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Pike River gains $25m short-term facility from NZOG

Thursday 30th September 2010

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Pike River Coal, whose long-serving chief executive Gordon Ward leaves next month, said it has agreed terms with 29% owner NZ Oil & Gas for a $25 million short-term working capital facility that allows it to complete mine development. 

Pike will pay an interest rate of 13% for the facility, with establishment and monitoring fees of $600,000. The facility is repayable on December 15.

Pike will also ask shareholders to extend NZOG's coal option, which allows it to purchase coal at market prices, through until March 2013.

"Pike River is now producing its highly valued coking coal and the first two shipments have been exported," said NZOG chief executive David Salisbury.

"But with the underground mine roadways still being developed and hydro-mining equipment in the commissioning phase, Pike River currently requires further working capital."

The shares last traded unchanged at $1.15.

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