracles.

If the market is 'forward looking' and all these future events are a certainty then why isn't some of the future benefits priced into the current shareprice?

Thats the point I am trying to make ... and like Hoop if the miracle does start to unfold then that is the time to be in ... to my of thinking buying the OAs at 14 cents today is the way to join the game

[Ian]

The standard Black Scholes model assumes the volatility is equally distributed. If you believe PRC stock has an equal chance of going down or up and by the similar amounts then yes the OA’s are overpriced based on current volatility.
Markets are forward looking but everybody’s view of the future is different. Rightly or wrongly I (and the market) current put a premium on the AO price, above the Black Scholes model, based on the belief that the stock price is undervalued and or there is greater upside potential.
Is it better to wait and see if the upside potential happens ? possible, but given my view I’m prepared to have some of my portfolio in AO. Time will tell. It’s just my view and I’m prepared to back it (to some degree) I’m not 100% in AO but I’ve got at least a very big toe in the water
Thanks for the comments thou

[Billy Boy]

I believe that once production has lifted and is steady, then all else will naturally follow.
Options and all.
Indications are that this could (repeat Could) be the case by years end. Then the game
changes. Charts ??, Volatilaty %%?, etc. Clean the blackboard and start again.
Short term Traders will revert to plan B and so on.
India is the one to watch. China .... Well.... yes ??

BB:)

[Beagle]

http://www.nbr.co.nz/article/pike-river-increases-cash-burn-127395

Company may need to mine investors pockets YET AGAIN, surely not, how many times will that make it ? Isn't their credibility allready on a knife edge, surely the market would completly reject yet another cash issue due to yet more production delays and higher cash burn ?

[blockhead]

Didn't really need FB to alert us to that though, its simple maths really, there are a mountain of costs in running that place so sooner or later the cash raised was going to run out if there weren't a few rupees going in the Bank. It will be close but if there are no delays I reckon the rupees will be rolling in before the hand needs to go out again.

Hope so anyway !

[Balance]

http://www.nbr.co.nz/article/pike-river-increases-cash-burn-127395

Company may need to mine investors pockets YET AGAIN, surely not, how many times will that make it ? Isn't their credibility allready on a knife edge, surely the market would completly reject yet another cash issue due to yet more production delays and higher cash burn ?

PRC will continue to treat small shareholders with the contempt they so richly deserve for their blind faith in the management.

If they need cash, what are shareholders to do? Say no and watch the company go into liquidation?

They have got you by the short and curly.

[Beagle]

I will hold my tongue - save to say that PRC will continue to treat small shareholders with the contempt they so richly deserve for their blind faith in the management.

Yeah, thankfully I've managed to also dodge the PRC B.S. ever since floating, more by good luck and natural scepticism than a through understanding of the coal mining process though......but then again maybe I'm not the only one short of a few good idea's on how to run a sucessful mine...

If they ever manage to consistently achieve 1 million tons per annum I might re-think the matter, but I for one won't be holding my breath !!

Lets face it without NZO's small mountain of cash ex Tui, this company would never have had the opportunity to mine investors for the recent $90 million. Straight out of one black hole, (Tui) and down another PRC ?

The company looks to be in extremly difficult financial circumstances if they can't ramp up production, surely NZO won't pump even more money into the company ? Throwing good money after bad ?

Thank God I am not a shareholder in this company who are world class at mining...something, its called "investors pockets"

[mouse]

I am surprised that Pike may run out of cash in September, NBR report. I cannot see where this is detailed in their quarterly report. Can someone help with the maths please? It appears that the $90 million cash raised, 31 March 2010 quarterly report, would provide a cash buffer of $18 million. My reading of the cash buffer is it starts 'buffering' in late August. Which should be then augmented with the cash from coal exports. How do others see it? :confused:

[Lion]

Relax Mouse, they have enough cash

Rampers' last gasp.

[Corporate]

I haven't looked at the figures for a while but I remember the bugger being a little light...maybe enough for a few months no production...

[Monkey Poms]

... You are a Japanese buyer of Coking Coal, your mission to secure 300,000 tons of coal to meet a given specification to make metallurgical coke. Options to purchase the full amount of coal from any of the mines as per below attachment (see Typical Metallurgical Coke Analysis Sheet picture below).

2nd option, to blend a number of coals to match the specification of the coking coal required. Fortunately for the buyer he has access to a coal which has failed to make the grade as a coking coal therefore sold as steam coal, half the price of Coking Coal. This steam coal failed to make the grade to become a sought after coking coal on a number of points.

The main criteria:
Ash level too high at 16% (Pike's ash = 1%)
Short on the swell (FSI) 5.5% (Pike's FSI 8.5% to 9%)

Hmmm... I'll buy
200,000 tons lower grade at US $100tn = US $20,000,000
100,000 tons premium grade at us £200tn = US $20,000,000
Total cost of coals purchased = US $40,000,000
+ Nominal cost for blending

Compared with 300,000 tons of coking coal x US $200 = US $60,000,000

"Mr Yamanaki, after studying the excellent coking coals from the various mines on our chart, not one of them fits the bill to be able to blend at a ratio of 2:1".

Mr Yamanaki pauses for a moment, "Sheila (Australian), get me that ginger kiwi from Pike on the phone first thing in the morning. Im off now for a game of golf and a couple of sakis. Just saved the company US $20,000,000. Thats why they pay me the big bucks".

This exercise is what happens within the offices of steel makers all over the world. All the numbers in this example are rounded off to make it simple.

The next Pike cargo because of it being out of speck, possibly due to washing 50% stone, 50% coal from the tunnels, to give the washer lads something to practice on whilst waiting for hydro to commence, will be price discounted to the Indians.

If anyone can obtain a coal analysis certificate for the shipment I will bet £1 to a piece of s**it that the ash level, high by Pike standard will be lower than the coals produced by any of the mines on the list.

Pike is a premium coking coal, the price Pike receives especially over the next couple of cargos should reflect this. It will be touch and go whether Pike may need to go back to the market for a small amount of capital again.

Gordon, no favours to NZO or the Indians.

Monkey Poms

[JoeBlogs]

Thanks for that Monkey Poms, very interesting stuff. I doubt we will see cashflow problems or they surely wouldn't have advanced all this not critical expenditure. People are just (understandibly) jumpy.

[Hoop]

My 2 cents opinion is that the management has looked to the future and have realised that the 24 April 2011 is not far away and they have recently "lit a fuse" under their own backsides to get up to speed and play catch up incurring extra expenditure. OK to play catch up increases the expenditure side of the balance sheet but without major logistic problems more coal is mined to counterbalance that extra expense. With all this extra machinery down the mine it may resemble Queen St at rush hour...

This crowd obviously don't treat their shareholders very well ...history as shown that the only time PRC management plays nice with their shareholders is when the have their hand out wanting money.

Exercise date for the options is 24 April 2010..so from after the Xmas holidays in 2011 for the following next 3 months we can expect PRC management to be our best friend and oozing with suffocating shareholderly love :p and a bearer of perpetual frequently flowing good news...$80,352,343 and 75 cents of our moneys worth to be exact.

Why the sudden hurry up now????....my suspicious mind would say ...one of their plans would be ...If very good news coming out a month or two before the Options expire date that PRC produced more coal than estimate in the last quarter, that would make certain shareholders would exercise their options....ehh

Disc: overweight in PRC

[swissboy]

Agree with you totally Hoop. This Company does treat it's S/H sh...y, I am also overweight PRC, PRCO,PRCOA,and I am also concerned. Now if they actually outperform their latest promisses,whilst excess above planned expenditure is happening this could be interpreted as them dooing everything at a faster pace to improove the situation, so all is not lost yet.

