PRC Pike River Coal

[JMKC]

Correct...all the mean time spewing out bucket loads of improperly refined diesel into the environment.

[ratkin]

It about time the rainbow warrior was sunk, where are the french when you need them ?

Lyttelton harbour allow them in to hold an open day and what do they do? Blockade the port . Ridiculous.

Middle class kiddies playing at poitics without a clue how the world works.
They should stick to annoying the whalers

[Dr_Who]

We should thank Greenpeace for pushing the PRC sp down so that we can accummulate more stock before they start producing coal. :D

[RossT]

The day greenpeace come out in favour of nuclear power as the only worldwide viable alternative to thermal coal power generation; is the day they get my support.

Until then the stereotypical white person with dreadlocks, an ill fitting hand knitted jumper, chained up to something with his warehouse padlock, accompanied by a smattering of hairy arm-pitted "sisters of mother nature", is all just getting a bit tiresome.

[Scuffer]

They should have sabotaged the coal loading system rather than sit in the port for days if they wanted to disrupt things and get some publicity. What a disregard for the hospitality shown by LPC, personally I agree with others on this thread they need to worry about other countries not us in NZ, we have always been an a friend to Greenpeace this type of petty play for publicity just backfired, pardon the pun.

[duncan macgregor]

I have a forest of trees that will cost me heaps to cut simply because of all this greeny bullsh*t. Its all two faced double standards holier than thou crap. NZ is full of it, run by a bunch of SHEALLAHS. One idiot on this thread actually stated that taking the coal to LPC would be more eco friendly than shipping it out from Taranaki.
Its allright to burn the stuff in india as long as we dont do it here. Its allright to travel by air spoiting this greeny message out with AiR NZ Who pay slave wages to the Chinese stewards, and over a million and a half a year to the guy that sits in the office.
Its all about to come back at you with free trade to china it will be your grandkids working for $3-00 something an hour. The yanks abolished slavery hope for your sake the chinese do similar. One decent nuclear device set in a remote volcanoe, would cast us into another ice age. In the mean time, pike tunnels ahead, will see how it goes when it gets going before i make my mind up. Macdunk

[Crypto Crude]

Mackdunk-In the mean time, pike tunnels ahead, will see how it goes when it gets going before i make my mind up. Macdunk

Oh My God...
Mackdunk on the fence... getting these bones up there has been the trickiest thing to date...
90% of the job is now complete...
I'd love to knock that fence down and watch MD fall to the other side, and buy..
MD, So NZO is all about Peak oil! What does that make Pike all about? Greenies, trees, forced labour (slavery), shellahs running the country, China, next Ice age, volcanos and nuclear devices?...
Quit stalling the thread MD....
jazz this thread up and buy....
:D
.^sc

[Dr_Who]

In the mean time, pike tunnels ahead, will see how it goes when it gets going before i make my mind up. Macdunk

WTF? MD interested in PRC? The sell radar is beeping! :D

Without China and India, this world would be in a depression, thanks to USA.

[Scuffer]

Do we have a threat to the shipping from Greenpeace, we don't want the greenies all camped out at Pike disrupting rail and shipping links, but they may not have to if they can sway public opinion.Can LPC guarantee a secure platform if greenpeace can so easily disrupt shipping, will Toll be able to keep the tracks in a good enough condition to carry coal they are falling apart at the seams now with derailments a common problem. The Labour government want to buy back the rail maybe this is why, we have to get the supply chain for our coal exports up to scratch muddling through like Toll have done is just not good enough. Can LPC really keep a coal system that is ill designed and old going without hiccups probably not we already know tradesmen are in short supply have the port and Toll got the skilled men to keep a run down set up ticking over probably not without massive capital injecture. We are heading into interesting times and the country cannot rely on the dairy industry to keep our heads above water coal is a great export for NZ due to the quality of our supplies, but will we manage it correctly or will we come off as the poor relations to Australia as usual.

[BlackPeter]

Do we have a threat to the shipping from Greenpeace, we don't want the greenies all camped out at Pike disrupting rail and shipping links, but they may not have to if they can sway public opinion.Can LPC guarantee a secure platform if greenpeace can so easily disrupt shipping, will Toll be able to keep the tracks in a good enough condition to carry coal they are falling apart at the seams now with derailments a common problem. The Labour government want to buy back the rail maybe this is why, we have to get the supply chain for our coal exports up to scratch muddling through like Toll have done is just not good enough. Can LPC really keep a coal system that is ill designed and old going without hiccups probably not we already know tradesmen are in short supply have the port and Toll got the skilled men to keep a run down set up ticking over probably not without massive capital injecture. We are heading into interesting times and the country cannot rely on the dairy industry to keep our heads above water coal is a great export for NZ due to the quality of our supplies, but will we manage it correctly or will we come off as the poor relations to Australia as usual.
Scuffer - actually, the government bought the rails already some years ago back - and to my knowledge is the link Greymouth-Christchurch in rather good shape. Haven't heard of derailments on this link yet - and the government put recently a larger amount into upgrading this section to allow for the increased transport capacity required by PRC.
Solid Energy is using the same link (Railway and shipping in Lyttleton Harbour) for many years - yes, there was the odd strike of harbour workers, but have never heard about a serious disruption. Have you?
Not sure whether the recent 2 (or was it 3?) hour shipping delay due to Greenpeace protests is really that significant for a 6 weeks trip to Europe either. Maybe things are not that bleak, as you paint them? I am rather hopeful that neither the transport link nor the lack of labour are the big problems for PRC. As long as they find the coal and get it out of the tunnel, everything should be fine.

[Scuffer]

I must be Bi polar then because my mate had to fix it for them because they had nobody to do it, it was 3am, maybe they were tucked up under their spanky blankets.

[tim23]

You expect that NOG would want to offload their PRC at some stage, note PRC was not mentioned in recent CEO briefing, it was all Tui & Kupe; PRC is not really their core business so an offload is quite possible I reckon.

[Steve]

You expect that NOG would want to offload their PRC at some stage, note PRC was not mentioned in recent CEO briefing, it was all Tui & Kupe; PRC is not really their core business so an offload is quite possible I reckon.

They will want the first shipment to go first, to show that the development risk has abated and enable them to get a better value on their stake...

[bermuda]

They will want the first shipment to go first, to show that the development risk has abated and enable them to get a better value on their stake...

Exactly..and a few months more.

[digger]

They will want the first shipment to go first, to show that the development risk has abated and enable them to get a better value on their stake...


Exactally as i always said.You sell a half completed house at a discount to what you put in,but at a preium when completed. I have always hoped NZO would wait until it is up and running.A going concern with proven cash flow.That will take a year to 18 months from now to achieve.Remember the buyer will most likely be oversea entity so a top price will only be obtained when most if not all risks are behind the project.To me it is a given that a NZ company working here on the job is best placed to finalised this project.
Even if NZO sells out i probably will stay in as i see it as a very good future earner with good regular dividend prospects.
See pit bottom is nearly finished so will soon be onto the final tunnel dig.Coal must come shortly after the fault line,as that must be the demarkation between rock and the coal seam.

[Dr_Who]

Looking at the graph PRC has a very nice uptrend. Maybe Sir Pheadrus can enlighten us.

[bermuda]

Looking at the graph PRC has a very nice uptrend. Maybe Sir Pheadrus can enlighten us.

$1.60 by end year at least.

The Aussie Petroleum News has 'unconfirmed' reports that $US300 per tonne has been set .

Now wouldnt that knock your socks off!

[Phaedrus]

Doc, An uptrend requires a Higher High after a Higher Low.

Longterm Trend. PRC made a low at (1) and a higher low at (3), so it needs to make a higher high (ie break above (2)) to be in a longterm uptrend.

Medium-term Trend. PRC made a low at (3) and a higher low at (5), so it needs to make a higher high (ie break above (4)) to be in a medium-term uptrend.

Short-term Trend. PRC made a low at (5) followed by a higher low at (8). As soon as the high at point (7) was bettered, it had made a higher high. Therefore PRC is in a Short-term uptrend.

http://h1.ripway.com/Phaedrus/PRC42.gif

Note how the OBV has been rising as the shareprice has been falling. This is a Bullish Divergence. PRC is being accumulated.

[boysy]

when abouts do we officialy find out the price of the coal prices ?

[RossT]

Ann-- Ground conditions now considered not good enough to dig the ventilation shaft from the bottom up as previously planned ( Alimak style ), so will be done from the surface now ( raise-bore method ) and as such now requires $5,000,000 additional spend on the shaft to come from the contingency fund. Time frame for shaft completion = October. Will intersect main tunnel at about the 2300m mark.

[Dr_Who]

Thanks Phaedrus (yu da man), your graphs are a real inspiration and very informative. :) In such a depressive market, it is nice to see abit of sunshine.

[RossT]

Regarding my post above, the word "additional" isn't in the ann, but seeing as how it is having to come from a "contingency" fund that was my interpretation.

[Sideshow Bob]

Still up 2c today on general market sentiment, despite the news.

[digger]

Lets think,5million over 25 years is 200,000 a year. 300 us for coal is about 385 nz dollars
That comes to 520 tonnes of coal a year,or.000433% of the coal will be used to pay for this additional cost for the shaft.Now it definately gets more complicated than this as the cost are upfrount and the monies had expenses to get the coal but so are the tax wirteoffs and the secerity that the job is done as saft as possible.
This is no big deal it is just part of a big job and propably somewhat built into the project before takeoff. A bit like my new house---every now and then would you believe things costs more than origionally planned--so far nothing as costed less.Good to see the market shook it off and went up.

[RossT]

I think one thing that the market should be favourably factoring into PRC is that it is looking positive for the $Kiwi to finally begin dropping ( famous last words, I know ). Seeing as PRC will be paid in $US, this is another "win" to go alongside the very anticipated contract coking coal price for the year.

[Financially dependant]

Good write up on drilling ventilation shaft.

http://www.nbr.co.nz/home/column_article.asp?id=21092&cid=4&cname=Business+Today

[glennj]

This shaft business is not the end of the world but there have been a fair few cost overuns delays etc. Hope this second contingency fund is all thats required before income starts being generated.
Didn't one of the sceptic geologists predict there were some geoligical flaws in the plans?

[RossT]

Far better to bite the bullet now and decide on the more expensive option, than to cross your fingers and hope the cheaper original option will see you right. Do it once and do it right, then when this puppy goes on the auction block early 09 there's no surprises and a premium hole in the ground to get a premium price for.

[Sideshow Bob]

Should I be worried now that BRICKS is following Pike River??

[Sumnerned]

Yes Digger!

Wife's new dress, kids' school fees, rates bill, ventilation shaft. All over budget. No news there.

[tim23]

Market seems unconcerned thats good news!

[Steve]

Should I be worried now that BRICKS is following Pike River??

Only when the thread descends into name calling and irrelevent discussions that have nothing to do with PRC... :)

[bermuda]

You guys are side tracked. $1.60 by end year.

[manxman]

You guys are side tracked. $1.60 by end year.

Bermuda

Any thoughts on whether PRC or NZO will be ahead by year end?

Seems like a good subject for a side bet.

Mx

[bermuda]

Bermuda

Any thoughts on whether PRC or NZO will be ahead by year end?

Seems like a good subject for a side bet.

Mx

Yes, it is a good little side play. My thoughts are that they will both reach $1.60 by year end....and that is a minimum.

NZO could go a lot higher provided the good news of Momoho arrives sometime after the expiry of the options.

PRC could also go a lot higher if the current operations proceed smoothly and the coking coal price gets contracted at $US300 per tonne.

If I had to make a bet I would go for a quinella.!!!

[RossT]

http://tinyurl.com/3x3n8q
http://tinyurl.com/2rfmtw

$300 looking more and more likely for 08 ?

[KS]

http://tinyurl.com/3x3n8q
http://tinyurl.com/2rfmtw

$300 looking more and more likely for 08 ?

Thank you for these articles, Ross.

By the time we reach full production, the price may have come down again?

"However, Mr. Galloway expects some relief in 2009, forecasting a return to normal production in Queensland in 2009 and a contract price of US $165."

[RossT]

Quite right KS about general consensus of a "softening" of prices after the 08/09 contract year, but what more could a start up company hope for (prc) for it's initial production period than a price even approaching us$300? It's "wet dream" material.

Thats like scoring 3 tries in the first 5 mins of a test!

And then if the price does come back to ( taking the above articles hypothesis ) us$165, thats still incredibly good for a company that planned on us$96.

Still, it's all speculation at this stage, but lookin good.

[digger]

Quite right KS about general consensus of a "softening" of prices after the 08/09 contract year, but what more could a start up company hope for (prc) for it's initial production period than a price even approaching us$300? It's "wet dream" material.

Thats like scoring 3 tries in the first 5 mins of a test!

And then if the price does come back to ( taking the above articles hypothesis ) us$165, thats still incredibly good for a company that planned on us$96.

Still, it's all speculation at this stage, but lookin good.


History tends to show repeatly that once a price is built in[say in this case300],it's come back is limited to no more than 10 to 15%. Oil is and excellent comparable example.All the way to 112 dollars it was always going to fall back but the retreat is never more than 15% and then only for a short while. Coal and oil are are both coming under pressure being a limited depleting resource. For those of you that have a long term horizon,i will predict that if 300 is bedded in it will in the longer future not fall below 250.Costs and future depletions will see to that.
PRC in 2009 is a good candidate for being NZX top preformer.

