Prairie Mining Limited: MARCH 2015 QUARTERLY REPORT

(firmenpresse) - MARCH 2015 QUARTERLY REPORT

Prairie Mining Limited (Prairie or the Company) is pleased to present its quarterly report for the period ending 31 March 2015.

Highlights during, and subsequent to, the quarter include:
HIGHLIGHTS:

· Results of Completed Drilling Campaign - excellent final results from the last three holes of Prairies drilling campaign received which confirm the 391 coal seam hosts extensive metallurgical and premium thermal coal throughout the target mining areas;

· Pre-Feasibility Study (PFS) - work continued on the PFS for the Lublin Coal Project (LCP or Project) with the study expected to be completed during 2015;

· New Coal Exploration Concession - Prairie was awarded a 100% interest in the Sawin-Zachód concession, contiguous with the LCP, increasing the Project area by 54km² to over 234km²;

· Coal Exploration Target - estimated at Sawin-Zachód which demonstrates the potential to increase the future mine life at the LCP;

· Permitting - the Company is awaiting approval of Geological Documentation. The approval will trigger a three (3) year priority right for Prairie to apply for a Mining Concession for the LCP.

· European Coal Marketing Studies - Wood Mackenzie continued with European coal marketing studies for the Project which will be completed alongside the PFS during 2015;

· Environmental and Social Impact Assessment (ESIA) - Continued baseline studies for the ESIA, the completion of which is a pre-requisite for the grant of a mining concession over the LCP; and

· New Agreement Signed over Australian Base Metals Projects - Prairie to potentially receive A$0.5 million cash in June 2015 and a further A$1 million in cash or shares (by September 2016) in consideration for JV partner, Marindi Metals, electing to acquire 100% of Prairies interest in its Base Metals Projects in the Pilbara region of Australia.

· Working Capital - As at 31 March 2015, the Company had working capital (cash and listed securities) of approximately $9.3 million and no debt.

GOING FORWARD:
The Company will continue to work towards further development milestones at the Project including the following:

· Advancement of the PFS with completion expected during 2015;

· Completion of comprehensive thermal and metallurgical coal marketing studies encompassing export and domestic marketing opportunities for the LCP;

· Completion of Environmental Baseline Studies which will feed into the ESIA; and

· Approval of Geological Documentation by the Minsitry of Environment (MoE) and subsequent completion of the Deposit Development Plan which would form the key component of the Mining Concession Application for the LCP.

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Figure 1: LCP Target Export Locations

For further information contact:
Ben Stoikovich
Chief Executive
Officer

+44 207 478 3900
info(at)pdz.com.au


Hugo Schumann
Business Development
+44 207 478 3900


LUBLIN COAL PROJECT

The Lublin Coal Project is a large scale metallurgical and premium thermal coal project located in the Lublin Coal Basin in south east Poland. The Lublin Coal Basin is an established coal producing province which is well serviced by modern and highly efficient infrastructure, offering the potential for low capital intensity mine development. The LCP is situated adjacent to the Bogdanka coal mine which has been in commercial production since 1982 and is the lowest cost hard coal producer in Europe.
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Figure 2: Lublin Coal Project Exploration Concessions

Completion of Exploration Program and Results of Drilling

Prairie is pleased to announce the coal quality results from the final three holes of the seven hole drilling program at the Project which all show high core washability yields. Furthermore, the coal analysis results continue to show outstanding coal qualities across the Project with very high calorific values, very low ash and good coking properties which support the potential for large scale production of metallurgical and premium thermal coal products.

The LCP hosts a current JORC Coal Resource Estimate (CRE) of 1.6 billion tonnes across 21 coal seams, including 157 million tonnes in the Indicated category derived from two key coal seams, the 391 seam and the 389 seam. The 391 and 389 seams formed the basis of Prairies mine plan for the LCP in the Scoping Study that was published in April 2014 (refer ASX Announcement 28 April 2014). The 391 coal seam is considered the highest quality coal seam within the LCP area both in terms of coal quality and coal seam thickness.

During the second half of 2014, Prairie announced that it had completed the final hole of its seven-hole core drilling campaign at the LCP, satisfying all work program commitments under the terms of its Exploration Concessions with the Polish government, well ahead of schedule. The drilling campaign was designed to enhance the historical drill data and geological model at the LCP in line with internationally recognised standards for mine design and development, delineate outer boundaries of the various coal seams and to update the coal quality and washability database to determine potential product pricing and yields. Core drilling was carried out to allow for coal quality and washability testing to be performed, providing critical input into the coal wash plant design and product marketing strategy.


Prairie has already released the results of the first four drill holes previously (refer ASX Announcements 31 October 2013 and 13 March 2014) and, following completion of the final three holes (namely Cycow7, Cycow 8 and Syczyn 8) and assaying at labs in Poland and the UK, is pleased to now report the results of the final three completed holes.

