PRC Pike River Coal

[Baddarcy]

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

Seems a very fair description of where we are at IMHO.

[dsurf]

Accumulate says it all

[Logen Ninefingers]

Whats the recommendation from out of the Blackball pub.

[peat]

Whats the recommendation from out of the Blackball pub.
they're recommending that Pike accumulates coal

[mouse]

Whats the recommendation from out of the Blackball pub.
Make a booking now for the AGM. 15 November.

[Logen Ninefingers]

The Blackball Pub's having an AGM? Awesome!!

[Baddarcy]

Well the staff still seem to be buying shares, can't be a bad thing i think.

[Dr_Who]

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.


PRC is like any other business. Once you start seeing the cashflow come in, you will have banks lining up to support and lend to them.

[patrick]

Getting the shares but NOT paying for them.
So would we all.

But still think the options are cheap; a lot can change in a few weeks and 40,000 tonnes a month, or so,and up we go.

Dis: Hold a lot.

[Ian]

Recent article

http://www.indianexpress.com/news/jindals-keen-to-acquire-coal-assets-overseas-with-psus/659198/0

ENS Economic Bureau Tags : coal, India, Jindal, Special Purpose Vehicle, SAIL Posted: Thu Aug 12 2010, 01:19 hrs New Delhi:
With the much-hyped International Coal Ventures Limited (ICVL) — a Special Purpose Vehicle floated by leading mineral and metal PSUs — failing to make much headway in acquiring overseas coal assets, steel PSUs such as SAIL and RINL have initiated in talks with Jindals-promoted JSW and JSPL to buy such properties abroad through a Public Public-Private Partnership (PPP) initiative.
With neighbouring China stealing the march over India in acquisition of coal assets globally, the Indian steel companies are keen to go full throttle by jointly executing deals. With coking coal prices shooting through the roof, the input costs of the utilities have soared.
At a summit on the steel industry's unfinished agenda, Steel Authority of India Limited (SAIL) Chairman C S Verma pointed out that the Japanese steel mills negotiate the coke prices together which put them in an advantageous position. “Indian steel producers too should hands to negotiate coke prices like Japanese producers,” he argued. The Indian utilities were currently importing 20 million tonnes of coking coal and when the production reaches 120 MT by 2012, they would have to import 90 MT more. Coke prices were hovering around 200 dollars a tonne in April-May.
Indicating that such an exercise was on, JSW Steel Vice Chairman and Managing Director Sajjan Jindal said his firm was already in talks with maharatna SAIL and navratna Rashtriya Ispat Nigam Limited (RINL) for floating a JV to scout and acquire global coal assets. This has put the spotlight once again on ICVL, floated jointly by National Mineral Development Corporation, Coal India Limited, NTPC along with SAIL and RINL, for its failure to execute any acquisition. ICVL has failed to take off despite being armed with a Rs 10,000-crore war chest and enjoying the powers of a navratna company.
ICVL has failed to win its recent bid for the Stanwell mine in Australia’s Queensland province, which Steel Ministry's insiders attribute to lack of risk-taking ability by the PSUs. Moreover the needs of the constituents were divergent. While CIL and NTPC needed thermal coal properties, SAIL, RINL and NMDC would prefer coking coal properties to feed their hungry furnaces. This mismatch of demand was the key factor behind the poor performance of ICVL, ministry officials argue. The proposed Public-Private Partnership model could help in circumventing the regulatory hurdles encountered by the PSUs in acquiring such assets.

[Billy Boy]

LPC shipping forecast
Five coal ships in ten day 17/8 - 27/8
Cant all be solid energy can it ???

[Casa del Energia]

LPC shipping forecast
Five coal ships in ten day 17/8 - 27/8
Cant all be solid energy can it ???

Maybe should not get too excited. (the following is only a guestimate but..) From best of memory - there's three coal trains coming out of Stockton a day (Actually, two a day and one at about 2 -$%#^@ -am). I've never counted the wagons but it looks (very) conservatively about 20 x 50 tonne wagons. Therefore: say - 3000 tonne per day, one month is at least 90,000 tonne.

So it could be just Soild energy... (?)

[Kees]

there are 30 x 50 tonne = 1500 per train thats their limit at the moment, was over lpc couple of days ago and there was no prc coal on the deck exept what was left over from last shipment plenty of other coal though.
no investment in prc at this time just enjoying the suspense and will be in like flyn when I see coal on the deck at lpc.

[LJB]

there are 30 x 50 tonne = 1500 per train thats their limit at the moment, was over lpc couple of days ago and there was no prc coal on the deck exept what was left over from last shipment plenty of other coal though.
no investment in prc at this time just enjoying the suspense and will be in like flyn when I see coal on the deck at lpc.

So that means PRC need about 13 train loads to dump 20000tonnes on the wharf by the end of August in 18-19 days. There better be some wheels rolling soon then!

[Agronomia]

From PRC's announcement 17/06/2008

At full production from mid 2009, there will be between one and two loadings
onto rail at Ikamatua per day. Pike River's total production will be exported
to coke and steel makers who prize the coal's unique low ash content in the
steel making process.

And from announcement 27/11/2007

Pike River has agreed with Solid Energy that it will have capacity reserved
of up to 1.3 million tonnes per year on the rail network and has priority
access to rail and port facilities to transport that tonnage.



Pity it's not 2009 and full production! However looks like they can at a push do more than one loading a day and they get priority. Hope that's the truth!

[patrick]

KEES
Please keep us posted.
thanks

[patrick]

Very quiet.
Are you all heading to the coalface?

[dsurf]

Very quiet.
Are you all heading to the coalface?

looking after the coal miners daughter

[Baddarcy]

Jolly decent of the dollar to drop against the USD just when we are supposed to be making a shipment. Not a significant difference but on a back of the envelope calc it is worth $85,000 to Pike for every cent it falls, can't be a bad thing !!

[Balance]

From PRC's announcement 17/06/2008

At full production from mid 2009, there will be between one and two loadings
onto rail at Ikamatua per day. Pike River's total production will be exported
to coke and steel makers who prize the coal's unique low ash content in the
steel making process.

And from announcement 27/11/2007

Pike River has agreed with Solid Energy that it will have capacity reserved
of up to 1.3 million tonnes per year on the rail network and has priority
access to rail and port facilities to transport that tonnage.

Pity it's not 2009 and full production! However looks like they can at a push do more than one loading a day and they get priority. Hope that's the truth!

Grey old day outside.

Well, the sp of PRC would be $3.50 today if the company had reached its production targets in 2009.

It is under $1 so think of it as giving outstanding opportunities to buy into the story at a great sp - for those who now believe the company is capable of delivering on its targets.

How's that for positive thinking on a Saturday?

[Balance]

looking after the coal miners daughter

Helping her to cook a hearty lamb stew no doubt to warm Dad's heart when he arrives back from helping out PRC?

Feel the heat from the coal fire as it roasts your backside if you try anything else?

[Baddarcy]

2 Coal ships in port this week and 3 next week, all i can gleen in that the one due in port tomorrow (KANPUR) is Indian flagged.

Surely shipment 2 is on its way and more importantly we will get an update on how "The Beast" the going and also if hydro is still on target.

[Logen Ninefingers]

I saw The Beast in full flight on Sunday - and he was awesome!!!

[blockhead]

Plenty lining up to buy and same on the sell side, what would Phaedrus make of that ??

Is it an inverted double backflip with a half pike tossed in perhaps signifying a train with numerous wagons on behind just went through Otira ??

[Logen Ninefingers]

Pike aye...a riddle, wrapped in a mystery, inside an enigma.

[peat]

Plenty lining up to buy and same on the sell side, what would Phaedrus make of that ??


yes I see more and larger buy/sell quotes/volumes too
higher liquidity should = less risk
but, volume is still very low so far today which doesnt really add up as per LNF's enigma

[Baddarcy]

Yes seems everyone is happy to stand their ground, lets see who blinks first, my guess is the 9 buyers at 96c

[neopoleII]

""Pike River Coal is preparing for its second export shipment of 20,000 tonnes of hard coking coal in August, one month behind plan.""
11 working days to go...............
can they? will they?
place your bets......... thats all its worth till management respect shareholders

[mouse]

""Pike River Coal is preparing for its second export shipment of 20,000 tonnes of hard coking coal in August, one month behind plan.""
11 working days to go...............
can they? will they?
place your bets......... thats all its worth till management respect shareholders
Coal berth empty this evening!

[Baddarcy]

Coal berth empty this evening!

Won't be by this time tomorrow !!!

[rainey]

But will it be for pike coal?

[mouse]

The wonderful thing about having Pike shares is we do not have to wait for Annual Reports etc to see how we are doing. We know instantly by looking at the coal export shipments. Even complete with a camera at Lyttelton Port. Accountants and General Managers are by-passed. What have we exported this month? is the simple question. It is quite brilliant, we are not dependant upon analysis, projections, sales figures etc. We just look at the port. We know how much is loaded since Pike at least have to tell us that.
The world is in a pretty serious situation financially. A stock like Pike is, I suggest, the ultimate hedge against most financial disasters. Pity about the Share Price. It should be higher.

[peat]

What have we exported this month? is the simple question.
Whats the simple answer mouse
I still think its zero. Am I wrong?

[Balance]

The wonderful thing about having Pike shares is we do not have to wait for Annual Reports etc to see how we are doing. We know instantly by looking at the coal export shipments. Even complete with a camera at Lyttelton Port. Accountants and General Managers are by-passed. What have we exported this month? is the simple question. It is quite brilliant, we are not dependant upon analysis, projections, sales figures etc. We just look at the port. We know how much is loaded since Pike at least have to tell us that.
The world is in a pretty serious situation financially. A stock like Pike is, I suggest, the ultimate hedge against most financial disasters. Pity about the Share Price. It should be higher.

Why should the sp be higher, Mouse?

Buggers have not been able to get coal in sustainable quantity out and where's the proof that PRC ever will?

Management are very quick to broadcast any little bit of positive news (even remotely positive) but will not keep shareholders (excl the big ones) and the market informed and up to date.

Meanwhile, the legions of shareholders and Pikers here eagerly wait for the next 20,000t shipload! Whatever happened to the 1m tonne per year?

See how cleverly PRC has manipulated Pikers into accepting sub-standard management and unacceptable performance?

[mouse]

Why should the sp be higher, Mouse?

Buggers have not been able to get coal in sustainable quantity out and where's the proof that PRC ever will?

Management are very quick to broadcast any little bit of positive news (even remotely positive) but will not keep shareholders (excl the big ones) and the market informed and up to date.

Meanwhile, the legions of shareholders and Pikers here eagerly wait for the next 20,000t shipload! Whatever happened to the 1m tonne per year?

See how cleverly PRC has manipulated Pikers into accepting sub-standard management and unacceptable performance?
We are I suspect now a sitting target for a takeover. Due to low share price. Should someone come along tomorrow and offer $1.40 a share, I suspect there would be a stampede for the cash. And another company would have vanished from NZ control. Of course management should long ago given us monthly production reports. Hopefully after the AGM we can get them. Even better monthly shipping reports! So the coal has been sold and cash in the bank. I am still confident about Pike. But could take the $1.40. Oh dear me! Life is full of amusing choices. PIKE IS UNDERPRICED.

[Agronomia]

I reckon two factors could influence a takeover.
Whether they can get 20000 tonnes to the port and away.
Whether Australian labour party with its mining taxes can win that election.
So I'd guess if both occur there could be more interest.
What's the chances?????????

[Balance]

I reckon two factors could influence a takeover.
Whether they can get 20000 tonnes to the port and away.
Whether Australian labour party with its mining taxes can win that election.
So I'd guess if both occur there could be more interest.
What's the chances?????????

Don't worry about whether or not a takeover will happen.

Worry whether PRC management are capable of getting the coal out of the ground.

If they can prove they can get the coal out, the sp will be $1.40 anyway.

If not, nobody will want to have anything to do with this black hole.

Funny how quiet the die-hard Pikers have become? As has been aptly described, PRC is a serial over-promiser and under-deliverer of the worse kind - promise when they need $$$ and once they have it, treat shareholders with the contempt they deserve.

