PRC Pike River Coal

[Bling_Bling]

Who is buying all the PRC shares? STOP buying it !!! Bling wants the SP down! :D

[tim23]

Good call dsurf - thats why they raise money Duncan - I bet you can tell me the winning lotto numbers for this week, trouble is you will give them to me after the draw, even I can do that!

[The BOWMAN]

quote:Originally posted by tim23

Good call dsurf - thats why they raise money Duncan - I bet you can tell me the winning lotto numbers for this week, trouble is you will give them to me after the draw, even I can do that!


Exactly, Duncan - "If you are that dumb you think its a buy at 85c then good luck, ignorance is definately bliss."
Warthog - " PRC could easily slip lower than $0.70 - an investment for deep pockets."

Where were you before 20 July when everyone on this board is predicting how much money to make from this IPO?

[winner69]

quote:Originally posted by Bling_Bling

Who is buying all the PRC shares?

Who?

The Pike River Plunge Protection Team

[Balance]

There is nothing wrong with PRC for those who invest and understand risks. The short term price movements matter not to those who understand the risks. The short term price movements matter only to those who were talking up PRC as a must have IPO. Hope lesson is learnt.

[duncan macgregor]

quote:Originally posted by The BOWMAN


quote:Originally posted by tim23

Good call dsurf - thats why they raise money Duncan - I bet you can tell me the winning lotto numbers for this week, trouble is you will give them to me after the draw, even I can do that!


Exactly, Duncan - "If you are that dumb you think its a buy at 85c then good luck, ignorance is definately bliss."
Warthog - " PRC could easily slip lower than $0.70 - an investment for deep pockets."

Where were you before 20 July when everyone on this board is predicting how much money to make from this IPO?
Beg to differ i said that i wouldnt touch this share with your barge pole long before it come to market. Macdunk

[Crypto Crude]

The bowman,
Mackdadunk clearly stated his views on Pike over the last 100pages of NZO thread... Disclosure/bad press/ risks and many more reasons centered around this project and because of this he bagged Pike and NZO which may have caused him to misinterpreted TUI... My views on Pike are throughout those pages aswell...
...

quote:duncan macgregor
SHREWDY, I dont agree with you on wage expences not being a problem. Fully qualified miners are being poached by Australian companies offering 150k a year. Prc has a ratio of one in six being qualified, which is far to low for safety reasons. The wage bill will either be a lot higher than expected or safety will be compromized. I am only going from what i have read on other sites so i might be wrong. Macdunk

I understand your view on wages Mackdadunk, But im looking at it from another angle, there are two cashflows, cash going out and cash coming in... now wages in terms of cash going out is microscopic in terms of expected revenues coming in...
If this company unfolds as it has been presented to us in the prospectus then Pike will be a few dollars with dividends in a few years...I dont not want to speculate on when SP will turn, it looks very likely that it will eventually happen...(going on current market info, but risks are present, and further delays should not come at a surprise...
Mackdadunk, be careful what you say about Pike, it is likely to come back and bite you in the behind... and as 1st Production gets closer then this project will re-rate....
I donot want to take a stance on Pike, it is still full of risks and I'd rather stick my neck out on other plays where I feel that I have more percieved control over risks...
....
All I really want to know is why is it that SC can pick the most horrible stock ever on the NZX (deliberately) for the *************s Comp, picked because of large volatility only....(TRS down 71% this year, worst performing stock picked by anyone), and yet SC is still beating Mackdadunk in the NZX sharetraders comp by 9 places...:D, whats up mackdadunk,
[8D]
.^sc

[duncan macgregor]

quote:Originally posted by Shrewd Crude

All I really want to know is why is it that SC can pick the most horrible stock ever on the NZX (deliberately) for the *************s Comp, picked because of large volatility only....(TRS down 71% this year, worst performing stock picked by anyone), and yet SC is still beating Mackdadunk in the NZX sharetraders comp by 9 places...:D, whats up mackdadunk,
[8D]
.^sc
You are a hard man SHREWDY. Macdunk was to busy in the ASX competition coming first one month and second another.
I am 27.4% up against your 32.4% on the NZX[:I].
On the ASX i am 34.3% up against your 19.3% where it matters. :D:D:DMacdunk

[Crypto Crude]

mackdadunk,
TRS, 71% down... SC working a portfolio with 4 stocks, MD working with 5...[:p]....
I was coming dead last on one of the earlier asx comp updates and Ive come up nicely ever since...im still expecting to take you out at the business end of both the asx comp and more importantly NZX comp...
MD.... I picked NZO for the ASX comp aswell:D:D, it looked like it would be a standout performer with big up potential...hector discovery and you are toast...
[8D]
.^sc

[Big-Noters]

If you are that dumb you think its a buy at 85c then good luck, ignorance is definately bliss. The only time this might be a buy is when it is up and running on the dummy investors money, then we can work out margins. I would think one more problem and the sp will plummet, otherwise it will be in the mid seventies for some considerable time. Macdunk

Gee I dont know Macdunny maybe they bought them at 0.85 to sell em at 0.90 this morning.

[Hoop]

one more problem and the sp will plummet
From reading the posts, one would get an opinion that this is a problem ravished company. [V]
Yes it's early days yet and this is a high risk stock with a large risk built or perhaps still being built into the shareprice....but lets have a bit of balance.
[u]Since the stock has been listed:</u>
Tunneling is on target.:)
Construction has been on budget :)
Stock over subscribed by $25 million :)
Outside companies coming to the party e.g Taranaki Port funding some of Greymouth Port :)
They now have power :)
Roading ..access available :)
Special Purpose cargo vessels building on target :)
Coal prices are healthy :)
Increased the economy of the West Coast (spin offs) :)
NZ$ ??? but not getting any worse [|)]

[u]There has been [u]one</u>major problem.</u>
The IPO was badly managed and ended attacting the wrong type of investors :(...More good news..most of those investors have now exited [xx(]....bad news ...those investors are wrongfully blaming the company when the blame lies with their illformed greedy decision to invest in the first place, looking for a quick buck..which everyone should know by now that you [u]don't</u> try to stag public floats. :(
The Ozzies own 30% of the float :([}:)]:( (transtasman humour)

The rest of all the bad news, and there is lots of it, is imaginary or presumed, not tangible at the moment.

I thought I better get all the good news in first before the bad news starts. One has to be a realist here as it is a high risk stock and there is bound to be some bad news at some stage :( :):):)

[duncan macgregor]

HOOP, It is early days yet, a lot of water will flow under the bridge before PRC pans out. Who knows it might come right and prove to be a good investment in the end, but not right now. The risks and expence of getting this up and running at a profit, are extreme. Double handling, double port costs, the list is long strewn with expences and costs that the starry eyed brigade are completely oblivious of. It will be two years before you see a dividend, so therefore short term you are hoping for an uptrend in the share price.
Most investors want one or the other, or a bit of both which is extremely unlikely given the risk factor with no income in the short term. I am surprized at the abuse that flows if you dare say its not worth the risk better opportunities elsewhere. I really cant see the sp getting back to square one until they get up and running. That is the time to go over production costs profit margins, then make an informed decision. So far you are only down 10%, it will be interesting to see how much this gamble has made or lost in 12 months. Macdunk
DiscL dont hold

[Parky]

quote:Originally posted by Hoop

one more problem and the sp will plummet
From reading the posts, one would get an opinion that this is a problem ravished company. [V]
Yes it's early days yet and this is a high risk stock with a large risk built or perhaps still being built into the shareprice....but lets have a bit of balance.
[u]Since the stock has been listed:</u>
Tunneling is on target.:)
Construction has been on budget :)
Stock over subscribed by $25 million :)
Outside companies coming to the party e.g Taranaki Port funding some of Greymouth Port :)
They now have power :)
Roading ..access available :)
Special Purpose cargo vessels building on target :)
Coal prices are healthy :)
Increased the economy of the West Coast (spin offs) :)
NZ$ ??? but not getting any worse [|)]

[u]There has been [u]one</u>major problem.</u>
The IPO was badly managed and ended attacting the wrong type of investors :(...More good news..most of those investors have now exited [xx(]....bad news ...those investors are wrongfully blaming the company when the blame lies with their illformed greedy decision to invest in the first place, looking for a quick buck..which everyone should know by now that you [u]don't</u> try to stag public floats. :(
The Ozzies own 30% of the float :([}:)]:( (transtasman humour)

The rest of all the bad news, and there is lots of it, is imaginary or presumed, not tangible at the moment.

I thought I better get all the good news in first before the bad news starts. One has to be a realist here as it is a high risk stock and there is bound to be some bad news at some stage :( :):):)




- Define wrong type of investors and how would you know this?
- I do not belive the fact that IPO has been put of couple of time does not mean its badly managed but gave them more time for more effective listing; the prospectus was one of the better ones I've seen

[Scuffer]

I was told today that the progress on the tunnel is not as good as we are being led to believe and we will be lucky to see coal by september next year.This snippet came from a guy who was on site maybe its his unprofessional opinion but I know he knows what he is talking about.:D:D:D

[Hoop]

MacDunk, Yep agree, however the information double handling etc was mentioned in the prospectus, and yes Parky the propectus was good (information wise) but too big for most investors who were expected to fully read it. NZO could have delayed the float (at their expense) a few more months..this would have made PRC more investor friendly, but it was delayed as it was, and NZO got negative comments because if it.

Hindsight is great and if I had known of the extent of investor dumping after IPO listing I would like anyone else hold off buying the IPO. Investors dumping the stock for a 10% loss just after the listing proves my point that the wrong type of investor bought...illogical to think this would happen before the float.

In theory (as MacD has pointed out) this stock at present would [u]not</u> interest the short or medium term investor, because there is a lot of risk and little to no reward for the next 15 months or so. Production may still be a year away if things go badly. Possible big swings in the shareprice would be the only time one would see short termers and TA investors enter.

Investor risk was outlined in the propectus as was the time frame until production and investor yields. (As also stated by MacDunk)

I mentioned my strategy on the other channel before the float as Bongo couldn't understand my logic in buying into the IPO either :).
Long term investor strategies are usually seen as strange, and can be very varied to meet each individuals strengths and weaknesses. General long term investors prerequisites are to have cool temperments [8D] as not to panic and get sidetracked with short/medium term fluctuations and trends and treat time is their friend ..lots of time!!..this requires discipline, and patience... their goals are set now but it may not be reached until a lot further way down the track.

My individual long term strategy for PRC is to buy half at the IPO float for $1.... sell in the short/medium term and (medium/longish term) if the price reached $1.30..... buy/accumulate on the dips (floor) the floor price is not established yet, 85c dip recently may be a false floor, only time will tell. If none of the buy sell criteria are meet before production and dividend I am willing to hold on as the dividend will offset the stagnate price. I will sell if it becomes dog status confirmed by long term trendlines or rerating down of the future target pricing.
From the prospectus .. I haven't yet worked out a long term pro production (2yrs) target price accurately, but I feel it will be around the $1,30 to $1.50 mark. ..this is hardly stellar stuff for the short/medium term investors and definitely not for the excitable NZO investor to which the float was targeted at.

In the long term I expect to realise my investment at equivalent 15%/annum, the long time frame minimises the risk. If nothing much comes out of it the life of this investment it will create a steady dividend income stream (cash cow) suitable for my old age or for gifts to the(grand)kids.

Disc: PRC holdings under 3% of my portfolio.

To reduce the boredom I dabble with a few $'s with short/medium term and some speculative plays, with mixed results :D [xx(]

[dsurf]

Just to remind everyone:

FOB costs in prospectus NZ$77

At long run price of coal = US$ 80

NZ$ = .65 USc

production = 1 mill tonnes p/a

EPS on 200 mill shares ( I hope no options issued) = 23c per share

P/E at issue price of $1 = approx 4.3 times

This suggests to me that there is plenty of room for cost increases to be absorbed and that this investment will have doubled in two years, ie by mid 2009 SP = $2.

That is a 50% pa return over 2 years.

That is why I bought in at the IPO

Yes costs will increase - but there is plenty of room for that.

Yes there is Risk - read the last 10 pages

But what about the reward? 50% p/a ?

[AMR]

I concentrated largely on the risks section at the back by BDA. It seemed reasonable except for their production ramp-up which was rated medium risk. Everything else was rated as low risk.

The other big issue is currency movements. A move to 0.75c against the USD would cut EPS to 15c after tax and dividend yield to 8%, giving a target SP of $1.3 or so(by my calculations...corporate tax is still 33% when production commences right?)

[Snow Leopard]

posted on 31-jul-07
eighty five cents?
eighty five cents!
I mean, like eighty five cents!!

At some point the tide should turn.

Disc: none, yet.
There is trading opportunites in them there shares.

[duncan macgregor]

Not enough volume PT to make it a good trading share. One very similar with huge volume is AGM on the ASX. Both companies will have huge price fluctuations before the settle down but volume is what is required. I would wait until PRC hits the seventies then move in and wait it out. Macdunk

[Snow Leopard]

I am sure that were I to post that PRC has a very nice company logo, someone, and I mention no names, would be along to point out that a company on the ASX had a much nicer one.

[Lion]

There's an ignore facility in the new sharetrader format PT.

[AMR]

An update on their tunnel.

"Improved rock conditions are currently allowing excavation for the second conveyor extension. Advance is therefore reduced during this period. The tunnel will halt at approximately 1228m to install the conveyor"

[the machine]

hope it does not take 3 weeks to install the extra conveyor

M

[the machine]

friday august 10th the tunnel is halfway and tunnel profile back to normal
now less that 1150m to go

M

[Nitaa]

Not enough volume PT to make it a good trading share. One very similar with huge volume is AGM on the ASX. Both companies will have huge price fluctuations before the settle down but volume is what is required. I would wait until PRC hits the seventies then move in and wait it out. Macdunk
Duncy. i trust that you bailed AGM when you saw the writing on the wall. I know that you are not stupid enough to still hold any of this stock from $1 plus and lose half its value.

PRC. Yes its looking very good for a buy

[duncan macgregor]

Duncy. i trust that you bailed AGM when you saw the writing on the wall. I know that you are not stupid enough to still hold any of this stock from $1 plus and lose half its value.

PRC. Yes its looking very good for a buyYou are right NITA not stupid enough for that, but stupid enough to try and pick the bottom a few days ago to end up with egg on my face. Macdunk

[geezy]

almost impossible to pick a bottom with the current market situation i believe? but maybe law of averages would help dunc?

[Balance]

Just another year or two to wait for the coal to come out of the ground. Meantime, hold PRC shares tight that all the different parts of the projects (tunnels, roads, ports, machinery, barges, weather etc) will effortlessly come on stream on schedule without any delays or problems. Any bad news will see the share price go lower?

[croesus]

If you want the bully on this stock, go to the Blackball Working Mans Club, any Saturday night (opp the Hilton and 50 metres south).....talk to some of the retired mine managers, not the tea ladys, ... come Monday you will be selling.