[bermuda]

History tends to show repeatly that once a price is built in[say in this case300],it's come back is limited to no more than 10 to 15%. Oil is and excellent comparable example.All the way to 112 dollars it was always going to fall back but the retreat is never more than 15% and then only for a short while. Coal and oil are are both coming under pressure being a limited depleting resource. For those of you that have a long term horizon,i will predict that if 300 is bedded in it will in the longer future not fall below 250.Costs and future depletions will see to that.
PRC in 2009 is a good candidate for being NZX top preformer.

Whist the flooding of the mines has caused all sorts of problems ( some of them will take 3 months to pump out and a further 3 months to reinstate ) the supply problems will only get better when Darylymple get its offloading expansion completed and this aint due until 2011.

Coking coal prices stay high, Period.

[RossT]

china iron makers telling aust coal producers to p-- off, going to be interesting month:D:D

Yes but the other side of that coin is that the aussie coal producers must have also told the chinese/Japanese mills to " p--- off" also, otherwise we would have had contract settlement by now at a price more favourable to the iron producers.

It is far more likely that the contract coal price will go the way of the coal producers, and the coke/steel mills will simply up the price of steel accordingly.

[Steve]

Who are the US coal producers?

[Dr_Who]

sky rocket :D:D

Only means more hostile T/Os for coal firms listed on the market. :):):)

[Bilo]

http://tinyurl.com/3x3n8q
http://tinyurl.com/2rfmtw

$300 looking more and more likely for 08 ?

The following article adds to the rumours that seem to be strengthening. Almost a pity really as price shocks and potential short term bubbles like this will only add to recession talk and retraction of planned Asian development at a time when the world needs Asia to keep spending. But what a huge boost for Australia if USD300 (and PRC at 3x prospectus) per tonne occurs:

Australia coking coal prices for Japan to treble-paper

SYDNEY, April 5 (Reuters) - Australian coking coal prices for export to Japanese steel mills are set to treble to $300 a tonne, creating a bonanza for BHP Billiton Ltd and other producers, the Australian Financial Review reported on Saturday.

Extremely tight supplies of coking coal would increase contract prices for the year beginning April 1, 2008, from $98 in the fiscal year just ended.A spokeswoman for BHP declined to comment on Saturday when contacted by Reuters. BHP has been in tense negotiations with Japan over the coal prices for months.

The Financial Review report indicates that an even greater price rise for Australian coking coal may be looming than earlier expected.

Japanese trade sources said that BHP had been seeking a price rise to $300 a tonne fob for coking coal but that the Japanese steel mills were reluctant to accept such a sharp price increase, Reuters reported on Thursday

Spot cargoes of coking coal have been sold recently at prices as high as $350 a tonne.

China's burgeoning steel production has been soaking up raw steelmaking materials throughout Asia, while production from Australia's coking coal province in central coastal Queensland state has been hit by floods.

Coking, or metallurgical, coal is Australia's second largest export, after iron ore. The government's Australian Bureau of Agricultural and Resource Economics recently forecast that the value of coking coal exports in 2008/09 would double to A$28 billion from A$14.2 billion the year before.

It did not forecast prices. But a $300 a tonne contract price for 2008/08 supplies would easily outstrip the bureau's forecast of additional export income for coking coal exports.

With Australia forecast to export 136.3 million tonnes of coking coal in 2008/09, an extra $202 a tonne on the price of the coal would add $27.5 billion, or A$30.0 billion, to the value of Australia's exports in the Japanese April/March fiscal year.

Australia is also involved in protracted negotiations with Asian steel mills for iron ore prices for 2008/09.

BHP Billiton and its main rival Rio Tinto Ltd/Plc are pressing for price rises greater than the 65 percent and 71 percent, depending on grade, recently agreed between Asian steel mills and Brazil.

This is being resisted by Chinese and Japanese steelmakers.

Australia is also negotiating with Japanese power utilities for a big contract price increase for thermal coal, used to generate electricity.

[rotweiller]

The same article also reported that due to the flooding in the Bowen Basin in Queensland that 11 million tonnes of production has been lost since Christmas.
Cheers

[RossT]

US$300 ALMOST HERE

http://tinyurl.com/4vf96v

"Bhp and Rio demanding 200% increase."
"Nippon steel souces admit us$300 is basically inevitible."
"Leading steel makers close to signing."
"Steelmakers have no scope to manouvre."

[duncan macgregor]

What you have to take into account has nothing to do with flooding in Queensland, or the short term price in a collapsing American dollar. What will really control the share price is the health of the world economy which is looking rather sick at the moment.
America is about to have a rude financial awakening with after shock ripples hitting supply and demand. The demand for metal products will take a massive hit if what i think eventuates right down to the demand for coal.
Coal being a dirty word in this greenie obsessed country wont have much sympathy. Before the big shock hits, its normal to have a few minor shocks, which is happening right now, with not one investor being in the black in the ASX or NZX competitions.
Keep your eye on the American economy thats what will dictate the PRC sp. Macdunk

[Dr_Who]

If PRC sp can hold above $1.00 it will go north from here. Great looking graph. :)

[bermuda]

What you have to take into account has nothing to do with flooding in Queensland, or the short term price in a collapsing American dollar. What will really control the share price is the health of the world economy which is looking rather sick at the moment.
America is about to have a rude financial awakening with after shock ripples hitting supply and demand. The demand for metal products will take a massive hit if what i think eventuates right down to the demand for coal.
Coal being a dirty word in this greenie obsessed country wont have much sympathy. Before the big shock hits, its normal to have a few minor shocks, which is happening right now, with not one investor being in the black in the ASX or NZX competitions.
Keep your eye on the American economy thats what will dictate the PRC sp. Macdunk

Yes America is one sick puppy and the recession there will be a lot worse than people expect.

But, as long as the previously oppressed Chinese economy keeps driving ahead at 11% demand for coking coal will remain high. Add on India's double digit growth and you have a recipe for continued high prices. And as you know coking coal is a lot different to thermal coal as far as pollution is concerned.

Inflation is going to wipe America ( and a few others ) off the map. It is all a function of Peak Oil.

But in the meantime PRC goes to $1.60 quite quickly imho.

[Dr_Who]

The talk of Ameican recession has been factored into the global market. American is history. The real market for coal is in Asia, especially China, India and Japan.

I recall Japan (second largest economy) going into and staying in recession for over 10 years. That didnt stop the rest of the world from booming.

[RossT]

Americas consumer base has supported the asian manufacturing base and the American consumer base is now broke. America would be far more relevant going forward if it wasn't for the fact that the emerging Indian/Chinese now have a rapidly emerging consumer base of their own. Then we have the rest of Asia, The Russian re-emergence etc.

America is the dying dog that no one wants to waste the money on by taking it to the vet to be put down, so it will die slowly in it's own fat bloated way, lying on the front porch remembering the long gone days when it could run around the neighbourhood barking it's dominance.

[bermuda]

Americas consumer base has supported the asian manufacturing base and the American consumer base is now broke. America would be far more relevant going forward if it wasn't for the fact that the emerging Indian/Chinese now have a rapidly emerging consumer base of their own. Then we have the rest of Asia, The Russian re-emergence etc.

America is the dying dog that no one wants to waste the money on by taking it to the vet to be put down, so it will die slowly in it's own fat bloated way, lying on the front porch remembering the long gone days when it could run around the neighbourhood barking it's dominance.

RossT, well said, my sentiments exactly.

Wait until PRC actually hits the coal. Looks like $US300 per tonne will be settled. Anyone one care to re do the PRC spreadsheet.!!!!. This is going to go up quickly.

[AMR]

Seems to be a breakout day today. I'll be re-entering on the pullback tonight.

[Rabbi]

SP going up on no news.
The management of PRC seem to be very professional in everything they do and they keep the market updated on a regular basis.
This latest change to the ventillation shaft is just one example of the professionalism of this outfit. Even though the cost has increased it shows they are not willing to cut corners on anything, especially mine safety issues.
I think the market will re-rate PRC quite significantly once they reach the coal.

[Balance]

That's the news driving the stock today.

So well done, Pikers - hate to say so but looks like big numbers are coming in.

Still need the coal to come out of the ground though..... how many meters of digging to go?

[Dr_Who]

That's the news driving the stock today.

So well done, Pikers - hate to say so but looks like big numbers are coming in.

Still need the coal to come out of the ground though..... how many meters of digging to go?

When the coal starts coming out of the ground, the sp will be over $1.40. :)

[BDLBOM]

Americas consumer base has supported the asian manufacturing base and the American consumer base is now broke. America would be far more relevant going forward if it wasn't for the fact that the emerging Indian/Chinese now have a rapidly emerging consumer base of their own. Then we have the rest of Asia, The Russian re-emergence etc.

America is the dying dog that no one wants to waste the money on by taking it to the vet to be put down, so it will die slowly in it's own fat bloated way, lying on the front porch remembering the long gone days when it could run around the neighbourhood barking it's dominance.

We are not a bit anti-America are we?
I know a lot of people are blaming America for the Credit crunch but I blame the banks and financial institutions.
They are the ones who issued all the ninja loans and then devised all those complex debt securities to conceal the level of risk.
America will bounce back pretty quickly. You'll see.

Anyway lets get back to PRC. How long will it take China to gobble up all the coal? And then where are we with PRC.?

[bermuda]

We are not a bit anti-America are we?
I know a lot of people are blaming America for the Credit crunch but I blame the banks and financial institutions.
They are the ones who issued all the ninja loans and then devised all those complex debt securities to conceal the level of risk.
America will bounce back pretty quickly. You'll see.

Anyway lets get back to PRC. How long will it take China to gobble up all the coal? And then where are we with PRC.?

Anyone who saw the ENRON documentary would have to realise America was sick. I am sorry but America is going backwards. They are brilliant people but they have become too materialistic and have built a nation on energy...and now they import over two thirds of their energy. Sorry, it is all backwards from here. But they will fight back.

[BDLBOM]

Anyone who saw the ENRON documentary would have to realise America was sick. I am sorry but America is going backwards. They are brilliant people but they have become too materialistic and have built a nation on energy...and now they import over two thirds of their energy. Sorry, it is all backwards from here. But they will fight back.

Don't imagine that documentaries are factual and objective. They're not.

[Balance]

Don't be too quick to write America off - the country has an amazing capacity to reinvent itself and still leads the world on many fronts. Witness the rise of America in the 1990s after it was given up for dead due to the rise of Japan and Germany in the 1980s.

China, the rest of Asia (including India), the Middle East, Russia and Latin America are all growing strongly and exporting their capital to one another rather than invest in America - so expect them to continue to drive demand growth for a while yet.

[digger]

Don't be too quick to write America off - the country has an amazing capacity to reinvent itself and still leads the world on many fronts. Witness the rise of America in the 1990s after it was given up for dead due to the rise of Japan and Germany in the 1980s.

China, the rest of Asia (including India), the Middle East, Russia and Latin America are all growing strongly and exporting their capital to one another rather than invest in America - so expect them to continue to drive demand growth for a while yet.

Balance,good post.The best one from you i have ever read.Accurate informative and dare i say it--balanced.

[Balance]

Still waiting for the tunnel to be completed ..... and coal to be shipped out.

At US$300 tonne, getting very hard to ignore.

[Base Trader]

Spot price cargoes for Australian Hard Coking coal are settling at US$340-US$350 per mt. PRC coal is comparable if not better due to low sulphur, similar volatility. The news I am hearing (which is not off the internet and from people in the industry – but should still be regarded as educated “gossip”) is that the annual contracts are settling just above US$300 mt and actually the buyers cannot get all the volume they need. The sellers are rationing to maintain relationships. This will keep the spot market tight for 2008.

The only real non-committed supplies after the annual settlements will be from the US which is high volatility coking coal. PRC compares very well to Australian coal but with lower sulphur but is lower volatility also.

Coking Coal Description - “Primary coking coal is of volatility at intermediate and lower levels, viscidity at intermediate and higher levels. When heated, it will yield gelatine of satisfactory stability. When coked individually, it can produce the coke characterized by tight structure, large size of lump, strong strength, good abrasion resistance, less cracks and non-fragility. However, as a result of heavy expansion pressure, it tends to result in the difficulty of coke pushing and do damage to furnace. So it is usually used as coal blend in coking.”

On the basis of the above I expect the spot prices to keep going higher for low volatility coking coal so PRC will pick some of this value up as they export later in 2008 (subject to project risk).

The issue of reducing demand for rest of 2008 and 2009 is important but not as important as the constrained supply position. Whether PRC gets a good piece of this is up to you technically savvy engineering types but at projected 1.2mt pa of coal production that adds NZ$250m pa in earnings at NZ/USD 0.80 to current US$98/MT prices. I am not sure of current market cap but I suspect that is a good PE.

Clearly a lot of "ifs" to get to 2009 at those production number at the same prices but there is a lot of "fat" there given a 300% increase in price.

disc: I bought some PRC on a flyer when the Goldman's subsidiary leant covertible debt in the latest rights issue. Technically the project can't be too bad if they leant convertible debt was my assumtpion (you can tell I am not a rock hound).