Buggers can't even get 20,000 tonnes to ship in July after promising to deliver the shipment in May!

NZ must now boast of the best mushroom cultivator in PRC - keep them in the dark and feed them horse manure and watch them queue up a mile with their cash.

[Balance]

Watch some of the Pikers finally giving up and getting out at 96 cents while they can.

Will the bell ring soon?

[rotweiller]

Coal Ship. currently loading at Lyttleton.
Whose coal is it ???
Cheers

[Ian]

It's not mine !!! thats one person down

[Ian]

Coal Ship. currently loading at Lyttleton.
Whose coal is it ???
Cheers

Baddarcy yesterday had said it was going to Indian ? not sure where that info has come from. I couldn't see a referance for destination on the LPC site

[Ian]

It's not mine !!! thats one person down

In fact as a PRC shareholer i'm hoping some of it is mine !!!!

[Logen Ninefingers]

If it was a Pike shipment you'd know about it. There would be a whole lot of fanfare and hoopla in the press.

[geezy]

pike what a disapointment u are

[mouse]

pike what a disapointment u are
The point that Management must realise is that a Take Over will mean their jobs are gone. New Management will be put in. Pike, are you hearing the promise. Deliver, or go. Not by the current shareholders, but by the new owners.
Life is tough out there. Can we have some coal please. And a statement of when our ship will come in. Your CV will not look too good. Company failed to deliver and was sold.
I managed to win $57.00 on Lotto today. Hope Pike Lotto will deliver!

[rainey]

Bad darcy didnt say it was going to India, only that it was of Indian registry

[rainey]

Any way, the stockpile at Lyttleton is zilch, can somebody see if theres amound at ikamatua

[swissboy]

What the H... is so difficult in keeping the owners informed. I agree this management is getting to be too precious!!!!!

[blockhead]

Used to be just (un) Balanced, must be contagious, now you are all pasting the hell out of Pike.

Go buy a few million ALF, much better prospects for you there I reckon.

[Balance]

Used to be just (un) Balanced, must be contagious, now you are all pasting the hell out of Pike.

Go buy a few million ALF, much better prospects for you there I reckon.

I guess it comes down to this : are you happy to be kept in the dark by PRC?

Is it okay for PRC to advise you on the very last day of July that they have (yet again) missed their promised shipment?

Is it okay for them to advise you of the ventilation shaft collapse a few days after it happened?

[Dr_Who]

Xstrata Plc, the world’s biggest exporter of energy coal, said the demand outlook for the commodity for both steelmaking and power production is “robust” because of urbanization in China and India.

http://www.bloomberg.com/news/2010-08-16/xstrata-ceo-freyberg-says-demand-for-steelmaking-energy-coal-is-robust-.html

[winner69]

Xstrata Plc, the world’s biggest exporter of energy coal, said the demand outlook for the commodity for both steelmaking and power production is “robust” because of urbanization in China and India.

http://www.bloomberg.com/news/2010-08-16/xstrata-ceo-freyberg-says-demand-for-steelmaking-energy-coal-is-robust-.html

50 or so Aucklands to be built Dr Who according to BHP

[Baddarcy]

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.

Well according to my plastic ruler today is the day Pike should be finished drilling out the 1st hydro panel.

Who needs an announcement from management with my plastic ruler and $10 calculator on the job !!!

[swissboy]

Quite right Blockey I apologise. A bad day yesterday and I dont want to be seen as (un) -balanced or un-boyed

[Mr Tommy]

Any way, the stockpile at Lyttleton is zilch, can somebody see if theres amound at ikamatua

Well there must be some coal there, as the lyttleton coal yard web cam shows a boat tied up, and you can actually see coal coming off the conveyor belt and falling into the hold in the screenshot.
But whose coal is it ?


http://www.lpc.co.nz/RP.jasc?Page=N225P2

[JoeBlogs]

Well there must be some coal there, as the lyttleton coal yard web cam shows a boat tied up, and you can actually see coal coming off the conveyor belt and falling into the hold in the screenshot.
But whose coal is it ?
http://www.lpc.co.nz/RP.jasc?Page=N225P2

I think rainey meant the PRC stockpile is zilch

[Bixbite]

Xstrata Plc, the world’s biggest exporter of energy coal, said the demand outlook for the commodity for both steelmaking and power production is “robust” because of urbanization in China and India.

http://www.bloomberg.com/news/2010-08-16/xstrata-ceo-freyberg-says-demand-for-steelmaking-energy-coal-is-robust-.html

About 6 billion people living in this planet, only one sixth of them are living in developed area, and the rest of them wishes to be equal.

[mouse]

:)In response to my query on getting monthly coal production output given to shareholders, I received the following reply..........

Thank you for your email, and the question you raise about reporting production.

We understand and appreciate shareholders’ interest in the development of the mine and in the reporting of company performance. As you will be aware Pike River is still in a development phase, with the coal that is currently produced being largely a by-product of the mine development, coming from the cutting of roadways, the mine pit bottom, and developing faces for the first stages of hydro-mining. Production of coal in this phase is quite variable, and is linked to the development plan, and in no way reflects or is representative of steady state production. Quantities produced vary depending on the development work being undertaken at the time, and all of the factors that impact on this work, such as shifting machines, machinery maintenance, etc. With these variable factors coal production will be up and down, with shorter term weekly and monthly performance figures not being representative. Over a short period figures can be quite misleading if people try to take these figure as representative of company coal production and performance.

It is for this reason that Pike River reports production on a quarterly basis as do all ASX listed companies. To do otherwise could in fact be disadvantageous to shareholders as figures will be out of context, and open to misinterpretation. Information needs to be disseminated in context and in a manner which does not raise false leads, positive or negative. While the interest of shareholders in this aspect is appreciated, on balance the reporting of short term development production is not considered to be meaningful.

The Company is in a ramp-up period heading towards hydro-mining and a level of steady-state production. The commencement of hydro-mining will produce a kick in production quantities, and these quantities will start to be reflected in the next quarterly activities report which will be released towards the end of October. End of quote.

To my view the reply seems to be quite adequate. Note that hydro mining seems to be targeted to be 80% of production with 20% being development coal.

[mouse]

Coal exporting. The problem seems to be related to getting the ship into port. It has to fit in with the shipping company movements. The ship may not arrive until late this month or even early next month. As I have suggested previously, coal at the Lyttelton Port has to pay storage charges. Hence they want to rail the coal with critical path shipping to save costs.
Hope this puts some fears to rest. We have the coal waiting but need a ship to load it onto.

[Ian]

Thanks Mouse

[Balance]

Thanks Mouse

Well done, Mouse - as I wrote before, you will go far in this game.

You are prepared to tackle companies and ask the hard questions - good on you.

Shame on the other Pikers (mushrooms).

[Billy Boy]

Hey Balance
I see you got you name in print (once) in mouses report. :D:D
Cheers BB

[Balance]

Hey Balance
I see you got you name in print (once) in mouses report. :D:D
Cheers BB

They like me down at the coal-face -"on balance the reporting of short term development production is not considered to be meaningful. " :D:D:D

Keeps them highly motivated to prove me wrong, see?

[the machine]

hey mouse, thats a damn fine good posting.

M

[Hoop]

thxs Mouse for your time and effort


This email seems to be carefully worded (even though it contradicts itself).
.
What is needed is FACTS @ FIGURES.... either PRC management telling us shareholders that there is X tonnes stock piled somewhere
or
tangible evidence of a X tonnes shipment.

Without the FACTS & FIGURES.. for me simple thinking wins out... (as proven from Pikes past performances)...

Simple physics....little to no developmental coal produced = little or no cutting of pathways..

unless tangible evidence proves otherwise.

[tony64peter]

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.
You're on to it. Train to be loaded this weekend, I'm told

[JoeBlogs]

Hmmm, I've just re-read the email I got after voicing my concerns that PRC were not making timely disclosures - have a look:


Thank you for your email, and your interest in Pike River Coal.
A comprehensive update will be contained in the company's June 2010 quarterly report which will be released in the last week of this month, covering developments for the quarter to date, including shipments, production, and the establishment of hydro-mining. It is considered this will give a more balanced view than piece-meal information addressing specific matters when there has been no material matters to report.


Some strange stuff going on here ;)

[temuk]

I see on the news that 1 of our workers is off to the games!

Less coal & hopfully more GOLD

[mouse]

A coal ship in port. Is it one of ours?

Short answer, NO.
Maybe the end of this month, or early next month. We have to find the boat first.

[morv]

Well patient ones the action is about to start today. Site, www.railtack.co.nz 7am has a twin engine unit heading for Ikamatua arriving 11am If the actions starting better get the orders in to the brokers before the rush begins

[JoeBlogs]

There's no reason a coal shipment in August will cause a rush to buy pike shares - they told us a month ago it was delayed for a month, if they delayed it again that would be below even PRC's forecasting abilities. Hopefully we'll hear news soon about the progress of hydro mining.

[Ian]

There's no reason a coal shipment in August will cause a rush to buy pike shares - they told us a month ago it was delayed for a month, if they delayed it again that would be below even PRC's forecasting abilities. Hopefully we'll hear news soon about the progress of hydro mining.

Normally i would say your correct but with pike I think people have started to think it will never happen so this might be a bit of a confidence boost for some all be it that it's was late in the first place

[JoeBlogs]

Well I hope you're right - there would be absolutely no excuse for missing this one......

[bung5]

Well I hope you're right - there would be absolutely no excuse for missing this one......

?? There are lots of excuses...

[mouse]

Well patient ones the action is about to start today. Site, www.railtack.co.nz 7am has a twin engine unit heading for Ikamatua arriving 11am If the actions starting better get the orders in to the brokers before the rush begins
I found the two engines on,
http://www.railtrack.co.nz/railtrack.htm
In the middle of the top lot of information.

[root]

Holding shares in Pike has devolved into train spotting.

[mouse]

Holding shares in Pike has devolved into train spotting.
I saw it second!

[swissboy]

Hey give the man some credit. It's ingin---, engin--- ingenio--,Clever

[Billy Boy]

Holding shares in Pike has devolved into train spotting.

And port spying.

[Mr Tommy]

Well this is all good fun, tracking trains and spying on the coal berth at Lyttleton.

And now I know where the person who used to colour in the Pike tunnel progress map each week has gone, they now colour in the Railtrack page.

[Billy Boy]

Yea....
Mi5, CIA, ruskies... etc
our agent and fees dont come cheap.... Be warned

[Monkey Poms]

Good morning Mouse and well done. Some food for thought to mull over while you have your coffee and Weetabix. ( Pike management have broken the Enigma code and are now monitoring this forum. Proof? The ref "balance" used twice in the very skillful way Pike replied by e-mail to questions asked by yourself and Joe Bloggs).

For a long time now my view has been that Piker's won't see any significant amount of coal production on a daily basis until the start of hydro mining. I forecast August and judging by the activity of Pike management on the 11th and 12th August filling their boots full of millions of partly paid shares, they obviously sense the final hurdle is about to be overcome. Don't get me wrong. I agree with the employee share purchase agreement. If management have the confidence to put up some cash it implies things are going well.

However, is this legal under NZ stock exchange rules? Over the last 2 years when the news of Pike's progress was slow the quarterly reports stretched the truth a little. Now the situation is improving and we are still told nothing in between quarterly statements Could this be construed as insider trading by management to obtain a better deal from their employers PRC? The recent sale of shares under the scheme allows the shares to be sold at a premium over the share price quoted at the close of play the day the agreement is struck. Payment 1 cent per share cash up front, final payment anytime within the agreed timescale. ( Very generous - nice if you can get it ). Not sure of the formula - say, stock price plus 15% premium. It's in the interest of buyers of shares in the agreed scheme to have a low stock price at the time of purchase.

Should we have been told the following? ( hypothetical, but close to the truth )
The next cargo of 20,000 tonnes to India to be delayed due to shipping problems. However,we have just short of 40,000 tonnes on stock, and although the coal is slightly out of spec the quality is still far superior to any if the coal produced by any Australian mine. On the start of hydro mining management expect monthly operating costs to sharply fall.

