Specialist West Coast hard-coking coal miner Pike River has posted a tripling of after-tax losses at $39 million for the year to June, highlighting that it is still in development phase with full-mining operations scheduled to begin in mid-September.
During the past almost three years Pike River, which was spun-off by present 29.5% shareholder NZ Oil & Gas in May 2007 raising $85 million, has spent $288 million.
Pike's 2.3km tunnel into the rugged Paparoa Ranges, 50km northeast of Greymouth on the West Coast, is targeting full production rates of 1 million tonnes per year over 18 years; with coking coal being a key ingredient in steel manufacturing overseas.
Pike shareholders, who have been tapped three times since listing with further rights issues, will receive no dividends this year.
Forsyth Barr broker Peter Young said the result was in line with the expectations of a start-up company.
However, he was "more certain that additional debt will need to be found", probably from NZ Oil & Gas, with up to $10 million being needed.
"On the positive front, it appears everything is on track for the hydro-mining start in about three weeks," Mr Young said.
During the past three years, shareholders have borne more than $50 million in cost overruns from geotechnical issues and a ventilation shaft collapse, all compounding to a more than 20-month delay to its inaugural $3.3 million coal export in February.
Shares in Pike were trading around $1 in January and were steady around 96c yesterday.
Craigs Investment Partners broker Peter McIntyre said the result was slightly worse than the $34 million loss he anticipated, but still being in development mode he was "not overly concerned with the outcome".
"They have a schedule for [full] mining operations in sight ... and picked up a $13 million one-off tax charge, which could be used to off-set tax losses later," Mr McIntyre said.
Pike River, which expects its imminent second export delivery is worth about $6 million, booked a $13 million loss the previous year, compared with the $39 million for the most recent financial year.