[Base Trader]

Also I should have mentioned - current prices are a function of supply issues and not demand issues. It would be imprudent not to consider a reeduction in demand but for the moment focus needs to be on the ability of the market to ramp up supplies.

[bermuda]

Don't imagine that documentaries are factual and objective. They're not.

Hi,
What did you think of the ENRON documentary? It was a pretty powerful message to me that America had gone too far. Grateful your thoughts.

[BDLBOM]

It wasn't "America" that had gone too far it was the people at Enron.

That would be like saying that the Blue Chip fiasco is a case of "NZ" going too far.

[Dr_Who]

Also I should have mentioned - current prices are a function of supply issues and not demand issues. It would be imprudent not to consider a reeduction in demand but for the moment focus needs to be on the ability of the market to ramp up supplies.

Economic boom in China and India has created a huge demand for coal, especially in the electricity and steel making sector. Supply cant seem to keep up. It takes years to find new coal and mine it, assuming they can find more new mines. Also, the high oil prices will have a positive effect on coal prices.

[Dr_Who]

Holy @#%$ PRC just hit $1.20. Both NZO and PRC is having a BULL RUN! :)

[remy]

yeh, nzo and prc going nuts, kicking myself for not buying in at 99c a few weeks back

[Dr_Who]

yeh, nzo and prc going nuts, kicking myself for not buying in at 99c a few weeks back

Have you been listening to McDunk? :p

[bermuda]

October 2007
Scuffer,
Do you really think that a $200 million dollar company hasnt thought this through?

Do you think that Peter Whittall ( who previously worked for BHP for 25 years ) doesnt know how to transport coal?

Have you read the prospectus?

Do you own any PRC shares?

A dozen of good Aussie red that Pike will perform and be worth $1.20 by June 30th?

I remember accepting two bets where posters insisted that Maari was going to produce before Tui. How they ever thought that is beyond me so I just had to accept.

What say you?

Scuffer,
Just as well you dodged that bet. Hope you are on board. The train goes all the way to Lyttelton and then on to India.They are starving for it.

$1.60 by end year.

[remy]

Have you been listening to McDunk? :p

McDunk was one person putting me off, i dont think many people here would of thought they were going to hit 120 in the space of a few weeks

[Dr_Who]

Can someone crunch the numbers for coal at $305 per ton?


Coal miners secure massive price rise
AUSTRALIAN producers of coal, the nation's largest export commodity, have secured a stunning price rise because of supply shortages.

European and Asian steel mills have agreeing a trebling in premium hard coking coal prices to around $US305 a tonne.
The reported settlements come on the back of soaring spot prices after millions of tonnes of production were lost because of severe flooding in Queensland in January and February.
According to ANZ commodity analyst Mark Pervan, the flooding has likely cut the world supply of seaborne coking coal - also known as metallurgical coal - by 4-6 per cent.
There are also reports that Japanese utilities have agreed to a more than doubling in Australian thermal coal prices to $US125 a tonne, up from $US56 a tonne.
Coal is Australia's biggest commodity export earner, with ABARE Economics predicting sales of 252 million tonnes 116 million tonnes worth $35.5 billion in the 2008 financial year, prior to the latest price hike.
ABARE predicts coking coal producers will sell 136 million tonnes worth $27. 4 billion onto the global market in the 2008 financial year.
According to industry newsletter the McCloskey's Coal Report, BHP Billiton has secured a $305 a tonne contract price from Indian/European steel giant Arcelor Mittal. Separately, South Korean steel producer Posco has confirmed it has agreed a 205-210 per cent rise in Australian coking coal prices from last year price of $US98 a tonne.
BHP Billiton declined to comment, and traditionally doesn't confirm price settlements until most of its contracts are agreed.
Swiss-based Xstrata, the world's biggest thermal coal exporter with significant operations in NSW and Queensland, has reportedly secured a $US125/tonne price from Japanese utility Chubu.
The coking coal price increase is above analyst expectations that back in March were for a coking coal price of $US225-$US250 a tonne. source: www.theaustralian.news.com.au 07 April 2008

[AMR]

Limit order finally got filled. Today is a good day to buy, resistance at 1.16 got broken last night. If you remember, NZO did a similar breakout at 1.18 the day before the big quarterly.

[Bilo]

Can someone crunch the numbers for coal at $305 per ton?


Coal miners secure massive price rise
AUSTRALIAN producers of coal, the nation's largest export commodity, have secured a stunning price rise because of supply shortages.

European and Asian steel mills have agreeing a trebling in premium hard coking coal prices to around $US305 a tonne.
source: www.theaustralian.news.com.au (http://www.theaustralian.news.com.au) 07 April 2008

My model valued PRC shares at 1.30 or 1.10 fully diluted at IPO.
It had moved to north of $2
But $300 for 18 years moves present value north of $6.

Still some fairly conservative assumptions (10pc WCC, 0.8 NZD/USD but they pale to insignificance against tripling revenue) and a bit ropey but as Phaedrus says - its the trend that counts.

[RossT]

What is there not to like about Pike at the moment?

The transport option chosen was easily the best option.
Share issue successfully completed in what was a shocking market period.
Commodity price is just brilliant!
Suppyling the fastest growing region in the world.
Excavation of tunnel pit bottom almost finished. <300 meteres to coal.
Significant resource in the ground (55mt) with which to possibly expand planned 17mt total mine output.
Most global negative market sentiment already factored into sp.

[trackers]

Deal talk sees Pike River shares at high



Pike River Coal (PRC) shares have hit a record on expectations of a new top benchmark for coking coal prices.
PRC shares yesterday closed 7c higher at 117c, off an intra- day high of 118c, on 620,000 shares crossed. The previous high was 115.2c.
Market players say PRC and the New Zealand economy are benefiting from Asian expansion. Demand for goods from China and India – with a combined population of 2.5 billion – would help stimulate the economy despite threats from a US recession.
Christchurch's Hamilton Hindin Greene client adviser James Smalley said PRC's recent work to secure moving coal, via Solid Energy and Lyttelton Port of Christchurch, had encouraged investors and helped the share price.
McDouall Stuart Securities research head John Kidd said the share price reflected PRC's position to take advantage of benchmark coal prices and its progress in tunnelling at its West Coast mine. The shares had also outperformed the main New Zealand Exchange indices in recent months.
PRC has nearly finished the pit-bottom stage of a 2.3km tunnel to a coal seam. It has targeted 200,000 tonnes of coal production in the year to June 30, 2009. Mining is to start in July.
PRC had committed to mining over a million tonnes of coal a year, but the high benchmark prices would probably pull back from the 2009-10 year with more Australian capacity coming onstream, and Australian port investment, Kidd said.
The outcome of important talks between Australian miners and Japanese steel producers on a benchmark for prices between now and March 2009 was "pretty much imminent", Kidd said. "There's been plenty of rumour but there hasn't been a final confirmation of price ... we're still waiting but really all indications are incredibly positive."

Industry talk has spot prices for coking coal going up to $US330 ($NZ423) a tonne. The consensus is for the benchmark now being negotiated to settle at $US200-300 a tonne, up from the $US98 a tonne set for 2007-08.
Supplies of coking coal had dried up due to both recent flooding in Queensland, which had badly affected mining, and constraints at ports along Australia's east coast, with China now a net importer rather than a net exporter.
Asian economies remained tigers, Kidd said. "The rate of growth in China still is so strong and the consumption so large ... there's still serious optimism about the level of import that China will require," he said.

PRC chief executive Gordon Ward agreed the benchmark would be negotiated in the $US200-300 a tonne range in the short term. A recent McCloskey Group report had a rumour that BHP Billiton had agreed a price of either $US290/ t or $US305/t with the world's biggest steel maker, Arcelor Mittal.
"If it comes in at about $US300 a tonne or something slightly below that, it's going to be at markedly increased levels over previous record amounts," Ward said.
PRC expected benchmark prices to fall over time, but New Zealand's economy would benefit from a continued Asian steel sector boom and strong growth rates, he said.
Solid Energy South Island general manager Simon Doig said he understood BHP Billiton was in Tokyo yesterday talking to Nippon Steel on benchmark prices. "Nothing definitive has come out yet, but all signs are that prices will be very healthy."



http://www.stuff.co.nz/4470197a13.html

[sideline]

Looks like PRC will open at 1.05 AU$, equivalent to 1.22 NZD in Oz



....LATER: well, did manage to open at 1.04

[Dr_Who]

My model valued PRC shares at 1.30 or 1.10 fully diluted at IPO.
It had moved to north of $2
But $300 for 18 years moves present value north of $6.

Still some fairly conservative assumptions (10pc WCC, 0.8 NZD/USD but they pale to insignificance against tripling revenue) and a bit ropey but as Phaedrus says - its the trend that counts.

July is not too far away. Those that are still waiting for the mine to open will have to pay a premium of $1.30+.

[AMR]

$300 dollars for 18 years?? I like pike but that's a big assumption to make. And I thought my valuation at $3.80 was a bit high!

[sideline]

$300 dollars for 18 years?? I like pike but that's a big assumption to make. And I thought my valuation at $3.80 was a bit high!

At an average inflation rate of 4% pa $300 in 18 years is only $150 today (which is not so much above
last year's contract price for coking coal). So even if the per-ton price stays at $300
it actually falls to half its current value in real terms in that 'optimistic' scenario. I don't find it
so unreasonable that the long term price trend could look like that (with ups and downs in between,
of course).

[Bilo]

At an average inflation rate of 4% pa $300 in 18 years is only $150 today (which is not so much above
last year's contract price for coking coal). So even if the per-ton price stays at $300
it actually falls to half its current value in real terms in that 'optimistic' scenario. I don't find it
so unreasonable that the long term price trend could look like that (with ups and downs in between,
of course).

Thanks Sideline
Now you are getting closer to why I think DCF using 10pc WACC for resource projects without inflating revenue is extremely conservative.

[trackers]

PRC 1.23/1.24 - Top 3 riser on the NZX for today. NZO, NZOOD following along behind nicely

[Mysterybox]

Yes! Very happy with how this ones been going, only wish I invested more into it :(

[Base Trader]

There seems to be some hesitancy in valuations from the brokers in this share based upon what I am not sure. If they have technical engineering concerns - fair enough but the risks have skewed in favour of value with the latest negotiations. Given they can hit 1m mt per year - that means for every US$1 higher price achieved that adds NZ$1.25m to the NPBT over projections. Given that the contracts are settling in the US$290-US$305 range that is NZ$370 - $380 per mt or an additional NZ$270m pa. Take off cost creep and you still are up plenty.

Clearly it is foolish to expect the 2009-2010 year at exactly these numbers but can those among you that follow commodities give me a recent example where a mined commodity has ramped up and come off immediately? Gold, Thermal Coal, Steel, Copper, Molybdenum, Cobalt? Even nickel which showed most reversion went from $15,000 to $50,000 has come back only to $30,000. And more particlarly when 3 (and what is to be maybe 2) players control 60&#37; of traded market and 70% of the high quality low volatility coal market.

While there is 900m mt produced per year only 220m mt is traded under seabourne freight. China and Ukraine which were self-sufficient cannot keep up and the Ukraine which requires 19.5m mt only has 17.0m mt in annual production. They are importing for the first time. There are no chinese stats but they are in the global market buying for the first time. Given the likely shakey infrastructure of many of the 670mt of coking mines that supply to non-traded markets the supply side looks uncertain. The global coking coal production is a black hole (no pun intended) but given what I have seen in most commodity market and the general inability to increase supply easily and quickly I think that a coking coal punt over the medium term reasonable.

A punt not for the faint hearted as there is real project risk but with potential annual profits before tax of NZ$300m rather than NZ$40m it looks like a good directional play. I believe that issues of cost creep, with PRC at 75%ile on the global cost curve, have been eliminated by the price increases over the medium term. At higher valuations these become an investment concern but not at a market cap of NZ$312m.

Clearly I am talking up my investment decision but I also believe in the coking coal storey.

[bermuda]

There seems to be some hesitancy in valuations from the brokers in this share based upon what I am not sure. If they have technical engineering concerns - fair enough but the risks have skewed in favour of value with the latest negotiations. Given they can hit 1m mt per year - that means for every US$1 higher price achieved that adds NZ$1.25m to the NPBT over projections. Given that the contracts are settling in the US$290-US$305 range that is NZ$370 - $380 per mt or an additional NZ$270m pa. Take off cost creep and you still are up plenty.

Clearly it is foolish to expect the 2009-2010 year at exactly these numbers but can those among you that follow commodities give me a recent example where a mined commodity has ramped up and come off immediately? Gold, Thermal Coal, Steel, Copper, Molybdenum, Cobalt? Even nickel which showed most reversion went from $15,000 to $50,000 has come back only to $30,000. And more particlarly when 3 (and what is to be maybe 2) players control 60% of traded market and 70% of the high quality low volatility coal market.