If comments such as this had been made, they may have had the effect of maintaining the Pike share price at the NZ$1.15 level and therefore PRC could expect a premium of 15% equal to NZ$1.32 against the NZ$1.10, struck under the scheme on 11th and 12th August. Management have an unfair advantage over the rest of us. Good or bad, they know the state of play at any one time. Not a problem until millions of shares are issued under the employee purchase scheme and the guys at the top are the main beneficiaries. The process is open to abuse as they can, if they choose to, manipulate the downward movement of PRC sp. By simply saying nothing, doubt is created.

The readers of this forum are a clever bunch and able to sort out in their minds any information given in between quarterly statements. They are therefore able to give an allowance, knowing that Pike are still at the development stage.

Monkey Poms

[JoeBlogs]

Thanks Monkey Poms, always appreciate your insight. I'm especially interested in your thoughts on the possible amount of coal stockpiled - it seems like they should have more than 20,000 tons given the progress with roadways? But of course they don't give us enough info to properly work it out.

[Mark Martin]

[QUOTE=Monkey Poms;316003]Good morning Mouse and well done. Some food for thought to mull over while you have your coffee and Weetabix.

WEETBIX here Monkey Poms, not Weetabix. Time you came back for another visit!

[Monkey Poms]

Hi MM
January I can't wait
Mouse is an ex pom.

Monkey Poms.

[Baddarcy]

Well patient ones the action is about to start today. Site, www.railtack.co.nz 7am has a twin engine unit heading for Ikamatua arriving 11am If the actions starting better get the orders in to the brokers before the rush begins

Good thinking on tracking the trains Morv !!

[Dr_Who]

This is like something out of a James Bond movie ...lol

[blockhead]

Its superb, I love it, the great unwashed are making a comeback !!

[Logen Ninefingers]

Someone bought 199 Pike options for $25.87.

Why?????

[Ian]

Someone bought 199 Pike options for $25.87.

Why?????

yes you would think for an extra 13c you could have rounded it up to 200

[Balance]

The readers of this forum are a clever bunch and able to sort out in their minds any information given in between quarterly statements.

Monkey Poms

Breathtaking leap in faith on your part, MP!

I am led to understand that mushrooms do not think or like to think?

[yabster]

nor do Toadstools- they are poisionous though.....

[mouse]

nor do Toadstools- they are poisionous though.....
The word from Pike, no names though, is they cannot understand how we have so much time to chat on Sharetrader. The answer is, it is more information than Pike gives and maybe more reliable. Monkey Poms latest post is brilliant. YES! It is all legal!!! This is the Wild West literally for investing. However, we do know what is happening thanks to Train Spotting and Coast Watchers. I am pretty confident, but do not have the cash to buy more Pike. It is still a punt. They have still to put in the second ventilation shaft plus get the machinery all working. Plus buy a new mining machine. Details later on the machine I understand.

[brucey09]

Is snr. mouse the mouse peace for pike?

[mouse]

Is snr. mouse the mouse peace for pike?
No, a concerned owner.

[Monkey Poms]

Is snr. mouse the mouse peace for pike?

brucey09 - Pike River Coal, to me, is by far the most exciting forum on Sharechat. The reason for that is down to the spectrum of people who make it so. They have something to say, expressing their views from all angles.
Mouse has been critical of Pike in the past on certain issues, and Balance has ceased to be a tyrant! ( now that he's bought shares )? He's turned out to be quite a nice chap!
( perhaps he even escorts old ladies across the road ). He does have his problems, though. Such as his strange fixation with mushrooms.
Mushroom stories seem to be contagious at the moment.
Bruce - stay loose!

Monkey Poms

[the machine]

Someone bought 199 Pike options for $25.87.

Why?????

and 5,346 traded on asx as well @ 9c - first for a long time.

M

[rotweiller]

Another 2 engine train due ay Ikamatua this morning.
Cheers

[blockhead]

And there are rumours of a rickshaw seen passing through Jacksons


Sydney Morning Herald
Minmetals back for more coal and ore John Garnaut, Shanghai
August 20, 2010

MINMETALS, the Chinese resource-trading giant, is on the prowl for Australian iron ore and coal assets after successfully bedding down last year's $1.4 billion OZ Minerals acquisition.

Zhou Zhongshu, president of Minmetals, told BusinessDay yesterday he had asked Andrew Michelmore, chief executive of his Australian subsidiary, MMG, to look for opportunities to broaden the company's portfolio beyond copper, zinc and lead.

''I have already told Andrew that the priority now is non-ferrous metals but I have also asked Andrew to keep and eye on iron ore and coal,'' Mr Zhou said.

[Mr Tommy]

The word from Pike, no names though, is they cannot understand how we have so much time to chat on Sharetrader. The answer is, it is more information than Pike gives and maybe more reliable. Monkey Poms latest post is brilliant. YES! It is all legal!!! This is the Wild West literally for investing. However, we do know what is happening thanks to Train Spotting and Coast Watchers. I am pretty confident, but do not have the cash to buy more Pike. It is still a punt. They have still to put in the second ventilation shaft plus get the machinery all working. Plus buy a new mining machine. Details later on the machine I understand.

Todays trainspotting has 2 more engines at Ikamatua at 11am
Todays Port watch has 3 coal ships due up until 18sept, on 23, 25 and 27 August
Things are lining up for a shipment before end of august as per Pikes latest quarterly report.

Talking about 2nd ventilation, remember the collapse of the first one, they drilled a second temporary small one which they said would also be used once the main one was repaired. So do they still need another one?
There was also an insurance claim, did anyone hear what happened with that claim? From memory it was for a couple of million $$$

[tony64peter]

One train left Ikamatua yesterday. Another today. Trucks running at capacity.Jubilation at output of the new machine.NZO to report on Wed 25th.

[JoeBlogs]

Second ventilation shaft? News to me.

Good to see some coal moving!

[digger]

One train left Ikamatua yesterday. Another today. Trucks running at capacity.Jubilation at output of the new machine.NZO to report on Wed 25th.


Hi tony64peter,
Where did you get hold of this exact reporting date from. On best guess i had it on wed, thur,or friday next week,sometime around director meeting. Friday would indicate the worst outcome so they could hide away during the weekend. Wednesday would suggest some hope for a good outcome--much needed.

[the machine]

Hi tony64peter,
Where did you get hold of this exact reporting date from. On best guess i had it on wed, thur,or friday next week,sometime around director meeting. Friday would indicate the worst outcome so they could hide away during the weekend. Wednesday would suggest some hope for a good outcome--much needed.

digger, nzo have an events calender detailing all the key dates

M

[the machine]

One train left Ikamatua yesterday. Another today. Trucks running at capacity.Jubilation at output of the new machine.NZO to report on Wed 25th.

thanks for the update tony64peter particulary the new machine

can't see any problem with old machine, but then I am bias

M

[digger]

digger, nzo have an events calender detailing all the key dates

M

So they have .Just read it ---lazy me,should have looked it up first.

Market not all that impressed with coal getting loaded as down again.

[tony64peter]

Hi Digger From the NZO website, calender,http://investorcentre.nzog.com/phoenix.zhtml?c=171108&p=irol-calendar.

[geezy]

and 5,346 traded on asx as well @ 9c - first for a long time.

M

forced with a gun to his head hehe

[mouse]

Second ventilation shaft? News to me.

Good to see some coal moving!
Extract from the Pike Activities Report, ending 30 June 2010. MINING EQUIPMENT PARAGRAPH. "...contracted for the next 6 months for a planned non-critical path stone drive for ventilation." I take this to be another vent shaft. All mines have them and as the mine gets deeper more ventilation is needed. Maybe question for AGM next November.
I suspect the Insurance Claim is thrown out. The shaft was drilled in the wrong place and thus fell down. Literally.

[blockhead]

Haven't read the Activities Report lately but it could be a horizontal shaft of course Mr Mouse

[mouse]

Haven't read the Activities Report lately but it could be a horizontal shaft of course Mr Mouse
Two Kilometres horizontal distance, plus a Graben!

[blockhead]

As I say, haven't read the report lately, just on the computer listening to WRC live in Germany

http://www.wrc.com/fanzone/world-rally-radio/

[Flogs]

One train left Ikamatua yesterday. Another today. Trucks running at capacity.Jubilation at output of the new machine.NZO to report on Wed 25th.

T64P, is this jubilation fact or just hope?

[Monkey Poms]

Can any of you Train spotters or ship spotters spot the name of the Pike River Coal employee who purchased 2.178.471 shares on the 12 th August 2010
the identity seems to be shrouded in mystery this makes me more determined to find out.
Pike partly shares sold under the employee purchase scheme on the 11th August 2010. NZX supplied all the information in full.

Found on Findata and NZX website:


ALLOT: PRC: Issue of Securities 02:23pm
PRC
11/08/2010
ALLOT

REL: 1423 HRS Pike River Coal Limited

ALLOT: PRC: Issue of Securities

ISSUE OF SECURITIES
Announcement in terms of listing rule 7.12.1

Please be advised of an issue of securities as follows;

(a) Class of Security - Unlisted partly paid Ordinary Shares
(b) Number issued - 2,178,471
(c) The nominal value and issue price - $1.10 to $1.39 (no nominal
value).
(d) Payment was in cash.
(e) Paid to 1 cent per share with the balance being due in accordance
with the terms of the issue.
(f) The percentage of the total class of securities issued - 24.7%
(g) The reason for issue - allocation of shares to employees under the
provisions of the Pike River Employee Share Ownership Plan (ESOP),
(h) The specific authority for the issue - Prospectus dated 5 June 2007,
and director's resolutions dated 21 January 2008, and 25 June 2010.
(i) The terms or details of the issue - Full rights to the new shares
attach when the balance of the issue price is paid. The price was set by
reference to a premium over the market price, the shares are escrowed for two
years, and have a final date of 5 years.
(j) Total number of listed securities in existence after the issue -
405,301,433 Ordinary Shares; 64,281,875 Options (2011)
(k) N/a
(l) Date of issue - 11 August 2010.
End CA:00198232 For:PRC Type:ALLOT Time:2010-08-11:14:23:59 Announcement


Monkey Poms

[manxman]

(g) The reason for issue - allocation of shares to employees under the
provisions of the Pike River Employee Share Ownership Plan (ESOP),

Monkey Poms

Is this necessarily to a single employee?

[Baddarcy]

Haven't read the Activities Report lately but it could be a horizontal shaft of course Mr Mouse I read it as a horizontal shaft too, if you have a look at the mine map on page 5 you will see there is a penciled in shaft just above where the ventilation shaft is. This penciled in tunnel than continues through the graben, thus the quote "non-critical path stone drive for ventilation"

[JoeBlogs]

That's the way I read it. A sort of reassurance that the remaining drives through the graben were non-critical at this stage, and wouldn't affect production. Not sure where you got 2 km from mouse?

[Ian]

http://www.railpage.com.au/f-p1429648.htm

quote
Pike River Coal also this week began railing its second consignment of coal to Lyttelton Portof Christchurch for export shipment. The 20,000-tonne parcel will be accommodated in KiwiRail’s existing South Island coal train programme of up to eight coal trains consisting of 30 wagons per day. Richard says he expects the full consignment will be moved within
a week to a week-and-a-half.

[peat]

http://www.railpage.com.au/f-p1429648.htm

quote
Pike River Coal also this week began railing its second consignment of coal to Lyttelton Portof Christchurch for export shipment. The 20,000-tonne parcel will be accommodated in KiwiRail’s existing South Island coal train programme of up to eight coal trains consisting of 30 wagons per day. Richard says he expects the full consignment will be moved within
a week to a week-and-a-half.

nice find
good to get some confirmation of that

shame that information is only available (first hand) to Kiwirail workers though

[geezy]

share price to leap 20 cents on this news? :)

[peat]

share price to leap 20 cents on this news? :)

wouldnt think so, its been said in this thread before that this delivery doesnt prove the business is viable. to do that they need to produce at much higher rates consistently.