Chris Lee from Paraparaumu, take note.

Away off to to Ces Clarke hut and Mt Ryall for a few days .
Cheers Croesus.

[Onthemoney]

If you want the bully on this stock, go to the Blackball Working Mans Club, any Saturday night (opp the Hilton and 50 metres south).....talk to some of the retired mine managers, not the tea ladys, ... come Monday you will be selling.

Chris Lee from Paraparaumu, take note.

Away off to to Ces Clarke hut and Mt Ryall for a few days .
Cheers Croesus.


Thanks for that Croesus always good to get the know near the project. Appreciated....

[peterb]

Congratulations to NZOG for getting PRC listed at such a market highpoint. AMP have canceled the Summerset IPO because of lack of investor interest. Shame about the share price though

[Rabbi]

Retired mine managers are notoriously bearish on Pike river but you have to take what they say with a grain of salt. They are particularly skeptical about the projected tonnages and the transport system. The forecast tonnages seem out of the ball park and then you have to get it to destination. The idea of purpose built ships going out over the Greymouth Bar, and trucks running day and night, doesn't sit well with old timers.

As a shareholder you have placed your bet on the management team to overcome the various challenges.

As a "miner" this is a speculative stock but the potential upside is worth the bet in my opinion.

[duncan macgregor]

Retired mine managers are notoriously bearish on Pike river but you have to take what they say with a grain of salt. They are particularly skeptical about the projected tonnages and the transport system. The forecast tonnages seem out of the ball park and then you have to get it to destination. The idea of purpose built ships going out over the Greymouth Bar, and trucks running day and night, doesn't sit well with old timers.

As a shareholder you have placed your bet on the management team to overcome the various challenges.

As a "miner" this is a speculative stock but the potential upside is worth the bet in my opinion.
It is all blind faith that might come right. I bet the shareholders that clamoured for more than there quotta of shares are feeling a bit let down. This is a very risky proposition with so much that might go wrong that it was never on my buy list. Hope it comes good but the time to buy was always when that first load of coal reaches India. Macdunk

[AMR]

Obviously a project...

The main point of contention seems to be the volumes which have never been done with hydraulic mining before. It was rated as "Low/Medium Risk" by BDA in the prospectus as the geology is suited for this type of mining. Potential upside is good, I think this project is less risky than it was last week with the drop in the kiwi dollar removing a fair bit of currency risk. Still, had I known the extent of post-IPO selling, I would have held off and bought later.

Disc : Hold PRC

[temuk]

Wouldn't we all!!

But still holding for the duration.

[the machine]

Obviously a project...

The main point of contention seems to be the volumes which have never been done with hydraulic mining before. It was rated as "Low/Medium Risk" by BDA in the prospectus as the geology is suited for this type of mining. Potential upside is good, I think this project is less risky than it was last week with the drop in the kiwi dollar removing a fair bit of currency risk. Still, had I known the extent of post-IPO selling, I would have held off and bought later.

Disc : Hold PRC

maybe because pike coal deposit is up a mountain it amplifies how effective hydraulic mining is - instead of pumping it out it pours out and gravity does the hard work.

some late buying on asx retreived the sp

m

[upside_umop]

I just wanna ask it is a project or a normal IPO. The firm is talking about future sales, so no reason to buy and hold until it diggs out coal.

i dont think its just a project for management to play around with..

wait until sales? should work.
but remember a share price is based on discounted future cash flows..
the shareprice reflects investors risk premium sought, and once hurdles are out of the way, the shareprice will rise accordingly, it will also fall accordingly if it stumbles.
so its a risk either way, if you hold out now and wait till they dig, then the sp may have jumped the mark.
but yes, i think the biggest gain will be made once coal is mined, and the mining rates are confirmed.

[boysy]

44m progress for week ending 20/8/07

http://www.pike.co.nz/about-pike-river-coal/Tunnel-scaled.jpg/image_view_fullscreen

[AMR]

Good going...

But speaking of the share price, it seems that there is a resistance level at 85c or therearound. Can anyone confirm?

[the machine]

61m for the week and a new daily record

m

[dsurf]

The drilling consortium want their bonus for finishing this year? Can't remember exact date.

[Rabbi]

The conveyer is now close to the rock surface so maybe this explains it,

[Balance]

May 05 -- Updated NZOG valuation: Mid Case Value = NZ$ 1.72

Prepared by Waaihoek (contributor to FIXX and ShareTrader websites)

The aim of the valuation is to conservatively estimate the fair value of NZOG based on a low, mid and high case approach to oil, gas and coal prices and to calculate the effect on the company’s three major projects (Pike coking coal mine, Kupe gas and condensate field and Tui/TAP oil field).

Recent announcements by AWE regarding TAP indicate slippage in the date for first production of oil and higher capex costs for the project. Also, the revised valuation reflects discussion on FIXX and ShareTrader regarding date for first Pike coal production and the view that significant coal in 2006 was unlikely. Delays in Kupe are also possible since a whole new gas processing plant must now be designed and constructed.

NZOG valuation spreadsheet therefore updated to allow for delays in start up dates for first production, and greater capex costs.

Delays in first production:

Pike first production has been pushed back a full year to Q3 of 2007 (with 0.5m tonne first year production) followed by relatively slow build up to full production (1.1m tonne) only in 2010.
Tui/TAP is modeled with first production in Q2 of 2007 as compared to Q4 in 2006.
Kupe is modeled with first production in Q1 of 2008, as compared to first production in Q3 of 2007.

Capex increases:

A 15% increase has been applied to capex requirements for the three main projects due to possible/likely increases in steel prices, and fabrication and installation costs for new oil and gas field plant, plus potential additional costs for Pike mine equipment and coal transport infrastructure.

The fair value estimates given below are predicated on positive final investment decisions (FIDs) being given to each of the three projects. Pike FID is due mid year 05 and Kupe and TAP FIDs by Q4 05. However the Pike FID is dependent on successful negotiations relating to various construction and transport contracts, and this process may not be completed by June 2005.

The spreadsheet is based on a discounted cash flow / net present value (DCF / NPV) model. Essentially this widely used method seeks to quantify the time value of cash flows, particularly the greater value of cash flows generated in the immediate future compared to cash earned in the later years of a project’s life.

Summary of results:
Low Mid-Case High
NZOG
Fair Value NZ$ 1.33 1.72 2.15 See a more detailed tabulation
of input variables and results on
Coal price US$/t 75 85 95 page 3.

Oil price US$/b 35 45 55

Gas price NZ$/Gj 6.0 6.2 6.4

Compared to the estimated "fair values" listed above, the current share price clearly undervalues the potential worth of the company. The current share price (NZ$ 0.88 on 16/5/05) is about 33% below the low case estimate, and nearly 50 % below the mid case.
An important factor in the current low share price is selling pressure on the options and heads, no doubt to raise funds for the upcoming option conversion deadline at the end of June. The option conversion effects will be relatively short term and the underlying value of the company will be better reflected in the share price once the conversion deadline is past.
Over the last 6 months the value to the company of the three major projects has undoubtedly increased due to significant rises in oil and coal prices. Current coking coal contract prices have settled at over US$120/tonne and are slated to be above US$100 for another 2-3 years.
NZOG recently (March Quarterly Report) estimated the gross value of the Pike coalmine at NZ$ 220m which is close to the mid case value of NZ$ 217m calculated in the present DCF/NPV spreadsheet. The NZOG valuation was calculated using a significantly lower long run coal price (US$63) compared to the mid case price per tonne (US$85) used in the present spreadsheet. NZOG have not released their opex mining costs per tonne of coal, but since there is good comparability between the two coalmine valuations, the distinctly lower NZOG coal price indicates that NZOG’s estimate of annual opex costs must also be significantly lower than the costs used in the present spreadsheet. This has positive implications for the value of Pike in the event that lower opex costs are applicable and coal prices trend towards the values used in the present spreadsheet.
Since the start of 2005 oil prices have been robust with an average above US$ 45 / barrel (ie the mid case price). In the longer term increasing world demand, combined with reported constraints in supply, looks to provide ongoing support for oil prices.
The Kupe gas reserves have recently been revised upwards to 281 Pj. These new reserves have been included in the calculations. Kupe capex now also includes the extra funds required to build the new gas processing plant.
The DCF/NPV spreadsheet used to produce the above "fair value" estimates may be downloaded from:
http://fixx.co.nz/downloads/NZOG-NPV-Combo-V12.xls
The spreadsheet calculates low, mid and high case estimates for each major project, as well as listing all the various input numbers. The input parameters cover a range of possible values as indicated on page 3. None of the values are extreme and each of the three cases could have some chance of occurring.
Notes are also included within the spreadsheet on the overall calculation assumptions and fundamentals of each project, plus notes and estimates of value for NZOG’s oil and gas exploration prospects. The notes include comments on NZ$/US$ exchange rates, WACCs, bank finance rates, likely trends in coal prices and the adoption of a zero inflation model.
The spreadsheet NPV methods have been tested against a detailed spreadsheet prepared by Coaster (FIXX website). The good results of this comparative testing can be downloaded at:
http://fixx.co.nz/downloads/PRCC-SpdSht-Comparison-V3-d.xls
Note that in all cases a zero inflation model has been adopted to simplify the NPV calculations. In addition in order to further simplify the calculations, Waaihoek’s NPV spreadsheet does not conform to a full NPV treatment as exemplified by Coaster’s Pike NPV spreadsheet.

Nevertheless Waaihoek’s spreadsheet has been calibrated against Coaster’s spreadsheet with accurate and robust results for the final NPV value. See further discussion and notes within the spreadsheet comparison file (above).



Disclaimer: Please note that the "Fair Value" and other financial data presented above for NZOG have been prepared in good faith and are only estimates. In addition please note that the spreadsheets contain simplifications and approximations, and no guarantees of any kind are given, offered or implied as to the correctness of the Fair Value estimates or other financial data listed above or contained in any of the associated spreadsheet.xls or word.doc files. Please consult your own financial advisors before making any financial investment decisions.


NZOG Fair Value: May 05

http://fixx.co.nz/downloads/NZOG-NPV-Combo-V12.xls

Note - calculations assume a zero inflation model

Input parameters Low Mid Case High

$NZ / $US (long run average) 0.67 0.67 0.67
WACC (discount rate) % 9 9 9
Bank Finance Rate (BFR) % 8 8 8
Loan period - years 5.5 5.5 5.5

Oil price / barrel $US 35 45 55
Condensate price / boe $US 35 45 55
LPG price / tonne $NZ 450 500 550
Gas price / gigajoule $NZ 6 6.2 6.4

Coal price / tonne $US 75 85 95
Coal opex / tonne NZ$ 65 65 65

boe = barrel of oil equivalent

Results NZ$m NZ$m NZ$m

Kupe (15%) 17.2 28.6 40.2
TAP (12.5%) 22.6 40.6 57.5
Pike (72%) 120.1 156.2 201.0

Exploration prospects 40 53 66
Cash (end 04 FY) + I + PPP 20 20 20
M Tax Losses 15 15 15

Sub Total $NZm 234.9 312.6 399.7


Options exercised 43.2 43.2 43.2
(June 05)

Less expenditures -12 -12 -12
(to end 04/05 FY)

Total $NZm 265.5 343.8 430.9


Fair Value $NZ 1.33 1.72 2.15
per share (200m)
Pike (gross) 166.9 216.9 279.2

M = monitised; I = interest; PPP = Pan Pacific Petroleum shares

[boysy]

Pike River mine investment tops $100m

The annual results put Pike River's total assets at June 30 at $118.1m -- $100.4m of that the mine development. Total liabilities were $45.2m, leaving net assets of $72.9m.




http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10460527

[Bilo]

from: Emma O'Brien in Wellington on eobrien6@bloomberg.net today;

"Merrill Lynch & Co., the third-largest securities firm, raised its price forecasts for iron ore and coking coal to records because of surging demand for the steelmaking raw materials from mills in China.
The price of iron ore may rise 30 percent next year, higher than the 8 percent gain the brokerage forecasted earlier, Merrill Lynch analysts led by Sydney-based Vicky Binns said in a Sept. 5 report. Coking coal will also rise 30 percent, they said."

A small movement in PRC share price...
With the NZD going south fast another NZO project could turn out looking brilliant....

[Bilo]

Last spot price I had was USD114 plus 30% and at 0.692
is over NZD200 per tonne...
Now that might bring some smiles to West Coasters in winter.

[bermuda]

from: Emma O'Brien in Wellington on eobrien6@bloomberg.net today;

"Merrill Lynch & Co., the third-largest securities firm, raised its price forecasts for iron ore and coking coal to records because of surging demand for the steelmaking raw materials from mills in China.
The price of iron ore may rise 30 percent next year, higher than the 8 percent gain the brokerage forecasted earlier, Merrill Lynch analysts led by Sydney-based Vicky Binns said in a Sept. 5 report. Coking coal will also rise 30 percent, they said."

A small movement in PRC share price...
With the NZD going south fast another NZO project could turn out looking brilliant....

Bilo,
Good info coming through from Merrill Lynch. I thought the new negotiations would see iron ore +25% and coking coal +20%.

So this news is even better.

Two of the largest Indian coking coal companies didnt invest in Pike for nothing. They are shrewder than the Chinese.

This float was put to the market at a terrible time for NZO. Provided everything proceeds smoothly then this project will knock a lot of the knockers.

[Scuffer]

Still don't see PRC as a buy until they are getting a supply to the customer too many handling problems at this stage, I see the current method of thought as flawed,12,000 tons on a ship to then unload and put on a bigger ship nah! not viable in my book.

[boysy]

dont people think these guys know what they are doing, i mean it might not be good enough for sceptical NZ investors but clearly good enough for indian coal companies.

[Closed Loop]

Still don't see PRC as a buy until they are getting a supply to the customer too many handling problems at this stage, I see the current method of thought as flawed,12,000 tons on a ship to then unload and put on a bigger ship nah! not viable in my book.


Scuffer that would all depend on how difficult it is to unload and then reload the coal.With big volumns the co has no doubt thought this one out as this problem is too straight forward. If PRC is to have big problems it will more likely be in some areas not yet considered.

[Bilo]

Still don't see PRC as a buy until they are getting a supply to the customer too many handling problems at this stage, I see the current method of thought as flawed,12,000 tons on a ship to then unload and put on a bigger ship nah! not viable in my book.

Many people have invested their cold hard cash into this enterprise after many many man years of careful thought. There is no significant hole in this project (other than the tunnel which is progressing nicely).

A 30pc increase in coking coal price could add a Billion NZD to current projected sales over the life of the mine and my calculations would have that add about $1 to the share price.

[Scuffer]

hey guys don;t get so worked up all I'm saying is double handling costs money so its not cut and dried, Macdunk was making the same precautionary statements, LPC have a tight budget for coal loading an they have been loading the black stuff for years.