While there is 900m mt produced per year only 220m mt is traded under seabourne freight. China and Ukraine which were self-sufficient cannot keep up and the Ukraine which requires 19.5m mt only has 17.0m mt in annual production. They are importing for the first time. There are no chinese stats but they are in the global market buying for the first time. Given the likely shakey infrastructure of many of the 670mt of coking mines that supply to non-traded markets the supply side looks uncertain. The global coking coal production is a black hole (no pun intended) but given what I have seen in most commodity market and the general inability to increase supply easily and quickly I think that a coking coal punt over the medium term reasonable.

A punt not for the faint hearted as there is real project risk but with potential annual profits before tax of NZ$300m rather than NZ$40m it looks like a good directional play. I believe that issues of cost creep, with PRC at 75%ile on the global cost curve, have been eliminated by the price increases over the medium term. At higher valuations these become an investment concern but not at a market cap of NZ$312m.

Clearly I am talking up my investment decision but I also believe in the coking coal storey.
Base trader, just loved reading that post. Thanks.

[Balance]

Latest upgraded valuation from broker report - $1.75?

When is PRC putting this on its site?

[777]

Latest upgraded valuation from broker report - $1.75?

When is PRC putting this on its site?

Valuations by brokers are not necessarily put on company's websites. Occasionally they may
be for various reasons but all brokers will have different methods or valuation and thus different answers.

[RossT]

Worlds largest steel maker - ArcelorMittal - Signs at $305 with Bhp


http://tinyurl.com/4ztjxq

[Robomo]

Worlds largest steel maker - ArcelorMittal - Signs at $305 with Bhp


http://tinyurl.com/4ztjxq

Now, if PRC could just increase the predicted 200,000 tonnes for the coming year that would be a real bonus! Wonder if they will take any steps to try and increase their target for this year given this massive price hike? It's likely that the price for hard coking coal will fall for the following year (so long as floods and other disasters stay away) when PRC should be in full production.

[dsurf]

Latest upgraded valuation from broker report - $1.75?

When is PRC putting this on its site?

Balance - which broker & can anyone post this on ST would be interesting to read.

[Mysterybox]

Wow looks like this stock is going to be my first real play(non-paper), everything looks great for the current year, especially the SP predictions.

[Scuffer]

The stars are starting to align for Pike lets hope that things don't turn sour,the only hiccups I can possibly see are Greenpeace raising public awareness, a world recession and Lyttelton port militancy, but they should be sweet, watch knowing my luck Greenpeace will start to use terrorist activities and blow something up.

[Dr_Who]

Latest upgraded valuation from broker report - $1.75?

When is PRC putting this on its site?

You are on to it mate. :) Why do you think I have been buying so many below $1.00? The fundamentals always come into play in the long term. It has taken people so long to realise the true potential of PRC.

[The Plunger]

Anyone interested in coking prices might want to look at the BHP announcment just out. Prices expected to increase by up to 240&#37; over previous years price.

[RossT]

Nippon steel signs with Bhp

PRC trades going thru at 129 as of writing this.

[Dr_Who]

HOLY SHIAT $1.30 bid $1.35 offer !!!

Look at the graph! :)

Please link BHP article.

[RossT]

http://tinyurl.com/6fkzx5

Thats a 7 cent rise three days running. Not too shabby at all.

[AMR]

I bought a couple of days ago on a TA breakout above 116. Now where's the old man from the Auckland meeting who suggested us TAs were all hindsight traders??:D:D:D

[Mysterybox]

Ahh! :'( why did I wait till now to buy this.. if only I made my play this morning.
:| going to take 4days to open the asb account. Ahh serves me right for not doing this sooner..

[Rabbi]

Ahh! :'( why did I wait till now to buy this.. if only I made my play this morning.
:| going to take 4days to open the asb account. Ahh serves me right for not doing this sooner..

It's run up a bit fast for my liking, and there is only so much hype can drive a shareprice. You should have waited for the impending retracement Mysterybox.
But still a potentially brilliant stock long term if their future coal output projections are correct.

[tim23]

Can you tell us when the retrenchment is coming so we can all buy and force the price up?

[Mysterybox]

You should have waited for the impending retracement Mysterybox.


Sorry, what is this? I think I know just wanting to confirm, thx for the reply.

[AMR]

When profit-takers sell out and the stock falls back slightly before continuing upwards.

[Base Trader]

I would suggest that waiting for retrenchment maybe a slightly risky plan.

The stock had languished as a result of the rights issue. Many people simply took the 90 cents rights and have taken profits, hence, the perfect buying period was March. The easy sellers will be being shaken out.

You need to ask yourself where is the greater percentage change. Up or down? If you are talking technically you need to ask yourself are buyers running out or are the sellers running out?

My take is that the easy selling and profit takers are being shaken out. My take is also that the general malaise comes with a long run project that has some delays and that is in the press regularly will begin to be shaken out when the realisation that cashflows flow coal flowing will be substantial. You have to ask who will be selling now vs who will want to buy?

I understand from Brokers reports (Morgan Stanley, McClosky, Macquarie etc) that 2008 will see a circa 15m mt deficit in seaborne met coal but that calendar 2009 will still see a deficit of circa 7m mt - which should underpin prices. Projected increase in supply of 1.0% for 2008 and 9.5% for 2009. So there appears at least 2 years of bumper prices. There are also a variety of sources noting spot contracts are trading at US$350-US$400 per mt - which underpins how tight the market is.

As for the long term. Maybe you need to consider that most of the 900mt of met coal (only 220mt is for Seaborne trade) is produced in former CIS and China. This infrastructure, by my guess, is going to be pretty shakey and when the commodity is traded at the margins of supply / demand my experience is production typically undershoots. Also there is the fact that 3 players control 70% of the high quality Seaborne met coal market.

Eventually, these prices will attract greater investment but for a market under-invested for so many years this will take time.

Again I make the point I think this is a great met coal price play and I dio not hide my enthuiasm for this investment at these numbers.

[The BOWMAN]

Base Trader. Very good analysis. I vote for you.

[Mysterybox]

Yes, thanks for that and to AMR for confirming :) I'll review once the account is activated.

[Balance]

It's run up a bit fast for my liking, and there is only so much hype can drive a shareprice. You should have waited for the impending retracement Mysterybox.
But still a potentially brilliant stock long term if their future coal output projections are correct.

Australian fund managers are aggressively buying into the stock. Will they be right or will they be wrong?

[Base Trader]

Most Aussie coal producers at full production are 6x-7x earnings. Given a US$100/MT @ USD0.70 which leads to a net profit of round about NZ$45m pa. The PE assumption then leads to market cap of $270m-$315m.

Current market cap is $328m so downside is limited.

The key value driver is that prices are substantially higher. One year at US$300/mt would net NZ$295m before tax. If the average goes up to say $150 / mt then market cap goes to NZ$540m or $2 per share.

I will stick my neck out and say $2 is a realistic July08 number if they can produce their first coal by then on time. Budget is less of a concern for me now.

A final thought is that NZOG is a development company. The Goldmans investment is an investment. Hence, we have no cornerstone investor saying I will not sell. This is a global market and prices will get arbed if the politics can be managed. The efficacy of a global marketing arrangement may be helpful for this investment and it would fit nicely into a diverse portfolio (i.e. not subject to Queensland floods etc).

[Base Trader]

But it is easy for me to say this when I strapped on my position at just below $1.

[Base Trader]

It looks official - BHP announced contract for April08-April09 are US$300/MT on Premium Hard Coking Coal.

[Hoop]

It looks official - BHP announced contract for April08-April09 are US$300/MT on Premium Hard Coking Coal.

Imagine a falling NZ$.......:cool:

[duncan macgregor]

Imagine a falling NZ$.......:cool:Imagine a falling American dollar. Its the cross rate that counts. The American dollar is held together by little bits of string and sticking plaster. Big turmoil when that gives way unless they sell in a range of currencies. Macdunk

[dsurf]

Imagine a falling American dollar. Its the cross rate that counts. The American dollar is held together by little bits of string and sticking plaster. Big turmoil when that gives way unless they sell in a range of currencies. Macdunk

Thats what hedging is for - to lock in profits.

[digger]

Thats what hedging is for - to lock in profits.

Hedging is my public enemy number one.The dairy company tried that for years with all there resources and still ended up in the red,and that was not counting the expert fees for helping you to lose money. If we get into hedging some half wit would have hedged all future profits away light years distance before $300 dollars turned up. At a AMG two years ago someone wanted to tie in profits at 40 dollars a barrel because we should act quickly as oil had hit 45 and it was a once in a life time chance to made a profit.
The reality is that oil and coal are precious depleting resources that are in a perminate super cycle that is unlikely to ever stop trending up.Get used to it and you will be ahead of the game,and don't make me mad by bringing up again this half cracked idea of giving away future profits,bacause giving away future profits is all that hedging is. Nothing would make me sell out quicker than to know the company was planning to hedge.
How is it that the admitatration bans swear words and abusive posts but allows talk of hedging.

[Drone]

Hedging is my public enemy number one.The dairy company tried that for years with all there resources and still ended up in the red,and that was not counting the expert fees for helping you to lose money. If we get into hedging some half wit would have hedged all future profits away light years distance before $300 dollars turned up. At a AMG two years ago someone wanted to tie in profits at 40 dollars a barrel because we should act quickly as oil had hit 45 and it was a once in a life time chance to made a profit.
The reality is that oil and coal are precious depleting resources that are in a perminate super cycle that is unlikely to ever stop trending up.Get used to it and you will be ahead of the game,and don't make me mad by bringing up again this half cracked idea of giving away future profits,bacause giving away future profits is all that hedging is. Nothing would make me sell out quicker than to know the company was planning to hedge.
How is it that the admitatration bans swear words and abusive posts but allows talk of hedging.


I would not be at all surprised to find that there is some hedging going on for at least the currency and it would be prudent to do so. A well designed hedging program smoothes cashflows for a firm taking out some of the peaks and troughs associated with wildly fluctuating commodity and currency prices. It provides some certainty for cashflow and balance sheet management. You will never totally lock in or lose profits with hedging, just reduce the highs and lows (say with a program of purchasing rolling forward contracts on a disciplined basis).

A prudent company would hedge exposures they do not have expertise in managing or forecasting , i.e these guys are coal miners not fx speculators so why leave themselves with a massive fx exposure?

If the coal price boom is so certain then maybe they should forget all the hassle of getting the stuff out of the ground and just take the 200m or so cash they have, leverage up and punt on coal futures? Is that what you are doing digger - put the house on it mate if its so certain.

Cheers

[Dr_Who]

Australian fund managers are aggressively buying into the stock. Will they be right or will they be wrong?

As I have said during the PRC IPO, it doesnt matter if NZers dont like the stock. Aussie investors have a better understanding of mining stocks than NZ investors. Like all good assets it will eventually go to overseas investors as a discount cos NZ investors have no idea what the @#@$ is going on.

[Rabbi]

Here comes the price retracement now after a 'bull" run the first three days of this week. As I said , that sort of increase in the shareprice cannot be sustained before profit takers move in and take profits. These traders have been sitting on the sideline waiting to time their exit. It's a well known cliche that a bell doesn't go off when a share has peaked, but anyone riding the waves, has to be quick and jump off the bandwagon to lock in profits, hence the high volume today.
Anyone wanting to increase their holding, should of course, buy on the dips (retracement).
I'm in for the long haul as it is an ideal takeover target for an Aussie miner.

[dsurf]

Hedging is my public enemy number one.The dairy company tried that for years with all there resources and still ended up in the red,and that was not counting the expert fees for helping you to lose money. If we get into hedging some half wit would have hedged all future profits away light years distance before $300 dollars turned up. At a AMG two years ago someone wanted to tie in profits at 40 dollars a barrel because we should act quickly as oil had hit 45 and it was a once in a life time chance to made a profit.
The reality is that oil and coal are precious depleting resources that are in a perminate super cycle that is unlikely to ever stop trending up.Get used to it and you will be ahead of the game,and don't make me mad by bringing up again this half cracked idea of giving away future profits,bacause giving away future profits is all that hedging is. Nothing would make me sell out quicker than to know the company was planning to hedge.
How is it that the admitatration bans swear words and abusive posts but allows talk of hedging.

I was talking about hedging the NZ$ versus the US$ - good rant tough

[Mysterybox]

Taken the plunge, first play ! ^_^ so excited cant wait to see how this pans out.

[Hoop]

Taken the plunge, first play ! ^_^ so excited cant wait to see how this pans out.

Well done Mysterybox...The first one is the hardest.
All the best
Hoop

[digger]

If the coal price boom is so certain then maybe they should forget all the hassle of getting the stuff out of the ground and just take the 200m or so cash they have, leverage up and punt on coal futures? Is that what you are doing digger - put the house on it mate if its so certain.

Cheers

OK if you were talking about hedging the currency then not so bad.I however do not want the coal or oil hedged as it just gives away future profits. As for putting the house on it if i am so certain,well you are a bit behind the game. I have put the farm on it and am winning. The biggest fear i have is the potential for future profits to be hijacked by a hedging policy and more importantly the actually future loss we face if we entre into any such contract.

[bermuda]

OK if you were talking about hedging the currency then not so bad.I however do not want the coal or oil hedged as it just gives away future profits. As for putting the house on it if i am so certain,well you are a bit behind the game. I have put the farm on it and am winning. The biggest fear i have is the potential for future profits to be hijacked by a hedging policy and more importantly the actually future loss we face if we entre into any such contract.


