TIDMPDZ
RNS Number : 5860F
Prairie Mining Limited
29 July 2016
PRAIRIE MINING LIMITED
NEWS RELEASE | 29 July 2016
JUNE 2016 QUARTERLY REPORT
HIGHLIGHTS:
-- Coal 2.0 - The Polish Government has outlined plans to unlock
the industrial potential of the Lublin Coal Basin, under the
catchphrase "Coal 2.0", where the Ministry of Development will
support the development of modern installations for coal
utilisation
-- Coal Markets Continue to Improve - Global coal prices have
improved by 30% in 2016 and are forecast to recover further over
the medium to long term. Coal is set to remain critical to Poland's
energy future, currently providing over 80% of the country's energy
needs
-- Development Funding Commences - Preliminary discussions with
strategic partners, EPC contractors, global project finance banks
and potential offtakers have now commenced following the excellent
results of the pre-feasibility study published last quarter
-- Permitting Milestones - Prairie completed a number of
significant work streams in relation to the ongoing Mining
Concession application including:
o Completed a draft Deposit Development Plan, which was
submitted to Polish experts for initial review and optimisation
o Made substantial progress on the ESIA, with the environmental
consent procedure officially initiated by the Regional Director for
Environment Protection in Lublin
o Commenced local land rezoning amendments with municipal
authorities in the Project mine area
o Continued the land acquisition process aimed at securing
access to the planned surface infrastructure sites for Project
development
o Lodged an Application for a power grid connection for the Jan
Karski Mine with the regional power distributor
o Progressed with the planned railway spur line connection to
the national railway network which was officially included in the
Lublin Regional Development Strategy during the quarter
-- Hydrogeological analysis continued in order to provide
enhanced hydrogeological data for the ESIA
-- Jan Karski Mine Location was formally announced which
received strong government and community support
Corporate:
-- Strong Financial Position - Prairie has cash on hand of
A$18.1 million and is in a strong financial position to progress
with its planned development activities
-- Strong Warsaw market following - Prairie continues to receive
extensive and positive media coverage as well as a growing
following in the Warsaw market
GOING FORWARD:
-- Advance discussions with strategic partners, project debt
providers and offtakers to structure a development financing
package for the Jan Karski Mine
-- Definitive Feasibility Study to commence after all Project
options have been suitably examined and an ultimate "go forward"
case has been selected
-- Project permitting activities including the ESIA, spatial
planning and land acquisition will progress as part of the mining
concession application
-- Continued development activity across the LCP specifically
aimed at improving knowledge of hydrogeological conditions and
confirming engineering and design requirements for the shafts
-- Progress with the planned railway spur line connection from
the Project into the national railway network based on cooperation
with Lublin regional authorities
For further information contact:
Ben Stoikovich Artur Kluczny
Chief Executive Group Executive
Officer - Poland
+44 207 478 3900 +48 22 351 73 80 info@pdz.com.au
JAN KARSKI MINE AT THE LUBLIN COAL PROJECT (Project)
Mining Concession Application & Project Permitting
Prairie Mining Limited (Prairie or Company) is currently working
towards completing a mining concession application which in Poland
comprises of the submission of a Deposit Development Plan (DDP), an
Environmental Social Impact Assessment (ESIA) that is to be
approved by regional authorities and approval of a spatial
development plan (rezoning of land for mining use). The DDP is a
Polish standard mine technical-economic study as prescribed in the
Polish mining regulations. Under Polish law, the environmental
consent decision has to be obtained prior to the obtaining of the
mining concession. The environmental consent decision is issued by
a specialised environmental authority (the Regional Director for
Environmental Protection).
Deposit Development Plan
During the quarter, the DDP was completed and submitted to local
Polish experts for their review and optimisation. The DDP is then
expected to be submitted for final review and approval by the
relevant government authorities in early 2017.
The DDP is a standard mine technical and economic study as
prescribed by Polish mining regulations. The DDP is required to
document the proper management and extraction of resources and will
be submitted to the relevant Polish government mining authority for
their review prior to the grant of a mining concession at the
Project.
The DDP includes economic assumptions based on the Project's
pre-feasibility study (PFS) published in March 2016 and is required
to meet specific Polish geological standards as well as conforming
with existing Polish mining regulation requirements.