[tony64peter]

...........Both

[tony64peter]

T64P, is this jubilation fact or just hope?
...................Both

[Baddarcy]

wouldnt think so, its been said in this thread before that this delivery doesnt prove the business is viable. to do that they need to produce at much higher rates consistently.

Yeah agreed, it's not so much the shipment being made, its how they are progressing on getting hydro up and running.

If they come out and say that the shipment is being made and Hyrdo is still on track for mid September and the ABM20 is going gangbusters towards the 2nd hydro panel, then the shareprice will go up definitly, but if there are any delays then it will drop even with the shipment.

[Dr_Who]

wouldnt think so, its been said in this thread before that this delivery doesnt prove the business is viable. to do that they need to produce at much higher rates consistently.

Ramp up production is only a formality. PRC needs to prove it has done the hard work and can produce coal. Anything from that onwards would come naturally and part of the progression. If the sp stays low, it can potentially be a T/O.

[rotweiller]

Another train due Ikamatua 1100 today - also a new ship at Coal Berth obviously not PRC at this stage.
Cheers

[Mr Tommy]

Found this old Pike document, must be a few years old now. A good read for a laugh ( or cry )


http://www.equity.co.nz/scripts/getfile.asp?DB_FILE_ID=335

[Ayrton]

PRC
23/08/2010
GENERAL

REL: 1717 HRS Pike River Coal Limited

GENERAL: PRC: Pike River Commences Railing Coal For 2nd Export Shipmen

PIKE RIVER COMMENCES RAILING COAL FOR SECOND EXPORT SHIPMENT

Pike River Coal has commenced railing coal from its rail loadout facility at
Ikamatua on the South Island's West Coast to the Port of Lyttelton in
preparation for its second export shipment of premium hard coking coal.

Pike River's inaugural export shipment of 20,000 tonnes of premium hard
coking coal went to India in February 2010. That shipment was worth
approximately NZ$3.3 million.

Chief Executive Gordon Ward says one train will run from Ikamatua to Port
Lyttelton daily for the next few days, increasing to two trains per day in
the latter half of this week.

"Our second export shipment, also 20,000 tonnes, is again destined for the
same life-of-mine customer, Gujarat NRE and is worth approximately NZ$6
million - significantly more than the last coal shipment due to higher coal
prices.

"Our coal will be loaded onto a panamax vessel at Port Lyttelton. The
vessel's current expected time of arrival at Lyttelton is 4 September 2010."
End CA:00198708 For:PRC Type:GENERAL Time:2010-08-23:17:17:52

[JoeBlogs]

Ah yes, September now. Why am I not surprised - someone needs to explain to these guys the concept of conservatism, or neutrality as a bare minimum. At lease this shipment will occur in the same year as initially forecast.....

[Unicorn]

I guess then that this will be considered to be the September shipment noted in the last Quarterly Activities Report "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."

[Baddarcy]

Sigh.....................would it really be so hard to give us an update on the hydro and AMB20 and general progress.................

[patrick]

Baddarcy
Not hard but we would not understand....that's the reasoning!

[JoeBlogs]

Yip, how patronising was that email sent to mouse? The comparison to reporting habits of Aussie mines was a joke - apples with apples please!

Was talking to a mate who's currently working as an electrical engineer for one of these Australian miners after many moons in the business over here - he raised a couple interesting points:

1) PRC are trying hard to recruit experienced technical staff, but are not offering the required packages to get first rate guys over here. We therefore end up with inexperience at best in high level positions.

2) The ABM20 is a good machine, but only in the right conditions. If the geology is tricky (i.e. undulating mine floor) it can be more trouble than it's worth.

The next couple of months should finally clear some things up for us - but of course we all know PRC's reporting policy, much like my grandmother used to say - "If you don't have anything nice to say, don't say anything at all!" (a lesson I obviously don't subscribe to) ;)

[Monkey Poms]

Ayrton. ( our coal will be loaded onto a panamax vessel )

This suggests the vessel will be partly loaded.
You have handy-size vessels loading up to about 45,000 tonnes. Panamax vessels load up to 60,000 tonnes, then you have the big Capes up to 175,000 tonnes plus.
Using a Panamax to ship 20,000 tonnes part- load is very expensive. It is possible to have a two port cargo - possibly Australian. This would also be expensive ( two sets of port dues ).
If Pike, in a moment of weakness, agreed to 20,000 tonnes of development coal at a discounted fob price, maybe more than 20,000 tonnes could have been agreed on a separate contract? Are all the trains loaded up to now carrying 1,500 tonnes, and how many trains can be loaded in the time scale up to 4th September? Or would it be easier to wait until Pike divulge the total?

Interesting stuff.

Monkey Poms.

[JoeBlogs]

Hi MP, it said in the release that the shipment will be 20,000 tonnes. Cheers

[blockhead]

The doomsayers should ponder on this part of the ann

Our second export shipment, also 20,000 tonnes, is again destined for the
same life-of-mine customer, Gujarat NRE and is worth approximately NZ$6
million - significantly more than the last coal shipment due to higher coal
prices.

Its not all bad if there is a bit of delay you know.

[Baddarcy]

Its not all bad if there is a bit of delay you know.

You are of course correct Blockhead, the fact they are doing a shipment is actually good news....i was just hoping for some info on the bits that will have a significant effect on SP, hydro and progress towards the 2nd hydro panel...

Guess we still have NZO's news day on Thursday to look forward to.

[percy]

Ayrton. ( our coal will be loaded onto a panamax vessel )

This suggests the vessel will be partly loaded.
You have handy-size vessels loading up to about 45,000 tonnes. Panamax vessels load up to 60,000 tonnes, then you have the big Capes up to 175,000 tonnes plus.
Using a Panamax to ship 20,000 tonnes part- load is very expensive. It is possible to have a two port cargo - possibly Australian. This would also be expensive ( two sets of port dues ).
If Pike, in a moment of weakness, agreed to 20,000 tonnes of development coal at a discounted fob price, maybe more than 20,000 tonnes could have been agreed on a separate contract? Are all the trains loaded up to now carrying 1,500 tonnes, and how many trains can be loaded in the time scale up to 4th September? Or would it be easier to wait until Pike divulge the total?

Interesting stuff.

Monkey Poms.
May have to do what pub talk said last time.{top up shipment with someone elses coal}

[the machine]

Ayrton. ( our coal will be loaded onto a panamax vessel )

This suggests the vessel will be partly loaded.
You have handy-size vessels loading up to about 45,000 tonnes. Panamax vessels load up to 60,000 tonnes, then you have the big Capes up to 175,000 tonnes plus.
Using a Panamax to ship 20,000 tonnes part- load is very expensive. It is possible to have a two port cargo - possibly Australian. This would also be expensive ( two sets of port dues ).
If Pike, in a moment of weakness, agreed to 20,000 tonnes of development coal at a discounted fob price, maybe more than 20,000 tonnes could have been agreed on a separate contract? Are all the trains loaded up to now carrying 1,500 tonnes, and how many trains can be loaded in the time scale up to 4th September? Or would it be easier to wait until Pike divulge the total?

Interesting stuff.

Monkey Poms.

most likely solid energy have balance of cargo

M

[Monkey Poms]

Quite right Blockhead. Until hydro-mining starts all we can do is nit pick.

Monkey Poms

[Corporate]

"Our second export shipment, also 20,000 tonnes, is again destined for the
same life-of-mine customer, Gujarat NRE and is worth approximately NZ$6
million - significantly more than the last coal shipment due to higher coal
prices.


$6,000,000 / 20,000 = NZ$300 per/t. At the current exchange that that is $210 per/t...not bad compared to the original prospectus.

[digger]

$6,000,000 / 20,000 = NZ$300 per/t. At the current exchange that that is $210 per/t...not bad compared to the original prospectus.

And in that price there is a discounted as is not pure coal being made up from rock floor etc,or so i have read. Things will improve just be patient for one more year.Have been saying this for a number of years i know but this time it is different.Just about 6 months away from the time a lot of you posters will be saying how your kicking yourselves for not buying in at todays prices.By the end of this year things will becoming clear how well PIKE will do or otherwise.

[dsurf]

update on the hydro and AMB20 and general progress - coming very soon as PRC will be doing their Full year results announcement shortly also.

$6,000,000 / 20,000 = NZ$300 per/t. At the current exchange that that is $210 per/t...not bad compared to the original prospectus. Is pleasing & should allay any immediate cash flow fears.

Very slowly PRC is derisking. Something to ponder - At the end of the CURRENT financial year PRC will have $50million revenue & be a growth stock based on an increasing production profile. IMO it will take a few more shipments before the market believes any suggested product profile but come December IF another couple of shipments have left then this could reduce the negativity to "market levels" and that alone will induce SP increases.

Discl: building stake in OA's

[Dr_Who]

The doomsayers should ponder on this part of the ann

Our second export shipment, also 20,000 tonnes, is again destined for the
same life-of-mine customer, Gujarat NRE and is worth approximately NZ$6
million - significantly more than the last coal shipment due to higher coal
prices.

Its not all bad if there is a bit of delay you know.

Shareholders have waited for nearly 3 years, so whats another couple of months. Silly to sell now when the coal is finally coming out of the ground and being shipped, which equates to income. Watch the re-rating of PRC once they can show ramp up in hydro mining. This is of cos assuming global coking prices stay the same and/or goes higher.

[Mr Tommy]

Sigh.....................would it really be so hard to give us an update on the hydro and AMB20 and general progress.................

Baddarcy, there was an extra line missed off that release yesterday

"Gorden Ward also reported the AMB23456 was going gangbusters. So far it had managed to run over 3 stoats and 2 rats. And it had managed to swerve to avoid a giant snail that happened to walk out in front of it"

[Awamoa]

Its 8 months today until the options have to be excercised or lapse.
What are the thoughts on these being worthwhile.
Currently selling for 12.5 cents plus excercise price of $1.25.Will Pike make $1.375 before 24/04/2011?

[Paint it Black]

Its 8 months today until the options have to be excercised or lapse.
What are the thoughts on these being worthwhile.
Currently selling for 12.5 cents plus excercise price of $1.25.Will Pike make $1.375 before 24/04/2011?

The market says even money but it's definitely worth a punt I'd say with the second shipment on it's way. Potentially there is a quick upside if you are a trader.

[JoeBlogs]

Barring any more major delays or stuff-ups, the sp should be well above 1.40

Of course you wouldn't pay 12.5c for an option today if you thought sp would only be 1.40ish at expiry - pretty big risk exposure for no real gain!

[Balance]

Its 8 months today until the options have to be excercised or lapse.
What are the thoughts on these being worthwhile.
Currently selling for 12.5 cents plus excercise price of $1.25.Will Pike make $1.375 before 24/04/2011?

8 months to go.

If PRC can show coal production at 80,000 t per month by then, you will have the sp at $1.50 at least.

So PRCOA could be worth 25c by then at least = 100% upside, compared to PRC head share gain of 56%.

Plus maximum downside is 12.5c versus PRC's head share.

That is the game - in layman's terms.

[Corporate]

I just did an interesting calculation

Market cap $385,000,000/18,000,000 tonnes of coal = $21 bucks a tonne. I'm getting interested.

[manxman]

I just did an interesting calculation

Market cap $385,000,000/18,000,000 tonnes of coal = $21 bucks a tonne. I'm getting interested.

And 80,000 tonnes/month @ $NZ300 per tonne gives revenue of $24 million/month and surely costs have not crept up past $NZ150 / tonne.
So that leaves about $12 million / month cash in hand on a capital of $385,000,000. Serious cash.

And then take digger's point that they aren't yet shipping top grade coal, so there's a wee upside.

And don't forget the Paparoa seam. Another 9,000,000 tonnes, and they will have drilled it so thoroughly while they work above it that they won't be risking another Graben surprise.

Will the coal price hold up? Well if steel demand falls, it will be the older, smaller, less efficient plant that is shut down first. The big new stuff which demands premium coal, will be kept on. Logic indicates that the best coals won't fall as much in price as the average.

