analyst's opinion

NZ coal mine may be worthless after blasts
November 25, 2010 - 1:15PM

?It's their only operating asset, and it's shut, and it's going to be shut for the foreseeable future,? said Cameron Peacock, a market analyst at IG Markets Ltd. in Melbourne. ?You can't see it opening anytime probably within the next six to 12 months. The near-term future is going to be pretty bleak.?

New Zealand Oil & Gas, Pike River's largest shareholder, this week had its biggest share drop on record after resuming trade following last week's first explosion. Prime Minister John Key said yesterday he expects cabinet next week to approve a commission of inquiry into the blast.
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?Given the high level of uncertainty regarding the nature of the incident, it is impractical to usefully discuss its potential value implications,? Macquarie Group said in a note, cutting its recommendation to neutral from outperform. ?However, it must be highlighted that a possible result is the current equity of Pike River Coal could become worthless.?