As part of preparation of the DDP, the final selection of the
site for mine surface infrastructure has been formally confirmed
and will be used in both the spatial development permitting and the
application for the environmental consent decision for the
Project.
Environmental and Social Impact Assessment
An application for an environmental consent decision for the
Project has been submitted to the Regional Director for
Environmental Protection in Lublin along with a Project Information
Card, which sets out the environmental procedure and project
specific issues of emphasis to be included in the ESIA. The
Regional Director of Environmental Protection has now officially
initiated the environmental consent procedure.
The ESIA, which is currently progressing, will provide the
relevant authorities with sufficient information to award the
environmental consent decision. Prairie is currently on track to
complete all environmental requirements and submit its ESIA to the
regional authorities in late 2016 and expects to receive the
Environmental Decision over the Project's mining area in 2017.
The ESIA is an extensive study that includes a wide range of
environmental monitoring programs, field surveys, ecosystem
sensitivity assessments, socio-economic surveys and a detailed
community study and stakeholder engagement plan. The scope of the
ESIA has been defined to meet Polish, EU and international
standards, including compliance with the Equator Principles to
support the future financing of the Project.
Land Rezoning
As part of the PFS and DDP, Prairie finalised the site location
for the Jan Karski Mine, which was selected based on geological,
mining, transport and commercial considerations. In relation to the
site location, a motion for the amendment of local land rezoning
has been lodged by the Company with the local commune, which allows
for the rezoning of land for the purpose of "deep hard coal mining"
and conversion of agriculture land where the surface mine
infrastructure will be located to be designated for "industrial
use". The commencement of the spatial planning procedure has been
initiated following substantial progress in acquiring land for the
planned mine site.
In June Prairie submitted a formal application for the inclusion
of a spur line, power line and the waste disposal site at the
Project to local communes.
Significant government support for the Project continues
During the quarter, Prairie held a conference in Lublin to
announce the final site selection for the future Jan Karski Mine at
the Lublin Coal Project. During the conference, Prairie presented
to local authorities, media and community the progress the Company
has made in its Project permitting (refer announcement 25 May
2016), Regional politicians confirmed their support for the Jan
Karski Mine, which will be located in the Siedliszcze municipality
in the Chelm Shire and has the potential to create a large number
of jobs as well as creating significant economic benefits to the
regional and national economy. The conference received wide
coverage in both local and national media, including major
newspapers and television, and was attended by senior Polish and
Australian officials.
The support also comes amid a recent Polish Government
announcement to unlock the industrial potential of the Lublin Coal
Basin, where the Ministry of Development outlined plans to support
the development of transport infrastructure and modern
installations for coal utilisation. Tagged the "Responsible
Development Plan" by Polish Minister of Development and Deputy
Prime Minister, Mr Mateusz Morawiecki, he further acknowledged the
need for infrastructure development in Eastern Poland. Specific
solutions outlined for the region included:
-- Unlock the industrial potential of the Lublin Coal Basin under a catch phrase Coal 2.0;
-- Develop infrastructure, especially express motorways being
part of international road routes and the Wilno-Lublin-Rzeszów
railway;
-- Enhance clean coal technologies by building modern
installations for coal utilisation in Lublin; and
-- Establish companies with export potential, offering high quality jobs.
-- The Plan prioritizes the need to establish a long-term energy
policy to ensure the Poland's energy security, avoid power
shortages and improve the economic and labour conditions in Eastern
Poland, while encompassing support for development of industries
based on natural resources.
Additional Drilling Program at the Project
During the quarter, Prairie conducted additional drilling at the
Project to provide relevant hydrogeological data for the ESIA.
Subject to the results of the drilling program, Prairie will look
to undertake further geological mapping and core drilling.
CORPORATE
Strong Warsaw Market Following
Following the Company's listing on the Warsaw Stock Exchange in
September 2015, the Company continues to receive extensive media
coverage and a strong following in the Warsaw market.
During the quarter, the development of the Project continued to
be followed by local and national Polish media with extensive
positive coverage and commentary being received in numerous
publications and from Polish market analysts.
During the quarter Prairie held a number of successful press
conferences and workshops with Polish fund managers and research
analysts as a follow-up to the PFS results published in March
2016.