[dsurf]

My take is that the new machine is required to ensure another shipment is possible in Sept. This means they are not reliant on hydro mining which may take a while to ramp up. The cost of mining with the new machine is more than hydro mining but more importantly they do need the cash. With production so close I am sure they could obtain short term bridging finance (from a bank not SH) for a month or two. Understandably people are jittery after waiting years but patience is required. The SP will rerate very quickly when production is steady and there is a shipment every month so in Feb/ Mar2011 I am picking a SP of $1.70 and oa's at 40c.

ps Black Scholes shortens to BS

[Dr_Who]

My take is that the new machine is required to ensure another shipment is possible in Sept. This means they are not reliant on hydro mining which may take a while to ramp up. The cost of mining with the new machine is more than hydro mining but more importantly they do need the cash. With production so close I am sure they could obtain short term bridging finance (from a bank not SH) for a month or two. Understandably people are jittery after waiting years but patience is required. The SP will rerate very quickly when production is steady and there is a shipment every month so in Feb/ Mar2011 I am picking a SP of $1.70 and oa's at 40c.

ps Black Scholes shortens to BS

You are on to it Dsurf.

Any minor short term problems with machinery has already been factored into the equation by the analyst.

[Mr Tommy]

Coal ships soon will be lining up to come into Lytleton port ....

GENCO LORRAINE Cashin Quay 1 16/08/10 TBA - Unknown - 18/08/10 TBA Singapore ISS-MCKAY LTD COAL
KANPUR Cashin Quay 1 17/08/10 TBA Sea 19/08/10 TBA Sea ISS-MCKAY LTD COAL
NIREFS Cashin Quay 1 19/08/10 TBA - Unknown - 21/08/10 TBA Sea WILHELMSEN SHIP SERVICES COAL

[mouse]

Taking the Quarterly Activities Report to 30 June 2010. Daily advance rate, in metres per day for each machine, so multiply by TWO. Is Current 8metres per day. Times 2 equals 16 metres per day.
So 16 x 5.5metres road width x 9 metres height equals 790. This is tons of coal, Monkey Poms, one cubic metre equals one tonne.
Daily production then is 790 tonnes, multiply by 23 working days in month equals 18,170 tonnes of coal per month.
AFTER HYDRO ALLOW SAY 13 metres per day.
We then have 26 x5,5metres x 9 metre height equals 1300 tonnes, approx.
Daily production then, this is during start up of hydro mining, is 1300 tonnes times 23 days equals 30,000 tonnes of coal per month.

These are very approximate figures, using the information in the Quarterly Report. Our cash position then becomes, very approximately, $6 million per month before hydro and $9 million after hydro mining. Not quite sure how much of that is 'Mine Gate' cash and how much transport cash.:confused:

Your ideas please. Note, this is only using figures from Pike Quarterly Report.

[friedegg]

my step brother is coming out of a 6 month course of mining in reefton soon and hes probably going to look at pike for a job,so if he does i can keep you guys posted on how busy his day was

[Silverlight]

The options have 263 days to go, thats 263 days to above the $1.25 strike plus what you pay for them. So 14 cents $1.39, just to break even ahead of buying the shares, plus in that time the shares will have retured 40%, just so your options break even

263 days is not that long, where were we 263 days ago? the PRC AGM.




We expect to be through the rock graben, which is about 100 metres wide, and back into coal in
early January 2010.



When did we get through the graben?

20 April 2010 PIKE RIVER ACCESS ROADWAY THROUGH GRABEN INTO COAL

263 days is under 9 months.


Headshare vs options? can PRC increase its value by 160m in 9 months?




in Feb/ Mar2011 I am picking a SP of $1.70



Thats 300% return on the options. We need some pretty good news and zero bad news for this to happen.

[freddy]

So 16 x 5.5metres road width x 9 metres height equals 790.
Your ideas please. Note, this is only using figures from Pike Quarterly Report.

all the pictures in all the reports show that the tunnels are not very high like about 3 mters not 9.

[digger]

my step brother is coming out of a 6 month course of mining in reefton soon and hes probably going to look at pike for a job,so if he does i can keep you guys posted on how busy his day was

Well lets hope your step brother has more business understanding than his step brother or else he will not last long with any company if he talks company business outside what is acceptable.He should only tell you about company releases or other info in the public arena that you may have missed.
I hope your step brother gets this jobs and keeps it.

[friedegg]

haha digger,i dont get on with him much so i wont get anything probably,but good to see they have facilities in place down there to get an educated workforce be it coal or gold

[mouse]

all the pictures in all the reports show that the tunnels are not very high like about 3 mters not 9.
Good point Freddy. My calculations were for an approximate height of coal of 9 metres. If the progress is only for 3 metre high, then production is obviously only a third of my calculations. And the income is also reduced by one third. It will take months though to get the third coal shipment, which is why I think my 9 metre guess is approximately correct.

[the machine]

Good point Freddy. My calculations were for an approximate height of coal of 9 metres. If the progress is only for 3 metre high, then production is obviously only a third of my calculations. And the income is also reduced by one third. It will take months though to get the third coal shipment, which is why I think my 9 metre guess is approximately correct.

maybe the roadway only has to be cut 3m high, being at the bottom of the vein and then the hyrdo mining takes out the top 6m or so above the roadway.

M

[stanace]

Well lets hope your step brother has more business understanding than his step brother or else he will not last long with any company if he talks company business outside what is acceptable.He should only tell you about company releases or other info in the public arena that you may have missed.
I hope your step brother gets this jobs and keeps it.

Why would this be a problem? Do all coal miners have to sign confidentiality agreements if they work for a public compay? I worked for a BIL subsidiary for years, never had to do anything like that.

[Logen Ninefingers]

Well lets hope your step brother has more business understanding than his step brother or else he will not last long with any company if he talks company business outside what is acceptable.He should only tell you about company releases or other info in the public arena that you may have missed.
I hope your step brother gets this jobs and keeps it.

I think he should be able to say how busy his day was.
"I guess it's a full on slog up at the mine these days, must be exciting being part of a new mine heading towards full poduction aye? Hows it all going?"
"Sorry, I can only tell you about company releases or other info in the public arena that you may have missed".

[JoeBlogs]

Haha,

Mrs Bob: 'How wass your day Bob?'

Bob: 'Please consult my solicitor for a legally compliant run-down on my day's activities'

Mr Daftwager: 'My client attended work for a nominal period today during which he carried out duties of a nature befitting a coal miner, and consumed his lunch. For details of Bob's lunch, please fill in confidentiality waiver 9X3 and expect a reply in 6-8 weeks. Details of his coal mining activities will be released in accordance with stock exchange listing rules by the company in due course.'

[Balance]

Mining companies - especially those in exploration - make friends with the engineers at the local pub and get the news first.

Simple.

[Logen Ninefingers]

If the company doesn't ship coal in August, or hydro-mining is further delayed, or PRC need to go back to the well and extract further funds from shareholders, please remember not to write one word of protest or criticism. If you think waiting until the last day of July to tell you there will be no July shipment is a bit on the nose, just remember that you an impatient, ungrateful nothing with the comprehension skills of an ant. If you do write anything at all critical, be prepared to be lambasted by fellow posters decrying your impatience, impertinence, ignorance, ingratitude, ineptitude, and a thousand other faults. Get ready for a barrage of praise for the heroic management team, get ready for a diatribe on the notorious difficulties facing start-up mining projects, get ready for a full defence of the companies disclosure practices. Do not, under any circumstances, suggest that there should be any accountability for the numerous huge delays in meeting stated milestones.

[mouse]

What stated milestones? It was just a misspeak.

[Logen Ninefingers]

Was the recent NBR article based on figures taken from the quarterly report?