Well said Digger,

It hasnt been an easy journey and we have had more than our share of knockers. It was because of NZO/PRC that I retired. I know you wont retire because I know you love the land, and you love hard work. Good on you. One day I will call in and see all the projects you have on the go. That would be a good day.

[Base Trader]

Well you can rest easy unless someone can tell me where you hedge hard coking coal. There is no market that I know of and I have yet to even hear of an OTC contract either.

You can hedge Richards Bay and Newcastle and European thermal coal. But no premium hard coaking coal.

[Base Trader]

But couldn't agree more with Digger.

You do not buy a coking coal share not to have exposure to the price. if you want risk mitigation you buy a conglomerate

[Placebo]

Well I am now the proud owner of a wee tranche of shiny PRC shares (well, I am sure they were shiny when they were made, are now all covered in black coking coal dust ;))

So now I have joined you NOGGERS. Who'da thought?

My tiny portfolio now consists of 2 companies whose job it is to either drag things out of the ground or process stuff dragged out of the ground, and sell them off to be burned. Weird old world

[Dr_Who]

Welcome on board Placebo. :)

I may even pick up more shares if PRC sp comes back.

[Mysterybox]

$1.25 at the moment, how long do these 'retrenchments' generally last for? If that can be answered.

Got in 500 @ 1.27 as of this morning so pleased with that :)

[remy]

just made an initial buy at 1.25, any reason for the dip down to 1.21?

[Dr_Who]

just made an initial buy at 1.25, any reason for the dip down to 1.21?

Its had a very good run from less than $1 to over $1.30, so one would assume there are some profit taking. If you see some good news on the energy or coal sector overseas, PRC will go for another run. Until then, we wait for PRC report on their tunneling.

[AMR]

No reason to worry fellows. There is resistance at 116 for it to bounce off. OBV is generally rising as well, the two down days we have had so far are on very small volume.

[Rabbi]

I just had a look at the tunneling progress on the PRC website and it
looks like the pit bottom should be finished by the end of next week. If that is so that means it is" full steam ahead" to the coal face, which is approx. another 300m. Depending on the condition of the rock, which influences the progress they can make, they should reach the coal seam sometime in July.
I expect PRC to report when the Pit Bottom is complete, as that is another major milestone for the Co. I don't think the work on the ventillation shaft has any effect on the progress of the tunnel, so I'm hoping the rock between the pit bottom and the coal seam will not slow progress on the tunnel. The quicker they reach the coal the better as this will cut costs for the contractor, and expedite coal production, which is what it is all about. Even though they have a contingency fund, what we don't want, as shareholders, is any more cost overruns.
At the moment it is looking pretty good and I don't expect PRC SP to
fall back too much before finding solid support. :)

[COLIN]

Share prices tend to fade away on Friday afternoons, I've often noticed, presumably because some traders do not like going into the weekend with open positions. I've sometimes picked up a bargain or two by hanging around until late Friday.

[digger]

Share prices tend to fade away on Friday afternoons, I've often noticed, presumably because some traders do not like going into the weekend with open positions. I've sometimes picked up a bargain or two by hanging around until late Friday.

Late buying can be excellent on Friday in more areas than just shares. For nearly 40 years i was the known buyer at the morrinsville saleyard on late friday afternoon. This was especially good when the farmers headed home to milk leaving me with the market much to myself and my usual late friday night milking. So yes where you can see a pattern that brings advantage go for it. After the 1987 sharmarket crash for some reason i never really worked out the market started off weak and slowly built up over the week to fall back again on friday afternoon and then the pattern seemed to repeat itself next week.
I would agree that friday afternoon when others are starting to focus on the weekend entertainment is the prefered time to be a buyer. Another reason for this IMHP is that sellers tend to leave they sell in but buyers are quicker to withdraw from the market.

[RossT]

Well that was a nice spike to sell out on that I did the "deer in the headlights" routine with, fearing missing a higher breakout. Could have upped the holding nicely (130 -121 or 122) but happy all the same. Yes Colin, fridays always seem to bottom out, which annoys me even more for myself not trading this spike.

I'm picking 125-126 next week and for a while, but it's time for some numbers for first coal in July ( if things stay on schedule ). My pick = $1.42.

New report on the website with a 12 month valuation of $1.75

Those 90 cent rights issue shares have certainly made my pillow more comfortable at nights, so currently very happy with how PRC is playing out.

[Base Trader]

Volume right off today (a quarter of the last 4 days) - hence, the sellers have it. But this type of share you should not worry about the few cents. Fundamentally their position looks sound. ANZ came out expecting a 11m mt shortage in Aussie Premium Hard Coking coal this year. My read is that spot cargoes will stay high and if they can begin to move coal for August they will trade into this deficit market and achieve a US$350-US$400 per mt price.

[bermuda]

Volume right off today (a quarter of the last 4 days) - hence, the sellers have it. But this type of share you should not worry about the few cents. Fundamentally their position looks sound. ANZ came out expecting a 11m mt shortage in Aussie Premium Hard Coking coal this year. My read is that spot cargoes will stay high and if they can begin to move coal for August they will trade into this deficit market and achieve a US$350-US$400 per mt price.

Wish it was all at the spot price eh. This stock will do exceedingly well.

[Steve]

Well that was a nice spike to sell out on that I did the "deer in the headlights" routine with, fearing missing a higher breakout. Could have upped the holding nicely (130 -121 or 122) but happy all the same. Yes Colin, fridays always seem to bottom out, which annoys me even more for myself not trading this spike.

I'm sure that we have all done the "deer in the headlights" routine. With experience, you learn that you should stick to the plan and ignore those emotions...

[tim23]

Be better buying next week then won't it, our share syndicate picked some more up yesterday, as stated above a few cents is nothing in the overall scheme assuming you think they will be North of $1.50 say in short order

[Hoop]

Share prices tend to fade away on Friday afternoons, I've often noticed, presumably because some traders do not like going into the weekend with open positions. I've sometimes picked up a bargain or two by hanging around until late Friday.

Friday afternoon traders disappear for good reason .. uncontrollable risk.

For us longer term investors yes Friday afternoon been good for us in a Bull market situation but I'm not so sure in a Bear Market situation.

Investors who bought in NZ last Friday may in hindsight wished they waited until Monday. Things got ugly in "good ol" USA Friday (-2%)

[Mysterybox]

Investors who bought in NZ last Friday may in hindsight wished they waited until Monday. Things got ugly in "good ol" USA Friday (-2%)

Felt that, still, in it for the long term.

[tim23]

Or if US had been stronger Friday then the opposite would apply but does it matter to PRC about extracting coal?

[Balance]

Or if US had been stronger Friday then the opposite would apply but does it matter to PRC about extracting coal?

Real share price will reveal itself when the coal comes out the ground. In the meantime, it's traders trading against one another.

[Dr_Who]

Investors who bought in NZ last Friday may in hindsight wished they waited until Monday. Things got ugly in "good ol" USA Friday (-2%)

It doesnt matter where the US market goes, have to look at oil and coal prices, both are up. The US market has been tracking down for this whole year and energy prices up.

[Steve]

Real share price will reveal itself when the coal comes out the ground. In the meantime, it's traders trading against one another.

Balance has hit the nail on the head - once the coal starts moving, most of the posters here will lose interest and will frequent the next big speculative thread... :rolleyes:

[Bilo]

Balance has hit the nail on the head - once the coal starts moving, most of the posters here will lose interest and will frequent the next big speculative thread... :rolleyes:

Steve, speculators frequently leave plenty behind for investors.

I considered myself a long term holder of Gloucester Coal (ASX.GCL). It refloated on the ASX a few years ago at 60cps, producing about 1M tonnes of semi-hard coking coal and 1M tonnes of poor thermal grade coal, I bought about $2 and sold for over $6 (to pick up my entitlements to PRC). It has turned out to be a sub-optimum move. GCL has been trading at $8 to $9. Usual story, price goes up, they find/define increased reserves, received takeover offers, plan production increases, prices continue to rise. Value gets recognised by the market.
The value hasn’t been recognised by the NZX resource stocks NZO, PRC – yet.
Lets face it, when you treble selling prices in practically any situation, all previous valuations, have been rubbished. Simple arithmetic suggests that if a $1 PRC share was viable at $60 per tonne, profitable with a margin of error at $80, then suggesting a value of less than $2 with the current coal price suggests that those behind the project were bonkers from the beginning.
When floated the PRC price was claimed to be at PE multiples hugely better than Australian producers.
At USD300 per tonne for the first year and Anderson's USD185 for subsequent years the net present value on my model is north of $3. (Remember on float numbers, it produced a conservative valuation of around $1.30.) It suggests that those professional valuations have fiddled the numbers in their calcs to derive a number that the blind sheep that follow them might believe.
March the clock on a year to full production and the company valuation goes out of the hard graft world with a sale price at USD300 per tonne on 1M tonnes of world best premium coking coal p.a. Sometimes you look at these numbers and think that there has to be some mistake and sometimes there just isn't.
PS This might not happen. DYOR

[sideline]

Aspect Huntley have released research reports dated 8-April about MacArthur Coal and Centennial Coal.
Generally I find them pretty useless with resource stocks - the seem to like mainly banks and other
financial companies, no matter what malaise those are in.
However, the reports contain some expectations about growth in coal consumption, broken down
into thermal and coking.
They expect CAGR of 4.3% for the 2006-2015 perriod for metallurgical coal.
They also took a stab at price expectations, the jist being that they will
abate slowly (only 10% per year for the next few years) as the supply and infrastructure problems
need some time to resolve.

Of course, being cyclists they eventually expect the price to go all the way back down to
100$. Yeah right.

[Dr_Who]

They expect CAGR of 4.3% for the 2006-2015 perriod for metallurgical coal.
.

Please translate to english! thanks :)

[sideline]

Please translate to english! thanks :)

CAGR = Compound Annual Growth Rate

The year over year growth rate applied to an investment or other part of a company's activities over a multiple-year period.

[digger]

Latest Pike tunnel shows 44 metres in week ending 13 april. From map it seems about another 20 metres in pit bottom so looks like we will hit Hawera Fault with another two weeks of drilling. After the Fault there is pencled in more rock before the coal but for the life of me i have never understood why. The Hawera Fault is the demarkation where the rock pushed up millions of years ago so surely after the Fault we must hit the coal.Obviously i am a farmer not a geologist so logic is all i have and that tells me [correct or otherwise] that coal must be immediatly after the Fault. If not could anyone explain why?

[Rabbi]

Latest Pike tunnel shows 44 metres in week ending 13 april. From map it seems about another 20 metres in pit bottom so looks like we will hit Hawera Fault with another two weeks of drilling. After the Fault there is pencled in more rock before the coal but for the life of me i have never understood why. The Hawera Fault is the demarkation where the rock pushed up millions of years ago so surely after the Fault we must hit the coal.Obviously i am a farmer not a geologist so logic is all i have and that tells me [correct or otherwise] that coal must be immediatly after the Fault. If not could anyone explain why?

Good point Digger.
In the interim report it states "the remainder of the tunnel will be driven with Pike River's roadheader until the coal seam is intersected at 2300m."
Considering the roadheader was not delivered until January 2008 we can assume it was not needed until the tunnel reached the fault. The interim report also states " The pit bottom area has been split into two sections, with excavations now to be located on both the Eastern and Western sides of the hawera fault. The pit bottom to the east of Hawera is currently being excavated in the hard rock....The pit bottom area west of Hawera in the coal measures will accommodate the ventilation shaft and the two main fans..."
Certainly different either side of the fault which leads me to assume it is a mixture of stone and coal, but I could be wrong, as I am no geologist either.

[RossT]

Page 48 of the prospectus has a cut away cross section view of the seam and the hawera fault. The toe of the coal seam kicks up dramaticly where it hits the fault, so the tunnel will effectively be going in under the toe of the seam initially to reach the point of the seam that it intersects.

If you don't have a prospectus it's on the website under "reports" - "other documents" - "NZ prospectus". ( I think thats the same one I have, I downloaded one ages ago ).

[digger]

Page 48 of the prospectus has a cut away cross section view of the seam and the hawera fault. The toe of the coal seam kicks up dramaticly where it hits the fault, so the tunnel will effectively be going in under the toe of the seam initially to reach the point of the seam that it intersects.

If you don't have a prospectus it's on the website under "reports" - "other documents" - "NZ prospectus". ( I think thats the same one I have, I downloaded one ages ago ).

Thanks RossT. It is page 47 actually but i get the idea.So the seam was pushed up at the Fault and that is the mistory of why we do not immediatly hit the coal. Still it is not far away,by 10 May for guess.

[sideline]

Good progress has been made tunneling. Looks like pit bottom will be finished this week,
Hawera fault possibly reached at end of this month.

[Dr_Who]

Will the weather affect their operation? Seems like the weather has turned and the real autum weather is here.

[manxman]

ahead of july shedule may be first coal comming out before june 30th, that will sparkle main share holder nog:):)

A bit of coal before 30 June would be nice, but the tunnel through and onward from the Hawera fault will be tricky. It looks neat in the prospectus but the roof will be chaotic shattered rock with coal above it. Not a job to tackle in haste.
And presumably the crews will be just getting up to speed on new equipment, using the roadheader rather than drill and blast so "past results are no guide to future performance" as they say. Getting close now though.