The composite results are highly encouraging as they confirm the 391 coal seam hosts extensive metallurgical and premium thermal coal throughout the planned target mining areas of the Project where the 391 coal seam is thickest. The 391 seam thickens towards the west of the Project area, as it approaches the border with the Bogdanka mine. In these areas, coal seam thicknesses extend up to 3.2 metres in the 391 seam.

The metallurgical coal analysis from the composite results shows Free Swell Index (FSI) numbers of 3.5 - 6.0 in all target mining areas of the 391 seam, comparable to international benchmark semi-soft coking coals as well as semi-soft coking coals already produced in Poland. In addition, the coal quality results indicate the potential for other metallurgical usage including as a PCI coal.

Exceptional washed coal qualities were demonstrated with clean coal seam calorific values ranging from 7,500 kcal/kg to 7,800 kcal/kg and very low ash contents of 2.0 - 2.7% on an air dried basis. In relation to thermal coal specifications, the 391 seam washed coal quality compares exceptionally well to the globally recognised thermal coal ARA benchmark, offering a significant premium both in terms of calorific value (heat content) and ash content. It also compares well to both Russian and Colombian thermal coals, which account for over 60% of Europes thermal coal imports.
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Table 1: 7 Hole Coal Quality Analysis - Zone C of 391 Coal
Seam

Drill Washed Coal Quality
Hole (Air Dried Basis)
ID

CalorificFSI Ash VolatilMoistuSulphurYield (at)
Value e re 1.35
Matte Float
r

Kulik 7,806 6.0 2.2% 36.4% 2.7% 1.0% 94%
kcal/kg

Cycow 7 7,832 5.5 2.3% 37.6% 2.2% 1.06% 71.5%
kcal/kg

Kopina 1 7,526 4.0 2.0% 35.6% 2.3% 0.9% 95%
kcal/kg

Cycow 8 7,618 2.0 2.4% 34.3% 4.0% 0.60% 91%
kcal/kg

Syczyn 7 7,830 6.0 2.4% 36.7% 3.3% 0.7% 97%
kcal/kg

Syczyn 8 7,798 4.5 1.5% 36.7% 3.8% 0.66% 84%
kcal/kg

Borowo 7,809 5.0 2.7% 33.2% 2.4% 1.0% 75%
kcal/kg

Figure 3: Drill Hole Locations & 391 seam 1m thickness contour

Pre-Feasibility Study
During the quarter the Company progressed past the mid-way point of the PFS. A joint team of consultants from Golder Associates (UK) Ltd (Golder) and Royal HaskoningDHV (RHDHV) are managing the PFS which has been designed to comply with international best practise in all study areas in order to support detailed technical and financial due diligence by strategic equity partners, offtakers, financial institutions and to promote a seamless transition to the Definitive Feasibility Study stage (DFS).
During the quarter the Company completed the following work streams:

· Review of transport options from mine site(s) to main railway line;

· Commissioning of a review of the main power grid network and supply options;

· Translation and review of Polish Regulations and Norms to understand where critical design limitation might exist;

· Alignment of Polish Geological Documentation and Deposit Development Plan requirements with the PFS and subsequent DFS;

· Discussions with longwall manufacturers and planned meetings with major equipment suppliers;

· Listing and review of Polish/International suppliers to the mining industry to maximise local supply of consumables;

· Commissioning of a review of salary structures to support the PFS cost base;

· Commissioning of a review of accounting practices for the PFS financial model;

· Set up of a document control hub in the Lublin project office; and

· Input to spatial planning and environmental impact requirements for re-zoning.

Going forward, Prairies PFS team will now focus on the completion of the PFS during 2015 including the following study requirements:

· Drafting of the resource report for the Update to the current Coal Resource Estimate;

· Shaft sinking and hoisting design;

· Geotechnical parameters for roof support system and optimised longwall panel layouts;

· Mine development and production scheduling;

· Finalisation of all surface engineering and transport systems;

· Finalising CHPP design;

· Waste management;

· Staffing requirements;

· Estimates of capital and operating costs; and

· Study reporting.

As part of the PFS work program, Prairies team is also compiling a detailed schedule of works required for the DFS for the Project.

New Coal Exploration Concession

During the quarter, Prairie announced that it had secured a 100% interest in a significant new coal exploration concession contiguous to the LCP. The new concession, known as Sawin-Zachód (Sawin), covers an area of 54km² (total Project area now over 235km2) of prime ground within the Lublin Coal Basin and has the potential to increase Prairies coal resource and increase future mine life at the LCP.

Prairies wholly owned polish subsidiary company, PD Co Sp. z o.o (PD Co), applied for Sawin from the MoE in Poland and was awarded the concession with the publication of a Positive Concession Decision. The Sawin concession is valid until 31 December 2017, with the right to obtain further extensions upon satisfying a drilling program as outlined by the MoE.
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Figure 4: Prairies Exclusive Concessions

The Sawin area was subject to exploration activities undertaken by the Polish Government and its agencies during the 1970s and 1980s that consisted of regional geological mapping and drilling programs which demonstrated the region is highly prospective for coal.