[JoeBlogs]

You're dead right Logen, but alas, you're flogging a dead horse. I've made my concerns clear to PRC, I'll continue to watch their disclosure practices closely.

[Logen Ninefingers]

You're dead right Logen, but alas, you're flogging a dead horse. I've made my concerns clear to PRC, I'll continue to watch their disclosure practices closely.

Watch all you want: apparently disclosing that there will a July shipment, and then disclosing on the last day of July that there won't be is fine. So if that's fine then I doubt you'll ever be able to come up with something that isn't considered fine. If they need to come back to shareholders for more funds, that's when the bowing and scraping and disclosing and buttering up will take place.

[JoeBlogs]

I never said I though that was fine, and my complaint to NZX outlined my concerns. The fact is you would be hard pressed to establish materiality in this case, and that is shown by the negligable effect on the shareprice. As I said, I've got a close eye on them, and I don't just watch.

[Balance]

If the company doesn't ship coal in August, or hydro-mining is further delayed, or PRC need to go back to the well and extract further funds from shareholders, please remember not to write one word of protest or criticism. If you think waiting until the last day of July to tell you there will be no July shipment is a bit on the nose, just remember that you an impatient, ungrateful nothing with the comprehension skills of an ant. If you do write anything at all critical, be prepared to be lambasted by fellow posters decrying your impatience, impertinence, ignorance, ingratitude, ineptitude, and a thousand other faults. Get ready for a barrage of praise for the heroic management team, get ready for a diatribe on the notorious difficulties facing start-up mining projects, get ready for a full defence of the companies disclosure practices. Do not, under any circumstances, suggest that there should be any accountability for the numerous huge delays in meeting stated milestones.

Right on, LN.

That's what you get on this forum for stating the obvious, urging posters to stand up for their rights and demanding accountability from the directors and management.

But mushrooms like the dark, don't they?

[blockhead]

I make no excuses for PRC's disclosure (or lack of) but if you posters don't like it why don't you get out of it ???

I think I know why, there is a horrible thought lurking around the back of your mind, it just might come right and be very succesful !!!

Its called risk and reward

[777]

But blockie with their downramping it is giving others time to accumulate more.

[Balance]

But blockie with their downramping it is giving others time to accumulate more.

Yup - keep accumulating and keep waiting and waiting.

Meanwhile the real coal miners in Australia (CC. CEY, GCL etc) are soaring out of sight.

[Logen Ninefingers]

I make no excuses for PRC's disclosure (or lack of) but if you posters don't like it why don't you get out of it ???

I think I know why, there is a horrible thought lurking around the back of your mind, it just might come right and be very succesful !!!

Its called risk and reward

The disclosure thing is one part of it, the other part of it is the lack of accountability around meeting targets, and the way the (shareholders) money is being spent in the meantime.
If your attitude is that as long as coal starts coming out of the ground on a regular basis at some stage then it doesn't matter how many years pass and how many millions are blown until that starts happening, that's just handing PRC a blank cheque. That's just incredibly wasteful. It shouldn't be about the thing eventually "coming right".

[Balance]

The disclosure thing is one part of it, the other part of it is the lack of accountability around meeting targets, and the way the (shareholders) money is being spent in the meantime.
If your attitude is that as long as coal starts coming out of the ground on a regular basis at some stage then it doesn't matter how many years pass and how many millions are blown until that starts happening, that's just handing PRC a blank cheque. That's just incredibly wasteful. It shouldn't be about the thing eventually "coming right".

Can you imagine the outrage a contractor is constructing a new motorway but it is subject to delays, horrendous costs over-runs etc - but the contractor just keeps quiet about progress but keep coming to taxpayers for more money?

Funny how Pikers cannot see how they are being treated by PRC?

[Logen Ninefingers]

Apparently the 2nd shipment, whenever it does go to Gujarat NR, will be worth approximately $6 million. This shipment is of development coal and is discounted because of a high ash content.

Wow, everyone knows that that in order to get to the 'good' low ash content coal, the valuable stuff, first you have to mine out a lot of 'development' high ash content coal.
Does anyone know how many million tonnes of 'development' coal are down the mine? I believed from the PRC website that we were sitting on 19 million tonnes of premium stuff....guess I was wrong.
So long-suffering Gujarat NR, who have stuck by PRC and offered up more dosh to keep the mine running, they are getting some discounted 'development' (nudge, wink) coal.
....and other shareholders (i.e. mugs) subsidise the thing through the profit from the shipment not being maximised.

[blockhead]

Balance, what do you see as a better way PRC should have done it (other than providing regular info) they ran into problems you and a few other posters would have forseen (you are more clever than them), they had problems with machinery, they didn't predict that particular graben, ok it happened. Should they have thrown their hands in the air and said "give in, too tough", man you would have been moaning then.

The way I see it, they have they confidence there is good quality plentiful coal there, they have a sale for it, they are doing the right thing. Sure they made mistakes but I bet the Oz miners you refer to (above) didn't have plain sailing from day one either.

[Logen Ninefingers]

From the PRC website:

About Our Coal
Pike River is mining premium metallurgical hard coking coal, in international demand by steel making mills and coke-making plants. Pike River coal sells for the same price as benchmark premium hard coking coal from Australia.
Pike River coal has the lowest ash content of the world's coking coals at one per cent (once processed through the coal preparation plant) and it also has very high fluidity. The selling advantage of low ash coal is that it uses less energy and results in less wastage in the process of manufacturing coke. Coke is an essential ingredient in the steel making process and is essentially carbon with some residual ash.
When coal is heated at super high temperatures to form coke, ash is a by-product which has to be separated and disposed of. Fluidity is a measure of how well the coal runs at high temperatures, with Pike River coal acting like a glue to bind other coals together.

......the above is all well and good, but let's factor in the high ash 'development' coal. Why no mention of the high ash development coal? Why can't I find the term 'development coal' anywhere? Is the term 'development coal' an industry recognised technical term? It seem's not, judging from my investigations.

[Logen Ninefingers]

Ahmedabad, July 20th, 2007 Sri Arun Kumar Jagatramka, Vice Chairman and Managing Director of GNCL, India's largest producer of LAMC and the first Indian company to have acquired coal mines in Australia, in a related development has joined the Board of Pike River. "We are one of the largest cornerstone investors in the company and have a very potent business agreement - Gujarat NRE has the firm Coking coal off-take for life of the mine for coal produced by Pike River Coal Company and therefore, when the Board requested that I share my expertise in the field of global coal dynamics and personal mining experiences in Australia I was only too happy" said Sri Jagatramka.
He has a reason to be happy. Pike River coal is understood to have the lowest ash and highest fluidity of any hard Coking coal in the seaborne trade. These attributes are valuable in the production of steel, having a high energy content and allowing other lower grade coals to be blended. Pike River coal, known as a "sweetener" in the industry is extremely low ash and relatively inexpensive. It is used as a blender, or a sweetener and for example, when blended with the coal mined in Australia by Gujarat NRE in its own mines, the resultant increase in the price realisations is manifold.

.....and when you are shipping all that high ash 'development coal' , the price goes from relatively inexpensive to positively dirt cheap!!! Any particular reason why the coal with the lowest ash and highest fluidity of any coal going around would also be relatively inexpensive? Seems to defy the natural laws of supply and demand.

