Pike aims to use hydro monitor mining equipment, basically high-pressure water cannons, to produce 1 million tonnes per annum at the underground coal mine in New Zealand’s South Island for at least 18 years.

The Kiwi company was set back by a large rockfall in February, which blocked the lower section of its recently finished ventilation shaft, pushing back the previous production plans.

Australian contractor Avko Mining is currently working on a 24/7 basis on an Alimak raise shaft to reconnect the ventilation shaft and allow ramp-up to begin.

In preparing for this phase, Pike said it would recruit 37 more staff by July to take the workforce to 150.

The hydro mining gear is being customised in Australia before delivery to the mine in June.

Pike said the equipment could mine up to 30,000 tonnes a day, once up and running.

To pave the way for hydro mining, a roadheader and two continuous miners will cut the roadways.

On future exploration, Pike has plans to conduct an 18-month test drilling program of its Paparoa seams, underneath the mine’s 13m-thick Brunner seam, to potentially unlock up to 8 million tonnes of coking coal.

Pike also detailed its offtake agreements, revealing the company has current contracts with Japanese steel mills to take 21-24% of output for three years.

Saurashtra World Holdings and Indian coke producer Gujarat NRE will also take 15% and 40% of output respectively for the life of the mine.

Current estimates have the mine producing a pre-interest and tax margin of $US65 a tonne at a sales price of $US125/t.

The company is expecting to have $NZ3.4 billion ($US1.92 billion) of sales over the mine life, assuming a price of $US115/t.

In an interim statement, the company had a cash position of $NZ22.37 million ($US12.61 million) at the end of last year.

Pike shares on the Australian Securities Exchange are unchanged at 70c so far this morning.