Mx

[sideline]

Will the weather affect their operation? Seems like the weather has turned and the real autum weather is here.

I think the weather in an underground mine is very steady - the sun just never shines!

[AMR]

Water drains naturally from the tunnel as it is sloping downhill. So no problems there.

[Dr_Who]

LOL.. you guys crack me up

I mean there could be flooding if the rain continues?

[Dr_Who]

I am getting frigging annoyed with you mate. You seem to have no idea about business, the markets or finance at all. I worry that you will post your opinion here and someone will act on your advice. Your comment about SKC should concentrate on family activities rather than gambling bloody annoyed me and you continually keep putting your foot in your mouth.

Either this site tries to be serious so it is not sniggered at by financial professionals, or it continues to pander to ignoramus' such as Dr Who who should really keep his ill-informed views to himself.

Is that you GW Bush? LOL

[Mysterybox]

15.04.08

Trade #14 and #15 noted "Block Special Crossing" and "Off Market" respectively.

Would anyone mind telling me what this means? Also are there any websites available that give closing/opening prices of stocks(NZX,ASX) in a datasheet? Or even if they just have them on site so I can make my own graphs.

Thanks in advance

[Dr_Who]

15.04.08

Trade #14 and #15 noted "Block Special Crossing" and "Off Market" respectively.



This usually mean a crossing between two parties from one broker. Usually an institution or large order will have crossings as the broker will ring around the large holder to find a buyer/seller outside the market.

[Rabbi]

15.04.08

Trade #14 and #15 noted "Block Special Crossing" and "Off Market" respectively.

Would anyone mind telling me what this means? Also are there any websites available that give closing/opening prices of stocks(NZX,ASX) in a datasheet? Or even if they just have them on site so I can make my own graphs.

Thanks in advance

Hi Mysterybox

www.stocknessmonster.com (http://www.stocknessmonster.com) is very good.

Cheers
Rabbi

[Mysterybox]

Hi Mysterybox

www.stocknessmonster.com (http://www.stocknessmonster.com) is very good.

Cheers
Rabbi

Am already using it, will have to look harder, thanks. =)

[airedale]

Hi Psycho, the worst thing about Dr Who's posts is that wretched terrier running around.
How about putting it in its kennel and keeping it there, Doc.:)
It is enough to start a migraine.

[dsurf]

15.04.08

Trade #14 and #15 noted "Block Special Crossing" and "Off Market" respectively.

Would anyone mind telling me what this means? Also are there any websites available that give closing/opening prices of stocks(NZX,ASX) in a datasheet? Or even if they just have them on site so I can make my own graphs.

Thanks in advance

post the following into a browser ( from yahoo finance singapore)

http://finance.yahoo.com/q/ta?s=nzo.nz&t=1y&l=on&z=l&q=c&p=m20%2Cm10%2Cm50&a=v%2Cm26-12-9&c=

Then click on "historical prices" link at the bottom of the screen

choose date & frequency options

Then click on "download spreadsheet" link at the bottom of the screen

[temuk]

LOL.. you guys crack me up

I mean there could be flooding if the rain continues?

Dr Who

It is on the west coast ---It always rains,just like last years AGM,
It pisssed down.

[Mysterybox]

post the following into a browser ( from yahoo finance singapore)

http://finance.yahoo.com/q/ta?s=nzo.nz&t=1y&l=on&z=l&q=c&p=m20%2Cm10%2Cm50&a=v%2Cm26-12-9&c=

Then click on "historical prices" link at the bottom of the screen

choose date & frequency options

Then click on "download spreadsheet" link at the bottom of the screen

Thanks, appreciated.

[Billy Boy]

Water in the shaft
This load is high up so there will be bugger all water to speak of, and
even in flood times the mine shaft will not be adversely affected coz
unlike ozzy, flood water will not run into it big time.
The fault
A fault is where the land has simply cracked and slipped in a direction.
(usually up or down). Put you hands togeather, move one of them four inches, you will now see how the fingers of one hand are half way down the other. Thats what a fault is but on a much larger scale. The ground at
the fault could be broken or a very neat break. I have seen both.
I dont see this bloody fault being much of a problem if the ground is
stable enough to get the shaft through or it is a reasonable clean break.

BWR
Did the fault go up or down on the shaft side. If down, how far and whats
the possibility of getting down to coal on shaft side. Just wondering !!
Cheers BB:)

[temuk]

At the AGM Peter Whittall dismissed any sugestion that there would be a problem.

From memory he said --If it was bay of plenty there would be a problem, west coast ,no problem.( don't ask me why the bay of plenty would be a problem).

This was 7 months ago. Maximan was there,how good is your remember.

[manxman]

At the AGM Peter Whittall dismissed any sugestion that there would be a problem.

From memory he said --If it was bay of plenty there would be a problem, west coast ,no problem.( don't ask me why the bay of plenty would be a problem).

This was 7 months ago. Maximan was there,how good is your remember.

As I recall, in the Edgecumbe earthquake, a lot of drains actually reversed their gradients. This can happen when you have drains with a designed fall of 1:1000. Pike River has a main drain with a gradient of 1:11, ergo no direction reversal on ground movements even in a severe quake. As a worst case, recall the Murchison quake of late 1960s where ground movements of a couple of metres were recorded. If this happened at the Hawera fault, then they would have to retrim the floor back 50 metres or so to ensure positive gradients. Compared to all the other problems of floor design and fluming, I guess Peter Whittall thought that this was just another problem the they would deal with as and when and if it happened. Certainly didn't ring any alarm bells with me.
If there is enough water to flood the tunnel then we have a viable hydro scheme. The more water at the mine, the less they have to pump back up from the CPP surely.

Mx

[bermuda]

This is an international project.

Get real guys, this one is set to double your money.

Whittal will get it out of the tunnel.

[the machine]

This is an international project.

Get real guys, this one is set to double your money.

Whittal will get it out of the tunnel.


bermuda,think you were being a bitsoft on any doubters.
double within next 12 months yes - but much more upside longer term and after paying tax what are they going to do with the profits?
pay big dividends is the go.

sure todays benchmark price is very high and will most likely drop from 2011 onwards - but even then it will be very profitable.

imagine getting 50c a share div pa for 20 years - thats my benchmark.

M

[AMR]

I am actually quite interested to see how they will utilise their debt (or total lack of it more correctly). Once it is operational for a couple of years and are on a firm financial footing, will they go the acquisition route for further expansion or a debt-funded share buyback? Has anyone asked John Dow about their longer term plans?

[dsurf]

I am actually quite interested to see how they will utilise their debt (or total lack of it more correctly). Once it is operational for a couple of years and are on a firm financial footing, will they go the acquisition route for further expansion or a debt-funded share buyback? Has anyone asked John Dow about their longer term plans?

Surely the first expansion would be development of the other coal seam to increase resources?

[Dr_Who]

PRC looks good with strong steady as you go price movement upwards. Good slow steady price movement is good for the stock. :)

[Billy Boy]

Surely the first expansion would be development of the other coal seam to increase resources?
I am quite sure that will happen in time, along with some others ;)
BB

[the machine]

Surely the first expansion would be development of the other coal seam to increase resources?


maybe, but that might not be until 20 years time.

meanwhile they will have to be paying big divs to get rid of all the extra cash

M

[AMR]

As for taking on a bit of debt...will it be tax-efficient if they borrowed to fund a share cancellation?

[temuk]

recall the Murchison quake of late 1960s where ground movements of a couple of metres were recorded.
Mx

When I was in alaska almost 3 years ago they were redoing survey
marks in a place called Mentasta lake because an earthquake had put them over 20 metres out.

The only water coming down the tunnel should be in a pipe bring
the coal with it.It is going to be pumped up using 4 huge pumps.

[Balance]

Earthquake would be good long term as it would split the mine wide open and allow for open-cast mining. Real low cost mining for the rest the reserves.

[digger]

Earthquake would be good long term as it would split the mine wide open and allow for open-cast mining. Real low cost mining for the rest the reserves.
Good point Balance.And if you stick around for another 5 or 6 hunderd million years there is probably a 50% geological probabily of that happening.

[upside_umop]

As for taking on a bit of debt...will it be tax-efficient if they borrowed to fund a share cancellation?

Should be, debt interest is expensed, which is tax decductible...shares have to pay tax, so maybe after things are up and running and this credit crunch passes, PRC may look at a little leverage to maximise EPS. :)

[Mysterybox]

A lot of the speculation/holding ideas here appear to be extremely long term, ie: if the company is purchased by an overseas oiler or, when PRC decides to buyback shares.

Still being a student of this art I cannot speculate how long it would be until this happens, can anyone give me an approximate of how long they intend to hold PRC? Or for what target price? Personally, at this point I am holding till around year-end and looking at selling near the $2 mark. Of course this could change, but yeah.

Thanks in advance

[airedale]

A lot of the speculation/holding ideas here appear to be extremely long term, ie: if the company is purchased by an overseas oiler or, when PRC decides to buyback shares.

Still being a student of this art I cannot speculate how long it would be until this happens, can anyone give me an approximate of how long they intend to hold PRC? Or for what target price? Personally, at this point I am holding till around year-end and looking at selling near the $2 mark. Of course this could change, but yeah.

Thanks in advance

Hi MB, the simple answer is that you stay with the upward trend as long as it is going up.
Run a weekly chart, draw a trend line connecting the closing prices.
When the price goes below that trend line....sell.

That is just one way of doing it, there are many others, and there are fundamental views, human emotions, fear, greed, the price of coal etc.etc. to deal with.

But keep it simple, and you can always buy back in if things change again.

[bermuda]

A lot of the speculation/holding ideas here appear to be extremely long term, ie: if the company is purchased by an overseas oiler or, when PRC decides to buyback shares.

Still being a student of this art I cannot speculate how long it would be until this happens, can anyone give me an approximate of how long they intend to hold PRC? Or for what target price? Personally, at this point I am holding till around year-end and looking at selling near the $2 mark. Of course this could change, but yeah.

Thanks in advance

Mysterybox,
PRC will advance very,very strongly over the next two years. Record coking coal prices will work their way into the bottom line to provide a simply stunning performance. Once production targets have been reached I could possibly see NZO exit in about February 2010 when the market will be singing PRC's praises.

But for PRC, the news will only get better as new aquisitions and the additional coal reserves get developed.

If you are only interested in doubling your money over the next year, buy PRC.( If you want to earn more than that then buy into VPE, BOW and RPM (Aussie oil..and Coal Gas Juniors ))

Edit.Sorry if the above is a bit rampish. But it is a fact.

[Mysterybox]

Thanks to both of you, I am getting some more funds (soonish) and am investigating RPM as we speak, but thank you both.

[Bilo]

Mysterybox,
PRC will advance very,very strongly over the next two years. Record coking coal prices will work their way into the bottom line to provide a simply stunning performance. Once production targets have been reached I could possibly see NZO exit in about February 2010 when the market will be singing PRC's praises.

But for PRC, the news will only get better as new aquisitions and the additional coal reserves get developed.

If you are only interested in doubling your money over the next year, buy PRC.( If you want to earn more than that then buy into VPE, BOW and RPM (Aussie oil..and Coal Gas Juniors ))

Edit.Sorry if the above is a bit rampish. But it is a fact.

Bermuda, it is about time that someone temporarily sin binned you for persistent downramping of the potential for the PRC share price.:D

Just a little reminder that we have a little side bet going on BOW/VPE and BOZ (which neither of us seem to have made a heap of progress on to date despite lots of good things happening). How about taking on a double: that the PRC share price will more than double in a year from today? - and I will buy dinner as well when I win.

[Dr_Who]

Thanks to both of you, I am getting some more funds (soonish) and am investigating RPM as we speak, but thank you both.

What they dont tell you is that there are high risk with some of these Aussie speculative stocks. So be prepare to lose as well as gain if you dont mind the risk and can sleep well at nights.

[AMR]

What they dont tell you is that there are high risk with some of these Aussie speculative stocks. So be prepare to lose as well as gain if you dont mind the risk and can sleep well at nights.

You might lose 50% on one pick but make it all back when the next returns 300%....so with specs it's important to place small bets to take full advantage of your odds and over time if you pick more winners than losers and your winners are much bigger than your losers. Same thing with futures. I'm sure the oil spec players only have a small percentage of their networths tied up in each play.

[bermuda]

Bermuda, it is about time that someone temporarily sin binned you for persistent downramping of the potential for the PRC share price.:D

Just a little reminder that we have a little side bet going on BOW/VPE and BOZ (which neither of us seem to have made a heap of progress on to date despite lots of good things happening). How about taking on a double: that the PRC share price will more than double in a year from today? - and I will buy dinner as well when I win.

Bilo,
Yes, I forgot about that bet! A bit like the two posters who bet me that Maari would be producing before TUI. Havent seen the two cases of red yet but I live in hope!

Anyway, I will stand by my bet on BOW and VPE.They had a very good run up only to be thwarted by Opes.

