21 Sep 2010

Mining company confident of securing more funding

7:01 am on 21 September 2010

Pike River Coal says it's confident of securing the funding it needs to continue developing an underground mine.

The listed mining company is in advanced talks with funders, and hopes to announce a deal by the end of the month.

Pike River, which lost $39 million in the year to June, says it needs more cash because the installation of hydro mining equipment is more costly and has taken longer than expected to secure.

General manager of mines Peter Whittall says the company is lightly geared and there's no concern about breaching banking covenants.

He says the mine is in a testing phase, after which it will start producing coal to order.

Shares in Pike River Coal fell 2 cents to close at $1.09 on Monday.

Earlier this year, the company raised $50 million through a rights issue and share placement, and a further $40 million through a bond issue to its largest shareholder, New Zealand Oil & Gas, which allowed it to repay another investor, Liberty Harbour, of Australia.