Within the Sawin concession area a total of 22 fully cored boreholes were completed at 1,200 to 2,700m line spacing which identified more than 17 potentially recoverable coal seams with the potential to host significant coal resources.

Coal Exploration Target

Having been awarded Sawin, Prairie then announced a coal exploration target of 90 to 130 Million Tonnes (Mt) (Coal Exploration Target) for the concession based on the modelling of historical data. (The potential quantity and grade of the exploration targets are conceptual in nature and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.)

A three dimensional model was created using Minex software with coal seams from 369 to 397, a total of 28 seams, being modelled.

For the assessment of the Coal Exploration Target, coal within 100 metres of the base of the Jurassic Strata was excluded. Coal in seams thinner than 1.2 meters was also excluded.

The table below contains estimates of the Coal Exploration Target tonnages for the seams that have been assessed and for which there has been insufficient exploration to consider as resources at the present time. The figures therefore represent the potential which is dependent on further exploration and reviews of the area. Please note all tonnages below have been rounded.

Table 2: Potential Range of Coal Exploration Target
Tonnages

Seam Average Average Exploration
thickness parting Target
thickness Range
(m)* (Mt)
(m)*
80% 120%
375A 1.53 0.03 8 12
376 1.41 0.02 4 6
377A 1.68 0.10 17 23
380 1.50 0.14 13 18
382 1.45 0.03 4 6
389 1.91 0.11 33 47
394 1.41 0.21 8 12
397 1.31 0.01 4 6
Total 90 130
*Averages are arithmetic and are not weighted

In-situ coal qualities range from 5,030 kcal/kg to 7,330 kcal/kg (net) on an Air Dried basis.

Having estimated a Coal Exploration Target for the Sawin, the Company will now look to undertake geological mapping and core drilling.

Under the terms of the Sawin concession with the MoE, Prairie is required to complete one (1) bore hole at a pre-determined location within the Sawin area. The activities for this one borehole must commence before 31 December 2015. Prairie can also complete a further seven (7) holes at its sole discretion although this is not required under the work program for the Concession Agreement.

Approval of Geological Documentation

In December 2014, Prairie completed a major project development milestone with the formal submission of Geological Documentation to the MoE for the LCP (excluding Sawin).

Geological Documentation is a resource estimate prepared according to the standards prescribed in the Polish resource reporting code.

Prairie is now awaiting approval of its Geological Documentation by the MoE which, once provided, would trigger a three (3) year priority right for Prairie to apply for a Mining Concession for the LCP (excluding Sawin). The approval would mean that Prairie would be the only legal entity able to apply for a Mining Concession over the LCP during this time, to the exclusion of any other party.

A Mining Concession application in Poland comprises the submission of a Deposit Development Plan along with an Environmental & Social Impact Assessment (for the award of an Environmental Consent Decision) and a rezoning plan that has been approved by local authorities. The Deposit Development Plan is a Polish standard mine technical-economic study as prescribed in the Polish mining regulations. The Deposit Development Plan for the LCP is being prepared by Polish consultancy GEO-EKO-WIERT and is due for completion in 2015.

Coal Marketing Studies

Prairie has access to multiple potential markets for the sale of its coal products given the location of the LCP in the heartland of industrial Europe, with excellent rail and port access. In addition, Prairies coal quality and coal washability testing program has indicated the potential to produce both metallurgical coals for the steel industry and premium thermal coal for the power industry.

Prairie appointed global energy, metals and mining research and consultancy group Wood Mackenzie to conduct European coal marketing studies for the LCP.

The marketing studies have reached the midway point and the results will be released to the market when finalised.

The studies have been designed to incorporate the Projects competitive advantage of being able to offer both metallurgical coal and premium thermal coal products from the same operation and to assess market opportunities that would maximise the revenue potential of coals from the LCP, with this analysis to be included in the PFS. Prairie intends to use the marketing studies to:

· Identify and screen market opportunities;
· Assess competitors;
· Refine product and marketing strategy;
· Inform elements of project design including coal handling and preparation plant;
· Support potential due diligence processes by project financiers, strategic equity partners and offtakers; and
· Provide price forecasts for coal products from the LCP for use in the PFS financial model.
·
Environmental & Social Impact Assessment

Prairie recently completed a number of major work program items in relation to its ongoing ESIA for the LCP. Prairies ESIA, being conducted by Multiconsult (formerly WS Atkins), 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 Prairies ESIA has been defined to meet Polish, European Union and international standards, including compliance with the Equator Principles as required by Equator Principles Financial Institutions, to support the future financing of the Project.