Financial Position
As at 30 June 2016, the Company had cash reserves of
approximately A$18.1 million, placing the Company in a strong
position to complete its planned development activities at the
Project.
During the quarter, Prairie sold its remaining 2.55 million
fully paid shares held in B2Gold Corp. (TSX:BTO) to raise proceeds
of A$6.2 million.
Board Changes
Effective 31 July 2016, Mr Emil Morfett will resign as a
Non-Executive Director of the Company. The board would like to
thank Mr Morfett for his excellent service to the Company and wish
him well in his future endeavours.
EXPLORATION TENEMENT INFORMATION
On 1 July 2015, Prairie announced that it had secured the
Exclusive Right to apply for, and consequently be granted, a mining
concession for the LCP.
As a result of its geological documentation for the Lublin
deposit being approved, Prairie is now the only entity that can
lodge a mining concession application over the LCP within a three
(3) year period.
The approved geological documentation covers an area comprising
all four of the original exploration concessions granted to Prairie
(K-4-5, K-6-7, K-8 and K-9) and includes the full extent of the
targeted resources within the mine plan for the Project. Prairie's
geological documentation did not include the Sawin-Zachód
concession which may be added at a later date.
As at 30 June 2016, the Company has an interest in the following
tenements:
Location Tenement Percentage Interest Status Tenement Type
--------------------------- ---------------------------- -------------------- -------- ---------------------------
Jan Karski Mine at Lublin Lublin Coal Project Mine 100 Granted Exclusive Right to apply
Coal Project, Poland Plan Area for a mining concession
Jan Karski Mine at Lublin Exploration
Coal Project, Poland Kulik (K-4-5) 100 Granted
Jan Karski Mine at Lublin Cycow (K-6-7) 100 Exploration
Coal Project, Poland Granted
Jan Karski Mine at Lublin Exploration
Coal Project, Poland Syczyn (K-8) 100 Granted
Jan Karski Mine at Lublin Exploration
Coal Project, Poland Kopina (K-9) 100 Granted
Jan Karski Mine at Lublin Exploration
Coal Project, Poland Sawin-Zachód 100 Granted
Prairie Downs, WA E52/1758 100* Granted Exploration
Prairie Downs. WA E52/1926 100* Granted Exploration
--------------------------- ---------------------------- -------------------- -------- ---------------------------
* The Company has entered into a farm-in agreement to assign and
divest up to 100% interest in the Prairie Downs Project
Forward Looking Statements
This release may include forward-looking statements. These
forward-looking statements are based on Prairie's expectations and
beliefs concerning future events. Forward looking statements are
necessarily subject to risks, uncertainties and other factors, many
of which are outside the control of Prairie, which could cause
actual results to differ materially from such statements. Prairie
makes no undertaking to subsequently update or revise the
forward-looking statements made in this release, to reflect the
circumstances or events after the date of that release.
Competent Person Statements
The information in this report that relates to Exploration
Results, Coal Resources, Coal Reserves, Mining, Coal Preparation,
Infrastructure, Production Targets and Cost Estimation was
extracted from Prairie's announcement dated 8 March 2016 entitled
'Pre-Feasibility Study Confirms LCP as One of the Lowest Cost
Global Coal Suppliers Into Europe' which is available to view on
the Company's website at www.pdz.com.au.
The information in the original announcement that related to
Coal Reserves, Mining, Coal Preparation, Infrastructure, Production
Targets and Cost Estimation is based on, and fairly represents,
information compiled or reviewed by Mr Stephen Newson, a Competent
Person who is a Chartered Engineer and Fellow of the Institute of
Materials, Minerals and Mining (UK) and has a 1st Class Mine
Manager's Certificate of Competency. Mr Newson is employed by
independent consultants Golder Associates (UK). Mr Newson has
sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity being undertaken to qualify as a Competent Person as
defined in the 2012 Edition of the 'Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves'.
The information in the original announcement that related to
Exploration Results and Coal Resources is based on, and fairly
represents, information compiled or reviewed by, Mr Samuel
Moorhouse, a Competent Person who is a Chartered Geologist and is
employed by independent consultants Royal HaskoningDHV UK Limited.