[Unicorn]

dont people think these guys know what they are doing, i mean it might not be good enough for sceptical NZ investors but clearly good enough for indian coal companies.

Peter Whittall certainly seems to know what he is doing. The mine itself, and the mine planning, have been going very well since he came on board.

But the evidence suggests they do not know what they are doing regarding the transport chain. The finance agreement that was scheduled to be signed by 29 June, is still nowhere to be seen. A key item that was due 24 days after the prospectus is still not settled. About four times the scheduled period has now passed, an enormous overrun! Does this mean any significant sales, which were previously expected Q4 2008 have slipped into Q1 2009?

One of the Indian companies was entitled to increase its stake at the IPO price, but declined - which indicates PRC was not good enough for the Indians at that time.

[Bilo]

One of the Indian companies was entitled to increase its stake at the IPO price, but declined - which indicates PRC was not good enough for the Indians at that time.

Perhaps they looked at the projection for the NZD and decided that the share price would be cheaper for them after the IPO ....

[Unicorn]

Last spot price I had was USD114 plus 30% and at 0.692
is over NZD200 per tonne...
Now that might bring some smiles to West Coasters in winter.

I think you will find that the 30% rise is on the US$96 reference price for 2007, not from the current spot price. Either way it is a great price - but indications are that PRC will not get much in the way of sales until the following years prices are in force. Anything could happen to the price by then (up or down).

[Bilo]

Yes Unicorn
But on top of a week where resources seemed to shake themselves clear of the banking malaise, where Chinese consumption and participation in the world seemed to be on the up, the Arabs confirmed that they will not be pumping oil for less than current prices, Australian domestic gas prices look to be joining the real world, and miners got the msg through that they will not be digging stuff out for less, a potential 30pc increase in coking price is a nice way to end a tumultuous and not very rewarding week (for me)on the market.

[Scuffer]

I would love to throw some cash at this company but not until they sort out the transport, its the only stumbling block, I think the best scenario is its trained to Lyttelton and shipped on a 70,000 ton capacity bulker from there, its obvious but not so easy to achieve with the politics involved.Lyttelton could load 100,000 tons a week if they could get it there.

[AMR]

Peter Whittall certainly seems to know what he is doing. The mine itself, and the mine planning, have been going very well since he came on board.

But the evidence suggests they do not know what they are doing regarding the transport chain. The finance agreement that was scheduled to be signed by 29 June, is still nowhere to be seen. A key item that was due 24 days after the prospectus is still not settled. About four times the scheduled period has now passed, an enormous overrun! Does this mean any significant sales, which were previously expected Q4 2008 have slipped into Q1 2009?

One of the Indian companies was entitled to increase its stake at the IPO price, but declined - which indicates PRC was not good enough for the Indians at that time.

This was from their quarterly report:

"Financing arrangements for the transport chain were progressed by the West
Coast Coal Company Limited (WCCC) consortium
during the June 2007 quarter. "

The other concern I have : Westpac. Any word on this?

[Oiler]

I would love to throw some cash at this company but not until they sort out the transport, its the only stumbling block, I think the best scenario is its trained to Lyttelton and shipped on a 70,000 ton capacity bulker from there, its obvious but not so easy to achieve with the politics involved.Lyttelton could load 100,000 tons a week if they could get it there.

Scuffer

There is no way in hell that more coal can be shipped to Lyttelton by train. The line is maxed out to capacity now.

Solid Energy would love to ship more coal and they even use barges to Lyttelton. The Otira tunnel is the major problem, diesel engines starving for air and rolling backwards as has happened.

They need to re electrify the tunnel and that would help the problem.

Lyttelton could load more than you suggest if they had the continuous stockpile available.

The barging to New Plymouth is not a big deal, sure it cost more but in the big picture,minimal.

I am not a PRC holder but will be buying in as soon as the comissioning starts.

[bermuda]

Studies have shown that the cost of getting coal to New Plymouth is the same as for Lyttelton.

[Hoop]

As time has passed, the question mark around the Pike shareprice is becoming clearer. I will be buying more shares in Pike, but from the start it was difficult to assess the share value, adding in risk + other problems discounts.

As most problems are now factored in, it seems that the market has valued the share between 80c (hostile market) to 86 (friendly market).
I guess as the time nears to production the demand for shares will lift the share price to nearer its producing target price of approx $1.30, assuming no unforeseen risks appear.

A question mark is the accuracy of the target price. Has the transport problem been costed correctly, effects of a possible world economic slowdown, labour costs understated, fluctuating coal pricing up and down etc.etc??

It seems that another correction to the sharemarket will bound to occur before production starts early/mid next year. I think this will be my entry point in topping up more PRC shares to my targeted level. Buying shares at 79c or less is now my objective (no change in risk), however the chances of this happening is becoming more remote.

[manxman]

Scuffer

There is no way in hell that more coal can be shipped to Lyttelton by train. The line is maxed out to capacity now.

Solid Energy would love to ship more coal and they even use barges to Lyttelton. The Otira tunnel is the major problem, diesel engines starving for air and rolling backwards as has happened.

They need to re electrify the tunnel and that would help the problem.



Oiler

That bit about a stalled coal train rolling backwards is seriously scary. When did this happen? And does it happen often?

Agree about re-electrification, but all the bridges (circa 1924 and mostly subject to 10k speed restrictions) need renewing as well if the line is to be upgraded. Then the government will want to increase access charges to recover the capital expenditure, which may kill off the trade. I bet Toll and Cullen are playing hardball on this one. It's really good that Pike are not waiting for a decision, which will remain forever two weeks away.

Mx

[Scuffer]

The stockpile of coal at Lyttelton is a problem as the area to store coal is limited, they also have only one system of unloading coal and if this system becomes flawed no coal is unloaded. 150-200 thousand tons would be lytteltons maximum loading limit at the moment, they have an old system and its not all purpose built so time for breakdowns etc. has to be factored into these figures. Lyttelton would dearly love to move more coal through the port but as it has been noted the problem is getting it there, the tunnel is the problem.Electrification of the line has been suggested but what about more engines and wagons another stockpile area in canterbury and keep a constant convoy of wagons through the tunnel not difficult I'm sure, the whole thing needs to be managed properly.I have been led to believe that the whole problem is because of existing agreements between the companies involved.
The bridges have been undergoing reinforcing for over two years now.

[bermuda]

My feeling is that NZO and Toll and Solid Energy had some serious talks but Solid Energy got a little greedy. And Port Taranaki became a lot more competitive.

I know that the cost landed in Port Taranaki is the same as that through to Lyttelton.Plus there our other logistical and competitive advantages for Pike in having sole control through Port Taranaki.

This is a Billion $$$ company and they have to ensure they are logistically capable of delivering. I mean look at the recent Newcastle shambles. Hardly a secure supply disribution point to Asian countries thirsting for high quality coking coal.

So just settle back and relax. The tunnelling is on schedule and guess what...the price of coking coal is forecast to rocket 30%. Well isnt that a dainty dish to set before the King.

[Scuffer]

Do you know what type of coal handling facilities are at port of taranaki

[Closed Loop]

Do you know what type of coal handling facilities are at port of taranaki

I am for getting a group together and have a look at Port Taranaki coal handling facilities. Bermuda is a natural organizer so what do you say.

[bermuda]

I am for getting a group together and have a look at Port Taranaki coal handling facilities. Bermuda is a natural organizer so what do you say.

I say that the news of a 30% increase in the price of coking coal has not yet been heard or recognised by the market.

[zigzag]

the maid was in the garden
hanging out her clothes
when along came bermuda
and stole her pantyhose

[digger]

Thanks Vince for getting me out of this circular Closed Loop the computer world sometimes operates in. Much of my problem was with XTRA. My wife said i was locked out do to my atrocious spelling.
Thanks everyone for not missing me as i never wanted a swell head anyways.

[digger]

I say that the news of a 30% increase in the price of coking coal has not yet been heard or recognised by the market.

Bermuda what 'what do you say Bermuda' was about arranging a tour through the Port Taranaki coal layout facilities.
The 30% increase in coal price was exactally in the area i expected.Met Peter Whithall in Waihe about 6 months ago and he had a consertive figure of US$58 a ton at that time as the break even figure required to make the mine successful. I bought a large holding in PIKE {now well down} on my gut feeling of world supple outlook that the price of coal will be about double Peters figure when we start to produce.
With both Oil and Coal the cost overruns are well factored in but the revenue overruns are not yet accepted or believed.Even with TUI the market has yet to accept the revenue overrun and may not until after the quartle report that the monies have been banked.
Read a article the other day stating that all minerals are in peak supply and will just trend up in coming years.

[Balance]

So how desparate was PRC? Squeezing the last $ out of the IPO to fund the mine? Or is it all the fault of the organising broker? One presents a buying opportunity - the other represents future funding risks.

http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10462367&pnum=2

A shareholder's lot is not a happy one

By Christopher Niesche

Since the shares debuted on the sharemarket on July 20, investors in the coal mine's initial public offering have seen their $1 shares slump by 14 per cent to 86c.

True, the timing of the Pike River float was hardly fortuitous - the sub-prime loan meltdown in the United States has seen sharemarkets around the world fall.

But the NZX's is down just 3.4 per cent since July 20, making Pike River quite an underperformer.

On the face of it this is quite surprising, given that Pike River tried to raise just $65 million, but said it had accepted $20 million in oversubscriptions.

But it just goes to show that the word "oversubscription" often doesn't mean much in this context.

In this case it means that Pike River was trying to raise $85 million, but would have gone ahead with the float if it got only $65 million.

The key to a good IPO is not to sell all the shares you can into a float, so that some investors are left hungry for more and there's demand in the secondary market.

That way, with any luck, the shares will rise, or at least hold on to their value.

Pike River and its advisers, McDouall Stuart, appear to have mismanaged this, with the result that Pike River shares have drifted as low as 80c.

Wellington-based McDouall Stuart seems to have had bad luck with its floats in the past few years.

It floated L&M Petroleum at 22c in January, but is now trading at 11c. Glass Earth, which it floated at 25c in October, is now trading at 22c.

Its big success is Dominion Finance Holdings, which it floated for $1 in July 2004.

It's trading at $1.44 now - a 44 per cent premium on the IPO. But even that is slightly underperforming against what the NZX-50 has done over the same period.

[Dr_Who]

Bad advice from advisors and/or greedy management? Both? Could have been a good float follow by further capital raising when the revenue starts flowing in.


disc: unhappy shareholder of PRC

[boysy]

balance are you sure you are living up to your name ? i mean the only times i read your posts they are negative could you perhaps have a balanced opinion ?

[bermuda]

Hi Digger,
Welcome back!
Who would want to do a tour through Taranaki's coal facilities??? Far out. Not me for sure.

If the forecast price rise of 30% is realised then you will be smiling all the way to the bank.

Dont get too disheartened by some of the posters on this thread. After all a couple of them bet me a dozen good read that Maari would be pumping before Tui. And all that info was out in the open just like the huge bonus that Pike will receive if the coking coal price increases as forecast.

This is a billion dollar project about to get a billion dollar bonus.

See you at the AGM (NZO that is )
Cheers

[boysy]

traders will always knok the likes of long term traders but if you are a long term investor you cant look past this especially when they start producing

[Balance]

So how desparate was PRC? Squeezing the last $ out of the IPO to fund the mine? Or is it all the fault of the organising broker? One presents a buying opportunity - the other represents future funding risks.



Boysy - cannot be more balanced than the above. If you believe that it was a stuff up by the organising broker, it's a buying opportunity. If you believe it's a case of PRC needing more funding yet to get the coal out, then it's a case of sell now and buy back cheaper later when they raise more capital.

So is it a buying opportunity or a risk? Deal or no deal?

[croesus]

I don't have any yet, picking there is more chance of negative news.. then positive.... plus have heard negative comments from local retired mine managers... re fractured seams etc..

Best of luck to holders, hopefully for them I am wrong........ will possibly buy a few when/if the price is in the mid 60c range.

[Hoop]

traders will always knok the likes of long term traders but if you are a long term investor you cant look past this especially when they start producing

That's exactly how I view this stock. The ideal point of entry price is the hard part to figure at present.

[manxman]

Balance:
The Pike River float was a success regardless of what the Herald might think. The first duty of the directors is to the existing shareholders. Pitching the IPO to satisfy the stags would devalue the holdings of existing shareholders. Each time the company goes to the market, existing shareholders take a hit so it was better to hoover up the extra $20 million while it was on the floor. NZO has a cash flow from TUI which virtually guarantees that there will not need to be any further public funding before production. Once production starts, there won't be a great need for money, and the banks will be queuing up (as they do when you don't need money).

The market got spooked at just the wrong time, and the stags took to the hills, but the project is safe because of the $20 million oversubscription no matter what Granny Herald thinks.

I don't imagine that the coal handling facilities at New Plymouth would be that fascinating, if they exist at present. I would be a starter for a get together in Greymouth to welcome the first ship, and see the first major cargo on its way north, but thats a wee way down the track yet.

Took up my entitlement, have now doubled it, and intend to double again before the first coal leaves New Plymouth.

Mx

[Balance]

Manxman,

If the PRC IPO is a success, I dread to think what an IPO failure looks like! The IPO was supposed to be a preferential entitlement to NZO shareholders but anybody who wanted stock could get it and as much as they wanted.

Those who bought at the IPO paid $1.00 and others can now buy at 86 cents. Put it another way, others can get 1160 shares now versus 1000 that yopu got at the IPO.

A good time to have a look at PRC is when the coal gets out of ground and the first shipment reaches Newcastle. Until then, the risk is that more capital raising could be on the way. Any rights issue will be at a lower price.

Fair enough?

[boysy]

balance you have clearly something against NZO/PRC and fair enough each to there own but as your name suggests what share/s do you not bag ?

[bermuda]

Manxman,

If the PRC IPO is a success, I dread to think what an IPO failure looks like! The IPO was supposed to be a preferential entitlement to NZO shareholders but anybody who wanted stock could get it and as much as they wanted.

Those who bought at the IPO paid $1.00 and others can now buy at 86 cents. Put it another way, others can get 1160 shares now versus 1000 that yopu got at the IPO.

A good time to have a look at PRC is when the coal gets out of ground and the first shipment reaches Newcastle. Until then, the risk is that more capital raising could be on the way. Any rights issue will be at a lower price.

Fair enough?

Balance,
Why on earth would you send a coal ship to Newcastle? Unless it was empty of course.
Sometimes I wonder whether you appreciate what is going on.
This is a huge project about to get a huge lift in the price of their product.

[AMR]

(I think Balance owns NOG judging by a few past posts on that thread)

Balance,
At the moment they effective have $20m of oversubscription income that could serve as project contingency, cost-overrun buffers, etc. This is in addition to the $11 million that they have set aside for the mine which was rated as "satisfactory" by BDA (although the tunnel costs have blown out slightly). There was also an issue of options mentioned at the 6 month mark. If there's any financing risk, it could be if the whole subprime worsens substantially and Pike cannot get capital from Westpac.

