Beleaguered Bathurst Resources will have to bide its time and
wait for global coking coal prices to strengthen before
starting its proposed West Coast mining operation, then
likely go back to shareholders for an injection of new
Analysts are picking the price recovery could be 12 to 18
Bathurst has deferred starting up its contentious Denniston
Plateau operation, having spent more than $300 million in
readying itself, and will have to rely on cash flows from
three small, existing South Island mines, Craigs Investment
Partners broker Peter McIntyre said.
''I'm surprised at how brutal the market has been, selling
down Bathurst's stock,'' Mr McIntyre said.
The stock was down more than 37.5% on Tuesday, and down a
further 19% yesterday, to briefly touch a record low at 8.1c
as investors got out.
He said Bathurst's decision to postpone increasing inaugural
coal production from the Escarpment area of the plateau had
been correct, given the uneconomic global price of the coal
at $US120 per tonne, and also in order to preserve its cash
in hand at less than $9 million.
''Investors can't expect that Bathurst will go ahead and dig
out coal at a loss,'' he said.
Hard coking coal is a specialist ingredient in steel
manufacturing, and Mr McIntyre noted that it was ''unusual''
that the recent ascent of the cost of iron ore per tonne had
crossed, and was now above, the descending price of coking
''Bathurst's immediate future depends on its [three] domestic
''The question of equity means it will have to wait for
prices to rise, then quickly come back to the market, which
could be 12 to 18 months away,'' he said.
The three existing domestic mines are Cascade, adjacent to
the Denniston Plateau, Takitimu in Southland and another near