Mr Moorhouse has sufficient experience that is relevant to the
style of mineralisation and type of deposit under consideration and
to the activity being undertaken to qualify as a Competent Person
as defined in the 2012 Edition of the 'Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves'. Mr Moorhouse consents to the inclusion in the report of
the matters based on their information in the form and context in
which it appears.
Prairie confirms that: a) it is not aware of any new information
or data that materially affects the information included in the
original announcement; b) all material assumptions and technical
parameters underpinning the Coal Resource, Coal Reserve, Production
Target, and related forecast financial information derived from the
Production Target included in the original announcement continue to
apply and have not materially changed; and c) the form and context
in which the relevant Competent Persons' findings are presented in
this presentation have not been materially modified from the
original announcement.
Appendix 5B
Mining exploration entity and oil and gas exploration entity
quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97,
01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013
Name of entity
Prairie Mining Limited
----------------------
ABN Quarter ended ("current
quarter")
23 008 677 852 30 June 2016
-------------- -----------------------
Consolidated statement of cash flows
Year to
date
Cash flows related to operating Current (12 months)
activities quarter
$A'000 $A'000
--------- ---------------
1.1 Receipts from product - -
sales and related debtors
Payments for (a) exploration
& evaluation (998) (4,588)
(b) development - -
(c) production - -
1.2 (d) administration (353) (1,188)
1.3 Dividends received - -
Interest and other items
of a similar nature
1.4 received 91 254
1.5 Interest and other costs - -
of finance paid
1.6 Income taxes paid - -
Other (provide details
1.7 if material)
(a) Investor relations (184) (881)
(b) Listing on LSE and
WSE costs (52) (696)
Net Operating Cash Flows (1,496) (7,100)
---------------- -------------------------------------------- --------- ---------------
Cash flows related to
investing activities
Payment for purchases
of:
(a) prospects - -
(b) equity investments - -
1.8 (c) other fixed assets (2) (7)
1.9 Proceeds from sale of:
(a) prospects - -
(b) equity investments - -
(c) other fixed assets - -
1.10 Loans to other entities - -
1.11 Loans repaid by other - -
entities
1.12 Other (provide details - -
if material)
Net investing cash flows (2) (7)
--------- ---------------
Total operating and
investing cash flows
1.13 (carried forward) (1,498) (7,107)
---------------- -------------------------------------------- --------- ---------------
Total operating and
investing cash flows
1.13 (brought forward) (1,498) (7,107)
---------------- --------------------------------------------
Cash flows related to
financing activities
Proceeds from issues
of shares, options,
1.14 etc. 6,249 8,660
1.15 Proceeds from sale of - -
forfeited shares
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - -
1.18 Dividends paid - -
Other (provide details
if material)
(a) proceeds from issue
1.19 of convertible notes - 15,000
(b) costs in relation
to issue of convertible
notes - (545)
(c) Share issue transaction
costs (3) (19)
----------- -------------
Net financing cash flows 6,246 23,096
---------------- -------------------------------------------- -------------
Net increase (decrease)
in cash held 4,748 15,989
Cash at beginning of
1.20 quarter/year to date 13,315 2,077
Exchange rate adjustments
1.21 to item 1.20 (1) (4)
----------- -------------
1.22 Cash at end of quarter 18,062 18,062
---------------- -------------------------------------------- ----------- -------------
Payments to directors of the entity and associates of the
directors
Payments to related entities of the entity and associates of the
related entities
Current quarter
$A'000
----------------
Aggregate amount of payments
to the parties included in item
1.23 1.2 (216)
----------------
Nil
1.24 Aggregate amount of loans to
the parties included in item
1.10
------- ------------------------------------ ----------------
1.25 Explanation necessary for an understanding
of the transactions
Payments include executive remuneration
(including bonuses), director fees, superannuation
and provision of a fully serviced office.
------------------------------------------------------
Non-cash financing and investing activities
2.1 Details of financing and investing transactions
which have had a material effect on consolidated
assets and liabilities but did not involve
cash flows
Not applicable
--------------------------------------------------
2.2 Details of outlays made by other entities
to establish or increase their share in
projects in which the reporting entity has
an interest
Not applicable
--------------------------------------------
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount available Amount used
$A'000 $A'000
3.1 Loan facilities Nil Nil
----------------- ------------
3.2 Credit standby arrangements Nil Nil
---- ---------------------------- ----------------- ------------
Estimated cash outflows for next quarter
$A'000
--------
4.1 Exploration and evaluation 800
--------
4.2 Development -
--------
4.3 Production -
--------
4.4 Administration 200
--------
Total 1,000
---- --------------------------- --------
Reconciliation of cash
Reconciliation of cash Current quarter Previous
at the end of the quarter $A'000 quarter
(as shown in the consolidated $A'000
statement of cash flows)
to the related items in
the accounts is as follows.
