Auckland, Feb 27, 2009 AEST (ABN Newswire) - Pike River Coal Limited (NZE:PRC) reports a net deficit of NZ$9,551,000 for the six months ended 31 December 2008. The result reflects the pre-production status of the Pike River premium hard quality coking coal mine and the effect of the significant decline in the New Zealand dollar exchange rate relative to the United States dollar, on the convertible bonds held by Liberty Harbor. An unrealized exchange loss of A$10.8 million was reported on the convertible bonds, and this loss will reverse if those bonds are converted into shares during their term (expiring March 2011).
Pike River made the breakthrough to coal during the half year ended 31 December 2008 and has now completed all surface infrastructure needed for mining.
Some geological challenges in the tunnel and pit bottom area have been encountered and overcome in the past six months. Most recently, work has been required to remedy an unexpected rock fall in the lower portion of the ventilation shaft. The timing was unfortunate coming just as Pike River was about to commence its ramp-up of coal production.
On the international front, the hard coking coal market appears to be in reasonable shape despite the international downturn. Self-restraint exercised by major coal producers in cutting back production and signs of recovery in China are expected to support coal prices at levels significantly higher than forecast at the time of Pike River's 2007 initial public offer.
At the mine all surface infrastructure has been completed and commissioned including the coal preparation plant and rail loadout facility. Once the ventilation shaft is reinstated the company will work through a ramp-up period to achieve full production in the fourth quarter of 2009.
All the construction challenges to date have been overcome through the commitment of Pike River's skilled staff and the contract staff of the award-winning McConnell Dowell construction company. McConnell Dowell shouldered much of the work of cutting the 2.3 kilometre access tunnel, carving out pit bottom and constructing the ventilation shaft.
Throughout this process the Pike River mine has maintained a solid safety record, with no significant injuries or safety issues above or below ground.
Pike River has been recognised by the Government for its efforts in safeguarding an outstanding scenic environment by harmonising a commercial mine with its natural surroundings.
Once the shaft is fixed, the stage will be set for a successful long term mining operation, with a strong revenue stream from exports of a high quality product.
Reporting period: 6 months ended 31 December 2008
Previous reporting period: 6 months ended 31 December 2007
------------------------------------------------------- 6 months to 6 months to Increase/ 31 Dec 08 31 Dec 07 (decrease)------------------------------------------------------- NZD 000's NZD 000's %Operating revenue - - -(Deficit)/surplus fromordinary activities aftertax attributable tosecurity holders (9,551) (1,579) n/aNet (deficit)/surplusattributable to securityholders (9,551) (1,579) n/a------------------------------------------------------- As at 31 As at 31 Increase/ Dec 2008 Dec 2007 (decrease)-------------------------------------------------------Net tangible assetsper share(1) $0.734 $0.765 (4)%------------------------------------------------------- Amount per Imputed amount security per security-------------------------------------------------------Interim/final dividend n/a n/a-------------------------------------------------------Record date n/aDividend payment date n/a-------------------------------------------------------
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