Daily Share Chat: Pike River Coal
By Jenny Ruth
Pike River Coal's December quarter operations report highlighted the need for the company to raise more capital than the originally planned and he expects it will be closer to $40 million, says Forsyth Barr analyst Andrew Harvey-Green.
"The rock graben facing Pike is taking twice as long as expected to get through."
While Pike said in early December it might be as little as three weeks away from reaching coal, more than six weeks on it appears the company is still two weeks away, Harvey-Green says.
"This is frustrating for Pike and investors alike."
The setback means hydro-mining has been delaying, hitting Pike's production forecasts for the year ending June by between 120,000 and 150,000 tonnes.
Fixed mine operating costs and less revenue is driving the amount of capital needing to be raised, he says.
"On the positive side, spot coal sales have continued to rise and the latest reports we have seen suggest a spot price of around $US190 a tonne."
Much of the price rise is due to a weak US dollar but strong demand for coking coal from China has been just as important, Harvey-Green says.
The price rise has almost offset the impact of the delay on his $1.19 a share valuation, he says.
Recommendation: hold. Daily ShareChat articles report how the main experts in the market might view a certain share and we provide this commentary as a useful resource for investors. Content on this site does not in any way constitute a recommendation to buy, hold or sell any particular share. Investors should always seek professional advice before making any investment decisions.
Related News
Pike to meet cash shortage with $50m fund-raising Pike River makes first export shipment as investors await capital raising plans Global coal prices set to jump, says McDouall Stuart Pike River posts loss, seeks bond extension Daily ShareChat: Pike River Coal
NZX Annoucements for PRC
|
Pike River Coal Limited Ordinary Shares
Current quote:
PRC $0.93 +2
Quotes delayed 20 minutes
Price when article published: $1.00
Sharemarket News By Email
Previous News
Stock Quote
At a Glance
| NZX 50 Index |
3226.19 |
 |
13.00 |
| S&P/ASX 200 |
4820.00 |
 |
0.10 |
| Dow Jones Industrials |
10564.40 |
 |
11.90 |
Comment & Analysis
|
“
In response to one of my previous blogs some readers took offence at my use of the phrase “unsafe marketing practices” to describe certain actions undertaken by the Huljich KiwiSaver scheme.
For example, boredacademic wrote: “Some ‘unsafe marketing practices’! Any questionable practices, minor or not, in this industry should make anyone run a mile.”
And the boredacademic [...]
”
David Chaplin More »
|
|
|