Prior to the commencement of the environmental baseline field work studies for the LCP, Prairies ESIA study team completed a desktop review of the available environmental and social data for its concession areas. Given the fact that existing mining operations exist adjacent to Prairies concessions, Prairie has benefitted by having access to a significant quantity of existing data for the region which represent actual mining conditions, including surface water flows and quality, some information on groundwater and ground levels after subsidence, noise and waste characteristics. This data, where it relates to areas already affected by the existing mine; will assist Prairie in the accuracy of its predictions of impacts resulting from new mining activity.

Following completion of this desktop review, Multiconsult has immediately commenced with the required baseline studies to obtain data that was not already publicly available. The baseline studies are now underway for all concession areas at the LCP, and will continue for some time to capture seasonal differences.

The Company has also completed its internal Stakeholder Engagement Plan which is a key component of the ESIA process, and will ensure that the Company communicates effectively with all relevant stakeholders of the Project.

Prairie is on track to complete all environmental baseline studies by the middle of 2015 and submit its completed ESIA report(s) to the Polish authorities before the end of 2015. The submitted ESIA will provide the Polish authorities with sufficient information to award an Environmental Consent Decision, which is a pre-requisite for the granting of a Mining Concession over the Companys concessions.

New Agreement Signed over Base Metals Projects

During the quarter Prairie announced that it had entered into a new agreement (New Agreement) with Marindi Metals Pty Ltd (Marindi) in relation to Prairies 100% owned Base Metals Project (BMP), located approximately 60 kilometers southwest of Newman in the Pilbara region of Western Australia.

Since October 2013, Marindi has been conducting an exploration work program at the BMP under a Farm-In Agreement with Prairie (Original Farm-in Agreement). Under the Original Farm-In Agreement, Marindi was required to keep the licences in good standing for a period of three (3) years to earn a 51% interest in the BMP and could then meet a series of expenditure commitments to earn up to a 100% interest in the BMP.

The Original Farm-In Agreement was replaced with the New Agreement during the quarter whereby Marindi can earn a 100% interest in the BMP by electing to pay Prairie A$0.5 million in cash by June 2015 and a further A$1 million in cash or shares by 30 September 2016 (Election), with Prairie retaining a 2.5% Net Smelter Royalty. In the event that Marindi chooses not to make its Election, the terms of the Original Farm-In Agreement will remain.

The New Agreement allows Prairie to focus 100% of its time, energy and resources on the world class Lublin Coal Project and provides the incentive for Marindi, which is led by highly experienced base metal mining executives, to rapidly advance the development of the Base Metals Project.

Corporate
Shareholding in B2Gold
As at the 31 March 2015, the Company held 3.75 million fully paid shares in B2Gold Corp. (TSX:BTO) (B2Gold). During the quarter, the Company sold 1.2 million shares held in B2Gold for net proceeds of approximately $2.7 million ($0.5 million is receivable as at 31 March 2015). The B2Gold shares are classified as available-for-sale current financial assets in Prairies Statement of Financial Position.

Financial Position
As at 31 March 2015, the Company had working capital (which includes cash and cash equivalents, trade and other receivables and listed securities) of approximately $9.3 million and no debt, placing the Company in an excellent position to complete its planned development activities at the LCP.

Exploration Tenement Information

The management team and the financial capital of Prairie are 100% focused on the development of the Lublin Coal Project in Poland. The Company holds an historical interest in a base metals project, being the BMP (during the quarter the Company surrendered the Perenjori project). During the quarter, a New Agreement was signed with third party developer Marindi Metals in relation to the Prairie Downs project and as a result, this project does not require the commitment of Prairies financial or managerial resources, however, it does provide the Company with exposure to potential cash and share receipts and a future net smelter royalty should exploration programs at the project prove to be positive. As at 31 March 2015, the Company has an interest in the following projects:

Location Tenement Percentage Status
Interest

Lublin Coal Project Kulik (K-4-5) 100 Granted
Lublin Coal Project Cycow (K-6-7) 100 Granted
Lublin Coal Project Syczyn (K-8) 100 Granted
Lublin Coal Project Kopina (K-9) 100 Granted
Lublin Coal Project Sawin-Zachód 100 Granted
Prairie Downs E52/1758 100* Granted
Prairie Downs E52/1926 100* Granted
* The Company has entered into a farm-in agreement to assign up to 100% interest in the Prairie Downs Project.

Forward Looking Statements

This announcement may include forward-looking statements. These forward looking statements are based on Prairies 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.

The Company advises that the information relating to the Scoping Study referred to in this announcement is based on lower-level technical and preliminary economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.

Competent Person Statements

The information in this announcement that relates to the Exploration Results (drill holes: Syczyn 7, Kopina 1, Kulik and Borowo), Coal Resources, Production Targets and the Scoping Study was extracted from Prairies ASX announcements dated 23 September 2014 entitled Annual Report to shareholders, 28 April 2014 entitled Scoping Study Confirms Potential for World Class High Margin Met and Thermal Coal Project and 13 March 2014 entitled Initial Washability Results Display Exceptionally High Yields which are available to view on the Companys website at www.pdz.com.au.

