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Pike River loss widens ahead of mining

Wednesday 25th August 2010 10 Comments

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Pike River Coal's annual net loss widened, reflecting the continued development of its West Coast mine.

The loss widened to $39 million for the year ended June 30, from $13 million a year earlier but it received payment of $3.3 million for its first shipment of premium hard coking coal in February.

Hydro-mining, the main method Pike will use, is due to start next month.

Pike says a further $25.2 million was invested in the mine during the year, bringing the total invested to $288.1 million after $11.2 million of depreciation charges.

The company burned through $47.5 million in cash in the year, up from $7 million the previous year. Pike had $20.6 million of cash left at June 30.

Pike, which listed in May 2007, has been plagued with delays and cost-overruns in developing the mine. Earlier this year it raised a further $90 million, its fourth equity raising. The IPO prospectus had forecast the West Coast mine would cost $174m to develop.

Pike shares fell 1% to 96 cents, compared with the 88 cents issue price for its latest capital raising.

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Comments from our readers

On 25 August 2010 at 4:19 pm Pike investor said:
Any more delays and managment should stop getting paid, after all were not making a bean.
On 25 August 2010 at 6:27 pm Happy Pike Investor said:
Perhaps you should have a look at the second announcement made today. Sounds like Pike are very close to getting the show on the road finally!!
On 25 August 2010 at 8:59 pm murray pearce said:
Has the price of coal not doubled during the delay-Can that be all bad
On 26 August 2010 at 9:07 am rjm said:
Pike shows all the signs of a operation that is controled by management that have little true understanding of the the mining developement which has lead to forever over promising & under performing. They have just got to many things wrong to stay in charge.
On 26 August 2010 at 1:53 pm Christopher said:
Is that a 64% development cost over run? That being the case then i think rjm has a valid point- the board and management have proved to be disappointing operators.
On 26 August 2010 at 2:57 pm Pike investor said:
The management command big fat salaries for absolutely no results. Where is the responsibility? accountability? Heads need to roll. Any more delays are unacceptable.
On 26 August 2010 at 9:49 pm Disenchanted Kiwi said:
I can only blame myself for investing in a government backed and promoted promise. I should have known better. This investment is turning into another form of social welfare for company management with contributions this time coming directly from the taxpayer/investor without going through Inland Revenue. Invest in NZ say the government. Give me more money says the company. Bullshit says me.
On 27 August 2010 at 7:42 am rob chamberlain said:
What is everybody's problem? I have a truck load tied up in this company and if it takes more time and money to get started what? may be all these moaning traders should stand aside and leave coal mining to real investors with some spine.
On 27 August 2010 at 1:59 pm Christopher said:
Pleased to see Rob C is happy with his investmentment - but then we aren't all traders and we aren't all wealthy enough to just blithely have a bundle added to the bill after we buy something.
On 3 September 2010 at 6:52 pm lofty said:
I have a few bob tied up in PRC, but I have to ask, $1 spent 2 years ago, vs $1 spent now - who's gonna be regretting two years ago? Regardless, wait 'till the hydro cutters kick in . . !
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