PRC will more than double in the next year. Why dont you come along to the National Convention on May 17th? Cheers

[Robomo]

The McDouall Stuart Research Note of 7 April 2008 advises the following expected Dividend Yield ("DivYld+1 0.0% (8.5 %)"). Can someone advise me just what that means -
1. Is the dividend yield figured on the share price at the time of writing ($1.10) or the target share price ($1.75)?
2. Is the quoted dividend yield figure the gross figure or imputated figure?
Thanks, Robomo

[Steve]

The McDouall Stuart Research Note of 7 April 2008 advises the following expected Dividend Yield ("DivYld+1 0.0% (8.5 %)"). Can someone advise me just what that means -
1. Is the dividend yield figured on the share price at the time of writing ($1.10) or the target share price ($1.75)?
2. Is the quoted dividend yield figure the gross figure or imputated figure?
Thanks, Robomo

All the answers you seek should be noted on the research note (often in fineprint under assumptions)...

[Bilo]

Bilo,
Yes, I forgot about that bet! A bit like the two posters who bet me that Maari would be producing before TUI. Havent seen the two cases of red yet but I live in hope!

Anyway, I will stand by my bet on BOW and VPE.They had a very good run up only to be thwarted by Opes.

PRC will more than double in the next year. Why dont you come along to the National Convention on May 17th? Cheers

Sorry Bermuda my visits to CHCH are infrequent and don't have a trip south planned until March 2009. I would have liked to catch up at the Petroleum conference but had a clash with another event. Perhaps at the next NZO AGM?

[AMR]

Resistance at 132 broken. PRC going for another run! I'm glad I swallowed my pain and bought back in after being bundled out.

[tim23]

Gordon Ward was on ASB Business this morning but I missed it what was the gist of his interview? Seems to have had positive effect today!

[RossT]

A single bid for 250,000 shares at $1.30 sitting there definitely helps support the days price, as has the unspecified ( >100,000 ) bid at $1.28 that has been sitting there for a couple of days.

Will be interesting to see what happens when/if they get pulled/traded, and if the dow retraces on it's good gains lately.

[Rabbi]

I would like to see them through the fault and it would be a plus if they could make good progress to the coal seam. In two or three weeks we should know if the drive to the coal seam is going to be relatively plain sailing or not. I'm not at all sure what progress the roadheader would make compared to the drill and blast used so far. The latest tunnel progress has them making 21m for the last week. Even at that rate they should be there by July.

[Unicorn]

The latest tunnel progress has them making 21m for the last week. Even at that rate they should be there by July.

There is a lot more progress than that. 21m tunnel, plus the last 22m of pit bottom roadway - and other work within pit bottom. One of the advantages of pit bottom in rock, compared to the original plan for pit bottom at the coal seam is the degree of parallel activity that can now take place.

[tim23]

Thanks american Physco - I had missed that, was good article.

[the machine]

There is a lot more progress than that. 21m tunnel, plus the last 22m of pit bottom roadway - and other work within pit bottom. One of the advantages of pit bottom in rock, compared to the original plan for pit bottom at the coal seam is the degree of parallel activity that can now take place.


and quick progress in a potentially methane free zone, compared to restrictions that lay ahead once past the fault.

M

[Mysterybox]

should of bought more.. should of bought more.. loving this as a first play =) been very exciting few weeks

[lakedaemonian]

I have to admit I'm a bit disappointed in having taken my short-term profits in PRC at 1.21 way back when before it dipped.

Seemed like the right thing to do at the time...good to see those who have stuck with it doing well.

I did hear the Pike River General Manager on Talk Radio this morning.

The conversation was in regards to staffing issues.

Only a handful of New Zealanders have applied for recent job openings.

But a heap of South Africans have been applying from their mining industry.

So it sounds like Pike River is suffering from the good kind of bad news constraining many successful businesses......too much work, not enough good staff.

He even specifically mentioned that folks without mining industry experience/qualifications were encouraged to apply........potentially sounds like a good opportunity in a growth industry for those with the bottle to do the hard yards.

Edit: Whoops.....not enough caffeine to break the haze.......I confused my equities........I was referring to NZO, NOT PRC...so scratch that.

[Dr_Who]

If oil prices continue to rally, it wouldnt surprise me to see PRC at $2.00 in the near future. Once they start to pump out the coal and the numbers come through, you may see institutional support. Abit like NZO, you only see real price movements once Tui started bringing in the oil and the numbers start showing.

[OutToLunch]

"He even specifically mentioned that folks without mining industry experience/qualifications were encouraged to apply........potentially sounds like a good opportunity in a growth industry for those with the bottle to do the hard yards."

Let's put that comment on the 'risk' side of the ledger.... potentially inexperienced staff working an underground coal mine. Pak N Save checkout staff might want to apply if they're keen on a career change?!

[lakedaemonian]

"He even specifically mentioned that folks without mining industry experience/qualifications were encouraged to apply........potentially sounds like a good opportunity in a growth industry for those with the bottle to do the hard yards."

Let's put that comment on the 'risk' side of the ledger.... potentially inexperienced staff working an underground coal mine. Pak N Save checkout staff might want to apply if they're keen on a career change?!

Possibly a risk......I'd be keen to learn more about Aussie mining industry OSH issues specifically in regards to VERY fast growing new projects.

If I were a young person working retail front of house...I think I'd be quite keen to consider a career change into something like Pike River...opportunity to make more money, advance up the food chain in a booming industry, and sock the money away for the next opportunity once the boom eventually fades down the line.

[digger]

I have to admit I'm a bit disappointed in having taken my short-term profits in PRC at 1.21 way back when before it dipped.

Seemed like the right thing to do at the time...good to see those who have stuck with it doing well.

I did hear the Pike River General Manager on Talk Radio this morning.

The conversation was in regards to staffing issues.

Only a handful of New Zealanders have applied for recent job openings.

But a heap of South Africans have been applying from their mining industry.

So it sounds like Pike River is suffering from the good kind of bad news constraining many successful businesses......too much work, not enough good staff.

He even specifically mentioned that folks without mining industry experience/qualifications were encouraged to apply........potentially sounds like a good opportunity in a growth industry for those with the bottle to do the hard yards.

This brings into focus just way you should have a buy and hold policy when you have a good handle on the fundamentals. Risk was everywhere on this project at the start.It was a good buy at the IPO and the cash issue because the NZ general investing public have little understanding of coal mining and were too inclined to overvalue that risk. Also i felt there was a too much down playing of the top management quality and their ability to overcome these problems as they rose.I invested all i could given that i am also building a new house.
My timing to look at first selling as comparied to holding for dividend is one year after first production.Note i did not say i was going to sell merely consider it then and not before. Say no sooner than August 2010.Pike at that point will probable peak with little remaining risk that so scares nZ and world investers. By then it will be a top going concern. On a policy like this you do not get taken out too soon on some broker need for commission just because you have made a small profit. I want a 5 or 10 banger.Greed is good for my bank account and that does not happen if you allow yourself to get taken out too soon.

[OutToLunch]

Don't get me wrong, it's a great opportunity for people to change careers (I was being tongue-in-cheek) -- but one does wonder about the safety implications of taking on staff who have never worked in an underground mine before. The risks are relatively high already simply because it's an underground coal mine. Throw in some inexperienced staff... it could be disastrous. I hope not. If I were managing the operation, I'd be taking experienced people from offshore ahead of inexperienced locals, even though I'd rather be supporting the locals otherwise.

[Robomo]

Don't get me wrong, it's a great opportunity for people to change careers (I was being tongue-in-cheek) -- but one does wonder about the safety implications of taking on staff who have never worked in an underground mine before. The risks are relatively high already simply because it's an underground coal mine. Throw in some inexperienced staff... it could be disastrous. I hope not. If I were managing the operation, I'd be taking experienced people from offshore ahead of inexperienced locals, even though I'd rather be supporting the locals otherwise.

It's a bit like the army - the non-commissioned officers (supervisors) are the key to training and maintaining standards at the coalface (no pun intended). The actual soldiers (workers) can be trained relatively quickly so long as there are experienced and competent sergeants/warrant officers (foremen / leading hands) to provide the on-site leadership and maintain safety standards.

Having seen what happens at an underground mine and been peripherally involved in mine safety and work I can say that a safe and successful operation will depend mainly on sound management strategies, policy and communication and experienced senior staff to implement those policies. The workers (even pak 'n Save staff!) themselves can be quickly trained to adhere to the standards imposed on them from the mine boss.

I hope I'm right having invested heavily in PRC (average buy of 90c per share so it's all looking good at this stage).

[AMR]

Solid Energy are advertising at Auckland Uni's career's day for the first time I think.

Anyway they are operating an apprentice programme for underground mining workers. The prerequsites are completion of high school.

[Scuffer]

Pike are not the only ones looking for experienced staff, training now will solve the problem but the staff they train today won't be experienced enough to fix the problem now, training will solve the present situation in 5-10 years, you can push apprentices through the system it only gives you a fix on paper, an experienced tradesmen takes a little longer, but management only see numbers. Pike have a problem like everyone else, some management see the problem of skills shortage as a governmental shortcoming, I say take the bull by the horns or the bear by the ring in its nose (as we are in a bear market) and create your own destiny.Pike need to offer the right money and conditions and train like there is no tomorrow because coal is going to be a massive earner for NZ, just become an employer of choice and the right staff will come knocking its what Cadburys did when they started to make chocolate. They just need to stop Fannying around looking for 22 reasons for someone else to fix it for them they need to manage it.

[Placebo]

Not sure if the Pak n Save model is the right one for PRC otherwise all the buyers would have to come and stuff their own coal in those trains :D

Anyway, GO PRC!! Up another massive cent today...!!

[baxter]

There are plenty of experienced coal miners in China.

[Mysterybox]

Solid Energy are advertising at Auckland Uni's career's day for the first time I think.

Anyway they are operating an apprentice programme for underground mining workers. The prerequsites are completion of high school.

Yes they were, not that I am studying engineering but I noticed their stall, can confirm this :)

[Sumnerned]

Good call Baxter.And who will end up owning NZO's shares in PRC?

[digger]

Good call Baxter.And who will end up owning NZO's shares in PRC?
the smart ones.

[tim23]

The Indians are already big, NOG could do a distribution to its shareholders just like they did with PPP, after all will they need the cash assuming the options are converted?

[digger]

The Indians are already big, NOG could do a distribution to its shareholders just like they did with PPP, after all will they need the cash assuming the options are converted?

Giving away PRC to NZO shareholders would devalue the holding. At 31% to 33%[with options converted] NZO holding would attract a commanding say in who gets what,which would be lost under a distribution.While NZO holds its stake it helps all the rest of us get a good price.Totaling up NZO stake plus the sum of our holding fron NZO we control the company so it is to us through NZO that a buyer has to deal. We do not want divide and conqure to be the name of the game.

[Dr_Who]

Agree with Digger. It is good to have a cornerstone shareholder to keep an eye on things. I dont think NZO will sell their stake at these prices, it will be like giving a $1m property away for $200k when it is only half built.

Looks like PRC is going higher. Maybe $1.50 in a few weeks?

[Dr_Who]

Australia's Newcastle Thermal Coal Price Rises for Third Week

April 21 (Bloomberg) -- Thermal coal prices at Australia's Newcastle port, a benchmark for Asia, rose for a third week as constraints on exports in New South Wales and Queensland limit supplies amid rising demand from power generators.

The weekly index for power-station coal prices at the New South Wales port gained $5.51, or 4.4 percent, to $130.93 a metric ton in the week ended April 18, a seven-week high, according to the globalCOAL NEWC Index.

The port, the world's biggest coal-export harbor, increased shipments of the fuel by less than expected in the first quarter as wet weather and a lack of available coal crimped loadings early in the period. Xstrata Plc, the world's largest exporter of power-station coal, in February declared force majeure on deliveries from its Newlands mine in Queensland after heavy rain.

``It's still a very tight market,'' said Clyde Henderson, a Sydney-based analyst at Barlow Jonker Pty, a unit of Wood Mackenzie Consultants Ltd. ``It will be quite a long time before things do much in New South Wales or Queensland and it's still not exactly wonderful out of South Africa and China as well.''

South Africa's mining output declined for a fifth month in February after a national power shortage, Pretoria-based Statistics South Africa said April 10 on its Web site. China turned a net coal importer in the first three months of the year as it reduced exports to ensure domestic supply during the heaviest snowstorms in decades.

The weekly globalCOAL index is up 46 percent so far this year. Force majeure is a legal clause allowing a supplier to miss contracted deliveries due to circumstances beyond its control.

Shipments at Newcastle's two coal terminals rose 6.8 percent to 22.26 million metric tons in the three months ended March 31, from 20.84 million a year earlier, Port Waratah Coal Services Ltd. said in a report on its Web site this month. That's an annualized rate of 89.5 million tons, less than the planned 95 million tons.

source: Bloomberg 21 April 2008

[tim23]

But if NOG had plenty of cash why wouldn't they distribute PRC shares? after all they have stated they want to focus on oil & gas not coal; if I were betting I'd go for the free distribution.