Its just the same as it always was. They just have to get the coal out. If they can get 20,000 tonnes/week then the SP must go straight past $2.

[Beagle]

And 80,000 tonnes/month @ $NZ300 per tonne gives revenue of $24 million/month and surely costs have not crept up past $NZ150 / tonne.
So that leaves about $12 million / month cash in hand on a capital of $385,000,000. Serious cash.

And then take digger's point that they aren't yet shipping top grade coal, so there's a wee upside.

And don't forget the Paparoa seam. Another 9,000,000 tonnes, and they will have drilled it so thoroughly while they work above it that they won't be risking another Graben surprise.

Will the coal price hold up? Well if steel demand falls, it will be the older, smaller, less efficient plant that is shut down first. The big new stuff which demands premium coal, will be kept on. Logic indicates that the best coals won't fall as much in price as the average.

Its just the same as it always was. They just have to get the coal out. If they can get 20,000 tonnes/week then the SP must go straight past $2.

On the other hand, if there's another ventilation shaft collapse or some other mine disaster the shares are completly worthless as this company has tapped investors pockets to the absolute max and has simply run out of excuses. Where's my pet stoat ?

[Balance]

On the other hand, if there's another ventilation shaft collapse or some other mine disaster the shares are completly worthless as this company has tapped investors pockets to the absolute max and has simply run out of excuses. Where's my pet stoat ?

How dare you! The Piker lynch mob is on its way to your home.

[Beagle]

How dare you! The Piker lynch mob is on its way to your home.

Not too worry, I'll sick my three lap dogs on the lot of them, they're really hungry and looking for another good fight after ferretting out and giving a certain Timaru cat a bloody good mauling the other day.

Seriously, those options look worthless to me, eight months to run...mind you I don't think much of the head share so I could be just a little biased and jaundiced from all the B.S. out there.

[manxman]

Seriously, those options look worthless to me, eight months to run...mind you I don't think much of the head share so I could be just a little biased and jaundiced from all the B.S. out there.

Disclosure: As a beardless youth, I was doing research on high swelling west coast coking coals in the 1960s so I admit an emotional need to see this thing succeed. I was a shareholder from the IPO until the vent shaft collapse, when I revolted against the standard of information coming from the company. They now look like one of the few exciting prospects on the NZX. The company has a great record of completing developments on time and under budget except when they are on the critical path. I promised Mrs Manxie a trip to Greymouth to see the first coal ship turn round in the river. And another trip to see the first coal train depart from Ikamatua. Its been a veritable vale of tears, but the patient may be rewarded next year. For the options, well if the hydro mining gets up to speed, there may still be a delay before the market appreciates it. I think that 8 months is still too tight to get the market to move, but the heads must move once(if) the coal production is established.

[blockhead]

Yes Mr Manx, I am a little like you, have been in Pike and NOG since the flag dropped, have traded them both a bit but collectively I am down 23% on a sizeable chunk, have never lost faith but have often had Mrs Blocky telling me I would have been better to have put it all in SSB like her.

Also like you Mr Manx you can throw me as far as you like but I always reckon I will land on my feet.....have stumbled a few times though.

I do believe PRC will soon get there and I shall be rewarded, wish I didn't have so many options I paid 17c for though, that creates a bit of stress

[Balance]

Yes Mr Manx, I am a little like you, have been in Pike and NOG since the flag dropped, have traded them both a bit but collectively I am down 23% on a sizeable chunk, have never lost faith but have often had Mrs Blocky telling me I would have been better to have put it all in SSB like her.

Also like you Mr Manx you can throw me as far as you like but I always reckon I will land on my feet.....have stumbled a few times though.

I do believe PRC will soon get there and I shall be rewarded, wish I didn't have so many options I paid 17c for though, that creates a bit of stress

Tick .... tick ..... tick ...?????

[mouse]

Tick .... tick ..... tick ...?????
What I have posted before. The clock is still ticking.
The sp has to get over $1.40 by April next year to make holding the options worthwhile. Should we fail to get the coal out then Pike is a takeover target. Either way, I prefer to hold shares, not options. Although I do hold the 2,600 options that I was allocated originally.

[Balance]

What I have posted before. The clock is still ticking.
The sp has to get over $1.40 by April next year to make holding the options worthwhile. Should we fail to get the coal out then Pike is a takeover target. Either way, I prefer to hold shares, not options. Although I do hold the 2,600 options that I was allocated originally.

How can PRC be a takeover target if it is not producing coal?

[percy]

How can PRC be a takeover target if it is not producing coal?

Surely a coal mine where the coal has not been mined is worth more than one where the coal has been mined.

[Bilo]

Surely a coal mine where the coal has not been mined is worth more than one where the coal has been mined.
Very good Percy but is it a coal mine until it is mining coal?

[RRR]

How can PRC be a takeover target if it is not producing coal?

Good one. Added more to the kitty last week. They will dig out coal one by one, piece by piece.

[Balance]

Surely a coal mine where the coal has not been mined is worth more than one where the coal has been mined.

Man, that is profound logic!

Bit like saying that a truck is worth more parked in the garage than when it driven?

If you are saying that PRC is not producing coal because of management incompetence - then, a takeover makes sense to a Solid Energy or one of the Australian coal miners which has expertise.

[percy]

Thank you posters for taking my post in the good humour it was posted in.
Sometimes I find I just can not help myself,and I would be upset if my attempt at humour offended others.

[swissboy]

2 more Engines due at Ikamatua today. First sign was 19th Aug. therefore 10500 tons should be sitting at Littleton this evening and promissed 2 Trains from later on this week = 10 days to 4 Sept. each with 3000 tons total 30k tons = 40000 tons by arrival of Ship. Why say 20000 expected next shipment

[BigBob]

2 more Engines due at Ikamatua today. First sign was 19th Aug. therefore 10500 tons should be sitting at Littleton this evening and promissed 2 Trains from later on this week = 10 days to 4 Sept. each with 3000 tons total 30k tons = 40000 tons by arrival of Ship. Why say 20000 expected next shipment

Maybe 20,000 tons is all they contracted on the vessel with someone else booking the spare capacity.... Maybe they're stockpiling in Lyttleton wating for another vessel... or maybe they're going to stop the trains from Ikamatua when they get to 20,000...

[mouse]

Surely a coal mine where the coal has not been mined is worth more than one where the coal has been mined.
There is a serious side to this debate. Should Pike Management fail to get the coal out, then takeover happens and Management is replaced. Which is why Management has to do the decent thing and get us some coal. I do not mind if they hit 700,00 or 800,000 tonnes a year. They can fail to hit a million. I always thought that figure was a bit like a politicians promise. Taken with scepticism. (We should have spell check on this blog, I even had to look it up in the dictionary). However production has to happen, or Management is gone. Not I hasten to add due to any shareholder action, just plain Market Forces.
Either way, shareholders should be OK.

[Beagle]

There is a serious side to this debate. Should Pike Management fail to get the coal out, then takeover happens and Management is replaced. Which is why Management has to do the decent thing and get us some coal. I do not mind if they hit 700,00 or 800,000 tonnes a year. They can fail to hit a million. I always thought that figure was a bit like a politicians promise. Taken with scepticism. (We should have spell check on this blog, I even had to look it up in the dictionary). However production has to happen, or Management is gone. Not I hasten to add due to any shareholder action, just plain Market Forces.
Either way, shareholders should be OK.

Good post Mouse...provided they don't run out of cash in the meantime. Surely NZOG must be a bit sick and tired of propping up this problem child ? As I may have mentioned before, NZOG must be thinking...staight out of one black hole, (Tui) and down another...

On another subject the only way the option pricing makes sense to me is as a loss / risk mitigation stratagy, otherwsie pricing looks expensive. I think its pretty safe to say this must be one of the highest risk shares on the market, so maybe option pricing isn't all that far out of the ballpark. I can't see how the Black & Scholes option pricing model would possibly be of any use here as the outcomes are so incredibly variable, so I suppose one simply has to go with one gut feel on the option price. I'd be interested if I had any confidence in the management or more specifically their "communication skills"

[Balance]

There is a serious side to this debate. Should Pike Management fail to get the coal out, then takeover happens and Management is replaced. Which is why Management has to do the decent thing and get us some coal. I do not mind if they hit 700,00 or 800,000 tonnes a year. They can fail to hit a million. I always thought that figure was a bit like a politicians promise. Taken with scepticism. (We should have spell check on this blog, I even had to look it up in the dictionary). However production has to happen, or Management is gone. Not I hasten to add due to any shareholder action, just plain Market Forces.
Either way, shareholders should be OK.

I will say this about Pikers - unlike the clowns in NZS who bailed out at 40 cents or thereabouts (including Hunter Hall - big institution with a battery of PHDs and MBAs to manage their investments!) and so gave Olam the opportunity to buy a long term play at a low price, Pikers have hung on.

Whether you are rewarded remains to be seen.

[dsurf]

How can PRC be a takeover target if it is not producing coal?

Doing second shipment shortly :) , then one every 2 months after that!!! Top quality & pre sold!!

[Ian]

I will say this about Pikers - unlike the clowns in NZS who bailed out at 40 cents or thereabouts (including Hunter Hall - big institution with a battery of PHDs and MBAs to manage their investments!) and so gave Olam the opportunity to buy a long term play at a low price, Pikers have hung on.

Whether you are rewarded remains to be seen.

It would seem a bit dumb to sell now just when things are really starting to look good.
I think there is still a bit of selling volume hanging around from the last lot of fund rasing – A few were brought on leverage positions so some might be reducing their positions a bit or not be in a strong position to buy more - once this blip is push though we shouldn’t see a lot of selling pressure (assuming things stay relatively on track)

[BigBob]

FLLYR: PRC: PRC result for year ended 30 June 2010

PRC
25/08/2010
FLLYR

REL: 1158 HRS Pike River Coal Limited

FLLYR: PRC: PRC result for year ended 30 June 2010

PIKE RIVER COAL LIMITED

Results for announcement to the market - 25 August 2010
Reporting period: 12 months ended 30 June 2010
Previous reporting period: 12 months ended 30 June 2009

12 months to
30 June 2010 12 months to
30 June 2009 Increase / (decrease)
NZD 000's NZD 000's %
Revenue from ordinary activities 3,346 5
66820 %
Loss for the period from ordinary activities after tax attributable to
security holders (39,028) (13,018)
(200) %
Net loss attributable to security holders (39,028)
(13,018) (200) %

As at
30 June 2010 As at
30 June 2009 Increase / (decrease)
Net tangible assets per share $ 0.64 $ 0.72 (11)
%

Amount per security Imputed amount per security
Interim/final dividend n/a n/a
Record date n/a
Dividend payment date n/a

Results for announcement to the market - 25 August 2010 (continued)
Reporting period: 12 months ended 30 June 2010
Previous reporting period: 12 months ended 30 June 2009
Pike River Coal Limited (PRCL) has reported a $39.0 million loss for the
financial year ended 30 June 2010 (2010 financial year) reflecting that the
namesake Pike River mine was in the development phase through the year. Sales
revenue received from the company's first shipment of premium hard coking
coal in February 2010 was $3.3 million. This coal was produced mainly from
the underground "pit-bottom" area where large excavations have been made for
the hydro-mining operations which are due to commence in mid-September 2010.
Hydro-mining is the main method of coal mining and uses highly pressurised
water to cut coal.
Costs of sales of $48.1 million included a depreciation and amortisation
charge of $8.8 million. Financial expenses of $6.1 million include $4.9
million of interest expense. A slight weakening of the US dollar cross rate
against the NZ dollar during the year resulted in $1.4 million of realised
exchange gains and $1.3 million of unrealised exchange gains primarily on the
USD denominated convertible bond.
An income tax benefit of $13.0 million has been recorded for the 2010
financial year. This tax benefit is recognised at the new company tax rate
that comes into effect on 1 July 2011 of 28% and is recognised in the income
statement as the company is expected to generate taxable profits in the
future, against which the tax losses can be offset.
In accordance with standard accounting policies, a total of $11.4 million
post production costs for pit-bottom roadway construction have been
reclassified during the 2010 financial year from operating costs to
production assets. These costs will be written off over the mine life based
on the saleable coal production in each reporting period as a percentage of
total saleable coal from the mine (the 'units of production' basis).
A further $25.2 million cash was invested in Pike River mine assets in the
2010 financial year. The total investment in mine assets at balance date was
$288.1 million, this being net of accumulated depreciation and amortisation
charge to 30 June 2010 financial year of $11.2 million.
The results for this period reflect that the mine is still in development.
During the 2010 financial year all coal was development coal recovered by
coal cutting machines - the roadheader and two continuous miners. A
considerable amount of driveage in stone was required to drive the access
roadways through the rock graben back into coal in April 2010. The costs of
pit-bottom development work and stone driveage in the rock graben from
September 2009 to 20 April 2010 have been expensed.
Accompanying this announcement are the company's financial statements for the
period ended 30 June 2010 that have been prepared in accordance with New
Zealand generally accepted accounting practice (NZ GAAP). The financial
statements give a true and fair view of the matters to which they relate and
our auditors (KPMG) have reviewed the financial statements and their audit
report is attached to the financial statements.
This announcement together with the attached financial statements provide the
information required in accordance with NZX Listing Rule 10.4.2, Appendix 1
and ASX Listing Rule 4.3A
Further information:
Brian Roulston +64 9 367 9367 Gordon Ward +64 4 494
0190
Company Secretary Chief Executive and
Managing Director

[zon]

The statement includes 4.2m of coal stock as of 30/6?

