Interpac Business and Migration Solutions Melbourne Australia

November 23, 2009

Pike River Coal expects to gain an extension to the production condition on its $US27.5 million ($A30.05 million) Liberty Harbor convertible bonds.

Pike River has asked Liberty Harbor to extend a production condition on the bond to June 30, 2010, from November 30. The condition is that the mine be capable of producing 800,000 tonnes in the 12 months from the condition date.

Problems encountered in the ramp-up at Pike River's mine, near Greymouth, delayed export shipments and meant the company needed additional funding.

Managing director Gordon Ward told the company's annual meeting at the mine Monday that a technical review of key mining issues was completed last week by a technical adviser to Liberty Harbor. No major concerns with the mine operation were identified.

Based on the response from Liberty Harbor so far, Pike River believed the condition would be extended, although commercial terms were still to be addressed, Mr Ward said.

Liberty Harbor is part of a Goldman Sachs asset management group.

Mr Ward said Pike River also was carefully weighing up alternatives, including debt and equity, for a further $NZ20 million ($A15.83 million) in working capital. Those funds were not needed until February.

Despite the difficulties encountered in developing the mine, all the infrastructure was now in place for mining about one million tonnes of coal a year for at least the next 18 years, Mr Ward said.

More than 17,000 tonnes of coal had been stockpiled so far, and would be part of the inaugural export shipment of 20,000 to 30,000 tonnes of hard coking coal to be sent to Pike River's Indian customers, due in the January to March quarter of 2010.

Pike River shares were up 1c to $1.01 at mid-afternoon in New Zealand.

In Australia, Pike River shares also were up one cent to 80 cents at 1339 AEDT.

(From The Sydney Morning Herald)