As for me, I made a mistake by participating in the IPO without taking due consideration of the risks but I will be increasing my stake significantly down the track (averaging UP) when technical indicators are giving buy signals.

[manxman]

Manxman,

If the PRC IPO is a success, I dread to think what an IPO failure looks like!
Think Burgerfuel, Feltex, Rakon all for different reasons. Rakon would be considered a screaming success unless you were an existing shareholder in which case you got heavily diluted by every Johnny-come-lately who knew a broker. The PRC float was successful in that it raised the money required to secure the future of the company without giving away loads of cheap shares. The closer the share price settles to $1.00 the better the call.


Those who bought at the IPO paid $1.00 and others can now buy at 86 cents. Put it another way, others can get 1160 shares now versus 1000 that yopu got at the IPO.

Not really. I could get a handful at $0.86, but to get what I picked up in the IPO I would have to pay up to $1.15. If the expected coal price increase starts to influence the market, it may be very hard to pick up a holding. PRC raised $85 million. Trading since the IPO has been a tiny fraction of that. The directors have no concern as to what a handful of speculators do to the shareprice in the short term. That's simple not their job.


A good time to have a look at PRC is when the coal gets out of ground and the first shipment reaches Newcastle. Until then, the risk is that more capital raising could be on the way. Any rights issue will be at a lower price.

Not sure about the Newcastle bit. They are having trouble getting coal out, so trying to get it in is a bit strange.

We buy shares now because by the time export shipments commence, we may have to pay $1.60. Don't forget that a 30% increase in the coal price will go straight through to the bottom line, as will any devaluation of the NZ$.

The directors could have created a roaring stag market by either
pitching the price lower
not accepting oversubscriptions

Either course of action would have left long term shareholders worse off. The risk of further capital raising being required has been substantially reduced by accepting the extra $20 million, but I agree, the risk still exists. Balance it against the risk that the shares will be well over $1.00 by the time the risk becomes acceptable to you. If your call on this is different from mine, then that's what makes a market, and as MacDunk would have it, the market is right.

Really, we won't know about this company until the end of next year when the hydraulic mining starts ramping up, and until then it is speculative. However the rewards are substantial.

Mx

[Bilo]

“Pike River and its advisers, McDouall Stuart, appear to have mismanaged this (Pike River IPO), with the result that Pike River shares have drifted as low as 80c.”
“Wellington-based McDouall Stuart seems to have had bad luck with its floats in the past few years.” NZ Herald Saturday September 08, 2007 Christopher Niesche

Once again The NZ Herald business reporters are being very unfair and expressing an opinion unsubstantiated by relevant evidence. This time to McDouall Stuart.

It seems to me that The Herald should not be pointing fingers at the only NZ broker who supports local resource companies.

The Herald should look more closely at the behaviour of major investors on the NZX.

The ACC and the Cullen Fund come to mind, but the fund managers who control the bulk of the capital invested in the NZX do not consider it necessary or their responsibility to contribute towards maintaining a market in the the various holdings they acquire.

They should promote active trading in the markets minnows by continually participating themselves. This is not McDouall Stuart’s fault or a reflection on the IPOs that they have brought to the NZX.

The share prices of minnows (and most companies not in the top twenty by volume traded) on the NZX reflects the apathy towards NZX share trading and participation in ensuring sufficient liquidity in the sharemarket by major holders of these shares and probably the companis themselves.

The share prices may also reflect the shameful standard and lack of financial reporting of NZX and NZAX companies and their business activities by the media (and I have had a contribution about this removed from this site previously so perhaps I shouldn’t be the one to raise this issue).

It is a joke to suggest that the NZX market reflects the underlying value in these companies when the liquidity is so dismally low and the spread is so volume dependent.

[bermuda]

Hi Bilo,
Well said.
I wish there was one dedicated Energy Reporter in NZ. Then we could really ramp up the quality. Unfortunately the media get it wrong very often..although Neil Ritchie is not too bad. Why not make him the New Zealand Energy Reporter on a good salary.

Re the Pike float I really dont think any of the major Brokers would have touched them because of all the bad 'media' about NZOG and also because the Float was so complicated causing so many delays.

Just remember to all out there, The Pike IPO will be a big success, bigger now than previously thought. It must be pretty clear to those that know the Coal ( Coking ) business that this project will feature on the world maps of coking coal producers. To those that dont understand there are some excellent websites. Pike is really holding a black gem.

[upside_umop]

what site do people here use to view coal prices.
thanks in advance.

[Balance]

Think Burgerfuel, Feltex, Rakon all for different reasons. Rakon would be considered a screaming success unless you were an existing shareholder in which case you got heavily diluted by every Johnny-come-lately who knew a broker. The PRC float was successful in that it raised the money required to secure the future of the company without giving away loads of cheap shares. The closer the share price settles to $1.00 the better the call.

Not really. I could get a handful at $0.86, but to get what I picked up in the IPO I would have to pay up to $1.15. If the expected coal price increase starts to influence the market, it may be very hard to pick up a holding. PRC raised $85 million. Trading since the IPO has been a tiny fraction of that. The directors have no concern as to what a handful of speculators do to the shareprice in the short term. That's simple not their job.


Mx

I think you have just invented the new defination of a successful IPO. I am sure PRC must be delighted it has such enlightened long term shareholders. In fact, that must be the reason why they managed the IPO the way they did.

I assume you will be there to take another generous helping of rights issue at $1.00 when the share price is 80 cents as that's great for existing shareholders?

As for a handful at 86 cents - I think you will find that you could have bought hundreds of thousands at under 90 cents.

[dsurf]

Balance - you could have bought 100's & 100's of thousands immediately following the IPO - but I think the point is that the volume offered is dropping and now you couldn't. Eventually (not neccessarily this year) the re-balancing will result in a rising shareprice believe it or not. Personally I see PRC as close to being a takeover target - falling $, rising coal - must be tasty for someone - pity they will never hear about it from our media!

[duncan macgregor]

What you guys have to take into account is how long before PRC pays a dividend. How long is your money sitting dead, before it starts earning, or how long before the sp reaches to that point over a dollar that plays catch up with bank interest rates.
Its pointless to say the dollar is dropping giving them increased income, completely ignoring the extra fuel, and transport costs in the process. It is similar doing a valuation in anything, you value the items life span, then deduct the years value from that each year. The tunnel and mine are worth nothing along with your shares when the coal is gone. If the mine lasts thirty years, you must get a dividend return to compensate your holding to be worth one thirtieth less each year when it will turn into a pass the parcel at the end.
It might not happen, they might find some more, or buy into it, which is another cost.
I really dont understand the logic of someone claiming to be a long time fundamental investor, being caught up in something like this. There Australian miner counterparts are earning huge money, i think that a fundamentalist should stick to what they preach, and leave well alone until they get some real numbers. Macdunk

[Dr_Who]

I disagree with you DM. The market usually value and buys companies based on future value, not current value. The short term flutuation of the SP does not indicate the true potential value of the company.

I am sure there are alot of mining firms in Aussie that are producing and paying a dividend. Those firms are fully priced at a much high price than PRC is trading at currently. It all comes down to pricing.

I believe PRC is under valued at 85 cents. I bought some in the IPO at $1 and will top up when the time is right.

[winner69]

I disagree with you DM. The market usually value and buys companies based on future value, not current value. The short term flutuation of the SP does not indicate the true potential value of the company.

I am sure there are alot of mining firms in Aussie that are producing and paying a dividend. Those firms are fully priced at a much high price than PRC is trading at currently. It all comes down to pricing.

I believe PRC is under valued at 85 cents. I bought some in the IPO at $1 and will top up when the time is right.

This sort of suggests you sort of agree the market has got the price of PRC correct at the moment .... you say market values companies on future value .... agree ... so 85 cents or whatever is what the market says the future value is (taking into account what most know and what the risks are) .... yes

So whats this about short term flucuations of the SP does not indicate the true potential value ... you just said the market has valued it on future value

[Big-Noters]

Quite right Doc

[duncan macgregor]

DR WHO, The short term price of a share gives the value the market thinks the share is worth today. Tomorrows price simply cannot fundamentely be worked out until profit and loss margins are worked out in numbers. You bought in blind faith, the market told you you paid to much for them, but you still intend to buy more in blind faith without the numbers.
You were wrong the first time, what makes you think you have it right this time?.
You made an emotional purchase, nothing to do with fundametal or TA strategies, you paid 14% to much according to the market, and are left playing catch up to get back to square one. You dont even know what percentage of profit comes back as dividends, or what the company intentions are about prospecting for more coal.
Thats what makes a market we cant all have similar views, the market simply would not work. Macdunk

[bermuda]

One of the reasons the Indians bought in was to give them supply security.

This isnt just any old mine. This will be a very important supplier of high quality coking coal into the world market.

As long as the world needs steel then coking coal will be in high demand. And judging from Merrill Lynch the market is saying dont stuff me around with your Newcastle problems give me a secure supply and if you can then we are prepared to pay. Which is why the price could rocket plus 30% at the next pricing negotiations which are due soon.

My advice would be to do some more research into future pricing and buy into Pike early December.

A 30% increase in forecast revenues is something to behold. Doesnt happen very often.

[Tok3n]

PRC could do with a takeover battle:

http://www.theaustralian.news.com.au/story/0,25197,22408448-643,00.html

[Dr_Who]

PRC could do with a takeover battle:

http://www.theaustralian.news.com.au/story/0,25197,22408448-643,00.html


I personally think if the SP stays at these levels or goes lower and there are no fundamentally wrong with the company, it will be a T/O target. I suppose time will tell. It will be another NZ resource going to overseas owners if it happens.

[digger]

PRC could do with a takeover battle:

http://www.theaustralian.news.com.au/story/0,25197,22408448-643,00.html

Tok3n,this likelyhood is very small until PRC is very close to production or even better up and running with all the teething probl;ems largely solved.
That is way i am very much in favour of NZO investing it's TUI income to complete this second project.It will be a prime company only when a going concern.Like how many people buy half built houses,yet millions have purchased fully completed ones. I am hopeful that NZO has read the comments that NZO monies should go first into a dividend to get the SP moving and discarded it as poor economic thinking.To get PRC and NZO SP up get PRC into production.Completing this second project will have a double positive effect for NZO and PRC.
This will be a must to sort out at the AGM.

[digger]

PRC could do with a takeover battle:

http://www.theaustralian.news.com.au/story/0,25197,22408448-643,00.html

Tok3n,this likelyhood is very small until PRC is very close to production or even better up and running with all the teething problems largely solved.
That is way i am very much in favour of NZO investing it's TUI income to complete this second project.It will be a prime company only when a going concern.Like how many people buy half built houses,yet millions have purchased fully completed ones. I am hopeful that NZO has read the comments that NZO monies should go first into a dividend to get the SP moving and discarded it as poor economic thinking.To get PRC and NZO SP up get PRC into production.Completing this second project will have a double positive effect for NZO and PRC.
This will be a must to sort out at the AGM.

[shasta]

Tok3n,this likelyhood is very small until PRC is very close to production or even better up and running with all the teething problems largely solved.
That is way i am very much in favour of NZO investing it's TUI income to complete this second project.It will be a prime company only when a going concern.Like how many people buy half built houses,yet millions have purchased fully completed ones. I am hopeful that NZO has read the comments that NZO monies should go first into a dividend to get the SP moving and discarded it as poor economic thinking.To get PRC and NZO SP up get PRC into production.Completing this second project will have a double positive effect for NZO and PRC.
This will be a must to sort out at the AGM.

Digger

Largely agree with your sentiments re Pike...

NZO should use there funds IMO as follows (in order):

1. Repay TUI JV debt
2. Advance funds to PRC
3. Pay off Kupe debt
4. Share/options buyback
5. Dividends

PRC does have a "letter of comfort" from NZO to the tune of $25m guaranteed to Westpac, & i presume they will need this sooner rather than later.

PRC @ 85c looks tempting (especially as a passive long term hold), given the fall in $US & the outlook for hard coking coal prices.

Probably a bit more weakness in the share price before it turns so, under 80c looks like a buy, under 75c back the truck up time!

[duncan macgregor]

The NZ dollar is dropping giving PRC that extra income or is it?. The american dollar is dropping in similar fashion. Is the coal exported at american dollar prices or tied to some other currency?. The price of gold is measured in American dollars and going up, but not in real terms. Anyone know which currency they sell at?. Might be INDIAN for all i know. Macdunk

[Nitaa]

duncan.... prc is not producing yet.. not far but not producing. all indications are that coking coal will significantly increase next year.

[duncan macgregor]

duncan.... prc is not producing yet.. not far but not producing. all indications are that coking coal will significantly increase next year. NITA, i know that, but what currency are they selling in was what i meant. Do they get paid in american dollars or indian currency or what which i presume is all tied in future contracts. If they get paid in NZ dollars for instance or american then the contracted future price is dropping. Macdunk

[shasta]

NITA, i know that, but what currency are they selling in was what i meant. Do they get paid in american dollars or indian currency or what which i presume is all tied in future contracts. If they get paid in NZ dollars for instance or american then the contracted future price is dropping. Macdunk

My impression is that the coal prices contracts are based on $US.

So all we need to be concerned with is the NZ/USD.

The fall is good for PRC, for WHEN it is producing in 2008.

Especially as the Indian companies have agreed to take a large %age of the production at market rates...

[upside_umop]

the usd is at record lows - against its trade weighted index.
i dont think nzd will be affected so much against this, as we're not a 'major' trader with us (in their terms), and our current account deficit is running at 9% of gdp - much larger than us.
given this, fundamentally the usd will outperform the nzd over the long term by far.
right now, our dollar is only funded by interest rate differentials, but as soon as we see a slow down in the housing market, look for the nzd to fall low. some say 60 cents is right, as any lower will decrease our standard of living too much, but history shows the violent swings of the nzd and i would be thinking 40 cents isnt out of the question again - depending on dairy.
i think nz was only just making a current account surplus when we were at 40 us cents, but dairy will have changed that a bit now..
so yeah, just because us is falling to record lows, doesnt mean in the medium long term we will stay at their levels, we will revolve around them imo.

[AMR]

Big volume today, the report must have been interpreted quite positively - the tunnelling may be almost one month ahead of schedule but at the same time there will be a cost blowout of $11 million which wipes out the contingency. Any opinions?

[upside_umop]

Big volume today, the report must have been interpreted quite positively - the tunnelling may be almost one month ahead of schedule but at the same time there will be a cost blowout of $11 million which wipes out the contingency. Any opinions?

i think its scheduled to finish one month later than expected, plus the blow out in costs :(

the coal price info is good, but at the end of day its just a forecast :(

more buyers than sellers now, maybe a chart from Phaedrus, or is it too early?

