Pike River has stock halted

Monday 16th March 2009

Pike River Coal, the mining company raising $45 million by selling shares to cover unforeseen costs until it can produce coal, had its stock halted from trading pending an announcement.

The shares had gained 1.3% to 81 cents prior to being halted and are down 11% this year. Pike will issue ordinary shares and bonus options. The fundraising includes a $41 million renounceable pro rata rights issue to shareholders and a $4 million placement to a major institutional shareholder.

The offer is for one new share and one bonus options at 70 cents for every five Pike share held.

The sale of shares comes after a rock fall in a ventilation shaft last month that temporarily halted mine operations. The rock fall has delayed the ramp-up of production for two-to-three months and put back the first coal sales proceeds until the third quarter.

By Jonathan Underhill

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