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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 equity.
Analysts are picking the price recovery could be 12 to 18 months away.
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 coal.
''Bathurst's immediate future depends on its [three] domestic operations.
''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 Christchurch.