Prairie confirms that: (a) it is not aware of any new information or data that materially affects the information included in the original ASX announcements; (b) all material assumptions and technical parameters underpinning the Coal Resource, Production Target, and related forecast financial information derived from the Production Target included in the original ASX announcements 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 ASX announcements.

The information in the original ASX announcements that related to Exploration Results (drill holes Syczyn 7, Kopina 1, Kulik and Borowo) and Coal Resources is based on information compiled or reviewed by Dr Richard Lowman, a Competent Person who is a Fellow of the Geological Society of London. Dr Lowman is employed by independent consultants Wardell Armstrong LLP which owns Wardell Armstrong Limited. Dr Lowman has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking 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.

Information in the original ASX announcement that relates to Production Targets and the Scoping Study is based on information compiled or reviewed by Mr Robin Dean who is a Competent Person and is a member of the Institute of Materials, Minerals and Mining (UK). Mr Dean is employed by independent consultants Wardell Armstrong LLP which owns Wardell Armstrong Limited. Mr Dean has sufficient experience that is relevant to the type of mining operation 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 this announcement that relates to Exploration Targets and Exploration Results (drill holes: Cycow 7, Cycow 8 and Syczyn 8) is based on information compiled or reviewed by Mr Jonathan ODell, a Competent Person who is a Member of the Australian Institute of Mining and Metallurgy. Mr ODell is a consultant employed full time by Prairie Mining Limited. Mr ODell has sufficient experience that is relevant to the style of mineralization 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 ODell consents to the inclusion in this release of the matters based on this information in the form and context in which it appears.

Lublin Coal Project - Coal Resource Estimate (based
on net coal seam
thickness)

Coal Seam Indicated Inferred (Mt)Total (Mt)
(Mt)

391 137 177 314
389 20 84 104
Other Seams - 1,141 1,141
Total - 157 1,402 1,559
Project
Area

Appendix 1 - lublin coal project Drill Hole details

Cyców 7/1
Borehole Completion Report. Part II. Borehole Construction
LOCATION
E 8440323.51 N 5682643.67
Elevati185.1m. Ams Inclination Vertical
on 8 l

Co-ordinate system: local 2000/8
Localicity: Biesiadki
District Cyców Area czna
DRILLING
Method From To TotalHole DiaNotes
meter

Open 0.00 8.00 8.00 311 pipe bit
Hole/Rock
Bit

Open 8.00 82.00 74.00216 rock bit
Hole/Rock
Bit

Open 82.00 705.50 623.5171 rock bit
Hole/Rock 0
Bit

Reaming 690.00705.50 15.50171 rock bit
Core 705.50970.00 264.596 coring
0 bit
HQ

FINAL DEPTH: 970,00 m (Depth to Floor of seam 391:
930.4 m) (Seam 391 thickness: 2.95 m)


CASING
From To Total Diameter Notes
0.00 8.00 8.00 244,5 mm (9 Welded, fully cemented
5/8")

0.00 82.0082.00 193,7 mm (7 Welded, fully cemented
5/8")

0.00 705.5705.50139,7 mm (5 Welded, fully cemented
0 1/2")


All casing cut at 1,5 m below ground level
GEOPHYSICAL LOGGING
Method From To TotalNotes
4 arm caliper70.29 480.24 409.9BLM - 1st logging
5

Natural Gamma0.00 480.62 480.6BLM - 1st logging
2

GG Dual 0.15 482.86 482.7BLM - 1st logging
Spaced 1
Density

Temperature 2.23 503.48 501.2BLM - 1st logging
5

Laterlog 79.41 484.55 405.1BLM - 1st logging
4

4 arm caliper700.03963.68 263.6BLM - 2nd logging
5

Natural Gamma469.01949.75 480.7BLM - 2nd logging
4

GG Dual 469.01949.75 480.7BLM - 2nd logging
Spaced 4
Density

Temperature 3.04 953.77 950.7BLM - 2nd logging
3

Laterlog 701.57953.99 252.4BLM - 2nd logging
2

Acoustic 705.15951.65 246.5BLM - 2nd logging
Scanner 0

Verticality 0.00 952.52 952.5BLM - 1st and
2 2nd
logging

HYDROGEOLOGY
MUD LOSS
From To Total Volume Notes
PACKER/PUMP TESTS
From To Total Notes
CEMENTING
From To Total Dry Cement TonnNotes
es

0.00 8.00 8.00 0.332 Cement casing
0.00 82.0082.00 1.018 Cement casing
0.00 705.5705.507.986 Cement casing
0

835.00 970.0135.00- Final Plug on
0 Completion part 1,
5,00
m
3 should be used to
cement interval
450,00-970,00
m

740.00 939.0199.00- Left drill pipe into
0 borehole, in interval
740,00-746
,00 partly
mill-out