[Ian]

The statement includes 4.2m of coal stock as of 30/6?

So have they extrated a bit more coal than we think !!! Inventories are also valued at the lower of cost or net realisable value

(g) Inventories
Inventories of saleable coal are valued at the lower of weighted average cost or net realisable value. Costs include direct material,
labour and transportation expenditure incurred in getting such inventories to their existing location and condition, together with an
appropriate portion of overhead expenditure. Inventories of materials, consumable supplies and maintenance spares expected to
be used in production are valued at weighted average cost. All inventory is valued at lower of cost or net realisable value. Net
realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the
estimated costs necessary to make the sale.

[dsurf]

What an uninspiring statement - We all know what happened up to the 30 June. What I would like are some forward looking statements even if they are averaged out.

e.g. 1/4 production will 30K
2/4 production will be 60K
3/4 production will be 100K
4/4 production will be 200K

These guys need to hire a PR person to do their media statements.

[Baddarcy]

These guys need to hire a PR person to do their media statements.

Totally agree, i've never seen a company so keen to keep news secret.

Most compamies when they have good news can't wait to run out and tell the world, but not this one.

They still have not even admitted offically to the market that the ABM20 is even on site.

[BigBob]

What an uninspiring statement - We all know what happened up to the 30 June. What I would like are some forward looking statements even if they are averaged out.

e.g. 1/4 production will 30K
2/4 production will be 60K
3/4 production will be 100K
4/4 production will be 200K

These guys need to hire a PR person to do their media statements.

Well you'll be happy to know that "PRC Have provided NZX with a copy of their Operations Update Presentation and Financial Results to 30 June 2010"....

The presso is not on their website so maybe not available to mere mortals....

[Baddarcy]

Well you'll be happy to know that "PRC Have provided NZX with a copy of their Operations Update Presentation and Financial Results to 30 June 2010"....

The presso is not on their website so maybe not available to mere mortals....

You can get it at NZX.co.nz :-)

Looks good so far hydro still on track and roadways in first panel complete !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Baddarcy]

Sorry a bit messy as have cut and pasted from a PDF.

Operations Update
and
Financial Results to 30 June 2010
25 August 2010
11
Operations Update
Hydro Min ing Status
•
Coal mining conditions are excellent
•
Roadways in hydro panel completed Aug 2010
•
Hydro-mining infrastructure largely completed
•
Large excavations completed at pit bottom for
water storage, sumps, hydro-pumps
•
Pumps now installed underground
•
First hydro-mining on track for mid Sept 2010
22
Roadway Development –
Mining Machines
ABM20 Continuous Miner
•
Coal cutting machines boosted by leased
ABM20 continuous miner
•
Single pass machine ideally suited for long,
straight roadways
•
Commenced mining at Pike 8 August 2010
•
Average daily advance rate achieved 12.2
metres
per day compared to budget 8
metres. This includes equipment moves etc
which are not regular.
•
A second ABM20 has been purchased, for
NZ$5m scheduled start date January 2011
Roadheader
•
Performance improving
•
Average daily advance rate:
May –
Aug 10:
2.8 metres
July –
Aug 10:
4.2 metres
(budget
8m/day)
•
Fluming has been trialed from directly behind
roadheader
and shows rates will improve.
33
Roadway Development –
Mining Machines
Continuous Miners
Two CMs
•
Average daily advance rate:
May-Aug 10: 2.2 metres
per machine (budget 8m per machine)
•
Modifications required to improve performance
•
Replace electric with hydraulic drives
•
Redesign cutting head booms
•
Basic modification approx 2-3 months to modify the CM to increase
availability
•
Further design modifications required to improve machine performance
•
Extent to which modifications undertaken will depend on performance of
ABM20s
44
Coal Price
•
Coal price achieved for February 2010
export shipment was US$122 per
tonne
•
Industry has now moved to mixture of
annual and quarterly coal price setting
•
Qtr ended 30 June 2010, US$200
per tonne
(FOB)
•
Qtr ended 30 September 2010,
US$225/t (FOB)
•
Spot prices were below US$200/t but
now above US$200/t
55
Second Export Shipment
•
Next Pike shipment 20,000
tonnes
worth approx NZ$6m
•
Ship ETA 4 Sept 2010
•
Shipment to life-of-mine Indian
customer, Gujarat NRE
•
Pike premium hard coking coal
used in steel-making process
66
Income Statement
Year ended
30 June 2010
$M
Year ended
30 June
2009
$M
Operating loss (48.8) 1 (11.2)
Net finance income (expense) (3.2) 2 (5.6)
Loss before income tax (52.0) (16.8)
Income tax benefit 13.0 3.8
Loss for the period (39.0) (13.0)
•
Mine in the development phase through the year
•
Considerable amount of drivage
in stone was required to drive access roadways
through rock graben
back into coal April 2010
•
Cost of pit-bottom development work and stone drivage
in rock graben
from Sept
2009 to 20 April 2010 have been expensed.
1. Includes depreciation and amortization of $8.8m
2. Includes $4.9m interest expense; and is net of a $2.7m fx
gain primarily on convertible
bonds.
Financial Results –
Year Ended 30 June 2010
77
Balance Sheet
At 30 June 2010
$M
At 30 June 2009
$M
Assets
Non-current assets 309.4 280.6
Current assets 30.6 25.8
Total assets 340.0 306.4
Liabilities
Non-current liabilities 42.9 43.0
Current liabilities 34.8 10.5
Total liabilities 77.7 53.5
Net assets 262.3 252.9
Equity
Share capital 314.5 266.1
Retained earnings (52.2) (13.2)
Total equity 262.3 252.9
Financial Results –
Year Ended 30 June 2010
8
Statement of Cash Flows
Year ended
30 June 2010
$M
Year ended
30 June 2009
Cash flows from operating activities $M
Cash from customers 3.4 -
Cash paid to suppliers and employees
Net interest
(47.5)
(3.3)
(6.2)
(0.9)
(47.4) (7.1)
Cash flows from investing activities
Acquisition of mine development assets
Acquisition of intangible mine assets
Acquisition of mine production assets
Acquisition of property, plant and equipment
Repayment of bonds and deposits
(13.0)
(1.1)
(10.5)
(0.6)
1.1
(77.4)
-
(2.3)
(0.1)
1.3
(24.1) (78.5)
Cash flows from financing activities
Proceeds from issue of share capital 47.5 43.4
Loan drawdowns 30.5 -
Repayment of borrowings (7.6) -
70.4 43.4
Net increase/(decrease) in cash and cash equivalents (1.1) (42.2)
Opening cash and cash equivalents 21.7 63.9
Closing cash and cash equivalents 20.6 21.7
Financial Results –
Year Ended 30 June 2010

[BigBob]

You can get it at NZX.co.nz :-)

Fair enough. I should have looked there...

My real beef is with the NZX. I don't get why they allow a release like that. It should be a requirement that the information is in the release - not just a statement to say that it has been released...

[Baddarcy]

Fair enough. I should have looked there...

My real beef is with the NZX. I don't get why they allow a release like that. It should be a requirement that the information is in the release - not just a statement to say that it has been released...

I work for a web based IT firm, they do it on purpose, they want you to look the thier website as it has advertising on it that you wouldn't see otherwise :-)

[sideline]

Well you'll be happy to know that "PRC Have provided NZX with a copy of their Operations Update Presentation and Financial Results to 30 June 2010"....

The presso is not on their website so maybe not available to mere mortals....

BigBob, if you get an ASX quote for PRC any reference there to the announcement will point you
to the presentation itself - no runaround like on the NZX!

[BigBob]

I work for a web based IT firm, they do it on purpose, they want you to look the thier website as it has advertising on it that you wouldn't see otherwise :-)

Well, they should include a URL then....


BigBob, if you get an ASX quote for PRC any reference there to the announcement will point you
to the presentation itself - no runaround like on the NZX!

Exactly...! It's not hard...!

[blockhead]

All that information seems tell me it is just about game on, get the ABM's modified a bit and start watching the trains pulling into Lytelton

[Ian]

yes it looks to be good news surprised the sp hasn't reated a bit stronger

[Beagle]

yes it looks to be good news surprised the sp hasn't reated a bit stronger

Yeah, look I just put my hand up for a lazy 10K...mainly because I was bored sh#tless this afternoon and can't think of any other way to make money today, just maybe after all this time this mine might finally get working....after all these years of sitting on the sideline with this stock I can't resist having a small punt any longer.

[digger]

Yeah, look I just put my hand up for a lazy 10K...mainly because I was bored sh#tless this afternoon and can't think of any other way to make money today, just maybe after all this time this mine might finally get working....after all these years of sitting on the sideline with this stock I can't resist having a small punt any longer.

Well i certainly will be saying Roger to your post Roger. After sooo many years of delays it looks like it will soon be game on. Will have a hugh effect on NZO that in this last year have had to carry both PIKE and KUPE. To have them both soon up and producing will and bringing in income instead of draining it will be a new world.

[Baddarcy]

Yes agreed it looks like fairly good news. Hydro is still on target, even sounds like it might be a bit ahead of schedule, it sounds like they are just about ready to go.

The ABM20 has been going ok by the sounds of it, good enough that they have bought a second one. Only bit of negative news i could see is that the roadheader and Cont miners are not really cutting the mustard, but at least they are being proactive and essentially replacing them with the AMB20's.

[Beagle]

Well i certainly will be saying Roger to your post Roger. After sooo many years of delays it looks like it will soon be game on. Will have a hugh effect on NZO that in this last year have had to carry both PIKE and KUPE. To have them both soon up and producing will and bringing in income instead of draining it will be a new world.

Roger that !! Its just a pity that this news and the lack of drain on NZO comes as markets overseas look sooo gloomy.

[Dr_Who]

Roger that !! Its just a pity that this news and the lack of drain on NZO comes as markets overseas look sooo gloomy.

Gloomy market = opportunity

The lower the sp the better. Abit like shopping at the Briscoe sale.

[Flea]

The ABM20 machine which is on hire is now doing 12.2M avg advance per day which must be about 180 cubic metres of coal which should net around $50k per day revenue. This is all before the hydro mining ramps up which is supposed to get them to forecast. Largely they should be at least creating enough revenue to limit the cash burn and get over their development stage which has been going on for 3 years now.

Word from an aquaintance is staff have been offered a bonus scheme to work their butts off to deliver the forecast, obviously these types of scenarios have risks and can back fire (BP comes to mind) by something going wrong but if they achieve target happy days for the shareprice and resulting dividends will be crazy because they only have low debt. Am I right in thinking if they pull off $200M per annum revenue and they paid a typical 75% of earnings as dividend that would be - 150M divided by total shares 393M = $0.38 cents per share dividend, I like that thought but half that would do fine!