--------------------------------- ---------------- ---------
Cash on hand and at
5.1 bank 10,062 3,315
---------------- ---------
5.2 Deposits at call 8,000 10,000
---------------- ---------
5.3 Bank overdraft - -
---------------- ---------
5.4 Other (provide details) - -
---------------- ---------
Total: cash at end
of quarter (item 1.22) 18,062 13,315
----- -------------------------- ---------------- ---------
Changes in interests in mining tenements
Tenement reference Nature of interest Interest at beginning Interest at end of
(note (2)) of quarter quarter
------------------- ------------------- ---------------------- ----------------------
6.1 Interests in mining
tenements
relinquished, reduced
or lapsed
------------------- ------------------- ---------------------- ----------------------
6.2 Interests in mining
tenements acquired or
increased
------------------- ------------------- ---------------------- ----------------------
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or
conversion rights together with prices and dates.
Total Number Issue price Amount
number quoted per security paid up
(see note per security
3) (see note
3)
------------------------------------- -------------- ------------ -------------- --------------
7.1 Preference
+securities(description)
-------------- ------------ -------------- --------------
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital,
buy-backs,
redemptions
----- ------------------------------ -------------- ------------ -------------- --------------
7.3 +Ordinary securities 151,608,969 151,608,969
-------------- ------------ -------------- --------------
7.4 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital,
buy-backs
7.5 +Convertible
debt securities(description)
-------------- ------------ -------------- --------------
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through securities
matured, converted
7.7 Options(description Options: Exercise Expiry
and conversion price date
factor)
1,600,000 - $0.35 30 Jun
2017
4,460,000 - $0.45 30 Jun
2017
765,000 - $0.60 30 Jun
2017
1,400,000 - $0.45 30 Jun
2018
Rights:
1,200,000 - - 31 Dec
2016
3,197,000 - - 30 Jun
2017
2,150,000 - - 31 Dec
2017
1,650,000 - - 31 Dec
2018
1,200,000 - - 31 Dec
2020
-------------- ------------ -------------- --------------
7.8 Issued during
quarter
-------------- ------------ -------------- --------------
7.9 Exercised during
quarter
-------------- ------------ -------------- --------------
7.10 Expired during Options: Exercise Expiry
quarter price date
(1,250,000) - $0.25 30 Jun
2016
(1,500,000) - $0.40 30 Jun
2016
-------------- ------------ -------------- --------------
7.11 Debentures
(totals only)
-------------- ------------
7.12 Unsecured notes
(totals only)
-------------- ------------
Compliance statement
1 This statement has been prepared under accounting policies
which comply with accounting standards as defined in the
Corporations Act or other standards acceptable to ASX (see note
5).
2 This statement does /does not* (delete one) give a true and
fair view of the matters disclosed.
Sign here: .......................................... Date: 29 July 2016
(Director/Company secretary)
Print name: Dylan Browne
Notes
1 The quarterly report provides a basis for informing the market
how the entity's activities have been financed for the past quarter
and the effect on its cash position. An entity wanting to disclose
additional information is encouraged to do so, in a note or notes
attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options
in respect of interests in mining tenements acquired, exercised or
lapsed during the reporting period. If the entity is involved in a
joint venture agreement and there are conditions precedent which
will change its percentage interest in a mining tenement, it should
disclose the change of percentage interest and conditions precedent
in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid
up is not required in items 7.1 and 7.3 for fully paid
securities.
4 The definitions in, and provisions of, AASB 6: Exploration for
and Evaluation of Mineral Resources and AASB 107: Statement of Cash
Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of
International Financial Reporting Standards for foreign entities.
If the standards used do not address a topic, the Australian
standard on that topic (if any) must be complied with.
== == == == ==
This information is provided by RNS
The company news service from the London Stock Exchange
END
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