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Pike River Coal is within weeks of hitting coal set to turn the company around from its $1.14 million loss for the year to the end of June.
The company has this year been hit with high operational costs that had used up an $11 million contingency fund.
Chief executive Gordon Ward said a final operations budget would be completed within six weeks after a spike in the cost of materials used in the 2.3km tunnel.
"It's fair to say the contingency has been used in full mainly because of increasing steel prices."
The tunnel should be just over 120m away from coal by today in the Paparoa ranges northeast of Greymouth. First production of premium hard coking coal for use in steel making was due by the end of September, with 200,000 tonnes due to be mined by June 2009.
Ward said the outlook for the year to June 2009 was positive with forward orders in place and prices for premium hard coking coal tripling to US$300 ($425.50) per tonne for first coal sales compared to a year ago. Around 100,000 tonnes would be sold at that price, with prospects for similar prices good next year but tailing off over the longer term.
"One of the really positive outcomes has been the highly successful capital raisings during the year, attracting investors nationally and offshore, to raise more than $182 million ... in a financial environment best described as challenging," Ward said. The company's shares closed steady at $1.89 yesterday.
