Listed hard-coking coal specialist Pike River Coal has put back its inaugural coal shipment by six weeks until mid-November but says it will meet the deadline of a convertible bond holder to have "steady" production by the end of November.
Pike also announced striking a deal with Japanese steel producers to deliver coal, an integral part of the steel-making process, at $US128 ($NZ195) per tonne.
The $US128 was an anticipated price and matched benchmark prices achieved by major Australian coal producers, Pike River chief executive Gordon Ward said in a statement.
However, 14 months ago Pike was contracted to deliver its first coal at $US300 per tonne and its management and analysts were confident at the time that the 2009-10 prices would be in the $US270-$US300 range.
ABN Amro Craigs broker Peter McIntyre said Pike "exhibited all the problems" associated with any mining venture start-up, including delayed production, fluctuating commodity prices and financing issues during the credit crunch.
"They are running a fine line to reach the November deadline. But they have the backing of major shareholders," he said of the potential for bond holder Liberty Harbor to make a claim for Pike missing its deadline condition.
Mr Ward said the first 60,000 tonnes of coal for export to Japan was delayed because of "teething problems" in getting production under way - a delay which follows a rock fall in February which impeded mine development by eight to 12 weeks.
"Pike River has sufficient funding in place to accommodate the [six-week] delay and it is on track to meet the Liberty Harbor convertible bond condition that first steady-state production is demonstrated by November 30, 2009," Mr Ward said.
The Liberty bond condition requires Pike River to be capable of producing 800,000 tonnes in the following year to November 30, 2010, or face penalties.
"The mine infrastructure is in place and once hydro-mining commences, the Pike River mine will be capable of producing in excess of one million tonnes per year," he said.
Liberty Harbor LLC has $US27.5 million in convertible bonds and could call on Pike to hand over 2.3 million ordinary shares, or the cash equivalent, if the November 30 deadline is missed.
At a share price of $1.12 the 2.3 million ordinary shares would be worth $2.576 million.
Pike River, which raised $41 million in a rights issue in April and could reap a further $73 million from future bonus share options, has said if necessary Liberty Harbor could be paid from the rights issue.