581.50 746.0164.509.383 Final Plug on
0 Completion part 2
stage
1

388.50 581.5193.00Final Plug on
0 Completion part 2
stage
2

271.50 388.5117.00Final Plug on
0 Completion part 2
stage
3

155.50 271.5116 Final Plug on
0 Completion part 2
stage
4

78.50 155.577 Final Plug on
0 Completion part 2
stage
5

1.50 78.5077 Final Plug on
Completion part 2
stage
6

Cyców 8
Borehole Completion Report. Part II. Borehole Construction
LOCATION
E 8443767.41 N 5688263.31
Elevati181.3m. Ams Inclination Vertical
on l

Co-ordinate system: local 2000/8
Localicity: wierszczów
District Cyców Area czna

DRILLING
Method From To TotalHole DiaNotes
meter

Open 0.00 8.00 8.00 311 pipe bit
Hole/Rock
Bit

Open 8.00 80.00 72.00216 rock bit
Hole/Rock
Bit

Open 80.00 637.60 557.6171 rock bit
Hole/Rock 0
Bit

Reaming 586.00637.60 51.60126 PDC
coring
bit

Core 637.60875.00 237.496 coring
0 bit
HQ


FINAL DEPTH: 875 m (Depth to Floor of seam 391: 842.24 m)
(Seam 391 thickness: 0.90
m)

CASING
From To Total Diameter Notes
0.00 8.00 8.00 244,5 mm (9 Welded, fully cemented
5/8")

0.00 80.0080.00 193,7 mm (7 Welded, fully cemented
5/8")

0.00 637.6637.60139,7 mm (5 Welded, fully cemented
0 1/2")


All casing cut at 1,5 m below ground level
GEOPHYSICAL LOGGING
Method From To TotalNotes
Verticality 0.00 870.00 870.0TW "Dalbis"
0

4 arm caliper62.31 637.19 574.8BLM - 1st logging
8

Natural Gamma0.02 638.22 638.2BLM - 1st logging
0

GG Dual 0.08 636.56 636.4BLM - 1st logging
Spaced 8
Density

Temperature 5.00 638.71 633.7BLM - 1st logging
1

Laterlog 80.01 637.50 557.4BLM - 1st logging
9

Verticality 1.24 636.74 635.5BLM - 1st logging
0

4 arm caliper627.09805.10 178.0BLM - 2nd logging
1

Natural Gamma627.07873.24 246.1BLM - 2nd logging
7

GG Dual 629.39875.43 246.0BLM - 2nd logging
Spaced 4
Density

Laterlog 638.91769.62 130.7BLM - 2nd logging
1

HYDROGEOLOGY
MUD LOSS
From To Total Volume Notes
- 24 - 3 m3

PACKER/PUMP TESTS
From To Total Notes
- - - - -
CEMENTING
From To Total Dry Cement TonnNotes
es

0.00 8.00 8.00 0.332 Cement casing
0.00 80.0080.00 0.994 Cement casing
0.00 637.6637.607.139 Cement casing
0

420.00 875.0455.0012.084 Cement Plug for
0 Diversion stage
1

225.00 420.0195.00Cement Plug for
0 Diversion stage
2

105.00 225.0120.00Cement Plug for
0 Diversion stage
3

1.50 105.0103.50Cement Plug for
0 Diversion stage
4


Syczyn 8
Borehole Completion Report. Part II. Borehole Construction
LOCATION
E 8446402.38 N 5684835.53
Elevati180.4m. Ams Inclination Vertical
on 7 l

Co-ordinate system: local 2000/8
Localicity: Syczyn
District Wierzbica Area Chem
DRILLING
Method From To TotalDiameterNotes
Open 0.00 8.00 8.00 311 pipe bit
Hole/Rock
Bit

Open 8.00 80.00 72.00216 rock bit
Hole/Rock
Bit

Open 80.00 625.00 545.0171 rock bit
Hole/Rock 0
Bit

Reaming 460.00524.00 64.00171 rock bit
Reaming 520.00623.70 103.7126 PDC
0 coring
bit

Core 623.70650.50 26.8096 coring
bit
HQ3

Core 650.50875.00 224.596 coring
0 bit
HQ

FINAL DEPTH: 875 m (Depth to Floor of seam 391: 820.17 m)
(Seam 391 thickness: 0.87
m)

CASING
From To Total Diameter Notes
0.00 8.00 8.00 244,5 mm (9 Welded, fully cemented
5/8")

0.00 76.6076.60 193,7 mm (7 Welded, fully cemented
5/8")

0.00 624.0624.00139,7 mm (5 Welded, fully cemented
0 1/2")

All casing cut at 1,50 m below ground level
GEOPHYSICAL LOGGING
Method From To TotalNotes
4 arm 72.23 617.80 545.5BLM - 1st logging
caliper 7