[Balance]

Ahmedabad, July 20th, 2007 Sri Arun Kumar Jagatramka, Vice Chairman and Managing Director of GNCL, India's largest producer of LAMC and the first Indian company to have acquired coal mines in Australia, in a related development has joined the Board of Pike River. "We are one of the largest cornerstone investors in the company and have a very potent business agreement - Gujarat NRE has the firm Coking coal off-take for life of the mine for coal produced by Pike River Coal Company and therefore, when the Board requested that I share my expertise in the field of global coal dynamics and personal mining experiences in Australia I was only too happy" said Sri Jagatramka.
He has a reason to be happy. Pike River coal is understood to have the lowest ash and highest fluidity of any hard Coking coal in the seaborne trade. These attributes are valuable in the production of steel, having a high energy content and allowing other lower grade coals to be blended. Pike River coal, known as a "sweetener" in the industry is extremely low ash and relatively inexpensive. It is used as a blender, or a sweetener and for example, when blended with the coal mined in Australia by Gujarat NRE in its own mines, the resultant increase in the price realisations is manifold.

.....and when you are shipping all that high ash 'development coal' , the price goes from relatively inexpensive to positively dirt cheap!!! Any particular reason why the coal with the lowest ash and highest fluidity of any coal going around would also be relatively inexpensive? Seems to defy the natural laws of supply and demand.

Are you expecting a rational reply from a Piker?

Of course it's just teething problems - the really good stuff is on the way.

Soon.

Maybe next month.

Possibly next year.

Er - maybe never.

[Baddarcy]

Deutsche Bank - August 2010
Deutsche Bank initiated research on 5 August 2010 with a 12 month price target of NZ$1.39 using a dcf methodology and a BUY recommendation. Contact person grant.swanepoel@db.com

Macquarie - August 2010
Macquarie updated research on 5 August 2010 with a 12 month price target of NZ$1.18 and maintained their OUTPERFORM recommendation. Contact person brooke.bone@macquarie.com



Forsyth Barr - August 2010
Forsyth Barr updated research on 3 August 2010 with a dcf valuation of NZ$1.22 and an ACCUMULATE recommendation. Contact person andrew.harvey-green@forbar.co.nz

[mouse]

Deutsche Bank - August 2010
Deutsche Bank initiated research on 5 August 2010 with a 12 month price target of NZ$1.39 using a dcf methodology and a BUY recommendation. Contact person grant.swanepoel@db.com

Macquarie - August 2010
Macquarie updated research on 5 August 2010 with a 12 month price target of NZ$1.18 and maintained their OUTPERFORM recommendation. Contact person brooke.bone@macquarie.com



Forsyth Barr - August 2010
Forsyth Barr updated research on 3 August 2010 with a dcf valuation of NZ$1.22 and an ACCUMULATE recommendation. Contact person andrew.harvey-green@forbar.co.nz
All of the above recommendations seem to recommend that the "Options' are valueless. Comments please?

[digger]

All of the above recommendations seem to recommend that the 'Rights' are valueless. Comments please?

To speak technically i assume you mean 'Options' are valueless. Rights around the NZ sharemarket world refer to the rights that arise from a cash issue.
Now it comes down to do you believe these valuations. Are they done on past preformance if so probably about correct.Before you sell your options though it would pay to ask if you think production will get well underway in the next 12 months.If things are up and running in top gear by then the options could be nearing the dollar.
Your call.

[Lion]

To speak technically i assume you mean 'Options' are valueless. Rights around the NZ sharemarket world refer to the rights that arise from a cash issue.
Now it comes down to do you believe these valuations. Are they done on past preformance if so probably about correct.Before you sell your options though it would pay to ask if you think production will get well underway in the next 12 months.If things are up and running in top gear by then the options could be nearing the dollar.
Your call.

Well said digger, I agree with you again. What's with all this talk of Black Scholes and volatility and options losing value at so many cents per month??
It entirely overlooks the extreme likelihood of Pike being in high production by April next year. Really, how can they not be? The coal's there, the machinery is there, the good prices are there, the skilled workers are there, the transport chain is there, the keen buyers are there, the funding's there, the drive to get the options in the money is there - really, everyone wants to make money here. The way some posters carry on here, you'd think there is a conspiracy by management to fail. Durrr!! No way.

And analysts, well fair go, how often are they right? And who are they really working for? Just look at the first four letters of their name.

Bring on those dollar options I say!

[Unicorn]

Well said digger, I agree with you again. What's with all this talk of Black Scholes and volatility and options losing value at so many cents per month??
It entirely overlooks the extreme likelihood of Pike being in high production by April next year. Really, how can they not be? The coal's there, the machinery is there, the good prices are there, the skilled workers are there, the transport chain is there, the keen buyers are there, the funding's there, the drive to get the options in the money is there - really, everyone wants to make money here. The way some posters carry on here, you'd think there is a conspiracy by management to fail. Durrr!! No way.

And analysts, well fair go, how often are they right? And who are they really working for? Just look at the first four letters of their name.

Bring on those dollar options I say!

Options losing value at so many cents per month
Options are cheaper than heads, so buying options allows money to be kept in the bank earning interest and reduces downside risk. The amount of interest earned reduces as the time on deposit reduces. The possibility of downside risk reduces as time passes.

The extreme likelihood of Pike being in high production by April
The track record to date suggests otherwise. Very few targets have been met, and in many cases there has been huge underperformance.

The coal's there. Appears to be.

The machinery is there. But it may need modification or may not perform to expectations. That has largely been the experience to date. The vital hydro mining gear is not proven at Pike River. The flumes and coal preparation plant have not run at full capacity.

The good prices are there. At present yes, in six months who knows.

The skilled workers are there. But what is needed are experienced workers, including hydro miners, delivering the planned levels of coal from this mine. They are not there yet.

The transport chain is there. But is unproven at the expected volumes.

The funding's there. I don't think so. My understanding is that PRC is reliant on income to get through to April.

You'd think there is a conspiracy by management to fail. I doubt it. But there is a track record of failure.

PRC is a company with potential. Whether that potential ever gets realised is yet to be seen. I don't think you could say it is extremely likely that PRC will perform as well as it is suggested. There is considerable risk involved in investing at this stage. Correspondingly there is potentially considerable reward, if they get things right.

Disc Hold PRC, consider them a risky investment.

[Monkey Poms]

Apparently the 2nd shipment, whenever it does go to Gujarat NR, will be worth approximately $6 million. This shipment is of development coal and is discounted because of a high ash content.

Wow, everyone knows that that in order to get to the 'good' low ash content coal, the valuable stuff, first you have to mine out a lot of 'development' high ash content coal.
Does anyone know how many million tonnes of 'development' coal are down the mine? I believed from the PRC website that we were sitting on 19 million tonnes of premium stuff....guess I was wrong.
So long-suffering Gujarat NR, who have stuck by PRC and offered up more dosh to keep the mine running, they are getting some discounted 'development' (nudge, wink) coal.
....and other shareholders (i.e. mugs) subsidise the thing through the profit from the shipment not being maximised.

Relax Logen Ninefingers, development coal minimum,

When driving the access tunnels mining engineers would calculate the angle of the tunnel and compensate to allow the extraction of coal by Hydro Mining to flow down the tunnel to the flumes. In some instances the tunnel may be driven through coal at the bottom of the seam and part of the floor, or vice versa through top of coal seam and part of the roof say 50 / 50.

I would think this 50 / 50 waste would have been taken out of the mine by some sort of dump truck then screened of any large rock boulders. The remainder crushed to say 25mm a size the washer cyclones accommodate and will then be able to separate the stone from the coal.

On the chart in my post no5696 the best of the best Australian coking coal the ash level for the Gregory 7- 3% I've bet you a £1 to a piece of **** that the forthcoming price discounted shipment of 20k to 30k to the Indian company - Gujarat, the ash level will be lower than the Gregory coal 7 - 3%. In fact i'll stick my neck out the ash level on the next shipment will be at max 4%.

It would have been easier for Pike management to have stated in the quarterly report: "We promised a 60,000 ton shipment, now we propose a smaller cargo. Your shipping costs will be higher therefore Pike will discount the shipment to help with the extra freight.

