Found this article which is just out this morning. Bit long but...

Found this article which is just out this morning. Bit long but well worth the read.
The opening paragraph is particulary interesting in that Pike is considering sending some small shipments to India to provide a bit of cashflow.
I guess 20,000 tonnes sold at US$128 per tonne could be worth a bob or two.........like about US$2.5 million.

Here is the article:

"Pike River eyes shipping coal to shareholders


By MARTA STEEMAN The Press | Wednesday, 26 Aug 2009

Pike River Coal is considering small shipments of coal to its Indian shareholders to bring in some cash.

Yesterday the West Coast mining company announced a further delay to its first planned shipment of coal 60,000 tonnes to a Japanese customer.

The date was pushed out to January to March next year, sending the Pike River Coal shares tumbling 11 cents to $1.03. That shipment is worth $26 million.

Managing director Gordon Ward said the possibility of small shipments of coal 20,000 to 30,000 tonnes to its Indian shareholder-customers was being considered, which could bring in cashflow. The shareholders are Saurashtra Fuels Private and Gujarat NRE Coal (NSW) Pty.

The delay in the 60,000 tonne shipment to Japan has been caused by various production problems at the mine.

The delays have a cost, but Ward said "we don't think it will be a significant amount".

It was well positioned to handle that with an operating coal mine, a healthy international market for coal driven by China and India. The spot price was around US$160 (NZ$233) a tonne, he said.

The company reported a $13m loss for the year to June 30 2009. A loss was expected because the company is completing mine development and was not in production until early June.

The delay to having the Pike mine in production has ramifications for its US$30m three-year convertible bonds bought by US-based Liberty Harbor.

Pike is seeking an extension of six months to the condition in the bond deal that the mine be capable of producing 800,000 tonnes of coal in the 12 month period ended November 30 next year.

Asked what cost might be sought by Liberty Harbor for an extension, Ward said he hoped "nothing".

Pike has already had to shoulder a higher interest rate on the bonds from April this year. The 6.75 per cent coupon rose 4 per cent to 10.75 per cent.

Pike will pay the extra 4 per cent by issuing additional bonds in January to Liberty Harbor unless it has repaid it in full before the end of December.

Liberty Harbor chose during the June 2009 year to convert 50 convertible bonds worth US$2.5m into Pike shares. Ward was not sure if Liberty Harbor still held the shares or had sold them.

A breakdown in three new coal cutting machines imported from "well-known" German manufacturer Wirth had caused production delays.

Ward said the tracks on the machines had broken and would have to be repeatedly "patched" to keep them going while new tracks were supplied at no cost to Pike from the German manufacturer.

The new tracks would not come until December.

Ward said it appeared Wirth had outsourced the production of the tracks to a company in Vietnam that had used inferior metal.

Pike could not make a claim on Wirth because "significant" manufacturers like Wirth did not expose themselves to those sorts of provisions in their contracts, Ward said. Each of the machines cost about $5.5 million.

A greater level of roof support megabolts eight metres long than expected was needed in the mine due to the 180 metre proximity of the Hawera fault. The fault had imposed more complexity than anticipated, Ward said.

Pike was taking time to familiarise staff with new machines and mining practices. There were now 137 employees and the company was having to spend more time managing the crews.

A consultant from Australia reviewed underground work practices and advised more ongoing maintenance of coal and rock hauling machines and intensified operator training."


END OF ARTICLE