Prairie Mining Ltd.: Premium Quality Hard Coking Coal Confirmed at Debiensko

(firmenpresse) -
PREMIUM QUALITY HARD COKING COAL CONFIRMED AT DEBIENSKO

HIGHLIGHTS:

- Following the acquisition of the fully permitted Debiensko Hard Coking Coal Project in October 2016, Prairie has recently received results from a fully cored borehole drilled at the Project
- The results confirm historical data for the Project which indicate that Debienkso hosts a range of premium quality hard coking coals comparable to internationally traded benchmark coking coals
- Given favourable regional supply and demand dynamics, coal of this quality will be in significant demand by steelmakers across Europe and attract premium pricing
- Coking coal is classified by the European Commission as a Critical Raw Material and of the 80Mt of coking coal consumed in Europe per year, 80% is imported
- A maiden JORC Resource Estimate for Debiensko will be announced in the coming weeks to support the Scoping Study mine plan which remains on track for completion during Q1 2017

Prairie Mining Limited (Prairie or Company) is pleased to announce the results of preliminary coal quality analysis from a borehole drilled at the Companys Debiensko Hard Coking Coal Project (Debiensko or the Project) during 2015/2016 by the previous owners.

Prairies preliminary review of the Debiensko deposit indicates that a range of premium hard coking coals can be produced from the Project that will be in high demand from European steelmakers. Two premium hard coking coal specifications have been delineated at Debiensko, namely Medium volatile matter hard coking coal (Mid-vol HCC) and Low volatile matter hard coking coal (Low-vol HCC).

The borehole was fully cored to 30 m below seam 407/4. All core was subject to detailed logging and core photography. Seam thicknesses and depths have been confirmed by a suite of geophysical logs while coal seams were analysed by accredited laboratories in Poland.

Prairies CEO Mr. Ben Stoikovich said The excellent coking coal quality results from Debiensko further reinforce Prairies potential to become a key premium hard coking coal supplier to European steelmakers. These initial results confirm that the Debiensko deposit hosts premium coking coals of comparable quality to internationally traded benchmark hard coking coals, and will achieve premium pricing in the market. As we continue to rapidly advance our assessment of Debiensko, we look forward to announcing the Projects maiden JORC Resource Estimate and subsequent Scoping Study results in the coming weeks.

Debiensko Premium Hard Coking Coal Benchmarking
Both Debienskos Mid-vol and Low-vol HCC lie within the range of premium hard coking coals produced globally. Indications are that the Mid-vol HCC at Debiensko is present between 850 m to 1,000 m from surface and the Low-vol HCC is present 1,000 m to 1,300 m below surface i.e. at depths similar to adjacent operating mines owned by Jastrzbska Spóka Wglowa S.A. (JSW) - the largest coking coal producer in Europe.

http://www.irw-press.at/prcom/images/messages/2017/38680/170123 - Debiensko - Premium Quality Hard Coking Coal_FINAL_PRCOM.001.png

Source: Industry Reports
Figure 1 - Premium Coking Coals

Medium Volatile Matter Hard Coking Coal
The quality of Mid-vol HCC from Debienkso compares favourably with the Australian Goonyella hard coking coal brand, and with medium volatile coals produced in Poland today by JSW. This coal features good rheological properties and coke yield, with reasonably low sulphur levels. Prairies assessment is that Mid-vol HCC from the Debiensko project would receive premium pricing in European and international markets.


Table 1: Debiensko Medium Volatile Matter Hard Coking Coal
Comparison to International
Benchmarks

Quality DebienGoonyeOaky ElkvieTuhup PittstBoryniPniowek
sko lla Creekw (Indonon a -JSW
* esia) -JSW
(Polan(Austr(Austr(Canad (Polan(Poland
d) alia) alia a) (USA) d) )
)
Ash (%) 3.2 8.9 9.5 9.5 7.0 8.0 8.5 8.5
Volatile 25.0 23.8 24.5 23.5 26.5 26.0 24.8 27.0
Matter
(%)
Sulphur (0.56 0.56 0.60 0.50 0.70 0.85 0.65 0.60
%)

Phosphoro0.025 0.025 0.070 0.07 0.02 0.019 0.059 0.050
us
(P)
in Coal
(%)

Free 8½ 8 8½ 7½ 9 8 7½ 8½
Swelling
Index
(
FSI)
CSR (%) 63 66 67 70 60 - - -
Fluidity 1200 1100 5000 150 450 - up to up to
( 2300 3000
ddpm)
C daf (%)86 88.4 86.8 81.2 - 88.0 - -
Rv Max 1.23 1.17 1.10 1.22 1.18 1.10 1.20 1.10
Vitrinite78 58 75 55 96 76 - -
(%)
* Indicative quality Debiensko Mid-vol HCC from washed sample from 401/1 seam at floats <1.40kg/m3

http://www.irw-press.at/prcom/images/messages/2017/38680/170123 - Debiensko - Premium Quality Hard Coking Coal_FINAL_PRCOM.002.png


Low Volatile Matter Hard Coking Coal
Debienskos Low-vol HCC is similar to other internationally traded low volatile matter hard coking coals, including brands such as Peak Downs (BHP Billiton Mitsubishi Alliance - BMA) and Hail Creek (Rio Tinto) produced in Australia. Whilst the Coke Strength after Reaction (CSR) is anticipated to be slightly lower than these Australian coals, the quality of Debiensko Low-vol HCC is anticipated to be in-line with coal produced at JSWs Jas-Mos mine in Poland, which is used as a stabilizing and leaning component of nearly every coal blend for production of blast furnace coke in the region.