Monkey Poms

P.S. Its good to know that Gujarat are helping Pike along ...(at a price)

[dsurf]

All of the above recommendations seem to recommend that the 'Rights' are valueless. Comments please?

Analysts are reknowned for herd like behaviour and using models that contain so many generalisations based on the past that the octopus / monkey will have the same success rate. There have been many studies showing that taking the opposite advice to that provided by large banks will result in at least as good a performance as not taking it.

The range of valuations = current SP + 12 to 25%. All that tells me is that the risk to the SP is most likely upwards. The options are worth 14c today. What they are worth when they expire ( remember this date can be changed!!!) we will have to wait & see but IMO that it is pointless relying on research from brokers. All they do is update forecasts to fit what has already happened and then conservatively add a margin depending on how confident they are. The only bit worth reading on the reccommendation is the Sell or Buy. This is the bit that drives the commission from thier "sales". The fact that there is 2 buys & 1 outperform means the marketing machines will be adding to the demand side which is good if you are long.

ps Black Scholes shortens to BS

[Logen Ninefingers]

"We promised a 60,000 ton shipment, now we propose a smaller cargo."

Geez, that's not like PRC...usually they under promise and over deliver.

[Ian]

Thanks Monkey Poms - A lot of the posts are interesting and intertaining, but i do prefer a bit of rational thought based on a bit of knowledge.

[Logen Ninefingers]

While I do appreciate some technical knowledge, isn't the bulk of Monkey Poms post just pure speculation? Like the ash quantity, which seems to be a percentage plucked from out of the air.
I'm told "Relax Logen Ninefingers, development coal minimum".....and yet PRC say this is a shipment of 'development coal', and they don't give any information other than that. So who knows more about whats going on here.

[Ian]

In terms of the pay off for the options.
based on buying either $13,000 of either PRC or PRCOA at 97cents or 13c (13402 PRC, 100,000 PRCOA)
the following would be the profit/loss

The first column is the Spot price at expiry of the options
The second column the profit/loss you would make on PRC
The third the profit/loss you would make on the options.

Below $1.45 the heads are of course better than the options but once you get over the $1.45 mark the options really start to make some money, so pick where you the the SP moight be and throw your chips on the table

Profit Loss
Price at Option Expiry PRC PRCOA
0.00 -13,039 -13,000
0.05 -12,371 -13,000
0.10 -11,703 -13,000
0.15 -11,035 -13,000
0.20 -10,367 -13,000
0.25 -9,699 -13,000
0.30 -9,030 -13,000
0.35 -8,362 -13,000
0.40 -7,694 -13,000
0.45 -7,026 -13,000
0.50 -6,358 -13,000
0.55 -5,690 -13,000
0.60 -5,022 -13,000
0.65 -4,354 -13,000
0.70 -3,686 -13,000
0.75 -3,018 -13,000
0.80 -2,350 -13,000
0.85 -1,681 -13,000
0.90 -1,013 -13,000
0.95 -345 -13,000
1.00 323 -13,000
1.05 991 -13,000
1.10 1,659 -13,000
1.15 2,327 -13,000
1.20 2,995 -13,000
1.25 3,663 -13,000
1.30 4,331 -8,054
1.35 5,000 -3,069
1.40 5,668 1,916
1.45 6,336 6,901
1.50 7,004 11,886
1.55 7,672 16,871
1.60 8,340 21,856
1.65 9,008 26,841
1.70 9,676 31,826
1.75 10,344 36,811
1.80 11,012 41,796
1.85 11,680 46,781
1.90 12,349 51,766
1.95 13,017 56,751
2.00 13,685 61,736
2.05 14,353 66,721
2.10 15,021 71,706
2.15 15,689 76,691
2.20 16,357 81,676
2.25 17,025 86,661
2.30 17,693 91,646
2.35 18,361 96,631
2.40 19,029 101,616
2.45 19,698 106,601
2.50 20,366 111,586

[Ian]

yes there is a lot of spectulation out there - and pike is not doing me any favours on the stress front. So posts that have a bit of thought benind them either positive or negative are great so keep them coming. that table of mine did format very well when it came through so sorry about that

[neopoleII]

""so pick where you the the SP moight be and throw your chips on the table""

isnt the whole point of investing in shares to make money without gambling?
yes there are calculated risks, but with the information supplied by pike management, either lack of, late, or un-understandable, investing in pike is a gamble.
what they really need to do is front up and tell us what is really going on.
with the knowledge that has been supplied over the last few years........... would you buy $100,000 of pike shares with your own money?
maybe some would......... but there arent many folks out there that would, i have a spare $10,000 and am sitting on the edge of my seat looking for some real and genuine information regarding to extraction of pike coal............ there is no way i would buy shares at present for the simple reason i have lost faith in pike management.
we all know the coal is there, how much there is, and generally what its worth, but they have an unknown management, with a dismal report card and an arogance to suggest they dont care about those who funded this project.

this is sort of like the wolf, fox, sheep and shepard...........
the wolf is the board, the fox is the trader, the sheep is the investor and the shepard is the NZX and securities board.
the shepard has no teeth, just and old stick, the fox is smarter than the lot, the wolf knows the shepard cant hurt him, and the sheep.........
well, they are fodder for all of them.
just look at how the financial sector treated its shareholders......

[Hoop]

.... What's with all this talk of Black Scholes and volatility and options losing value at so many cents per month??
It entirely overlooks the extreme likelihood of Pike being in high production by April next year. Really, how can they not be?.....


Thxs Unicorn ..a quality reasoned post.:)

Lion + Others..... BS is an investor tool... You don't have to use it ... you have the option to ignore all or any investment tool..

Option pricing tools are mentioned on this thread because Pike has options and experienced investors know how these options tools work ..and it helps explain why the PRCOA price is where it is today and the reasoning why the PRCOA price have been range bound between 13 - 15c while the PRC head shares have taken off in an uptrend this last month...knowing these mechanics would have you investing in the heads not the options during this last month as I have done**.


The really good thing about using mathematical tools (TA incl) is that they are clinical and therefore the evaluated result leaves out that destructive intangible emotional bias part of the investor's state of mind... that many investors erroneously and subconsciously factor in when assessing the reward/risk of a company financial instruments whether it is shares rights options bonds or whatever.

Granted that looking at Option pricing now can end up to be totally wrong in the future ..but as you are dealing with variables each day...each day sees a different result as BS and Binomial equations and other TA tools are always in a state of flux.....Its all to do with evaluating the balance of Risk v Reward on that specific day of evaluation.

Remember no maths formula is perfect...not even the basic 1+1=2.
You have in the practical world, positve synergistic effects when 1+1= more than 2 and antagonistic effects when 1+1 = less than 2 which unfortunately many NZ companies seem able to do with ease.

** overweight in PRC
have no PRCOA atm... last time sold out in the low 20 cents..

[Ian]

I see a gamble as investing money with an uncertain outcome so almost every investment to me is a gamble; It’s just that some investments are less of a gamble than others.
Putting your money in the bank has risks just very low in comparison.
Investing in a blue chip stock is a gamble just a lower gamble the PRC.
A casino bet in gives you a more certain return than the share market on average (because the odds can be calculated), it’s just a negative return on average that’s all. (I’m guessing a few poster might say that about PRC as well)

[Dr_Who]

To speak technically i assume you mean 'Options' are valueless. Rights around the NZ sharemarket world refer to the rights that arise from a cash issue.
Now it comes down to do you believe these valuations. Are they done on past preformance if so probably about correct.Before you sell your options though it would pay to ask if you think production will get well underway in the next 12 months.If things are up and running in top gear by then the options could be nearing the dollar.
Your call.