[Dr_Who]

If energy prices continues to go up and $NZ down it will be positive. I will wait a few more months before I top up.

[Unicorn]

Big volume today, the report must have been interpreted quite positively - the tunnelling may be almost one month ahead of schedule but at the same time there will be a cost blowout of $11 million which wipes out the contingency. Any opinions?

The report states that the tunnel has fallen one month behind schedule. Project costs are up by $11M, mainly due to increases to the previous $25.6M tunnelling cost. These are major blowouts considering it is only three months since the Prospectus was published.

The good news is that the price of coking coal looks much stronger than was previously forecast.

There is still no word of the financing for the transport chain - which was expected to be signed by 29 June. In fact no mention at all of that critical, and major, component of the project. That rings major alarm bells for me.

[croesus]

Prescient thinking Unicorn.


Have lowered my purchase aspirations to 40 to 50 c


Lots of tears before bedtime yet.


Croesus

[upside_umop]

Prescient thinking Unicorn.


Have lowered my purchase aspirations to 40 to 50 c


Lots of tears before bedtime yet.


Croesus


pitty the market thinks different to you in the last wee while...

[boysy]

will be interesting to see how feds action tomoro effects comodity pricies

[croesus]

pity you can not spell, .... umop

[upside_umop]

omg...or should i say omg, .... that doesnt look right does it? (notice the comma)
you cant back up your statement so you come back to me with a careless spelling mistake?
but yeah, it doesnt really need to come to that, and anyone in their right mind knows that prc is not going to go to 40-50 cents (not in the foreseeable future)
if you want to stir poo, go the burgerfuel thread, thats one you could pick up for 40cents in the foreseeable future. put the spell check on this reply if you must.

[croesus]

umop...don't stress... whats your time line for the "foreseeable future" ... you are talking nonsense again... when was the last time the future was forseeable ?.... "anyone in their right mind" more gibberish... I say buying at the listing price... was dumb...

anyway I am having a early night
cheers Croesus

[Bacchus]

Cro. you are a dork. You are having " an early night "

[Balance]

Pike River cost up to $185m
By TINA LAW - The Press | Wednesday, 19 September 2007


Pike River Coal (PRC) will spend an extra $11 million to develop its mine, but higher coal prices are expected to offset the additional spending.


The listed West Coast coalminer said yesterday it would now cost $185m to develop the mine, instead of the budgeted $174m, after discovering the remaining 40 per cent of the tunnel was made up of a more expensive fractured rock than expected in the May prospectus.

PRC has also delayed the start of mining by a month to April.

PRC general manager Peter Whittall said dealing with geology led to such things and PRC had to deal with the type of rock that came up.

Nearly all other development costs, including plant and engineering works, were on, or under, budget.

The $11m came from a contingency fund outlined in the prospectus and money would now have to be reallocated into that fund. Whittall was unsure about how much money would be put into it, but he did not think it would reach $11m.

[whatsup]

Early days there could be more cost rises and delays yet to come with the really hard rock still to be tunnelled through, 40% is quite a distance in tunnelling distances.

[winner69]

One headline today 'Light at the end of the tunnel'

Are they trying to go through the mountain and come out the other side?

[BWR]

Whatsup,

The hard rock has the lowest tunnelling cost.

It is the fractured, and softer rock, which causes the extra costs.

[sideline]

Hi BWR,
could you clarify (on the NZO thread maybe) whether the calls capping the oil price have now
expired or are some still in place??
I know that some of the puts extend to 2010.

Thanks

[upside_umop]

umop...don't stress... whats your time line for the "foreseeable future" ... you are talking nonsense again... when was the last time the future was forseeable ?.... "anyone in their right mind" more gibberish... I say buying at the listing price... was dumb...

anyway I am having a early night
cheers Croesus

you will need to foresee events in share trading otherwise you may as well not do it. you will be going blind. sure, some people come to different conclusions about shares based off what they foresee will happen to the company.

what i foresee with prc is obviously different to you. i was disappointed with the release, i mean it was only a prediction that coal prices will be higher..but there is high upside to this probability that it will evenuate given the world economy...especially since this latest fed cut :)

i didnt say buying at ipo was smart, yes i did put an order in, relatively small, but ill be holding for a while, and i didnt think it would sink like it did. however, i will top when time is right.

here is something interesting though, i think commented about it a few days back about the state of nzd etc current account balances etc etc in this thread. seems like this bloomberg reporter thinks just like me, backed up by some major economists.

http://www.bloomberg.com/apps/news?pid=20601081&sid=axAfGQUySU6k&refer=australia

[croesus]

Fair comment umop, oh and my apologies for being a bit grumpy last night.....certainly was'nt meant personally...........hopefully for current holders my 40/50c estimate is on the low side..

Time will tell.
cheers Croesus

[dsurf]

Coal up 30% - SP down 50% to 40c to 50c - hope you feel better after a good sleep!!

[boysy]

well shareprice up again to 90c

[AMR]

Share price up to...higher than it was before, but it is on quite low volume. Better to be cautious than get wiped out by an aborted breakout.

[Dr_Who]

It seems like all the short term wannabe staggers in the IPO has sold out and left are the long term shareholders. Up on low volumes. I still think this company is under valued at these levels based on the coal price. The cost to put in the infrastructure is only a one off cost. After that it is all pure income for many years.

[boysy]

Lets just hope that NZO publicly announces that it will if needed fund the rest of the PRC development .NZO should spend its TUI revenue on project development not just wildcat drills.

[upside_umop]

they have already announced they will fund upto 25million via equity or debt placement. whether that is enough to get them through to production i dont know.

i still like the concepts of wildcat drills, and if they were to stop, it would seem they were becoming a mature company before they are mature...

keep on exploring!

[boysy]

exactly upside, they should do wildcat drills but right now they should focus on how to get PRC and Kupe up and running. They no longer have services of ocean patriot in the short term so they should get the existing developments up and running so more exploration can occur.

[AMR]

Here's a chart of PRC. It's only a 3 month chart so it does not carry a huge amount of weight, but it's still better than nothing.
http://img218.imageshack.us/img218/9199/prcchart23rdsept2007witqd0.png

The uptrend is now entering a congestion zone around the 90c - 92c mark around where the previous peak back around the IPO date was. The volume is quite low compared to the big falls and rises earlier, so I'm expecting the current movement to bounce back from the 90c mark and return to the trendline.

file:///C:/DOCUME&#37;7E1/User/LOCALS%7E1/Temp/moz-screenshot.jpg

[Scuffer]

A reliable source told me that there is a grader with PRC logo on it sitting on the wharf at the port of CHCH. the coal pile must be ready to be graded,start ya buying boys, but I'm not sure on the ships yet.

[BWR]

Have a look at the photo album in www.pike.co.nz

Photos of the grader and other equipment being uploaded this morning.

[Scuffer]

Have a look at the photo album in www.pike.co.nz

Photos of the grader and other equipment being uploaded this morning.

Yup thats the one sitting in lyttelton

[digger]

New Hope Offers A$591 Million for Resource Pacific (Update2)

By Madelene Pearson

Sept. 26 (Bloomberg) -- New Hope Corp., an Australian coal miner, offered A$591 million ($515 million) in stock for rival Resource Pacific Holdings Ltd.

The bid values Resource Pacific shares at A$2.55 each, 31 percent more than yesterday's closing price, Brisbane-based New Hope said in a statement today.

New Hope exports about 65 percent of the coal from its Queensland mines to Asia, according to its Web site. It also has a 50 percent stake in Queensland Bulk Handling, a coal-export terminal in Brisbane. Resource Pacific operates an underground coal mine in the Hunter Valley, New South Wales, according to its Web site.

New Hope shares fell 8 cents, or 3.3 percent, to A$2.37 at 11:13 a.m. in Sydney, after closing at a record A$2.45 yesterday. The stock has risen 76 percent in the past year. Resource Pacific shares jumped 50 cents to A$2.45.

To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net

Last Updated: September 25, 2007 21:19 EDT


Seems to be a bit of interest in coal starting to slowly develope. Same thing could happen to PIKE once it gets producing.

[AMR]

Well seems like my prediction was wrong. We've had a few days of decent volume confirming the breakout from the 86c resistance level. Prices are now testing 92c resistance.

[Dr_Who]

We can put a value on PRC based on the Resource Pacific T/O offer price. Can someone do the maths please?

[boysy]

testing 93 cents now on higher volumes

[AMR]

With coal at $US115 per tonne :

Pike River E.P.S after tax when ramping up in 2008 = 8.9c
Pike River E.P.S after tax when fully producing in 2009 = 41.2c

RSP seems to be very early stage as well, they seem to be in the midst of their production ramp-up with one mine and developing another. Where Pike will be late 2008/early 2009.

Current P.E of RSP immediately after T.O announcement = 43.2

Pike River at the same PE : 8.9 x 43.2 = $3.71

The PE was taken from ASB Sec, so it's probably a bit out. Great numbers, but let's not forget we are still drilling a tunnel in fractured (and probably waterlogged) rock seams and with comparing PE's only being a cheap and nasty method of valuation is probably overly optimistic. Perhaps someone else could do a DCF valuation of Pike?

[Dr_Who]

$3.71 valuation?

You are giving wet dreams.

[AMR]

I know, it is wildly optimistic. A lot of factors that haven't been taken into account in the previous "cheap and nasty analysis". For a start...

=> The Ramp up. Firstly, it is with hydraulic mining, secondly, BDA reckons the ramp-up volumes in the prospectus are on the high side. And they know more than most of us probably.

=> Markets. I have no evidence to back this up, but a "gut feel" suggests that kiwi resource companies will probably trade on lower PEs than Aussie ones simply due to the history and size of the ASX resource sector.

[Dr_Who]

Coal prices soar to record over $US100
Reuters | Friday, 28 September 2007

COSTLY COAL: A worldwide rally in energy prices has seen coal break $US100 a tonne in Europe.

Physical coal prices for delivery into Europe broke record levels over $US100 ($NZ136.25) a tonne, as the worldwide rally in energy prices broke through into the opaque and fragmented coal market.


Coal prices have been rising all year as availability has progressively tightened. Unfortunately for consumers, freight rates have also repeatedly hit record levels, forcing up the delivered cost of coal.

Three Q4 delivery coal cargoes traded on Thursday, one at $US102.00 a tonne DES ARA and one at $US101.00 DES ARA on the globalCOAL trading platform. A further parcel was sold at $US101.00 through brokers, traders said.

These were the first visible, on-screen coal trades ever at over $US100.00 a tonne. In January, CIF/DES ARA coal prices were around $US65.00 a tonne.

Prices of prompt loading South African coal cargoes bounced back above $US65.00 a tonne free-on-board (FOB) Richards Bay on Thursday, having drifted down to around $US63.85 for an October cargo on Wednesday.

A flurry of four trades within minutes of each other on electronic trading platform globalCOAL saw prices rise to the highest traded level on Thursday of $US65.50 a tonne for a December loading panamax.

Two November loading panamaxes traded at $US65.00 and $US65.25 a tonne and two December panamaxes at $US65.50 and $US65.30.

There were several companies involved in the trades including banks, traders and a major European utility/trader.

The buyers were covering short positions for Q4, one of the companies involved said.

South African availability for Q4 and Q1 is tight and getting tighter, traders and utilities said.

Prices for prompt cargoes could rise to $US70.00 or more within weeks if Indian buyers return to the market as expected for two million tonnes for Q4 shipment, traders said.

:D:):D:)

http://www.stuff.co.nz/4218215a6026.html

[the machine]

coking coal is a lot more than usd$100/t

go pike!

M

[Nitaa]

I saw an article in a paper a few days ago where it mentioned that BHP is effectively holding to ransom coal prices, sorry i didnt read any more than that but the short of it is that coal prices are definately on the up

[Sehnsucht888]

Nice to see some good positive news on Pike..

http://www.stuff.co.nz/dominionpost/4222014a6034.html

Pike buoyed by trend towards rising coal price


Pike River Coal (PRC) is bullish about coal, ahead of new international prices being set next month.

Pike coal is due to come into production from late April, and prices for that coal will be influenced by November's talks between Australian coal producers and northern hemisphere customers.

PRC chairman John Dow said supply problems had helped push prices up. Coal exports from Australia's east coast were being constrained by infrastructure bottlenecks particularly at Queensland's Dalrymple Bay coal terminal.

Coal vessels faced a 16 to 20-day wait at sea to be loaded, Dow said. "Those kinds of logistics and supply bottlenecks that are driving up prices are unquestionably having a positive impact on Pike," he said.

"It's not just on hard-coking coal, which is the premium stuff we produce, but we're also seeing it at the thermal coal end."

Late last month physical coal prices for Europe broke record levels of over $US100 ($NZ136).

Macquarie Research has upgraded its 2008 premium hard-coking coal price forecast to $125 a tonne from $120 a tonne. The 2007 price was $98 a tonne, giving a 27.6% forecast rise year on year.

Dow said towards the end of each calendar year, the big hard-coking coalminers had an annual bargaining session with principal customers. Typically miners like BHP Billiton, Rio Tinto and Xstrata would meet coal buying customers, particularly from Japan, to set the price for the year ahead.

"It's our expectation the price for Queensland premium coal, which is similar to what Pike negotiates, will be significantly upwards from the $US96 which was available this time last year," he said. "It's definitely having an impact on producers of high-quality, hard-coking coal.

"We'll have about 200,000 tonnes of production in calendar 2008. And we'll be up to full speed with one million tonnes a year from calendar 2009 onwards," Dow said. Recently, a "significant" breakthrough had occurred in commodity prices for both hard and soft coal, partly driven by growing demand from China and India. This would likely translate into higher longer-term contract prices "likely to be around for a while".

Dow is a former chairman and managing director of Newmont Australia and also a director of the Australasian Institute of Mining and Metallurgy.

New Zealand's mining industry was now starting to see opportunities that were not available three or four years ago, he said. Australia's economy was going "gangbusters" on the mining boom, which had given Australians "quality of life".

"We need all kinds of things but getting the Government to be positive about the potential for minerals has been the hard part up until now."

PRC's shares traded at a 108c high the day they listed, but then fell to an 80c low on August 21, before trending back up. They closed yesterday flat at 93c.

[Dr_Who]

Must be the McDunk factor. Everytime DM opens his mouth the price goes up. :p:D

[duncan macgregor]

Must be the McDunk factor. Everytime MD opens his mouth the price goes up. :p:D You reckon if i keep opening my mouth you might get back to what you paid for them before production. Not against it i only think that there is a lot safer and less risky investments in the market with more potential. Macdunk

[dsurf]

Another "risk" appears to be mitigating for PRC with the NZO annual report stating that " The transport chain agreements with West Coast Coal Consortium are now finalised". Of course agreements are quite different to coal travelling on the way to India on the final boat but progress is being made & must mean that risks are decreasing.

