21 Oct 2009

Pike River Coal needs more cash

12:27 pm on 21 October 2009

Pike River Coal needs more cash to fund development of its Brunner mine on the west coast of the South Island.

The listed coal company says it needs an extra $20 million to fund its operations in the first half of next year. It is considering whether to raise debt or issue new shares.

Pike River Coal says the options for raising the extra cash include international coal customers who are interested in securing a long term supply contract taking a stake at a premium to the coal miner's current share price.

In August, Pike River said there would be another delay in shipping its coal offshore, with delivery to customers not expected until the first quarter of next year.

It is still seeking an extension from Liberty Harbor to a $US27.5 milion funding agreement, as it won't meet its target of producing at least 800,000 tonnes by November next year.

If it does not obtain that agreement, Pike River remains confident it can pay back the money owed back, and fund the cost of producton.

Meanwhile, the company says its first shipment will up between 20,000 - 30,000 tonnes in the first quarter next year - half what it previously expected to export.