Analyst and down rampers have forgotten some very important fundamentals in the coking coal sector. Firstly, the coking coal price is holding up very well and look to stay at good levels for a period of time. Second the coal sector is going through consolidation with China, India and even recently Thailand going on a global shopping spree.

I would hate to be short on PRC when/if they announce a T/O offer.

[Ian]

I see this all the time in business, people think uncertainty and risk is a bad thing.
Risk and uncertainty create opportunities
You make money by better understanding those risks than next person.
If the market knew with 100% certainty that the share price in PRC was going to be $2 at the option expiry date . Would we invest now?
Hell no !
Because the CURRENT spot price and option price would be just below $2 and 75c respectively. ( A little bit lower to take into account the holding cost, the rate you could get at the bank).
The risk would be gone and so would the POTENTIAL profits.

[Ian]

That doesn't give PRC management the right to keep us in the dark thou

[Monkey Poms]

While I do appreciate some technical knowledge, isn't the bulk of Monkey Poms post just pure speculation? Like the ash quantity, which seems to be a percentage plucked from out of the air.
I'm told "Relax Logen Ninefingers, development coal minimum".....and yet PRC say this is a shipment of 'development coal', and they don't give any information other than that. So who knows more about whats going on here.

Logen Ninefingers I paid a visit to Pike on the day they started to move the coal from the mine to Ikamatua. At the mine I noticed a mound of rock shale with a fair amount of coal in it
over time this mound would have grown in size and pike then would have washed the coal as i have described and as a % of the total tonnage to be loaded on the next cargo, very small.
I own and operate a dense medium coal washing plant with cyclones.
In my part of the world a mine worked a seam of coal one third of m thick and followed that seam of coal for six miles under the north sea from the start of a shift it took a miner
two to three hours travelling time to get to the coal face. The mine employed in excess of two thousand men produced around one million tons per year the cost of pumping water
to stop the mine flooding huge.

LN (Development coal minimal ) Pikes coal seam 27 times thicker than the one i described working six miles under the North Sea. I am spot on with the ash.

Monkey Poms.

[Ian]

What do you think Ascending Triangle or just wishful thinking ?

[Balance]

That doesn't give PRC management the right to keep us in the dark thou

Why not? Pikers have shouted down anyone who dare question the management and Pikers have given their 110% support to the company - irrespective of how well or how badly PRC is run. PRC is sacred.

[Beagle]

Yeah, Oil hit $82 a barrell the other day and I thought, here we go its broken a major resistance level and its off to the races for the Peak Oil theorists again, (I have some sympathy for Peak Oil Theories), so I came really close to pushing the keyboard to buy 20K NZOG at $1.26, thankfully I was interrupted by a phone call and shortly after that I remembered that one of NZOG's major so called "investments", and the continuing handbrake on this company is probably THE fundamental reason why their share price is so depressed.. which is of course PRC.

These two companies are almost inextricably linked and until PRC can actually make some decent numbers NZO will continue to languish at current levels, so wtih no dividend, what's the point ?

[bung5]

Yeah, Oil hit $82 a barrell the other day and I thought, here we go its broken a major resistance level and its off to the races for the Peak Oil theorists again, (I have some sympathy for Peak Oil Theories), so I came really close to pushing the keyboard to buy 20K NZOG at $1.26, thankfully I was interrupted by a phone call and shortly after that I remembered that one of NZOG's major so called "investments", and the continuing handbrake on this company is probably THE fundamental reason why their share price is so depressed.. which is of course PRC.

These two companies are almost inextricably linked and until PRC can actually make some decent numbers NZO will continue to languish at current levels, so wtih no dividend, what's the point ?

How does something so significant slip your mind.

[Beagle]

How does something so significant slip your mind.

Yeah I wonder myself, perhaps it was a lack of a decent coffee that morning. (note to self, must have at least two good quality cups of coffee and some decent thinking time before purchasing any shares and do not get carried away and irrational about peak oil theories).

[darksentinel]

Yeah I wonder myself, perhaps it was a lack of a decent coffee that morning. (note to self, must have at least two good quality cups of coffee and some decent thinking time before purchasing any shares and do not get carried away and irrational about peak oil theories).

Or perhaps you intentionally tried to forget the shambles that is PRC and investor-relations?

[swissboy]

If you guys dont like the treatment you get from the PRC Management why dont you simply sell your holdings and have a good night's sleep.
Together, the 2 Indian shareholders and NZOG hold more than 50 % of all shares so why should they care about ordinary Shareholders???

[Beagle]

Or perhaps you intentionally tried to forget the shambles that is PRC and investor-relations? darksentinel


There's a euphemistic term for sure....

I suspect like many investors, I find it incredibly hard work keeping up with all the vast myriad's of historic rorts, whilst contemporaneously sifting through the ones that appear to have more immediate currency, (hence the need for abundent coffee) LOL.

[macduffy]

If you guys dont like the treatment you get from the PRC Management why dont you simply sell your holdings and have a good night's sleep.
Together, the 2 Indian shareholders and NZOG hold more than 50 % of all shares so why should they care about ordinary Shareholders???

Fair point, swissboy.

I decided many years ago that trust in management was a prerequisite for remaining invested in a company.

Anything else just isn't worth the hassle as far as I'm concerned.

[mouse]

All of the above recommendations seem to recommend that the "Options' are valueless. Comments please?
I am surprised that we still have investors backing the options. The three rating agencies, or sharebrokers, whatever, have all given similar 12 month price targets. Even the Deutsche Bank figure of $1.39 indicates only a break even figure for the options. Note that these analyse the sp possibilities with the strong support of Management of Pike. They have access to the mine engineers and management, which is what we do not have except at the AGM.
Next, the options could be extended. Certainly is true, but not at the current option price. I am certain that Pike will want to raise more cash for the next mine. Hence they may well want to keep some value in the options. But ordinary shareholders must also, I would have thought, be given new options at the same time the current options are extended, maybe the lot at $2.25 a share expiring April 2013.
Summary. The options are at the present time valueless. Comments please.
Note, I have 2,600 options and 10,000 ordinary shares.

[peat]

Seems odd to me people are saying the options could be extended. whats the basis for that

investopedia definition includes "an option is the right but not the obligation blah blah blah during a certain period of time or on a specific date (exercise date).

Surely that period of time is determined at the time the option is written and isnt changeable later at whim?

[POSSUM THE CAT]

swissboy: be like this cat & never buy any in the first place it allways was a disaster waiting to happen

[mouse]

Seems odd to me people are saying the options could be extended. whats the basis for that

investopedia definition includes "an option is the right but not the obligation blah blah blah during a certain period of time or on a specific date (exercise date).

Surely that period of time is determined at the time the option is written and isnt changeable later at whim?
Pike is in the business of developing coal mines. They need plenty of cash hence extending options at a higher price could be a good method of helping to raise the extra money. One thing is certain, as a True Believer and Pike Supporter to 10,000 shares I might add, is that Pike will want more cash off me. For a certainty you understand, within the next couple of years. I shall be happy to pay up. Patriotic Duty and Profit you understand.

[Unicorn]

I am surprised that we still have investors backing the options. The three rating agencies, or sharebrokers, whatever, have all given similar 12 month price targets. Even the Deutsche Bank figure of $1.39 indicates only a break even figure for the options. Note that these analyse the sp possibilities with the strong support of Management of Pike. They have access to the mine engineers and management, which is what we do not have except at the AGM.
Next, the options could be extended. Certainly is true, but not at the current option price. I am certain that Pike will want to raise more cash for the next mine. Hence they may well want to keep some value in the options. But ordinary shareholders must also, I would have thought, be given new options at the same time the current options are extended, maybe the lot at $2.25 a share expiring April 2013.
Summary. The options are at the present time valueless. Comments please.
Note, I have 2,600 options and 10,000 ordinary shares.