[Billy Boy]

Hey McDunk
Like who ??? Long term

[duncan macgregor]

Hey McDunk
Like who ??? Long term Long term on the NZX TPW. Macdunk

[temuk]

And the price went up 9 cents "just like that"!!

[dsurf]

SSH: PRC: SSH Notice From Credit Suisse (UK), London 09:35am
PRC
08/10/2007
SSH

REL: 0935 HRS Pike River Coal Limited

SSH: PRC: SSH Notice From Credit Suisse (UK), London

NOTICE 29267 DETAILS

Submitted Date : 08-Oct-2007 09:33
Status : Accepted

Substantial : Y Director : N
Add Holder : Y Change Holder : N
Ceased Holder : N Change Nature : N

Issuer Code : PRC Pike River Coal Limited
Holder : Credit Suisse (UK), London

Address : Five Cabot Square
: Canary Wharf
: London E14 4QR
Country : United Kingdom

Contact Name : Monica Pobes
Phone : +44 20 7883 4754

Total of Interest : 17000000
Total Issued : 200000000
Total % : 8.5

Class : PRC
Votes Attached : 1

Beneficial
Total of Interest : 17000000
Current % held : 8.5
Names :
Transaction Dates : 17/09/07
Total Votes :
Considerations :

Non Beneficial
Total of Interest :

Description :
Deposit of abovementioend shares
Documentation
With Notice : No
Not Filed : No
Been Filed : No
Number of pages : 0

Date of Last Notice :

[Billy Boy]

It's only 6 months untill first coal.
share price now is 92 - 93 cents.
Six months time ? do your own sums
BB

[manxman]

It's only 6 months untill first coal.
BB

BB it's going to be more like 15 months to first revenue as the mine slowly ramps up. First they have to dig themselves some working room.

Stocking the coal processing and transport chains will take more than 150,000 tonnes, possibly a lot more if the customer wants a single grade in a shipload. In the meantime the bills have to be paid.

I don't expect that they will be cashflow positive until the hydro mining is fully commissioned, say early 2009, and dividends not before 2010. Counting chickens will not make the share price go up. As the project de-risks, then the market may suddenly get the bit between its teeth, which would be really nice to see, but only Mr Market knows when that might be.

Once they hit first coal, they will probably book a lot of what is really capital tunnelling in the coal to current expenses. This will be tax efficient, but may produce horrendous figures for cost per tonne of coal in the early stages. If Mr Market doesn't understand, then there should be some great buying opportunities.

Mx

[Mike.Gayner]

dsurf - are you able to explain that announcement to me in english? Please excuse me, but I'm new to this, and PRC is my first share holding. I would like to understand what's happening.

[dsurf]

dsurf - are you able to explain that announcement to me in english? Please excuse me, but I'm new to this, and PRC is my first share holding. I would like to understand what's happening.

They own 8.5% of the head shares in the company company - Anyone owning more than 5% must submit a substantial shareholder notice. They must update when they buy or sel more. Not sure of exact timeframes that market must be updated in.

[BWR]

Unfortunately Substantial Shareholder Notices cover more than simple ownership of shares. They also cover a whole range of possibilites whereby one party might be in the position of controlling the votes exercised by another parties shares.

This results in duplication of reporting through overlapping substantial shareholder notices, and for this reason it is possible to have notices totalling more than the number of shares on issue.

[Dr_Who]

Offshore institutional interest in the stock... very nice:)

[shasta]

Unfortunately Substantial Shareholder Notices cover more than simple ownership of shares. They also cover a whole range of possibilites whereby one party might be in the position of controlling the votes exercised by another parties shares.

This results in duplication of reporting through overlapping substantial shareholder notices, and for this reason it is possible to have notices totalling more than the number of shares on issue.

Thanks for that clarification BWR, much appreciated.

PRC is very much a "Kiwisaver" type stock, with many years production ahead & consistent dividends in the future, just has a difficult 12 months or so ahead, sucking up cash before it becomes cashflow positive.

Would be interesting if people were looking at a blocking stake at this early stage of the proceedings...

[skinny]

Indeed, as is Kupe. I can't believe some of the longer holders are bailing out of NZO at this point; it is precisely the wrong time to sell. NZ fund managers will start piling in big time as soon as they have a bit more certainty over the production and income profiles.

[Billy Boy]

MANXMAN. Yes you are right of course.
I still think the price will not now go much below 90 cents.
By first coal I mean "Finish the Tunnel and get to the stuff".
Then the Share price will hover around 100 - 115 cents
Commercial production in 2009. A handle on production costs,
price will go as you say.
Those of us who get in early (at 90c) will (I feel) double their money by
2010 - 11. by 2013 -14, Treble it. with divvy comming in.
We can only guess.
Thanks for your thoughts
Cheers BB

[manxman]

Anyone northerners coming to the AGM.
Mrs M and I will fly down and pick up a $1/day campervan for relocation back to Auckland. (stocking up in Marlborough, Martinborough and Hawkes Bay)
In the old days I would have stayed at Revingtons, but I believe it is a backpackers now.
Suggest a sharetrader rendezvous after we have cleaned out the sausage rolls at Pike River.

Mx

[duncan macgregor]

MANXMAN. Yes you are right of course.
I still think the price will not now go much below 90 cents.
By first coal I mean "Finish the Tunnel and get to the stuff".
Then the Share price will hover around 100 - 115 cents
Commercial production in 2009. A handle on production costs,
price will go as you say.
Those of us who get in early (at 90c) will (I feel) double their money by
2010 - 11. by 2013 -14, Treble it. with divvy comming in.
We can only guess.
Thanks for your thoughts
Cheers BB The market told you that a dollar was to high for the risk involved so what makes you think the price will hover from about 100-115?. You got it so wrong at the start, what makes you so right this time. That is straight out cross your fingers and hope analysis. The time to buy, or not to buy is once the risk is reduced to a level where your fundamental analysis has some figures to work with.
The risk is still very high, its a straight out gamble of everything going to plan. Let me point out what i would consider are the risks with what might or might not happen.
1, This crazy global warming issue who pays for that.
2, Transport costs skysrocketing with double handling out of two ports.
3, The acute shortage of miners, who get paid $3000 a week in Australia [not KIWI wages].
4, Is this it for thirty years, or do they try and find more or buy in to other mines.
5, They paid 3 million to have the power connected when surely they could produce it far cheaper with a large generator. Might have been able to use coal seconds for that.
6, The company has never come out with a blue print of their future intensions of what happens to the profits. Dividend policy for starters, what percentage are you likely to get in dividends.
7, I think it is to much of a gamble, not only with the practical side, but also of company intent, for any practical investor, other than the starry eyed brigade to even consider.
If the company comes out with full and open disclossure for instance then it might not be as big a gamble as it is at this moment in time. Macdunk

[Ripping]

45m advance in the tunnel last week to 1535m.

http://www.pike.co.nz/about-pike-river-coal/Tunnel-scaled.jpg/view

[Dr_Who]

Anyone northerners coming to the AGM.
Mrs M and I will fly down and pick up a $1/day campervan for relocation back to Auckland. (stocking up in Marlborough, Martinborough and Hawkes Bay)
In the old days I would have stayed at Revingtons, but I believe it is a backpackers now.
Suggest a sharetrader rendezvous after we have cleaned out the sausage rolls at Pike River.

Mx

I cant make it to the AGM. Is it possible for someone to post up the question and answers at the agm?

[digger]

Coal for 2008 in Europe Rises to a Record $100 a Ton, ICAP Says

By Mathew Carr

Oct. 8 (Bloomberg) -- Coal for delivery to Europe next year rose to $100 a ton for the first time as demand for the fuel increases and shipping costs jump.

The forward contract for delivery to Amsterdam, Rotterdam or Antwerp rose as much as $2, or 2 percent, to a record $100 a ton, according to broker ICAP Plc. It was at $98 a ton at 10:36 a.m. in London.

To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net

Last Updated: October


Took this from waaihoek on FIXX. It read just too good to not paste here. Remember the 100 dollars a ton is for thermal coal and hard cokeing coal is well north of that. Will be decided in next month from memory.

[bermuda]

Digger,
I am pretty sure that is CIF.
Freight costs have really gone north lately but hey, I reckon coking coal (fob ) has the potential for a 25% increase.
An independent supply chain away from the horrors of Newcastle is what these Indians want.
Pike will be a winner that is for sure. Some people do not understand the coking coal market.

[Sehnsucht888]

Article in the Dom this morning relating to Aus cutting back Coal exports and a likely surge in prices - similar to this article in a different paper by the same guy:
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article2609726.ece

[Dr_Who]

If this pups share price dont perform closer to production stage, it could possibly be a T/O target if gobal coal prices continues to climb. It makes sense for a large offshore resource firm that can reduce cost and add value to buy PRC out if it is under valued.

[Billy Boy]

MacDunk
Tks for your thoughts.
I feel you have focused on just about every negative one
could think of.
I am a long term investor and think PRC is a better bet
than the finance sector at the moment. Although have
bought a small parcel of DPC a few weeks back @ 101c.
Coal is in the energy sector and that sector, I feel, will
hold up well on into the future. Market forces will prevail
be it in the labour force, price, availability, Politics, whatever.
I went to evening hosted by Kevin Armstrong - Chief
Investment Officer for the ANZ Bank, recently.
His Lecture revolved much around "PERCEPTION" and the
effects of. If you get a chance go to one of these lectures
they are very very interesting and well worth the time.
I even got nibbles and drinks afterwards. No sausage rolls.
thanks again.
Cheers & Beers
BB

[Nitaa]

The market told you that a dollar was to high for the risk involved so what makes you think the price will hover from about 100-115?. You got it so wrong at the start, what makes you so right this time. That is straight out cross your fingers and hope analysis. The time to buy, or not to buy is once the risk is reduced to a level where your fundamental analysis has some figures to work with.
Macdunk

Macdunk. I think these comments are seriously flawed. The comment that the market told you a dollar was way too high is wrong. When he purchased PRC the market was saying its worth $1.01 and that is what he has paid. So are you trying to say the market was wrong at that time? Remembering the stock opened at something like $1.08 or something.


Then you say the time to buy is once the risk is reduced. In that case the savy, smart or shrewd investor who sees significant gains if that person has the foresight to see what you or I dont see. Based on your last sentenced posted on the above quote, your time to buy NZO would be right now as you have many of the numbers to make a fundamental analysis of the stock.

Not trying to be picky here Macdunk but it seems like your emotions with certain stocks will impede you on potential buying opportunities. Its best to try to make trading decisions with a clear mind rather than being clouded in judgement.

Important: if you initally like or dont like a stock, don't let your mind try and justify why you like or dont like it. One thing is certain, you creative side of your brain will find ways to justify your inital views.

Another point Macdunk and we see it time and time again. History will always repeat itself in this area. A countries stock index might be the darling of the sharemarket world one year but be the dog the next. The same thing goes for indivdual stock.

[duncan macgregor]

BILLY BOY, You have to be carefull in this game that you focus on the negative against the positive, to come up with the risk element. The positive in this case is quite clear, the negative is not. When i see people gushing on about the positive overlooking the negative element, i know that their in love with the idea has clouded their thinking. Who knows it might be a good thing, but up to this point its a complete disaster. Anyone with a decent stop loss system would have lost money and been gone. That would represent most of the more successfull investors. The buy and hold at all cost brigade, or the ones with no sell system, are all at the moment playing catchup.
I only pointed out the negative, much to the disgust of the people in love with the idea.
Who cares if its coal, oil, or pig pooh they are selling, its whats in it for me with my investment dollar thats all that counts. The company is keeping you lot in the dark about policy going forward, you dont even know if they have a dividend policy on percentage of profits, or if they will prospect for more. Much better prospects else where. Macdunk

[sideline]

BB, Nita et al,
MacDunk is a perennial downramper who seems to have an axe to grind here.
Probably some deal gone wrong in the past and now he is stuck in a rut.
I just ignore his posts completely.

[Dr_Who]

Everyone has an opinion, be it positive or negative. Actually, DM is doing us a favour by ramping the price down, so that some of us cashed up long term investors can pick up some cheap stock. :):D

[dsurf]

The company is keeping you lot in the dark about policy going forward, you dont even know if they have a dividend policy on percentage of profits, or if they will prospect for more. Much better prospects else where. Macdunk

MACD - A few points

1/ This is not NZO & we are not in the dark.

2/ A buy signal was generated when the sell - side dryed up and a base was formed around 85c. At the same time forecast coal price went up 30%. Did you get on board? I guess not as you were blinded by emotion from what both TA & FA were saying

3/ Dividend policy from the prospectus = a dividend payout of 50% of free cash flow. Dividends when paid (if any) are expected to be paid six-monthly, and are generally expected to have attached any available imputation credits

4/ Will they prospect for more - no because they already know where it is!


3.9.1 Increased Resource Recovery
Pike River believes there is significant opportunity to enhance the value of the project by taking advantage of a number of options that are not currently included in the Mine Plan or the Financial Model. These include:
• Mine Plan: Application of less conservative mine design parameters in the Brunner coal seam whilst still maintaining the integrity of the surface subsidence protection measures. On current planning, substantial barrier pillars of coal will be left in ground to reduce or avoid the impacts of subsidence. Only 17.6 million tonnes is currently included in the Mine Plan as saleable coal, out of a total resource of 58.5 million tonnes, a recovery rate
of 30%. Local mining experience within the Brunner Seam and other coal mines on the West Coast suggest the application of a less conservative mine design, whilst still maintaining the integrity of the surface, is possible. This may lead to extraction of a further 1 to 2 million tonnes from within the current Mine Plan area.
• Hawera Fault: Recovery of additional coal adjacent to the Hawera Fault of 0.5 to 1 million tonnes. This may arise for two reasons. Firstly, the 2006 drilling programme has provided further detail on the angle (hade) of the Hawera Fault. This angle is proving to be a shallower dip than currently in the Mine Plan and therefore a greater coal resource may be available. Secondly, the width of barrier against the Hawera Fault is believed to be
conservative. Pike River expects to be able to reduce this barrier subject to successful coal extraction in other parts of the Mine.
• Paparoa Seam: There is the potential for recovery of coal from the underlying Paparoa coal seam which represents significant upside potential for Pike River. This potential resource is located about 200 metres below the Brunner coal seam and has been identified by outcrop sampling at several locations along the escarpment and one drill hole. Golder Associates has reviewed the available exploration data for the Paparoa coal seam and
concluded that the seam has potential to provide additional coal resources. Further exploration is required to establish the size and coal quality characteristics of this potential, additional resource. Once the Mine has been developed, further drilling will be undertaken to define a resource for which an estimated tonnage and coal quality
characteristics may be reported in compliance with the JORC Code. This will allow more detailed mine planning and scheduling to be evaluated. Application of typical coal recovery from the Brunner coal seam suggests potential recovery of up to 8 million tonnes Run of Mine production from the Paparoa coal seam. Estimates of resource of the Paparoa coal seam have not been included in the resource analysis in section 3.4.2. Mining of
the Paparoa coal seam will require additional approvals from the Minister of Conservation, possible amendments of existing resource consents and/or the obtaining of new resource consents.

