The company said a “considerable amount” of driveage in stone was required to drive the access roadways through the rock graben back into coal in April 2010.
Development coal was recovered during the financial year by coal cutting machines – a roadheader and two continuous miners.
The costs of pit-bottom development work and stone driveage in the rock graben from September 2009 to April 20, 2010, have been expensed.
A total of $11.4 million post production costs for pit-bottom roadway construction have been reclassified during the 2010 financial year from operating costs to production assets.
These costs will be written off over the mine life based on the saleable coal production in each reporting period as a percentage of total saleable coal from the mine.
Sales revenue received from the company’s first shipment of premium hard coking coal in February 2010 was $3.3 million.
This coal was produced mainly from the underground pit-bottom area where large excavations have been made for the hydro-mining operations due to commence in mid-September.
Hydro-mining is the main method of coal mining and uses highly pressurised water to cut coal.
Costs of sales of $48.1 million included a depreciation and amortisation charge of $8.8 million.
Financial expenses of $6.1 million include $4.9 million of interest expense.
A slight weakening of the US dollar cross rate against the NZ dollar during the year resulted in $1.4 million of realised exchange gains and $1.3 million of unrealised exchange gains primarily on the USD denominated convertible bond.
An income tax benefit of $13.0 million has been recorded for the 2010 financial year.
This tax benefit is recognised at the new company tax rate that comes into effect on July 1, 2011, of 28% and is recognised in the income statement as the company is expected to generate taxable profits in the future, against which the tax losses can be offset.
Pike has started railing coal from its rail loadout facility at Ikamatua on the South Island’s West Coast to the Port of Lyttelton in preparation for its second export shipment of premium hard coking coal.
Its inaugural export shipment of 20,000t of premium hard coking coal went to India in February 2010.
Pike’s shares were steady at 76c in morning trade.