No, the options are not valueless. Buyers are offering 11 cents for them. They do that because they think there is a possibility that they might make a profit from buying them.

Nobody knows what the value of the options is, because nobody knows what PRC shares will be trading at on 24 April 2011. And nobody knows what someone might be prepared to pay to buy an option at some point in the interim period.

Brokers valuations are notoriously unreliable. What they basically say is that if a whole series of assumptions come true over a period of time, then a fair value of a share would be $x.xx. Life is not that easy to predict. And if shares always traded at fair value then share prices would not be nearly as volatile as they are.

[percy]

No, the options are not valueless. Buyers are offering 11 cents for them. They do that because they think there is a possibility that they might make a profit from buying them.

Nobody knows what the value of the options is, because nobody knows what PRC shares will be trading at on 24 April 2011. And nobody knows what someone might be prepared to pay to buy an option at some point in the interim period.

Brokers valuations are notoriously unreliable. What they basically say is that if a whole series of assumptions come true over a period of time, then a fair value of a share would be $x.xx. Life is not that easy to predict. And if shares always traded at fair value then share prices would not be nearly as volatile as they are.

I have found a day can be a long time in the sharemarket.Last week my AVE shares were aprox $ 1.20 today $1 .69. Many a time I have sold out of a company just to see the share price take off.Held TAG in Aussie for 12 years.6 mths after I sold SP was 5 times higher.Instead of paying 90cents for a share the options give great leverage.This leverage can work for you as well as against you.The Chinese or the Indians wanting to save guard supply could mount a takeover.On the other hand more delays and further capital raising will make options worthless. But I would expect next cash issue there will be some very long dated options issued !!!

[friedegg]

options make people edgy and edgy people post a lot about how **** the company is that they have backed if things arent going right,because they stand to lose all thier investment at expiry date

[friedegg]

wow two days and no dribbling on about prc and thier ducks,delays,port cams,whose drinking at the blackball etc,hope i didnt hit a nerve

[mouse]

wow two days and no dribbling on about prc and thier ducks,delays,port cams,whose drinking at the blackball etc,hope i didnt hit a nerve
And Options, And Options.

[Baddarcy]

Well the next couple of weeks we should actually have something to talk about, isn't "the beast" due to start digging today and it certainly looks like a shipment of coal will be leaving next week.

[peat]

anyone got any more to say about the exercise date for PRCOA being extended
Is that even legal.

[blockhead]

I think you are all getting ahead of yourselves, if the head shares are sitting on $2 in April the oa's won't need extending

[digger]

anyone got any more to say about the exercise date for PRCOA being extended
Is that even legal.

NZO once extended an option but that was because at the time of issue a certain well was supost to have been drilled.The extension was to cover that drill. For PRCOA no commitment of that nature was ever made so it could well be not in keeping with the legal configuration to extend them as it is not fair to head holders. What is more likely to happen if PRCOA looks like they will expire worthless is to issue a new option available to both head and PRCOA holders.This has happened before with NZO and the second options were eventually all converted to heads giving NZO a big capital lift at a needed time.But no guarantees it will happen here---just a possibility.

[Balance]

NZO once extended an option but that was because at the time of issue a certain well was supost to have been drilled.The extension was to cover that drill. For PRCOA no commitment of that nature was ever made so it could well be not in keeping with the legal configuration to extend them as it is not fair to head holders. What is more likely to happen if PRCOA looks like they will expire worthless is to issue a new option available to both head and PRCOA holders.This has happened before with NZO and the second options were eventually all converted to heads giving NZO a big capital lift at a needed time.But no guarantees it will happen here---just a possibility.

Sentiment towards mining stocks turn on a gust of wind.

If PRC starts delivering on production and shipments, and show incremental progress and improvement every month - the market will start pricing in 1m tonnes of coal a year.

Until then, the OAs are speculative.

[Logen Ninefingers]

isn't "the beast" due to start digging today

Manu Vatuvei & his shovel are down at the mine??

[Ian]

Sentiment towards mining stocks turn on a gust of wind.

If PRC starts delivering on production and shipments, and show incremental progress and improvement every month - the market will start pricing in 1m tonnes of coal a year.

Until then, the OAs are speculative.

So Balance what’s you educated guess at the SP range in April 2011 that PRC might achieve if things start going to plan. Is a SP of $1.6 - $2 by then realistic? If things start going to plan will the market have priced in a lot of the value by then and what is that value

[Balance]

So Balance what’s you educated guess at the SP range in April 2011 that PRC might achieve if things start going to plan. Is a SP of $1.6 - $2 by then realistic? If things start going to plan will the market have priced in a lot of the value by then and what is that value

Needs a fortune-teller to figure out what PRC will be worth as there are enough variables to drown the most basic of valuation model - price of coal, contracted price, exchange rate, hedging policy, shipping costs, discount rate, cost of production, options convertibility etc.

However, one can take a best case most optimistic scenario - assuming that PRC is able to produce and ship 1m tonnes a year from 2012, obtain an average price of US$200 per tonne, exchange rate stays at US$0.73 etc, cost of production remains constant, options all fully convert into new shares , PRC's valuation could be :

Discount rate of 10% - $1.82
Discount rate of 15% - $1.42

Start working back from there using your own assumptions.

One thing for sure - if PRC meets production and shipment targets progressively, the market will get itself very excited.

If PRC fails (yet again and again) to meet targets - the answer is obvious.

[mouse]

I think you are all getting ahead of yourselves, if the head shares are sitting on $2 in April the oa's won't need extending
Expect a Miracle every Day.

[Baddarcy]

Manu Vatuvei & his shovel are down at the mine??

Yeah i saw it mentioned in the Quarterly Report. Apparently he is capable of using his shovel, and bolting the roof all in one go. No wonder the Warriors want to keep him, as there is usually a fairly big pile of "stuff" that needs shoveling at Warrors HQ.

[Logen Ninefingers]

The beast is going at the coal face hammer and tongs!! The seven dwarves are singing up a storm!! GW and the blue ducks are attacking the coal face with gusto!! Even the rats and stoats are into it with little minature picks!! We should have 10 to 20 thousand tonnes of high ash (discounted) 'development' coal outa there any day now!! Yeeeeehaaaa - roll on 1 million tonnes per year!!!

[Baddarcy]

The beast is going at the coal face hammer and tongs!! The seven dwarves are singing up a storm!! GW and the blue ducks are attacking the coal face with gusto!! Even the rats and stoats are into it with little minature picks!! We should have 10 to 20 thousand tonnes of high ash (discounted) 'development' coal outa there any day now!! Yeeeeehaaaa - roll on 1 million tonnes per year!!!

Mate...you forgot the 2 weazels !!!

[neopoleII]

i think at the next shareholder meeting, we need to get a vote, or resolution or some-such-thing, ...... for a webcam of the coal storage facility.
it wont cost much to run, and sure will keep managment honest, and gives us a constant passive disclosure.
how does one go about letting management know, or getting shareholders to vote for such a thing?

[Logen Ninefingers]

I reckon management needs a shake-up too....get a different figurehead at the top. Maybe things haven't gone so hot the last 3 years, so lets just bring someone else in and change things up a bit. The big cheese's usually take credit when everythings going sweet, but blame someone else or keep a low profile when things go wrong. Old Tony Hayward was troughing it nicely until that big oil spill buggered things up for him - as the figurehead at the top his head had to roll. Let's have a shake-up at PRC, if only to acknowledge that events to-date have not been acceptable. People like Paul Reynolds who refuse to go and sack others don't seem to realise that their symbolic role is compromised by failure. As the recognisable face of the company, the boss corrodes the company's image when he has the stink of failure around him.