[the machine]

But if NOG had plenty of cash why wouldn't they distribute PRC shares? after all they have stated they want to focus on oil & gas not coal; if I were betting I'd go for the free distribution.


nzo will extract a huge premium for such a large stake,thats why most if not all will be sold as a bigstake.

no one will know if the indians / others, have a pre-emptive right to buy them by matching any offer, until the time comes in 2-3 years when nzo dispose of the asset.

perhaps an option could be to sell a 25% stake and free distibute remaining to nzo shareholders on a 1 fotr 10 basis.

but that is years away.

M

[Steve]

no one will know if the indians / others, have a pre-emptive right to buy them by matching any offer, until the time comes in 2-3 years when nzo dispose of the asset.

If such a pre-emptive right does exist, it would have been disclosed under the listing rules by way of an interest in a substantial shareholding...

[RossT]

Strike looms at Lyttleton Port

Lyttleton port company has issued Solid Energy with a notice of "force majeure" saying it can not guarantee to meet any coal handling/ ship loading contracts due to pending Strike action by employees.

A sign of potential future trouble for PRC without a doubt.

http://tinyurl.com/5uk2ym

[zac]

There seem to be continuing industrial problems at lyttleton. Is this because the Christchurch City Council politburo are seen to be fellow travellers and a soft touch?

[COLIN]

There seem to be continuing industrial problems at lyttleton. Is this because the Christchurch City Council politburo are seen to be fellow travellers and a soft touch?
Exactly. I couldn't have expressed it better myself.

[Mysterybox]

How long does a strike of this proportion generally last though? Have we had any other similar examples?

[Scuffer]

I've said all along this could be a problem for PRC but will it effect the sp the whole thing better be sorted by the time we get coal to a train or we could be in trouble and we will be looking at a sp drop but it can't go on for ever and I'm sure that LPC wouldn't be so stupid as to let it drag on, we are not in an economic climate for hammering out unions, the workers have a lot going for them these days most companies cannot find staff or retain the quality they already have,LPC may have to eat a little humble pie and hammer the unions when they have an economic climate to do so, a bird in the hand so to speak.I will not be happy if I see paper profits disappear.

[Steve]

How long does a strike of this proportion generally last though? Have we had any other similar examples?

A few years ago when there was a strike at LPC, a lady on the picket line died after being run over by a guy who was being harrassed in his vehicle while trying to cross the picket-line.

Hopefully the wharfies will remember to behave better this time around...

[Billy Boy]

Would'nt be hard to send the coal down the line to Timaru.
Pike to set up it's own stevadoring Co (like the alumimium co in Bluff)
Then Solid energy would be happy, pike would be happy, Timaru would be very, very happy, and the 1950's style/modeled LPC and union would be
very unhappy. The last shambles just about cost CHCH city council/LPC and the Union everything. A major container shipper went to Timaru if I
remember correctly, and another threaten too. Union had to pull their heads in or lose their jobs. (and port). There again maybe a pay increase is in order, I dont know.
BB

[Dr_Who]

Strike looms at Lyttleton Port

Lyttleton port company has issued Solid Energy with a notice of "force majeure" saying it can not guarantee to meet any coal handling/ ship loading contracts due to pending Strike action by employees.

A sign of potential future trouble for PRC without a doubt.

http://tinyurl.com/5uk2ym

Good excuse to pick up some cheap PRC if the sp tracks back significantly.

[RossT]

Good excuse to pick up some cheap PRC if the sp tracks back significantly.

Definitely my intention. I sold out this week for 134, bought back in at 132, and then sold out yesterday for 137.

Absolutely loving PRc at the moment, how could we not with a 50% + return on the rights issue shares already in such a short space of time.

Still, I'm hoping this Port situation may give me an opportunity to get back in, in the low 30's.

[bermuda]

Good excuse to pick up some cheap PRC if the sp tracks back significantly.

Exactly Dr Who, exactly!!!

Probably the most undervalued coal stock in the southern hemisphere.

[Dr_Who]

I havnt sold any PRC. But will pick up more stock if there are any significant drop in the sp. I believe coal will continue to climb in the future with India and China needing some major infrastructure development. Do you know how much steel and other resources they will need to improve their infrastructure? China and India will need huge amount of coal to power the electricity sector and steel production.

[Scuffer]

Would'nt be hard to send the coal down the line to Timaru.
Pike to set up it's own stevadoring Co (like the alumimium co in Bluff)
Then Solid energy would be happy, pike would be happy, Timaru would be very, very happy, and the 1950's style/modeled LPC and union would be
very unhappy. The last shambles just about cost CHCH city council/LPC and the Union everything. A major container shipper went to Timaru if I
remember correctly, and another threaten too. Union had to pull their heads in or lose their jobs. (and port). There again maybe a pay increase is in order, I dont know.
BB
Billy when Timaru is the size of ChCh and ChCh has shrunk to the size of Timaru, LPC might worry, until then or the next Tsunami I think LPC will stay the port for the south island and shipping companies will still go there its where their market is.

[Billy Boy]

Billy when Timaru is the size of ChCh and ChCh has shrunk to the size of Timaru, LPC might worry, until then or the next Tsunami I think LPC will stay the port for the south island and shipping companies will still go there its where their market is.
Scuffer
The size of the town/city has got bugger all to do with loading coal.
Tsunami !!! what the hells that got to do with anything.
Coal ships are purpose built. so if LPC is going to stuff PRC around
then PRC will start looking at alternatives very quickly.
Timaru is only one option.
BB

[temuk]

Port of timaru would probably bend over backwards at the
moment as Mersk and Hamburg Sud have annonced they are pulling out.
In the past they have loaded bulk woodchips from Timaru.

The distance would only be about 100km further to Timaru from Rollerston.

[Billy Boy]

Port of timaru would probably bend over backwards at the
moment as Mersk and Hamburg Sud have annonced they are pulling out.
In the past they have loaded bulk woodchips from Timaru.
Temuk
Mersk & Hamburg. Do you know where they are going ??
Gossip has it that Bluff will be doing a lot more chips, but
that may well be from local maturing sources.
BB

[Sideshow Bob]

Coal is the new gold
By JENNY RUTH - Sunday Star Times | Sunday, 27 April 2008


It's likely to make greenies shudder but the prospects for Pike River Coal just keep getting better.


The company is still drilling its 2300m tunnel with about 250m to go before it hits the coal seam and starts producing the black stuff, expected in July.

The price of coal, particularly the premium hard coking coal Pike River will produce, just keeps rising.

Pike River has pre-sold 70&#37; of its first three years' expected production and 55% of expected production for the life of the mine, most of it to its two cornerstone Indian shareholders, Saurashtra with 10.2% and Gujarat with 9.4%. The price will vary every year, benchmarked off the price set between the major Queensland producers and their Japanese customers.

The company is expecting to produce only 200,000 tonnes in the year ending June 2009, but forecasts an increase to about a million tonnes a year thereafter.

When Pike River floated in mid-2007, it was forecasting a price of $US101 ($126.53) a tonne. By the time it issued its rights issue prospectus in January, it was expecting something above $US130 a tonne for the year beginning April 1.

Now, managing director Gordon Ward says the price is likely to be close to $US300 a tonne.

That's based on BHP Billiton's acknowledgement earlier this month that market rumours were on the mark. Rather than spell out actual prices, the big Australian said it expects pricing to increase by between 206 and 240%.

BHP said it had reached settlements initially with customers outside Japan and "more recently with key Japanese customers".

BHP's followed a similar announcement from South Korean steel maker Posco. Another coal giant Xstrata is reported to be holding out for more than $US300 a tonne.

The Goonyella, Queensland, price used in the company's prospectuses was $US96 a tonne last year.

A number of one-off factors, including flooding of Queensland mines in February, electricity problems in South Africa and snowstorms in China, have contributed to short-term supply problems which have bumped up the price temporarily. But there are also underlying fundamental demand factors driving prices higher: voracious demand coming from China and India.

Analyst Jason Familton at First NZ Capital says the Asian coal team at sister broking firm Credit Suisse are predicting China will need an additional 100 million tonnes of lesser- quality thermal coal by 2010 if its current power demand continues at current levels. They also expect India will need another 35 million tonnes if its power generation growth picks up 4%. Familton says the underlying drivers are similar for coking coal.

Familton is now expecting Pike River's coal price will average about $US95 a tonne long-term, up from his previous $US80 assumption. That's near the middle of current market expectations ranging between $US80 and $US120 a tonne. And it's way higher than historical prices: industry newsletter the McCloskey Coal Report shows Goonyella coal sold for just $45.30 a tonne in 2003.

Ward isn't so sure about those long-term predictions. "It's going to take a few years for prices to drop to that level."

He points to what's been happening in the oil market, saying it took a long time for people to realise that a step- change upwards in pricing was occurring, rather than any short-term blip.

Analysts' predictions "may turn out to be a little on the conservative side", Ward says. He's heard Canadian coal producers are struggling to make any money at prices below $US100 a tonne which is likely to put a floor under the price. "We may see longer-term coal prices stay higher for longer but who knows how much."

Not surprisingly, Pike River shares have been among the best performers on the stock market recently. They traded as high as $1.35 last week, well above the $1 float price and the 90 cents rights price. Since it listed, the benchmark Top 50 Index has shed about 15%. The shares are still well below analysts' valuations which, if Ward is correct, my prove to be overly conservative.

Familton has a $1.39 valuation but a 12-month target of $1.55 and rates the stock "outperform". Guy Hallwright at Forsyth Barr has a $1.45 valuation and an "accumulate" recommendation. Perhaps not so surprising since his firm is Pike River's sponsoring broker and underwrote the rights issue (it was over-subscribed), John Kidd at McDouall Stuart is the most optimistic with a $1.75 price target.

http://www.stuff.co.nz/4498521a1865.html

[Mysterybox]

Based on the prior post, would it be true that some estimates here are less conservative for PRC?


The company is expecting to produce only 200,000 tonnes in the year ending June 2009, but forecasts an increase to about a million tonnes a year thereafter.

An increase of a million tonnes a year after?
Is this one of the main prospects for peoples long-term holding of PRC? Thats a serious increase from 200,000.

TIA

[Tok3n]

Those figures were in the prospectus

nothing new..

[Rabbi]

Those figures were in the prospectus

nothing new..

The one million tonnes a year is not conservative but "out of the ball park" in my opinion. Experienced coal miners suggest that a target of one million tonnes a year will be hard to achieve, but if the market believes it what the heck. I suppose it's possible, but everything would have to go extremely smoothly inside ther mine, no gas issues, coal falls etc.etc.

[Mysterybox]

Sorry let me re-phrase that, by conservative I was refering to the SP targets. As mentioned in the article the highest is $1.75 but a few posts have been suggesting $2+ (long term), I am just asking (being new to this) whether we're being less conservative with our shareprice estimates?

[AMR]

The production ramp up was noted as "medium risk" but AMF consulting. Reasons given were that it was a relatively unproven technology, no one had ever done these sorts of volumes with hydraulic mining but at the same time solid energy have used hydraulic mining for a while now.

[sideline]

The projected increase in production comes mainly from a change in mining technique:
Initially (first year) mining will be mainly by road-header machine, grinding through the coal
and developing the layout of the mine. This is a slow process.
Once this is done the bulk of the volume will come from hydro-jet mining which is expected
to be a much faster and more efficient process.

[Dr_Who]

These conservative valuations are based on the average long term cola price of $95. Coal prices are currently at $300. The real question is, what is the real average long term coal price? If you believe in peak oil and that China and India continues to boom, then you would believe the average coal price to be above the $100 mark easily.

[temuk]

Temuk
Mersk & Hamburg. Do you know where they are going ??
Gossip has it that Bluff will be doing a lot more chips, but
that may well be from local maturing sources.
BB

Sorry about the delay Billy but here is some of the report in the timaru herald 20th March.

"A huge blow has been dealt to the South Canterbury economy with more than half of Prime Ports trade to be lost to Port Chalmers.
Container lines Mearsk and Hamburg Sud have announced they will combine their container services currently operating throught Timaru on the USA and Europe .They will be replaced with a smaller service once a week feeding into Port Chalmers."

It goes on to say "they are doing 100,000 20 foot equivalent per year
and container exchanges of over 1000 per ship."
" Mearsk Line said the change was caused by increasing fuel costs."

If you want to know any more let me know, the paper is at the top of the heap!

[morv]

if their cornerstone shareholders are prepared to equal the spot market they will only have to mine 350000 ton in year 2 to achieve their revenue target if they originally did their budgets on 100 to 120

[Billy Boy]

Temuk
Tks for that. Sad day for timaru. It shows one thing, that they dont wont to go back to LPC in any big way. If I remember correctly, they left PLC
for Union reasons. I have a large holding in PRC . Lets see how this union thing pans out and how Pike respones.
Cheers BB

[duncan macgregor]

The LPC bastard pom union will be good for PRC share price movement. Over the long term it will only have a dampening effect on the share price. As long as there is a decent share turnover to get in and out like a robbers dog then no worries. Thats when it pays to talk nice to the tea lady, to find out when the next blackmail threat is on the cards.
I used to get the insides from POA, and POT, which stood me in good stead which i shared in the forum. Any watersiders down there in the forum, can do the boys and girls a favour by letting us all know when it might happen.
If i was silly enough to live in Christchurch my first priority would be to get to know a watersider. Macdunk