[Corporate]

The ABM20 machine which is on hire is now doing 12.2M avg advance per day which must be about 180 cubic metres of coal which should net around $50k per day revenue. This is all before the hydro mining ramps up which is supposed to get them to forecast. Largely they should be at least creating enough revenue to limit the cash burn and get over their development stage which has been going on for 3 years now.

Word from an aquaintance is staff have been offered a bonus scheme to work their butts off to deliver the forecast, obviously these types of scenarios have risks and can back fire (BP comes to mind) by something going wrong but if they achieve target happy days for the shareprice and resulting dividends will be crazy because they only have low debt. Am I right in thinking if they pull off $200M per annum revenue and they paid a typical 75% of earnings as dividend that would be - 150M divided by total shares 393M = $0.38 cents per share dividend, I like that thought but half that would do fine!

Unless coal prices go through the roof there is no way they will pull of $200m in free cash flow. I'd go with $100m conservatively and paying out 50% of profits. Still a great return

[Monkey Poms]

The ABM20 machine which is on hire is now doing 12.2M avg advance per day which must be about 180 cubic metres of coal which should net around $50k per day revenue. This is all before the hydro mining ramps up which is supposed to get them to forecast. Largely they should be at least creating enough revenue to limit the cash burn and get over their development stage which has been going on for 3 years now.

Word from an aquaintance is staff have been offered a bonus scheme to work their butts off to deliver the forecast, obviously these types of scenarios have risks and can back fire (BP comes to mind) by something going wrong but if they achieve target happy days for the shareprice and resulting dividends will be crazy because they only have low debt. Am I right in thinking if they pull off $200M per annum revenue and they paid a typical 75% of earnings as dividend that would be - 150M divided by total shares 393M = $0.38 cents per share dividend, I like that thought but half that would do fine!

Flea How did you get 180 cubic metres a day.


Monkey poms.

[bung5]

$200 mil revenue is realistic..... but not profit.

[Agronomia]

Anyone know how much (so far!) NZO have invested in PRC, can guess what sort of money NZO would require to sell out their holding and what then that might translate to in terms of value of PRC and then possible shareprice?

[JoeBlogs]

If they earn similar amounts as for the current shipment, and mine 1 million tonnes per year, they will be looking at revenue of:

($6,000,000/20,000 tonnes) x 1,000,000 tonnes = $300 million

This is, incidentally what the latest McDuall Stuart report forecasts for 12F, giving a forecast NPAT of $130 million ish (although this is based on 850 kt).

So revenue could realistically be anywhere in the range $200-350 million, with a profit range of say $80-$180.

McDualls are going for 12F eps of 32.2, with a 17 cps dividend.

[Beagle]

If they earn similar amounts as for the current shipment, and mine 1 million tonnes per year, they will be looking at revenue of:

($6,000,000/20,000 tonnes) x 1,000,000 tonnes = $300 million

This is, incidentally what the latest McDuall Stuart report forecasts for 12F, giving a forecast NPAT of $130 million ish (although this is based on 850 kt).

So revenue could realistically be anywhere in the range $200-350 million, with a profit range of say $80-$180.

McDualls are going for 12F eps of 32.2, with a 17 cps dividend.

I doubled down this morning on my very small punt yesterday, it looks like the new machine cuts more than the mustard LOL...hey if a conservative accountant like me can get a sniff of a forthcoming profit, maybe analysts and others can too and its off to the races for the SP...?

[JoeBlogs]

I think we're definately headed in the right direction - 100,000 off market trade at 99 c this morning is a good sign I would think. I like the fact that they're getting a second ABM20 in, sounds like this mine could be well suited to 'the beast' with it's reasonably steady grade, and long straight roads. In saying that, I'm very reluctant to get too far ahead of myself with PRC these days - will just keep quietly hoping ;)

[Flea]

Monkey Poms
ABM20 data sheet - Overall width in operation 4.9/5.2M, Overall height in operation 2.15/2.45/3M (not sure if roof height is 3 but pic on quarterly activities report showed plenty of headroom above staff shown but this maybe the main tunnel)
Therefore 12.2 x 5 x 3 = 183 cubes
Machine is capable of advance rates of 56-72M per day in ideal conditions with competent operators, so if we squeeze a bit more out of her there's good upside potential

[JoeBlogs]

Interesting Flea, so with 2 of these machines in the right conditions, with experienced operators, you could theoretically get 435-560kt per year (5 day weeks) without even worrying about hydro. That compares pretty well to the 200 kt they're currently forecasting.

[Ian]

If they earn similar amounts as for the current shipment, and mine 1 million tonnes per year, they will be looking at revenue of:

($6,000,000/20,000 tonnes) x 1,000,000 tonnes = $300 million

This is, incidentally what the latest McDuall Stuart report forecasts for 12F, giving a forecast NPAT of $130 million ish (although this is based on 850 kt).

So revenue could realistically be anywhere in the range $200-350 million, with a profit range of say $80-$180.

McDualls are going for 12F eps of 32.2, with a 17 cps dividend.

This should surely put the SP up around the $2 within the next 6-12months

[blockhead]

Whoa there boys !! don't get ahead of your selves, you will draw (un) Balanced out of his lair

Far too positive, there is not a negative post on this page

[JoeBlogs]

We may need some Balance - it's nice to excercise a few 'what ifs' sometimes, but these guys still have to delliver. Interestingly, they have set a new milestone by actually beating one of their forecasts! (ABM20 advance rate). So out of the hundred or so forecasts we can measure them against so far, thats........... about a 1% hit rate! Where's my checkbook......... ;)

[Ian]

We may need some Balance - it's nice to excercise a few 'what ifs' sometimes, but these guys still have to delliver. Interestingly, they have set a new milestone by actually beating one of their forecasts! (ABM20 advance rate). So out of the hundred or so forecasts we can measure them against so far, thats........... about a 1% hit rate! Where's my checkbook......... ;)

Well hopefully you wont wait to long getting that cheque book out ...

[Baddarcy]

Well hopefully you wont wait to long getting that cheque book out ...

Seems to be plenty of sellers still around at 99c so i'm not sure you have to rush to find your chequebook JB :-)

[remy]

craigs ip released some research yesterday..

"We keep BUY rating and NZ$1.39 target price
We estimate that PRC will likely produce EBITDA of NZ$73.6m (down from NZ$76m) in FY11 and
NZ$212.4m (up from NZ$210m) in FY12. The key downside risks to our target price include a
sustainable drop in the global HCC price and longer-than-anticipated delays in production. We
have a Buy rating and NZ$1.39 target price."

[macduffy]

Just a thought, but can I interest any of you Pike River people in having a look at Bathurst Resources - BTU?

An Aussie company that has bought ( by option) the rights to the Buller Coal Project from L and M Mining. The BCP virtually surrounds Solid Energy's Stockton mine and hosts similar high quality coking coal as Stockton.

A Definitive Feasibility Study has been completed for the first phase and preliminary reports are favourable. Rail, port, power facilities etc are in place or readily upgradable. A final decision to mine is expected before the end of 2010.


Yes, it's about time BTU had it's own thread!

Sorry for highjacking PRC's but I thought you might be interested.

[Billy Boy]

Extract from LPC,s ann.
Coal export volumes fell 2.7% to about 2 million tonnes though the port is preparing for an influx of hard coking coal from Pike River, and longer term making sure it has enough storage space for when the Buller Coal Project is started.

Mc duff
"Sorry for highjacking PRC's but I thought you might be interested"
Not at all !! very interesting indead, thanks.
Some thing now beginning to add up !!
BB

[Corporate]

Well after a long time watching I picked up 10,000 pike today. Not a big investment but I'm in :-)

[gNZ]

Hi all.
newbie question-
Is the craigs target price for end of financial year?

[JoeBlogs]

Hi gNZ

Generally when an analyst gives a 12 month price target they're referring to a year from the date of the report - but I wouldn't worry too much about the timing detail, they're basically saying in the next year or so we're targeting 'x' price.

Cheers

[Beagle]

Well after a long time watching I picked up 10,000 pike today. Not a big investment but I'm in :-)

Ditto, yesterday, but couldn't resist doubling down today, its the gambler in me. Will add as management, (hopefully at long long last, fingers crossed), prove themselves capable of running a reliable operation.

[JoeBlogs]

Welcome to the casino guys - or the roller-coaster depending on how you look at it! Let's go for roller-coaster, where the risk is only perceived.

[Corporate]

Ditto, yesterday, but couldn't resist doubling down today, its the gambler in me. Will add as management, (hopefully at long long last, fingers crossed), prove themselves capable of running a reliable operation.

Hah yes this is probably one of my more conservative share/option purchases. My investing style does not match my occupation (also accountant) :-)

[Dr_Who]

Ditto, yesterday, but couldn't resist doubling down today, its the gambler in me. Will add as management, (hopefully at long long last, fingers crossed), prove themselves capable of running a reliable operation.

Roger! you've joined the dark side and bought more shares. :)

[RRR]

Hah yes this is probably more conservative share/option purchases. My investing style does not match my occupation (also accountant) :-)

I hope so. PRC story has never been better. Bought some more yesterday.

[Bilo]

craigs ip released some research yesterday..

"We keep BUY rating and NZ$1.39 target price
We estimate that PRC will likely produce EBITDA of NZ$73.6m (down from NZ$76m) in FY11 and
NZ$212.4m (up from NZ$210m) in FY12. The key downside risks to our target price include a
sustainable drop in the global HCC price and longer-than-anticipated delays in production. We
have a Buy rating and NZ$1.39 target price."

Thanks for this Remy. What were the assumptions around coking coal price? Going south in real terms is a "pikers" cop out. They should give a range of targets based on HCC price...

[Monkey Poms]

Monkey Poms
ABM20 data sheet - Overall width in operation 4.9/5.2M, Overall height in operation 2.15/2.45/3M (not sure if roof height is 3 but pic on quarterly activities report showed plenty of headroom above staff shown but this maybe the main tunnel)
Therefore 12.2 x 5 x 3 = 183 cubes
Machine is capable of advance rates of 56-72M per day in ideal conditions with competent operators, so if we squeeze a bit more out of her there's good upside potential

Flea,

X 3 ? It may be wishful thinking on my part.
Pike coal in my experience is a friable coal easy to cut. 12.2 metres per day x at a height of 3 metres - when the ABM20 is capable of achieving rates of 56-72m per day.
This suggests one of the following progress of the ABM20 is restricted due possible inability to transport mined coal to the flumes.

(the wishful thinking bit ) ABM20 has cut the full 9 metre height 3 cuts over a long length of tunnel = 12.2m advance on a daily basis = to 12.2m x 3m strips = 36.6m length
this is about half of what the ABM20 is capable of achieving. If you are correct 12.2m x 3m height this equates to one sixth of the ABM20 capability (not good). The pictures on the quarterly activity report indicates (not sure) tunnel 3m high cut through rock by one of the smaller machines using 2 passes to achieve 5m width.

Using the no 9 in your equation how much per day does the ABM20 earn (1 cubic metre = 1 ton ). Wishful thinking ?

If Gordon told us everything this forum would be boring.

Cheers. Monkey Poms

[Baddarcy]

Flea,

X 3 ? It may be wishful thinking on my part.
Pike coal in my experience is a friable coal easy to cut. 12.2 metres per day x at a height of 3 metres - when the ABM20 is capable of achieving rates of 56-72m per day.
This suggests one of the following progress of the ABM20 is restricted due possible inability to transport mined coal to the flumes.

(the wishful thinking bit ) ABM20 has cut the full 9 metre height 3 cuts over a long length of tunnel = 12.2m advance on a daily basis = to 12.2m x 3m strips = 36.6m length
this is about half of what the ABM20 is capable of achieving. If you are correct 12.2m x 3m height this equates to one sixth of the ABM20 capability (not good). The pictures on the quarterly activity report indicates (not sure) tunnel 3m high cut through rock by one of the smaller machines using 2 passes to achieve 5m width.

