Pike River is in negotiations with convertible bond holder Liberty Harbor, which holds $US27.5 million ($NZ39 million) in bonds, for an extension from November 30 to June 2010.
Shares in Pike River have been static for the past week, trading at $1 after a high of $1.20 and low of 99c in the past two months.
It is now 17 months since Pike River was first due to supply its inaugural contracted coking coal exports, but mine development was stalled by a ventilation shaft collapse, subsequent remedial work, machinery problems and crossing a fault line, which combined to slow progress and continually force production dates to be moved out.
At present, the company is blasting through a large 100m-wide "graben" (depressed hard rock) in its tunnel, which drill testing had failed to identify earlier, estimating it would be "back into coal" in early January, with full production scheduled for the April-June 2010 quarter.
Because of the delays, Pike River offered and achieved a fully subscribed rights issues of $41 million in April and is again considering another issue and debt raising in February of $20 million, to provide required working capital.
Craigs broker Peter McIntyre said with the possibility of a Liberty bond extension and the $20 million issue, Pike would likely not reach full production until June next year, when the bond extension date starts.
"Shareholders have been hardened to the [repeated] delays. Three months is not that significant," Mr McIntyre said yesterday.
Pike's managing director, Gordon Ward, was unavailable for comment this week, but told shareholders coal hydro-mining (waterblasting) would begin in the April-June quarter next year.
Mr McIntyre said of more interest to investors was the rising price of coking coal - a specialist coal required for steel making - recently rising from $US100 per tonne to $US180.
He predicted China's use of coking coal might increase 10-fold over the next year.
He said while Pike would have to deliver 800,000 tonnes in its first year of production, its gross income for full-year 2010 was expected to be $43.2 million, rising to $145.6 million for 2011 based on current coal prices and forward contracts to supply Indian partners.
Pike plans to mine 1 million tonnes per year for 18 years and is bullish on the possibility of mining an adjacent coal seam in the rugged Paparoa Range, 50km northeast of Greymouth, having spent about $288 million to date on the project.
The Liberty bond condition requires Pike River to be capable of producing 800,000 tonnes of coal during the year following November 30, or face penalties.
Mr Ward said a technical adviser to Liberty had completed a review of "key mining issues" last week and "had not identified any major concerns with our mine operation".
"Based on the response from Liberty Harbor to date, we believe the condition will be extended to June 30, 2010, although commercial terms are still to be addressed," Mr Ward said.