[dsurf]

some posters believe that the transport chain is an ongoing risk. I do not understand this since the costs to PRC are capped?

3.9.2 Reduced Transport Costs
Pike River has the ability to reduce its costs under the Transport Services Agreement with WCCC. In particular, the $93 million capital costs to be incurred by WCCC under the Transport Services Agreement, and recovered from Pike River (in the form of a capital charge), are capped, and Pike River will benefit from lower transport costs if the capital costs are lower than this cap. In addition, third parties may utilise any extra capacity under Pike River's transport chain and in such case, Pike River will receive a portion of the revenues received from these third parties. Further, where Pike River and WCCC work
together on improvements in productivity and efficiency resulting in reduced costs in the transport chain, Pike River is entitled 59 to a cost reduction equal to 50% of the amount saved. No allowance for these potentially reduced costs or additional revenues has been made in Pike River's Mine Plan or Financial Model.

[upside_umop]

nice dsurf, you bet me to it.
i remembered about the extra potential reserves but didnt see dividend policy, so that clears that one up. 50% policy is safe and should give a nice divi, aswell as being able to develop extra opportunities/reduce debt.

also, this is of relevant interest.

3.9.3 Other Opportunities
Pike River intends that the Prik River Coal Mine will be its cornerstone development. However, Pike River will also seek to make appropriate acquistions of interests in synergistic or value adding coal assets to create a more diversified coal portfolio.


MacDunk, does every miner you invest in specifically state what they are going to do once they run out of reserves? You keep on saying 'what is pike river going to do once they run out after 30 years...' Its quite clear that they do want to be a going concern and not just pack up ship once its their cornerstone development is all mined.

[Orangeman2]

You would be a fool not to buy PRC, price of coal is on the rise and the tunnel is 65% complete! It is approaching crunch time and when they pay dividends of say 15% (as in their prospectus) with a possible capital gain, why not? Otherwise buy NZO as they are a big holder in them and that spreads the risk around. NZO when they pay dividends will be a great buy. Just shame they have taken so long to rocket, then again they did only cost me 44c.

[duncan macgregor]

Long term on the NZX TPW. Macdunk I bet some of you PIKERS regret not listening to old macdunk. TPW is now up 7.64% since i wrote that earlier this month. Thats nearly up as much as you lot are down since the IPO.
Only kiddin guys. Macdunk

[tim23]

Gee - you've still got it bad - you kidding hardly, I don't buy that.

PS Can you tell me the winning lotto numbers for Saturday?

[Mike.Gayner]

I may be new here, but I still feel that Macdunk's arrogance and pessimism is totally unwanted.

[winner69]

maybe 'unwanted' ...... at least you didn't say 'unwarranted' ..... cause he's entitled to his view

[duncan macgregor]

I may be new here, but I still feel that Macdunk's arrogance and pessimism is totally unwanted. Good on you mate the first thing to learn in this game is to stand aside and look at an investment as a potential disaster first, and a dead cert winner second. When you see people gushing about what they know nothing about, its time to step in. If my arrogance offends you then sorry about that i give you plenty of opportunity to get back at me with all my predictions if you look them up.
Do yourself a favour understand risk versus reward dont be a PIKER. Macdunk

[AMR]

Orangeman : With the rise in the price of coal, projected dividends are more like 20-23cps now - it will only be realised of course if the kiwi dollar slumps to 57c by 2009 which is still some way off.

Mike.Gayner : I hate to say it as a Piker myself, but Macdunk has been right so far with the tunnel getting an $11 million budget blowout and one month's delay. The IPO price did not take into account the risk, that much is right. The risk now is far far less than the IPO risk.

So my thoughts are as follows - In three years, those who bought in at the IPO will make double their money (26% annualised return). Those who bought in after the IPO will make 2.5x to 3x their money, not including the opportunity cost that they could have invested elsewhere.

MacDunk, let me as you something. Will you be investing once the tunnelling is complete, the transport chain is done, and the first ship is off to India?

[duncan macgregor]

Orangeman : With the rise in the price of coal, projected dividends are more like 20-23cps now - it will only be realised of course if the kiwi dollar slumps to 57c by 2009 which is still some way off.

Mike.Gayner : I hate to say it as a Piker myself, but Macdunk has been right so far with the tunnel getting an $11 million budget blowout and one month's delay. The IPO price did not take into account the risk, that much is right. The risk now is far far less than the IPO risk.

So my thoughts are as follows - In three years, those who bought in at the IPO will make double their money (26% annualised return). Those who bought in after the IPO will make 2.5x to 3x their money, not including the opportunity cost that they could have invested elsewhere.

MacDunk, let me ask you something. Will you be investing once the tunnelling is complete, the transport chain is done, and the first ship is off to India? The time to invest in this is when the extreme risk is removed. Up to that point it is a gamble not an investment. To invest in something requires you to understand the risks involved.
I understand the practical risks of price blow outs in the tunnel and later on the shipping problems from two ports. The cost margin per tonne to get it out, taking into account start up costs, is far higher than any other coal mine in the southern hemisphere. To counteract that is the quality, which must get reflected in a higher price.
We dont know the start up costs which i expect to increase far beyond expectation. I would lay odds that most of the people who get upset with me for pointing out an opposing point of view do not have practical experience in this field as i do.
I said at the start, that i wouldnt touch it with your barge pole, that still applies up to the point when the numbers come out for a rational analysis. macdunk

[upside_umop]

maccy d, its great your giving us a blast.

you talk about risk? obviously the risk is high, but as we get closer to production without any hiccups, the shareprice will rise accordingly to the risk - investors will slowly build the shareprice when it gets closer to production, it wont just bounce up to certain level once they have said first coal is out, you should know that better than anybody. im afraid that if you wait that long, then it will be too late, as the shareprice will too high for your liking, without the significant possibility of being a good returner in your books. that is of course, if everything goes to plan. if you dont think it will, then it is best to sit on the sides, but if your a risk adverse investor jump in and enjoy the ride - ups and downs.
initial estimates to get prc coal to market was nzd77. i know it sounds high, but so is coking coal. im not sure of other coal miners in oz, but guessing its a lot lower than this, do you have any figures? oz is having a bit of trouble with their ports too getting that coal out, bit of a bottle neck i might say.
thermal coal prices over $100 us, what is coking coal? anybody?
also, what would you say the required rate of return is currently given the associated risk?

cheers

[Nitaa]

It seems like the pot calling the ketting black or the tyre calling the condom rubber. Even by your own admission, you have invested into uncertain stocks. Mining stocks that you have made money in over in Aus are like that. High reward and high risk. Just look at what local Solid Energy has gone through over the last couple of years. If you want to derisk you investment then tie you money up in one of the major banks earning 3% p.a.

Everyone has there views even the ones that go against yours. Your system has more holes in it than swiss cheese but if it works for you good luck to you. In this current environment any clown can and should make money. Its when the economy turns sour is when the real smart investors show out and novice traders get blown away.

If we talk about Pike, only hindsight will tell if investors have made a good decision. Not some clown like you hilighting that the SP dropped 15% yadi ya. Smart investors who know their stuff are not peterbed by corrections in the market as its a naturual part of the stock market cycle. IMO time will show that Pike is a good investment irrespective what the SP does in the next 12 montrhs.

discl. hold none but its on my radar

[Dr_Who]

Smart investors who know their stuff are not peterbed by corrections in the market as its a naturual part of the stock market cycle. IMO time will show that Pike is a good investment irrespective what the SP does in the next 12 montrhs.

discl. hold none but its on my radar

Exactly right! Thats why i am a holder and will buy more if it comes back down to a good buying level.

[duncan macgregor]

NITA, Good on you for getting your Irish up, but if you feel so strongly about it buy the company [or part there of]. Give me credit for one thing i did tell them before it was even listed that i wouldnt touch it with a barge pole. At the moment i hold MCR, AGM, MRX AUZ. PEM,IGO, SMY. Three of those companies are up over 100&#37; with me on them in 2007 plus a 6% exchange rate gain. If you want a good one for the future look up PEM with the price of lead sky rocketing. I merely show the downside to the blue eyed brigade, feel free to show me the downside on any of my lot. Macdunk
I would just like to add that lead has increased in price 130% this year still rising due to supply and demand.

[Crypto Crude]

mack dunk a trunk....
serious question time...

Is Pike going to go into production next year or not?
:cool:
.^sc

[Nitaa]

Why dont i buy into Pike? Although i believe it will provdide great returns most of my investment dollar is going elsewhere. I am investing most of my hard earned in my business. If i had spare money i would have invested in Pike below 90 cps for a long term investment. That is also irrespective if the invesmtn drops to 50 cps or goes up to $2.00 per per share in the next 12 months.

To me thats the difference between an investor and a trader. Traders are more prone to knee jerk reactions. look at how many got frightened of the sub prime issue. Now the Dow is at record levels.

[tim23]

Duncan refers to gambling - oh yeah one minute you're a trader(gamber?) next minute not what are you - apart from being a bitter never wrong share purchaser/gambler/trader - like I say what are are you?

[duncan macgregor]

Duncan refers to gambling - oh yeah one minute you're a trader(gamber?) next minute not what are you - apart from being a bitter never wrong share purchaser/gambler/trader - like I say what are are you? JEEZE TIM ARE YOU PISSED AGAIN MATE. Its a bit early to blubber on like that surely. Macdunk

[upside_umop]

maccy dee,

you still havent commented about the dividend policy, potential extra reserves etc.

also, about the extraction costs of other coal miners in oz.

do you agree about the shareprice rising accordingly until it nears production, and it wont just bounce up to an extraordinary level where u would have hopped in before? prime example, nzo, once production starts the associated risks were gone but the sp didnt bounce up as some expected....

i see some jap firm is setting up camp in oz to pull out 4 tons a year of coking coal. gonna cost them 280 mill i think to set up, which is relatively good considering pike - pity its private.

out of curiosity, did you get a prospectus?

[steve fleming]

The time to invest in this is when the extreme risk is removed.

MD, there is a guy in Aussie called Andrew Forrest.

His company, Fortescue Metals Ltd ("FMG") is developing one of the most ambitous and risky iron ore projects ever seen and is still about a year away from producing its first ore and earning its first dollar.

However despite FMG not yet having produced a pound, Forrest is now Australia's third wealthiest individual with a $5billion fortune while FMG has a market cap of $15billion.

Lucky Forrest did'nt have you as his advisor.

Stockmarkets are fundamentally based on the relationship between risk and reward - Forrest is a great example of that.


http://www.news.com.au/business/story/0,23636,22561445-462,00.html

[duncan macgregor]

STEVE, You talk of a different set of circumstances. The people here are small time investors looking to increase their wealth by investing in some safe company whose sp will increase at a higher rate than leaving it in the bank. We can, and most of us have in the past, backed our own ability in the business world to larger or lesser extents, taking higher levels of risk than PRC represents. The point being we must judge the level of risk against the expected return against other companies, who are in competition for our investment dollar.
I would say most investors in this company like the idea, think its the best thing since sliced bread, but have no practical understanding at all of the mining industry, or the problems faced. I merely point out the problems, nothing more nothing less. So far i have been 100% correct, the sp is down about 8% in a bull market. The time to buy this is when, from our position risk is reduced to the level of the ordinary investors understanding of what the risks are.
Its rather amusing to be so obviously right, according to the numbers, and blasted for being so wrong, by people who got it so wrong, that they try to convice themselves how right they are. Macdunk

[Crypto Crude]

The people here are small time investors looking to increase their wealth by investing in some safe company
how do you know what posters risk profile is?
....
well you did not answer my question, probably because it is a double edged sword question huh...! one that could easily backfire on the Mack dad a tron huh...:D...
..... if Pike goes into production next year then SP will explode... if it doesnot produce then you will be right.....
production is still some time off and the action is forward looking...
but dont they say to get in early just in case?
Im going to pick PRC for sharetrader comp next year....
If I see it in your selection aswell, Then I will hammer you all year long (prob no different to 07)...This year You slid under the radar by picking NZO in the NZ sharetraders comp and then mack attacking it on the threads... :p.... your mate SC....
:cool:
.^SC

[Balance]

I recall statements that NZO's sp would explode when Tui start producing. Also, when PRC listed.

Wrong. Wrong.

Wonder why.

[duncan macgregor]

how do you know what posters risk profile is?
....
well you did not answer my question, probably because it is a double edged sword question huh...! one that could easily backfire on the Mack dad a tron huh...:D...
..... if Pike goes into production next year then SP will explode... if it doesnot produce then you will be right.....
production is still some time off and the action is forward looking...
but dont they say to get in early just in case?
Im going to pick PRC for sharetrader comp next year....
If I see it in your selection aswell, Then I will hammer you all year long (prob no different to 07)...This year You slid under the radar by picking NZO in the NZ sharetraders comp and then mack attacking it on the threads... :p.... your mate SC....
:cool:
.^SC SHREWDY, a bit tough on old Macdunk threatening me with bad language at five paces if i select PRC for next years comp. We are all here to make as much as we can for as little risk as we can, that covers 90% of investors, the other 10% are on a different planet. Whats wrong with exposing risk to people that are oblivious to it?.
I also expose companies worth buying into with predictions to even things up look a few of them up then have a go at my record in selecting companies. The fine art of investing is buy today that which will trend up after you bought it, not buy something that maybe or might, that trends down, but might come good next year. Buy PEM SHREWDY, its trending up nicely have a go at that. LEAD has gone up 130% this year and rising, PEM is the eighth biggest producer in the world with a very low PE, and absolutely no risk. Hope to see you soon at the AUCK share trading meeting, will let you buy me a beer for putting you on to a winner. Your old mate Macdunk

[Crypto Crude]

Mackdunk,
Im aware of PEM, not risky enough for me brother...
will put it back on the watch list after recently taking it off...
lata.....

unbalanced,
the day The Tui JV announced first production was on the worst market day possible, the market just didnot care and nobody was buying shares...
The company never backed up the strong announcement with further updates...
....NZO SP did go from 97c to $1.30 something... so SP did explode, I didnot think that the SP was fully factored in at that stage, it was the combination of a few events that pushed NZO all the way back down including Pike SP not so strong, markets turned weak, triple exploration failure for the JV, bad PR, NZO selling PPP shares gave cloud over TUI project... etc....
......
:cool:
.^sc

[duncan macgregor]

Like i said SHREWDY, NZO options its getting close to pass the parcel time, last one holding will find it worthless. PRC is a bad buy right up to production. When The numbers come out, thats when to decide for long term stick it under the bed types if its a buy, or not. Its not for me being a trader, there will never be enough volatility, or volume, to make it a buy for me. AUSSIE miners are my scene, much more excitement. Macdunk

[Balance]

SC ... you need to get your facts right.