Using the no 9 in your equation how much per day does the ABM20 earn (1 cubic metre = 1 ton ). Wishful thinking ?

If Gordon told us everything this forum would be boring.

Cheers. Monkey Poms

Remember they have only had the thing running for 2 weeks :-) I't might be a bit of big ask to expect them to go hooning around the mine at 72m per day right from the get go. I think it is reasonable to expect improvements as time go one thou.

[mouse]

Remember they have only had the thing running for 2 weeks :-) I't might be a bit of big ask to expect them to go hooning around the mine at 72m per day right from the get go. I think it is reasonable to expect improvements as time go one thou.
You have to get a Driving Licence first for the beast.

[Beagle]

Roger! you've joined the dark side and bought more shares. :)

Yeah, where do I sign up for my mine tour, Pikers Hard hat, drive of the flash new machine and best of all my free pet Stoat. Are there any other finge benifets I don't know about, maybe free coal for life as long as I bring my own chisel and hammer LOL.

[Baddarcy]

Yeah, where do I sign up for my mine tour, Pikers Hard hat, drive of the flash new machine and best of all my free pet Stoat. Are there any other finge benifets I don't know about, maybe free coal for life as long as I bring my own chisel and hammer LOL.

Sorry Roger you need to get your facts straight here, in our mine you need to bring you own hose and bucket of water, none of this pick and shovel crap thanks!!

Also i would recommend going for the free pet weazel over the stoat, telling your mates at the pub that you have a pet weazel sounds soooooo much cooler that a pet stoat !!!

[Beagle]

Sorry Roger you need to get your facts straight here, in our mine you need to bring you own hose and bucket of water, none of this pick and shovel crap thanks!!

Also i would recommend going for the free pet weazel over the stoat, telling your mates at the pub that you have a pet weazel sounds soooooo much cooler that a pet stoat !!!

Sorry mate I'm new around these parts...but errr, just a point of order..arn't all the weazel's presently congregated in Timaru ?

[remy]

Thanks for this Remy. What were the assumptions around coking coal price? Going south in real terms is a "pikers" cop out. They should give a range of targets based on HCC price...

Key assumptions FY08A FY09A FY10A FY11F FY12F
Production and Reserves
Coal production (Mt) 0.00 0.00 0.05 0.52 0.93
Brunner seam 2P reserve (Mt) 17.6 17.6 17.6 17.0 16.1
Price paths
Hard coking coal (US$ / tonne) 128 199 231
NZD/USD 0 .77 0 .61 0 .70 0 .72 0 .69
Mine Development Capex (NZ$m) 99.4 78.5 24.1 11.0 6.2
Cash cost/ton 994 135 106
Extraction and Admin costs (NZ$m/t) 952 92 61
Transportation costs (NZ$m/t) 40 41 42
Royalties 2 3 3

[Baddarcy]

Sorry mate I'm new around these parts...but errr, just a point of order..arn't all the weazel's presently congregated in Timaru ?

Nice :-).........................

[morv]

Two trains for Ikamatua listed on todays railtrack site,definitely looks like they will make the 20000 tonnes,and if the mine machinery is going at the predicted rates they could have a 3rd shipment ready soon

[Corporate]

Maybe I'm misguided, but PRC is a screaming buy. It's not for the faint hearted but I think the risk/reward ratio is in the favour of holders. The amount of free cash flow they will generate is incredible.

Buying a HCC coal mine that is ramping up to full production for $400m is hard to ignore.

[corporateraider]

The key to what the share price will be still lies in the level of annual production they will achieve. It is not difficult to see why the market is still sceptical about 1m tonnes per year.
I remain confident that better is to come.

[Corporate]

The key to what the share price will be still lies in the level of annual production they will achieve. It is not difficult to see why the market is still sceptical about 1m tonnes per year.
I remain confident that better is to come.

Agreed. I'm not to concerned if they never make 1mtpa. I'd be happy with 800,000tpa at current coking coal prices.

I think people forget that there is 18mt of premium coking coal!

[boysy]

The question remains they have failed to meet every target to date what makes people so confident that the 1 m tpa target is achievable clearly if they met the target the sp should rocket and vice versa. Is the right team in place to take the sp further the next few weeks and months will be telling. Quite apart from the Coking coal price which they have no control of they need to show they can profitably extract the coal from the mine at rates they have forecast end of story.

[Baddarcy]

Maybe I'm misguided, but PRC is a screaming buy. It's not for the faint hearted but I think the risk/reward ratio is in the favour of holders. The amount of free cash flow they will generate is incredible.

Buying a HCC coal mine that is ramping up to full production for $400m is hard to ignore.


The question remains they have failed to meet every target to date what makes people so confident that the 1 m tpa target is achievable clearly if they met the target the sp should rocket and vice versa. Is the right team in place to take the sp further the next few weeks and months will be telling. Quite apart from the Coking coal price which they have no control of they need to show they can profitably extract the coal from the mine at rates they have forecast end of story.

I actually think you are both correct, for those of us that have been following Pike closely and have been thru the lows of the ventilation shaft collapse, graben, dodgy tracks etc etc i think we can see the wood thru the trees. Right now Pike is only days away from their holy grail, hydro mining kicking off, so i think we can see that the troubled times are probably over.

But for those that are not close to what is going on at the mine just see a company that misses every target ever set and makes all sorts of promises and seems to do capital raising after capital raising.... and then fails to deliver. For this reason they simply will not look closer at the stock until it is actually producing large amounts of coal for a sustained period of time.

Unfortunately for the share price these people are in the majority and we are in the minority... i think for this reason the share price take off will be somewhat slower than we all hope for.

But of course a bit of positve press in the main centre daily papers and that will all change, and a rocket it could become :-)

[Dr_Who]

Agreed. I'm not to concerned if they never make 1mtpa. I'd be happy with 800,000tpa at current coking coal prices.

I think people forget that there is 18mt of premium coking coal!

You are on to it mate.

[Bilo]

Key assumptions FY08A FY09A FY10A FY11F FY12F
Production and Reserves
Coal production (Mt) 0.00 0.00 0.05 0.52 0.93
Brunner seam 2P reserve (Mt) 17.6 17.6 17.6 17.0 16.1
Price paths
Hard coking coal (US$ / tonne) 128 199 231
NZD/USD 0 .77 0 .61 0 .70 0 .72 0 .69
Mine Development Capex (NZ$m) 99.4 78.5 24.1 11.0 6.2
Cash cost/ton 994 135 106
Extraction and Admin costs (NZ$m/t) 952 92 61
Transportation costs (NZ$m/t) 40 41 42
Royalties 2 3 3

Thank you Remy
It looks like the assumptions are about right for 2012 - just the perennial question of whether they get there sooner.
I sense some urgency, resolve and determination setting in, to get the job done.

[Corporate]

I'm actually not to concerned about Pike missing deadlines. The coal isn't going anywhere and the price is going up. It's big project and there are so many unknowns.

Don't get me wrong. This is a risky investment, but it fits with my profile.

[mouse]

Agreed. I'm not to concerned if they never make 1mtpa. I'd be happy with 800,000tpa at current coking coal prices.

I think people forget that there is 18mt of premium coking coal!
Not quite correct. I think the situation is that there is 50 million tonnes of mineable coal at Pike. But we must not allow any subsidence so cannot mine the other 32 million. The situation is daft. We need to start mining at say 850,000 tonnes a year and then get Govt approval for all mineable coal to be got out. It would extend the life of the mine and be brilliant for our balance of payments. So its a no brainer. Get all the mineable coal we can get.

[neopoleII]

mouse........ this is still a young country, and the politics are still juvinial .
give it 10 - 15 years and a land of benificiaries, ALL the coal will be mined.
the real question is........... who will own the mine.
my guess is..... not NZers

[mouse]

mouse........ this is still a young country, and the politics are still juvinial .
give it 10 - 15 years and a land of benificiaries, ALL the coal will be mined.
the real question is........... who will own the mine.
my guess is..... not NZers
Exactly. Pikers, of which I am one, must try to stop the sale of one of our most valuable companies overseas for a song. We have millions of tons of coal, far more than the prospectus talks about. The coal seems to be now coming out. Hallelujah. God has heard our cries. Or maybe Management are getting a bit more on the ball. Either way, wonderful.

[Monkey Poms]

Exactly. Pikers, of which I am one, must try to stop the sale of one of our most valuable companies overseas for a song. We have millions of tons of coal, far more than the prospectus talks about. The coal seems to be now coming out. Hallelujah. God has heard our cries. Or maybe Management are getting a bit more on the ball. Either way, wonderful.

Steady on Mouse! Monkey Poms has a PASSION for Pike. I've been in from the beginning through thick and thin.

If management can achieve the production target of one million tons of coal per year ( I think they can ) then I see Pike's long term share price at $3, providing the coal price holds up.
Should, at the first sign of success ( Hydro mining ), a foreign company offer $3 for your shares to take CONTROL of your company, how many of you guys would cave in and sell?

I would opt to keep my shares and be content with a large dividend every year.

Monkey Poms.

[GTM 3442]

mouse........ this is still a young country, and the politics are still juvinial .
give it 10 - 15 years and a land of benificiaries, ALL the coal will be mined.
the real question is........... who will own the mine.
my guess is..... not NZers

Sadly, you're probably right.

The likelihood of foreign control increases with every passed deadline.

New Zealanders are not good with money, and seem deteremined (in aggregate) to sell their birthright for a mess of pottage. And often a small mess, and not much pottage, either.

[Baddarcy]

Hmmm still no sign of the buyers this morning.... guess they are waiting for the actual start of hydro before committing. Thou there does seem to be a bit of firming in the options, but i guess that is expected given the longer timeframe for them.

[RenHoek]

Thou there does seem to be a bit of firming in the options, but i guess that is expected given the longer timeframe for them.

Huh? longer timeframe? What do you mean by that?
My understanding is that they need to be exercised by 24/04/11.
Is this no longer the case?

[JoeBlogs]

Yes that's still the case, I think Baddarcy is meaning people buying options are typically looking further ahead than those buying head shares (not always of course)

[geezy]

PRC dont need any other single thing except coal out! mid sept coming soon !

[Baddarcy]

Huh? longer timeframe? What do you mean by that?
My understanding is that they need to be exercised by 24/04/11.
Is this no longer the case?


Yes that's still the case, I think Baddarcy is meaning people buying options are typically looking further ahead than those buying head shares (not always of course)

Yup spot on JB, exactly what i meant :-)

It is still almost 8 months away, which seems like a longish timeframe to me.

[Baddarcy]

PRC dont need any other single thing except coal out! mid sept coming soon !

Yes very soon, 2 - 3 weeks at most and we will be there, i was sort of expecting the price of PRC and PRCOA would start to show signs of life around now....but have been a bit disappointed so far...... today's volume of only 33,066 so far is fairly limp at best.

[swissboy]

No trains booked for today must have their 20k on the wharf. Sad, obviously not going for extra this export shipment due to be collected this Saturday. But quite right mid Sept is only 2-3 weeks away so stay positive

[JoeBlogs]

Interesting bit of action after the bell!

[Baddarcy]

Interesting bit of action after the bell!

Yes agreed, basically nothing all day, then a 250k and 75k both at 99c after the close.

[Baddarcy]

From todays "The Australian"

PIKE River Coal (PRC) is now loading trains with the second 20,000-tonne shipment of hard coking coal from its new mine in New Zealand's South Island and destined for Lyttelton port and then India. Deutsche Bank has a "buy" on the stock, recommending that investors get in ahead of the start of hydro mining, which will see high-pressure water used to split the coal seams, and will account for 80 per cent of the mine's output.

http://www.theaustralian.com.au/business/mighty-excited-over-minotaur/story-e6frg8zx-1225911619535

[mr.needs]

Thou there does seem to be a bit of firming in the options, but i guess that is expected given the longer timeframe for them.

Or maybe its the fact the liquidity in the options is lower. This would mean the price would rise faster