A recent article that has appeared in the (NZ) Christchurch's...

A recent article that has appeared in the (NZ) Christchurch's "The Press" newspaper looks at the rapid rise of PRC's share price.

Here is the article : -

Pike River Coal's share price is experiencing a surge both in New Zealand and across the Tasman as it benefits from a resurgence in the resource sector. There are also signs of recovery in the steel industry.

A 39 per cent increase in its share price in Australia prompted a query from the Australian Securities Exchange as shares in the dual-listed West Coast miner rose from A$0.61c on May 1 to a high of A$0.85c on May 8.

The shares closed yesterday at A$0.87.

In New Zealand, the shares have risen from 75c on April 29 to $1.08 yesterday, a 44 per cent increase.

Responding to the ASX, Pike River managing director Gordon Ward said the company was not aware of any information that had not been announced.

However, he noted two recent broker reports had re- rated the company's share price outlook and there had been positive news relating to the steel industries in China and India.

Ward told BusinessDay yesterday there were signs of recovery coming out of the Indian and Chinese steel industries, which used hard coking coal.

"That's probably the main reason for resource stocks having appreciated quite considerably over the last month."

Grant Williamson, director of sharebroker Hamilton Hindin Greene, said two factors had probably influenced Pike River's share price.

Its successful $45 million capital raising would have had an impact, but the biggest factor was probably a boost in the resource sector due to international commodity prices going up.

Williamson said he expected the next big move in the share price would come when Pike River had successfully reached production, which will happen in June.

Ward said the increase in the share price had justified the decision from shareholders to further invest in the company during the capital raising.

The company was negotiating its coal price for the March 2010 year and expected to get about US$128 a tonne based on the numbers being achieved by the big Australian miners. It was more than the US$95 Pike River had signalled in its prospectus.

The price would be confirmed in the next couple of months, Ward said.