Natural 0.12 615.22 615.1BLM - 1st logging
Gamma 0

GG Dual 1.57 617.80 616.2BLM - 1st logging
Spaced 3
Density

Temperature 1.24 618.29 617.0BLM - 1st logging
5

Laterlog 74.95 616.10 541.1BLM - 1st logging
5

4 arm 619.81872.78 252.9BLM - 2nd logging
caliper 7

Natural 684.95871.10 186.1BLM - 2nd logging
Gamma 5

GG Dual 619.70854.58 234.8BLM - 2nd logging
Spaced 8
Density

Temperature 619.52873.41 253.8BLM - 2nd logging
9

Laterlog 618.21854.06 235.8BLM - 2nd logging
5

Acoustic 623.82855.25 231.4BLM - 2nd logging
Scanner 3

Verticality 0.44 872.54 872.1BLM - 1st and 2nd
0 logging

HYDROGEOLOGY
MUD LOSS
From To Total Volume Notes
- - - - -

PACKER/PUMP TESTS
From To Total Notes
- - - - -
CEMENTING
From To Total Dry Cement TonnNotes
es

0.00 8.00 8.00 0.332 Cement casing
0.00 76.6076.60 0.994 Cement casing
0.00 624.0624.006.945 Cement casing
0

420.00 875.0455.0012.023 Final Plug on
0 Completion stage
1

225.00 420.0195.00Final Plug on
0 Completion stage
2

105.00 225.0120.00Final Plug on
0 Completion
stage 3
1.50 105.0103.50Final Plug on
0 Completion stage
4


Appendix 2 - JORC Code, 2012 Edition - Table 1 - Lublin Coal Project - Drilling
Section 1 Sampling Techniques and Data

Criteria JORC Code explanation Commentary
Sampling · Nature and quality of · Openhole rock cutting
techniqu sampling samples were obtained at 2m
es ( intervals during the
eg cut channels, random drilling of the
chips, or specific
specialised industry openhole sections of the
standard measurement tools boreholes (Quaternary,
appropriate to the minerals Cretaceous and Jurassic
under investigation, such strata above the Coal
as down Measures.

hole gamma sondes, or
handheld XRF instruments, · Continuous rotary rock
coring was undertaken
etc). These examples should through the Coal Measures
not be taken as limiting strata
the broad meaning of
sampling. including the target seams
of coal.
· Include reference to
measures taken to ensure The coal seams and Coal
sample Measures strata were
subject to quality control
representivity and the to confirm that sufficient
appropriate calibration of coal has been recovered to
any measurement tools or provide a representative
systems sample of each seam
used. considered for mineral
extraction. The quality
· Aspects of the control
determination of incl
mineralisation that are udes detailed core logging,
Material to the Public measurements of core
Report. recovery to confirm an
acceptable level of
· In cases where industry recovery and the use of
standard work has been geophysical logs to confirm
done this would be the thickness of coal seams
relatively simple and associated partings of
( dirt.
eg reverse circulation
drilling was used to obtain · The coal cores are
1 m samples from which 3 kg maintained in plastic
was pulverised to produce a sleaving/sheeting prior the
30 g charge for fire sampling, and the samples
assay). In other cases are placed in plastic bags
more explanation may be to
required, such as where
there is coarse gold that mitigate moisture loss. The
has inherent cores are also stored at
samplin temperatures of < 18
g problems. Unusual degrees centigrade within
commodities or an air conditioned
mineralisation types container to mitigate
( moisture
eg submarine nodules) may loss.
warrant disclosure of
detailed · A unique system of sample
information. numbering has been employed
for each coal
sample
including borehole name,
seam code and sample
number. In
addition
, all samples are weighed.
This
information
is cross-checked by the
receiving laboratory to
confirm that there has been
no mix up between site and
the laboratory in regard to
the sample references and
location within a
particular coal
seam.

· Each coal seam was sampled
as
a single unit, or as sub-sam
ples
(pl
ies) of coal. Partings (eg mu
dstone)
were sampled separately. In
all cases the
complete
/whole core is sampled (i.e.
the core is not
split)
. Only samples of >90% core
recovery are taken as
representative for whole
seam or individual ply
samples. The thickness
control to determine the
acceptable % of recovered
is determined by reference
to geophysical logs (see
below).

· Samples of the immediate
roof/floor were analysed to
determine basic properties
for potential
dilution.

· Samples of roof and floor
strata
(
eg mudstone, claystone,
sandstone) were obtained
for geotechnical
testing.

Drilling · Drill type (eg core, · The drilling was
techniqu reverse circulation, undertaken by a combination
es open-hole hammer, rotary of rotary
air blast, auger, Bangka,
sonic, openhole and core drilling.
Sections of potentially
etc) and details (eg core unstable ground were
diameter, triple or
standard tube, depth of cased off during the
diamond tails, drilling of these deep
face-sampling bit or other exploration boreholes. The
type, whether core is Coal Measures strata were
oriented and if so, by what recovered as a continuously
method, cored sequence of strata,
the core diameter
etc).
being 63 or 85mm. The core
drilling method deployed
was wire line rotary
drilling
using single tube core
barrels.