31 July - Announcement that Tui starts oil production. NZO's sp - $1.28. 2 weeks later and 13 August 2007 - NZO's sp - $1.03. What an explosion! Oops ...I mean implosion.

16 August - PM Clark officially opened Tui project and first oil shipped. Sp - $1.00. A week later, $1.04. Another explosion! PRC MUST definitely get PM Clark to officially open PRC - it's good for 4%.

[Scuffer]

Hey Duncan you have said your piece and I for one agree with you but these guys are just taking potshots at you, leave 'em to it, I said the same things early in this saga and also got lambasted, so now I just have a quick look on this thread and leave them to it.

[duncan macgregor]

I'm not trying to sway anyones thoughts about this company but I think they have a few problems to overcome. The bar in the greymouth harbour is a major and the barges are not a viable option, barges were used out of Lyttelton but not anymore and lyttelton doesn't have the draught problems of Greymouth,also when the grey river is in flood there is a lot of shingle enters the harbour which causes problems as it deposits around the ships blocking their exit. A ship towing a barge in a rough sea may even have to let the barge go and the sea is not a mill pond off the west coast, I think their best option is to train the coal to Lyttelton. The tunnel to the coal probably won't be finished this time next year so I think the wait is far from over. SCUFFER you certainly did let them know at the time what you thought. That transport problem is one you are not supposed to mention. Ignorance is bliss sometimes its a folly to wise people up but its fun. Macdunk

[Crypto Crude]

balance,
my facts are right...
yes SP did run 97c to $1.30...
I did not say that SP ran after first production...
I thought that SP should have at least ran stronger with a positive announcement such as first production, but I guess a mixture of hype and the worst market day lead to what proceeded....
.... OK so I got it wrong that SP would continue to keep running after first production, but I got it right all the way up...
I listed all the reasons why it didnot continue to run...all of them were out of my control...
It felt like at one stage posters had written the project completely off...

:cool:
.^sc

[STRAT]

If I see it in your selection aswell, Then I will hammer you all year long
:cool:
.^SCShrewd, If Duncan waits till next year before entering and then does enter that would be totally in keeping with what he has been saying thus far ;)

[upside_umop]

sc/balance, thats what i have said the last few posts.
as the risk deteriorates, the price will adjust accordingly, just as it did with nzo. sure it was a bad time for announcement wrt to production, but i dont think we would have seen the sp jump 30 cents or anything.
some people think with prc, that as soon as production figures are announced for the first month, the shareprice will make all its gains there and then. imo wrong.
sure, there will be a bit of appreciation once:
- the figures are given on extraction rates ( in prospectus the independant review thought extraction rates on the high side)
- another small appreciation on the barge problem as scuffer has been talking about (but im not sure many people would have factored this into the sp, so if there is a problem, it will drop)

most of the sp apprecation will come leading upto mining imo, reasons:

-coal prices determined in coming months, set to be record highs.
-as tunnel and associated mining requirements get met, this will derisk the project.
-if they stick to budget and time restraints.

people keep going on about the transport problem, im not sure about the ports issues, im no sea marine, but given the port upgrades, and management i would hope its been looked at sufficently.

also, the transport cost is limited (see earlier posts, and read prospectus)

maccy dee, you still havent said anything about the extraction costs in australia?
again, did you get the prospectus?

i will give my projection on sp at end of year in coming days...

[Crypto Crude]

upside umop....
absolutely correct that PRC will start to rerate b4 production...
mackdadunk is talking of entry when virtually all the risk has gone out the window and therefore quite a chunk of the return...
he understands that non disclosure adds to the risk and fair enough for him that he wants to see figures... I personally do to...
but, unless some sort of disaster comes and production doesnot happen, then PRC has returns written all over it which is the point im trying to make....
next year it will have much less risk and much larger returns... right now is all the risk, and less of the returns...
Option to delay investment right about now is probably pretty smart...
next year smart cookies will swarm, and I only wish this puppy had listed options....
:cool:
.^sc

[AMR]

Hey Shrewd, in the prospectus it was mentioned that there might be a bonus issue of options given out some 6 months after the IPO. Do you reckon they'll still do this?

[Crypto Crude]

maybe this is a question we can get Bermuda to ask DS next week....
I'll forward the question on...
Bermuda's gonna be a busy boy with all these questions eah...
:D
.^sc

[Dr_Who]

The only reason the SP in PRC did not perform had nothing to do with fundamentals. It has more to do with how the IPO was handled, very poorly. There was greater demand than supple for PRC shares, so the directors got greedy and decided to take advantage of it and issued an extra $150 million (dont quote me on the figures) leaving no demand for investors to purchase on the market when it listed. All the hunger for the stock was mopped up by PRC issuing xtra shares in the IPO.

The fundaments of PRC is sound and I am very comfortable to accummulate more stock on price weakness for my long term portfolio. In a few years, we will revisit this stock and Macdunky will have to eat his words..LOL :D

[STRAT]

Macdunky will have to eat his words..LOL :DYeah right, Good luck with that :D

[upside_umop]

dr who, maccy dee didnt say he wouldnt buy this stock.
he said he would consider it when it was more derisked, which is fine...he may get a better return for his time than all of us if he does...we just ran the risk at ipo which didnt go as expected :(

[STRAT]

dr who, maccy dee didnt say he wouldnt buy this stock.
he said he would consider it when it was more derisked, which is fine...he may get a better return for his time than all of us if he does...we just ran the risk at ipo which didnt go as expected :(Youre onto it UU. eg A 20&#37; gain over 3 months beats a 30% gain over a year any day of the week.

PS may I ask, what exactly is an upside_umop

[duncan macgregor]

upside_umop[/B] Its a BAD HAIRCUT Macdunk

[Mike.Gayner]

"umop" would be "down" inverted ;)

[upside_umop]

yeah nothing too special, as mike says, its upside down when you invert the umop :D

[Mr Tommy]

Todays sunday star times says Credit Suisse has disclosed it owns 17m shares, 8.5% of Pike

[manxman]

Todays sunday star times says Credit Suisse has disclosed it owns 17m shares, 8.5% of Pike

This was reported as an SSH notice to NZX on Oct 8th and BWR (Post #908) explained that it didn't really mean that Credit Suisse had bought them.

Might just mean that someone has borrowed against them or used them in some arcane financing deal that we mere mortals can only wonder at. They certainly didn't sneak up and buy them on the market. Perhaps someone has used them as security to raise money for a blast furnace in India which is designed to run on Pike coal.

Will be looking out for anyone with a cowbell at the AGM though.

Mx

[Dr_Who]

Both PRC and RPL SP is on the move again. Must be the Mcdunk factor again...LOL :D

[Xerof]

so the directors got greedy and decided to take advantage of it and issued an extra $150 million (dont quote me on the figures)

For the record, and to save further villification of those directors, the IPO was for 65m, with 20m in oversubscriptions, which, as you say, was taken up.

[the machine]

almost back to its issue price in nz but in au the exchange rate has a negative impact at present

M

[tim23]

How do you figure that Machine? A$.85c x 1.17 = NZ$.99c so the prices match up just fine by me.

[the machine]

How do you figure that Machine? A$.85c x 1.17 = NZ$.99c so the prices match up just fine by me.

Back in july the nz$ was a lot higher and for our au$3,000 investment we were issued 3,300 shares using exchange rate of about .90 au = nz$1.

That au$3,000 today would buy 3,500 shares.

So with price in nz presently nz$.99 [which is almost the ipo] then nz investors are almost square, however au investors are about 6% down, being the exchange rate difference.

M

[duncan macgregor]

If you lot had taken account of the likely fall in the NZ versus AUSSIE dollar like i did you might have been roughly 5% up instead of 1% down. The smart ones would have bought PRC on the ASX not the NZX I use the term smart loosely. Only kidding but the NZ dollar can only go down in the end, so still time for long term investors to stop and think it out. Macdunk

[digger]

MD are you not using the "smart'' word rather loosely give that just a few months ago you had PRC going down to 40 to 50 cents.

[Dr_Who]

With oil price at record high and going higer, you have to be crazy not to have exposure in the energy sector. PRC is looking cheap now. Hands up who got some PRC at around 85 cents a few weeks back??...LOL WOOT!

[boysy]

40 m progress for the week ending 15/10/07

[Scuffer]

Think this coal is still a way off yet I know a guy who was there a couple of weeks ago and they might have to tunnel a bit more yet, but there are a few happy people now the sp is back to ipo.

[Dr_Who]

If PRC can stay above $1 it will head north. :)

Must be the Mcdunky factor

[Scuffer]

Doc the only prob I see for them is in the transportation and that has been the off put for me.

[Dr_Who]

Doc the only prob I see for them is in the transportation and that has been the off put for me.

These problem has been factored into the SP during the IPO. With coal price on the up and $NZ dollar moving south, it will add to the bottom line. Dont be put off by abnormal cost, but look at the long term potential revenue. It seems like the aussie investors like this stock more than NZ investors.

[bermuda]

Doc the only prob I see for them is in the transportation and that has been the off put for me.

The cost of getting coking coal to Taranaki is about the same as that Solid are paying to get theirs to Lyttelton.About $NZ77 per tonne. The supply logistics for Taranaki are getting better and better compared to Newcastle which is currently experiencing further queues of up to 50 ships. Pike's transportation route will prove to be important in attracting buyers who demand supply surety.....not that they will ever have trouble attracting buyers. Their coking coal is a world class coal which commands a premium.

I can understand the dip in the IPO float price but as production gets nearer the wise investors (who look 6 months out ) will be flocking to buy PRC particularly as it looks almost certain that the coking coal price will get a 25-30% leap in price effective April 2008.

Time for all you doubters to get a proper perspective on this emerging world class supplier.

[Scuffer]

Does anyone know how the coal is going to be loaded and unloaded from shore to ship in greymouth and then unloaded and the same question for loading in Taranaki onto the panamax freighters, this is an area that can't be overlooked its ok saying its factored in but it could become a serious problem.

[duncan macgregor]

If PRC can stay above $1 it will head north. :)

Must be the Mcdunky factor GOOD ON YOU DOC back at the starting line lets see what happens now. The only ones making money are the traders up to this point, other than the more switched on that bought them on the ASX. A lot of water to flow under the bridge before you know if PRC is a good or bad investment. Hope it comes out as you hope it will. I prefer safer investments. Lead has risen in price by over 130% in 2007 sure beats coal, you cant go wrong in that commodoty at the moment. Macdunk

[Scuffer]

Hey good to see ya right there with me in case these guys go for my jugular again, how are ya MRX going mine are sweet.

[Rabbi]

As far as the transportation is concerned , they can barge coal up to Taranaki while they are waiting for the Jebsens. They don't need these purpose built ships until they crank up the tonnage. With tunnel finished by March, they will need slurry lines to get the coal out. I'm not sure what the forecast for the first year is, according to the prospectus, but they are about two months behind at the moment. Not looking too bad overall.

[Nitaa]

GOOD ON YOU DOC back at the starting line lets see what happens now. The only ones making money are the traders up to this point, other than the more switched on that bought them on the ASX. A lot of water to flow under the bridge before you know if PRC is a good or bad investment. Hope it comes out as you hope it will. I prefer safer investments. Lead has risen in price by over 130% in 2007 sure beats coal, you cant go wrong in that commodoty at the moment. MacdunkThe only ones who are losing at the moment are the traders as well macdunk.

macdunk, clearly you must consider yourself a trader and any long term investments with you are out the window.

there is a saying macdunk..all good things come to those who wait. and the smart ones who have done their homework, wayed up the risk v reward will be the winners.

[upside_umop]

maccy dee, a dont know about you, but it would have been hard to have traded this share given the short time its been on the exchange. ie, how would you know the indicators have ticked off?
i think the people who made the money in this case were the ones who averaged down.
i didnt average down..but as you say, on the start line again and with coal prices crusing north its a good investment to have with its current uptrend. agree?

[Scuffer]

I can see that they will barge the coal until the purpose built ships arrive from jebsens I want to know how they will get it on and of the barges and panamax ships, does greymouth have a coal loading facility and does Taranaki have one too?

[duncan macgregor]

Hey good to see ya right there with me in case these guys go for my jugular again, how are ya MRX going mine are sweet. Only having a laugh here glad to see you with MRX its going ballistic. Macdunk

[Scuffer]

Yup I know whats going on there its up 27% on what I bought in at.

[Dr_Who]

GOOD ON YOU DOC back at the starting line lets see what happens now. The only ones making money are the traders up to this point, other than the more switched on that bought them on the ASX. A lot of water to flow under the bridge before you know if PRC is a good or bad investment. Hope it comes out as you hope it will. I prefer safer investments. Lead has risen in price by over 130% in 2007 sure beats coal, you cant go wrong in that commodoty at the moment. Macdunk

Cheers mate. Was only pushing ya button for fun. As mentioned previously, I am a long term investor that look for value stocks. Any short term movement is an opportunity for me to accumulate more shares. Time will tell if this will be a winner or loser. Look at the big picture and not just the fly on the wall.

[tim23]

And if you owned a great lead stock Duncan would have owned a gold stock that went better than yours and if you like the coal stock Duncan will own a better one; remember at primary school "my Dads a policeman what does your Dad do?" - Duncans Dad was that policeman.

[duncan macgregor]

And if you owned a great lead stock Duncan would have owned a gold stock that went better than yours and if you like the coal stock Duncan will own a better one; remember at primary school "my Dads a policeman what does your Dad do?" - Duncans Dad was that policeman. Tim sorry to dissapoint but Scuffer and i both have MRX. I also have PEM which is a lead stock, MRX is copper. I also told you a few pages ago that TPW was a long term buy so have a go at that if you want to be childish. Macdunk

[Nitaa]

Macdunk.

tim23 is right. remind me of the child who threatens to get his father (the policeman) to lock u up in jail.

come on macdunk.. grow up.. stop talking through the hole in your butt and share in real dedate...your a broken record that rehashes the same shhit different day.

your probably the only person i have ever known not to make less than 50&#37; on EVERY stock in a 1 month time period. if you want to gloat about how good you are, how big wallet is or how much punch your percy has then take viagra every 2 hours.

hopefully next post you come up with something orginal but i doubt it.

prc (macdunks PeRCy for a very short term play) for a long term play.

[ritchie]

go the bush

[Hoop]

My strategy is coming off the rails already :(:(

Plan...buy half at IPO, buy other half (if shareprice falls) at high 70's, then sit and wait, sell out if a fast rise above $1.30 within 18 months. 40% profit/18months.

Don't think it will fall to sub 80cents, wished I bought at 85cents now :o

[Dr_Who]

Crude Brent hit $87.71 this morning!! Alternative energy is looking good if oil prices stay high.

[AMR]

I should have trusted the TA and bought on the breakout :(