[peat]

What do you think Ascending Triangle or just wishful thinking ?

sorry for not replying to your earlier post.
yes it is looking that way but remember the result of a technical pattern is often in proportion to its size and this is quite a small pattern in the big scheme.
Volume should increase on any upside breakout to confirm of course.
So yeh fingers crossed for a breakout and into a powerful 3rd of a 3rd.

not sure if I like the idea of a webcam on the site tho. whats the point of TA if everyone can see whats happening ;+)

[mouse]

i think at the next shareholder meeting, we need to get a vote, or resolution or some-such-thing, ...... for a webcam of the coal storage facility.
it wont cost much to run, and sure will keep managment honest, and gives us a constant passive disclosure.
how does one go about letting management know, or getting shareholders to vote for such a thing?
Or we get a motion that Pike tell us what is mined each month. Any good miner would know how much coal was mined each shift, thus the figure of monthly production should be able to be easily available.

[Balance]

Or we get a motion that Pike tell us what is mined each month. Any good miner would know how much coal was mined each shift, thus the figure of monthly production should be able to be easily available.

Mushrooms like to be kept in the dark and get fed horse manure to grow vigorously.

Get the picture?

[Logen Ninefingers]

Mushrooms like to be kept in the dark and get fed horse manure to grow vigorously.

Get the picture?

I get the picture, and I like your line of thinking. Discontinue the efforts to get the coal out and instead turn the mine into the Southern Hemisphere's biggest mushroom farm. Instead of horse manure we use duck droppings and the ground up remains of stoats, rats & weasels. PRC Premium West Coast Mushrooms could be a world renowned brand earning this country untold millions in export dollars. Keep the coal in the ground and watch is value skyrocket over the decades while we grow fat and rich on mushrooms.

[Balance]

If Pikers want performance from PRC management, they are going to have to demand accountability and transparency.

It's that simple and it can be done.

[777]

You guys are getting boring.

[Logen Ninefingers]

You guys are getting boring.

Waiting for coal to come out of the PRC operation is like watching paint dry, I agree.

[Logen Ninefingers]

Whitehaven rumours spur record high
August 10, 2010

SHARES in New South Wales coal producer Whitehaven Coal have risen to a record high on speculation it could become the subject of a $3 billion-plus takeover bid from US interests.

Whitehaven closed 23¢ higher at $6.36 a share after doing little to hose down the speculation that its biggest shareholder, US investment group First Reserve Corp (27 per cent), was to join US coalminer Alpha to make a bid.

Whitehaven confirmed that it has had a data room open for a ''long period of time'' in relation to various potential transactions.

Last week, again in response to speculation of corporate action, Whitehaven told the ASX it had had, and continued to have, discussions with third parties in relation to potential corporate transactions.

''Those discussions that are continuing are preliminary and remain incomplete, and it is highly uncertain whether they will lead to a proposal for consideration by the company's directors and shareholders,'' Whitehaven said last week.

Whatever the outcome, the speculation has ensured that any takeover bid for Whitehaven will be from a starting point that is much higher than it would have been otherwise. Since early July its market value has increased by $920 million, or 41 per cent.

That increase is due to the takeover speculation as well as to a re-rating of Whitehaven's takeover appeal in light of the fancy valuations placed on coal assets in other transactions. Yesterday's mild 3.7 per cent rise for Whitehaven, albeit to a record, suggests the market believes its strategic appeal to potential predators is about fully priced in in its shares.

The AMCI group is Whitehaven's second biggest shareholder, with about 11 per cent.

- Itochu, Japan's fourth-largest trading company by market value, has agreed to buy a 2.75 per cent stake in Aston Resources for $33 million.

The purchase will give Itochu exclusive negotiation rights to acquire a stake in the Australian company's Maules Creek coal project and market the commodity.

Itochu would seek to take a minority stake in the operations, company spokesman Yasuhiro Tera****a said yesterday.


Source: The Age

[peat]

re options again
Heres a little gem from the end of a Business Strategy journal

Finance theory tells us tha that the greater the uncertainty, the lower is the value of the expected cash flows (because we discount them more aggressively) but the greater is the value of an option.

They probably werent thinking of PRC but seems to apply as a basis for the supposed over valuation of PRCOA

[JoeBlogs]

And it makes perfect sense in the context of risk:reward

Uncertainty (perceived or otherwise) of future cashflows is clearly the reason the shareprice is at these levels. As you remove the uncertainty (operational risk), the SP will respond accordingly, and quickly. The OAs still offer good value.

[Logen Ninefingers]

PRC are doing their second shipment around the time NZO announce their result to give NZO a boost.
They are giving Gujarat some discounted development coal & also helping out NZO.

[dsurf]

Needs a fortune-teller to figure out what PRC will be worth as there are enough variables to drown the most basic of valuation model - price of coal, contracted price, exchange rate, hedging policy, shipping costs, discount rate, cost of production, options convertibility etc.

However, one can take a best case most optimistic scenario - assuming that PRC is able to produce and ship 1m tonnes a year from 2012, obtain an average price of US$200 per tonne, exchange rate stays at US$0.73 etc, cost of production remains constant, options all fully convert into new shares , PRC's valuation could be :

Discount rate of 10% - $1.82
Discount rate of 15% - $1.42

Start working back from there using your own assumptions.

One thing for sure - if PRC meets production and shipment targets progressively, the market will get itself very excited.

If PRC fails (yet again and again) to meet targets - the answer is obvious.

What is the SP at 10% discount rate, $US 250 tonne, and exchange rate $US 0.60?

[Balance]

What is the SP at 10% discount rate, $US 250 tonne, and exchange rate $US 0.60?

Just for you, matey - $3.10

No more requests from others - simple financial and valuation model to set up.

[dsurf]

Just for you, matey - $3.10

No more requests from others - simple financial and valuation model to set up.

Thanks, I will be adjusting my oa's sell price upwards accordingly to $1.50 ish! - your the man - as per your last post sentiment is far more important though.

[Ian]

See http://www.sharechat.co.nz/article/3dc46a5f/daily-sharechat-pike-river-coal.html nothing overly new

Daily ShareChat: Pike River Coal
By Jenny Ruth

Tuesday 10th August 2010
Text too small?

Pike River Coal's fourth quarter activities report and the rate at which it is burning cash was a negative surprise and highlights the company may have to find more cash, says Andrew Harvey-Green, an analyst at Forsyth Barr.

"Cash burn for the fourth quarter was $23.3 million, a monthly rate of $7.8 million. If that rate was to continue and the next coal shipment was delayed three weeks, cash will run out in September," Harvey-Green says.

"It is therefore crucial that Pike ramps up production as profiled." At current coal prices of about US$180 (NZ$247.52) to US$190 a metric tonne, and the current cash burn rate, Pike needs to sell more than 30,000 tonnes a month to be cashflow break even, he says.

Still, he doesn't expect yet another capital raising because the company is throwing a lot of resource at getting production rates up and, once it starts hydro mining, "30,000 tonnes per month should be easy. Any cashflow shortfall is therefore likely to be short lived and less than $5 million, assuming coal prices do not materially fall further."

Reasons to be concerned are the company delayed its second coal shipment by about a month and its planned start to hydro mining in mid-September is also a little later than expected. "These delays, while minor compared to past delays, highlight that Pike is yet to get on top of its operational forecasting."

Recommendation: Accumulate.

Daily ShareChat articles report how the main experts in the market might view a certain share and we provide this commentary as a useful resource for investors. Content on this site does not in any way constitute a recommendation to buy, hold or sell any particular share. Investors should always seek professional advice before making any investment decisions.