Drill · Method of recording and · Chip samples of openhole st
sample assessing core and chip rata were taken over each 2m
recovery sample recoveries and of drilled strata.
results Lithological descriptions
assessed. were made of the chip
samples.
· Measures taken to maximise
sample recovery and ensure
representative nature of · Continuous cores were
the obtained
samples.
in the coal measure section
· Whether a relationship and
exists between sample
recovery and grade and over coal seams. Core
whether sample bias may recovery was calculated for
have occurred due to each core run based on the
preferential loss/gain of length of the core run and
fine/coarse
material. the length of the recovered
core measured before and
after extraction from the
core
barrel
. The calculation of the
coal seam recovery was
determined by the careful
measurement of the
recovered
core
and determination of the
thickness of the seams by

the interpretation of geophys
ical
logs
. The geophysical log suite
included natural gamma,
density and for

Cycow 8, Cycow 7 and Syczyn 8
acoustic
scanner.

· Recovery of target seams
(including seam 391) was
generally high - 90% or
greater and these were
considered as appropriate
for quality
assessment.

Logging · Whether core and chip · Detailed geological logs
samples have been of the Coal Measures strata
geologically and are produced based on the
drilling depths.
geotechnically logged to a
level of detail to support These depths are then
appropriate Mineral amended as necessary
Resource estimation, mining following detailed
studies and metallurgical interpretation of the
studies. geophysical logs. The level
of detail is
· Whether logging is
qualitative or quantitative sufficient to support
in nature. Core (or Mineral Resource
costean, channel, estimation.

etc) photography. · All cores are photographed.
· The total length and · All cores are logged
percentage of the relevant
intersections
logged.

Sub-sampl· If core, whether cut or · As is normal practice in
ing sawn and whether quarter, coal exploration the whole
techniqu half or all core section is taken for
es and taken. analysis and the core is
sample not split.
preparat· If non-core, whether
ion riffled, tube sampled, Immediately the coal seam
rotary split, cores are extracted from
the core barrel a spot coal
etc and whether sampled wet sample is taken for gas
or testing, secured in an air
dry. tight
container.
· For all sample types, the
nature, quality and · The core is stored within
appropriateness of the core boxes in plastic
sample preparation sleaving or sheeting prior
technique. to logging and sampling to
mitigate moisture
· Quality control procedures loss.
adopted for all
sub-sampling stages to · All samples were logged by
maximise an experienced local
geologist from
representivity of samples.
· Measures taken to ensure Polgeo (on contract to PDCo)
that the sampling is and checked by
representative of the in
situ material collected, PDCos site geologist prior
including for instance to sampling. All samples
results for field were taken under the
duplicate/second-half supervision of or by, the
sampling.
PDCo site geologist.
· Whether sample sizes are · Samples are not split and
appropriate to the grain therefore they are
size of the material being considered representative
sampled. of the in-situ material
collected.

Quality · The nature, quality and · Coal quality testing has
of appropriateness of the been undertaken to meet
assay assaying and laboratory Polish and International
data procedures used and whether standards. This includes
and the technique is considered analysis on all coal seams
laborato partial or >0.60m thick and additional
ry total. detailed analysis on target
tests economic seams (generally
· For geophysical tools, >1.0m thick). This includes
spectrometers, handheld XRF float and sink and detailed
instruments, analysis
(
etc, the parameters used in eg ultimate analysis, ash
determining the analysis analysis, coking
including instrument make properties.
and model, reading times,
calibrations factors · Geophysical logs are used
applied and their to verify the thickness of
derivation, coal
etc. samples

· Nature of quality control · A basic suite of analysis
procedures adopted has been undertaken by
( accredited Polish Labs.
eg standards, blanks, This includes proximate
duplicates, external analysis, sulphur, CV and
laboratory checks) and ultimate analysis. The
whether acceptable levels major part of each sample
of accuracy has been sent to an
( accredited international
ie lack of bias) and laboratory in the UK for
precision have been float and sink analysis and
established. additional analysis
(
eg ash analysis, ultimate
analysis, ash fusion,
coking
properties).

Verificat· The verification of · The thickness records of
ion of significant intersections all coal samples recorded
sampling by either independent or by
and alternative company the contract geologists has
assaying personnel. been checked by the

· The use of twinned holes. PDCo site geologist and subse
· Documentation of primary quently
data, data entry
procedures, data verified by Mr ODell by
verification, data storage means of interpretation of
(physical and electronic) geophysical logs and
protocols. reference to the sampling
and core description
· Discuss any adjustment to records.
assay
data. · Twinned holes have not
been
used.

· Sampling and coal quality
test result records are
held in electronic format
in Poland and the
UK
. All data has been verified
by

PDCo geologists.
· All laboratory data has
been checked for
inconsistencies by

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