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Pike River answers clearer by tonight; NZOG and PRC in trading halt

Monday 22nd November 2010

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Fresh efforts to drill an inspection bore hole into the Pike River coalmine and to send a New Zealand Army bomb disposal robot into the main mineshaft mean there may be answers by the end of the day about the fate of 29 miners trapped underground at the site.

PRC chief executive Peter Whittall and Greymouth police superintendant Garry Knowles told a press conference this morning that they hoped to have a clearer picture of conditions in the mine by the time they next report to media, expected to be late afternoon today.

Meanwhile, PRC and its 29% shareholder New Zealand Oil & Gas have had their shares suspended on the New Zealand and Australian stock exchanges following last Friday's explosion.

The companies have given no indication of when the halt was likely to be lifted, but the trading halt in Australia will remain in place until at least Tuesday.

"While in the trading halt, information will be prepared for release to the market on the possible implications for NZOG," the company said in a statement. "We expect to make that release before markets open tomorrow."

Yesterday, the company began drilling a borehole into the mine to assess the gas levels in the mine's air before letting Mines Rescue teams enter, according to a statement by Pike. The borehole is expected to be complete by midmorning, although Pike cautioned that unstable rock could slow progress.

The explosion is the latest in a series of setbacks for Pike. The coal miner just got away its second export shipment of high value coking coal in September, but has been forced to cut its production forecast for the year by almost half to 340,000 to 360,000 tonnes after delays in underground road construction and equipment installation stalled its hydro coal mining operations.

Earlier this month, the company held its annual meeting expressing the hope that its troubles were now behind it and that the mine would reach full production next year, two years late.

In 2009, Pike's mine suffered a rock fall in the lower section of its 108 metre ventilation shaft, which delayed production for around three months.

That same year, production was further delayed after three of the company's imported coal-cutting machines broke down.

Pike fell 4.4% to 88 cents on Friday before the trading halt, as was last at 61 Australian cents on the ASX, while NZOG fell 4% to $1.20 on the NZX, and was last at 92 Australian cents on the ASX.

Shares of Indian stock exchange-listed Gujarat NRE Coke, which owns 17% of PRC, fell 1.7% on Friday to Rs.55.70, following the news.

BusinessDesk.co.nz



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