Table 2: Debiensko Low Volatile Matter Hard Coking Coal
Comparison to International
Benchmarks

Quality DebienPeak GermanHail Blue BuchanNeryunJas-Mo
sko Downs Creek Creek Creekan gri s
* (Aust (Aust (Aust - (USA) (Russ(Pola
(Polanralia)ralia)ralia) No.7 ia) nd)
d) (USA)

Ash (%) 9.5 10.0 9.5 8.9 9.0 5.3 10.0 7.8
Volatile 20.5 20.5 19.0 20.5 19.9 18.7 19.3 21.4
Matter
(%)
Sulphur (0.30 0.60 0.54 0.4 0.71 0.73 0.21 0.56
%)

Free Swel7½ 8½ 8½ 7 8½ 8½ 8 7½
ling

Index
Fluidity 128 275 400 300l 1113 100 18 200
(
ddpm)
C daf (%)80 89.1 88.6 88.2 91 - 80.8 -
Rv Max 1.5 1.40 1.45 1.26 1.48 1.63 1.50 1.40
Vitrinite59 68 73 54 70 76 81 -
(%)
*Indicative quality Debiensko Low-vol HCC from unwashed sample from 404/9 seam


http://www.irw-press.at/prcom/images/messages/2017/38680/170123 - Debiensko - Premium Quality Hard Coking Coal_FINAL_PRCOM.003.png

european hard coking coal market
European industry relies on imports for approximately 80% of its coking coal needs - the highest quality of which, hard coking coal, is the type of coal found at Debiensko.

In 2010 and 2014, the European Commission (EC) carried out an assessment at the European Union (EU) level to identify Critical Raw Materials based on:

- Economic importance - the proportion of each material associated with industrial megasectors, such as construction, combined with its gross value added to EU GDP to define the overall economic importance of a material.

- Supply risk - based on accountability, political stability, regulatory quality etc.

The EC concluded that coking coal is a critical raw material for Europe with its economic importance to the continent only surpassed by tungsten and vanadium.

http://www.irw-press.at/prcom/images/messages/2017/38680/170123 - Debiensko - Premium Quality Hard Coking Coal_FINAL_PRCOM.004.png

Source: European Commission
Figure 2 - European Commission Raw Material Criticality Assessment
In 2015 Europe consumed a total of 80 Mt of coking coal, of which 50 Mt was hard coking coal. Europe relies heavily on imports of coking coal primarily from the USA, Australia and Russia. Poland and the Czech Republic are the only European producers, however their domestic production is in rapid decline. In 2015, 64 Mt (i.e. 80%) of total European coking coal consumption was imported, including 40 Mt of hard coking coal and 10Mt of semi-soft coking coal.

http://www.irw-press.at/prcom/images/messages/2017/38680/170123 - Debiensko - Premium Quality Hard Coking Coal_FINAL_PRCOM.005.png

Source: Industry Reports

Figure 3 - European Coking Coal Supply / Demand Fundamentals
Central Europe - which encompasses Poland, the Czech Republic, Slovakia, Hungary, Austria and Germany - accounts for approximately 50% of European coking coal consumption. In 2015, these countries consumed over 25 Mt of hard coking coal of which over 15 Mt was imported.

Regional Market
Debienskos strategically competitive location means that about half of Central Europes coking plants and steelmaking capacity is within 250 km of the Project and connected by existing road and rail infrastructure.
With a well-established rail network providing ease of transport to end users based in close proximity to Debiensko, Prairie will benefit from a significant pricing netback advantage over USA and Australian imported hard coking coal.
http://www.irw-press.at/prcom/images/messages/2017/38680/170123 - Debiensko - Premium Quality Hard Coking Coal_FINAL_PRCOM.006.png


Figure 4 - European Coking Coal Supply / Demand Fundamentals

- Poland - the main steel plants producing coke are Huta Czestochowa owned by ISD and situated in Czestochowa, producing ~0.6 Mtpa coke and Tadeusza Sendzimira, situated in Cracow, with a capacity of ~1.4 Mtpa coke. ArcelorMittal owns the Zdziesowice coke plant, the largest in Europe with a total coke capacity of 4.2 Mtpa. JSW owns the coking plants Debiensko, Radlin and Jadwiga and the Przyjazn merchant coke plant with a total capacity of some 4 Mtpa coke.
- Czech Republic - the largest exporter of coking coal in the region is NWRs Czech subsidiary, OKD a.s. (OKD), which is now subject to insolvency proceedings and where coking coal production is estimated to cease by 2023.
- Slovakia - hosts US Steels Kosice works which has a coke capacity of 1.7 Mtpa i.e. coking coal requirement of 2.4 Mtpa.
- Hungary - hosts one integrated steelmaker, Dunaferr, situated at Dunaujvavos which requires 1.4 Mtpa coking coal to meet its coke output capacity of ~1.0 Mtpa. The plant is currently supplied by Poland, the Czech Republic and Russia.
- Austria - has one major integrated steelmaker, Voestalpine, which operates one coke oven plant located at Linz and has an annual output capacity of 2.1 Mtpa coke implying a coking coal consumption rate of production is 3 Mtpa. The plant secures rail-delivered supply from Poland, the Czech Republic and Russia.
- Germany - is the largest market for coking coal in Europe with current consumption of coking coal amounting to ~15 Mtpa.

For further information, contact:
Ben Stoikovich--
Chief Executive Officer--
+44 207 478 3900--
--
Artur Kluczny--
Group Executive - Poland--
+48 22 351 73 80--
--
Sapan Ghai--
Corporate Development--
+44 207 478 3900--
info(at)pdz.com.au--


See here for the full press release:
http://www.asx.com.au/asxpdf/20170123/pdf/43fgcfnwrgmv67.pdf

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Datum: 23.01.2017 - 16:05 Uhr
Sprache: Deutsch
News-ID 519245
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