Prairie Mining Limited: Maiden 301Mt Hard Coking Coal Resource Confirmed at Debiensko

(firmenpresse) -
MAIDEN 301 MILLION TONNES HARD COKING COAL RESOURCE CONFIRMED AT DEBIENSKO

HIGHLIGHTS:

- Maiden Coal Resource Estimate of 301 million tonnes of hard coking coal at Debiensko

- 93 million tonnes JORC Indicated and 208 million tonnes JORC Inferred Coal Resources

- Attractive coal quality parameters within all seams with the proven potential to produce high quality hard coking coal

- Size of Resource and proximity to European steel mills and coking plants highlights the globally signigicant scale of Debiensko and its strategic importance to Europes steelmaking industry

- Coking coal market fundamentals and regional supply / demand dynamics are highly favourable as European steelmakers continue to import over 60 million tonnes of coking coal every year; coking coal remains on the EUs Critical Raw Materials list

- Prairie continues to rapidly progress works at the Debiensko mine site to bring the Project back into production utilising existing infrastructure

- Coal Resource Estimate will be used to support the Debiensko Scoping Study which remains on track for completion during Q1 2017

Prairie Mining Limited (Prairie or Company) is pleased to announce the completion of a maiden hard coking Coal Resource Estimate (CRE) at its 100% owned Debiensko Hard Coking Coal Project (Debiensko or Project) in Poland. This CRE will be used by the Company to support the ongoing Scoping Study at Debiensko which targets the highest quality, most laterally extensive and most readily accessible coal seams.

The CRE is reported in accordance with the JORC Code (2012) and comprises 93 million tonnes (Mt) in the Indicated Category as part of a total CRE of 301Mt. The CRE is based on seven of the thicker, more consistent hard coking coal seams within the Debiensko licence area.

Table 1: Debiensko Hard Coking Coal Resource (air dried basis)
Seam Indicated (Mt) Inferred (Mt) Total Coal

Resource

In-Situ (Mt)
401/1 20 22 42
402/1 - 53 53
403/1 - 34 34
403/2 - 39 39
404/1 - 30 30
404/9 35 20 55
405 38 10 48
Total 93 208 301
* Rounding errors may occur
** The Indicated and Inferred Resource tonnage calculations are reported with geological uncertainty of +/-10% and +/-15% respectively

Prairies CEO Ben Stoikovich commented: With this Maiden Coal Resource now established, we can evaluate a number of technical options for the Scoping Study which will assist us in rapidly advancing the development of a new hard coking coal supply for European steelmakers. The total Coal Resource of over 300Mt is significantly larger than our Exploration Target announced upon the acquisition of Debiensko in October 2016. With the recent confirmation of premium hard coking coal at the Project, Debiensko continues to exceed our expectations and we look forward to announcing the Scoping Study results during the current quarter. Prairie is fully committed to rapidly progressing works at the Debiensko mine site to bring the project back into production.

Prairie Group Executive Artur Kluczny commented: Since acquiring Debiensko in October 2016, Prairie has moved decisively to integrate the Debiensko team and re-initiate project planning and development works. The presently published coal resource data reinforce our conviction that Prairie can become, alongside JSW, another strategic supplier of hard coking coal to European industry, whilst generating jobs and significant investment in Poland.

Prairie will incorporate this CRE into Debienskos Scoping Study mine plan. The Scoping Study is being conducted in accordance with international best practise in all study areas and remains on track to be completed during the current quarter.

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

BACKGROUND
Debiensko is a world class, fully permitted, hard coking coal project situated in Upper Silesia in Poland, a strategic location in the steelmaking heartland of Europe where more than 80% of current coking coal usage is imported and the commodity is classified by the European Commission (EC) as a Critical Raw Material for European industry.

The Upper Silesian Coal Basin is one of the largest and most extensively worked in Europe and covers approximately 7,400km² in the south west of Poland. It has been a longstanding and significant source and supplier of coking coal, as well as thermal coal. Debiensko is a brownfield project (operations ceased in 2000) and is bordered by the successful operating mines Szczyglowice-Knurow and Budryk owned by Europes largest coking coal producer, JSW.

Exploratory drilling within the concession area first began in the early 1900s, culminating with the drilling of 9 deep boreholes in the 1980s by Polish government agencies. Debiensko Mine commenced production over 100 years ago, and has worked over 30 seams in the 300 series coals above the target seams subject to this estimate. A significant proportion of the data for the Project is historical and has been collated by Prairie from a number of sources, including archives of the Polish Government and Polish Geological Institute/National Research Institute.

http://www.irw-press.at/prcom/images/messages/2017/38759/170201 Debiensko Maiden JORC Resource Announcement_draft_boardprcom.001.jpeg

Figure 1 - Debiensko Concession

MAIDEN COAL RESOURCE ESTIMATE

The maiden Coal Resource Estimate confirms that the coal seams within Debiensko form an extensive, moderately dipping, consistent, and laterally continuous set of coal seams containing high quality hard coking coal. The CRE, together with the fact that Debiensko is a former operating mine and has two neighbouring mines currently producing coking coal in the same geological setting, reaffirms the significant potential to successfully bring Debiensko back into operation.

Prairie has engaged Royal HaskoningDHV to complete a Scoping Study for the Project. RHDHV has over 130 years experience, providing expertise in the fields of aviation, buildings, energy, industry, infrastructure, maritime, mining, transport, urban and rural planning and water. Royal HaskoningDHV has worked extensively in deep European coal mining including in the UK, Kazakhstan and Poland.

COAL QUALITY

Debiensko has attractive coal quality parameters, within all seams, with the proven potential to produce high quality hard coking coal. The resource estimate does not present washed coal quality results but instead presents only raw unwashed coal parameters.

Prairie has scrutinised the historical data and incorporated data from the recently drilled Debiensko 12 borehole to produce this estimate and confirm the hard coking coal quality. Furthermore, the CRE focuses on seven of the thicker, more laterally extensive coals. Further seams of potentially workable thickness occur but are generally not laterally extensive enough to warrant inclusion at this stage. Coal qualities for the target seams are given in Table 2 below.

Table 2: Coal Quality Parameters at Debiensko
Seam Parameters Indicated Inferred
Range Weighted Range Weighted
Average Average

From To From To
401/1 Moisture% 0.33 1.24 0.68 0.45 1.25 0.60
Ash% 3.15 24.24 9.24 5.89 24.03 7.47
VM% 24.69 31.51 27.75 20.86 31.92 25.42
Sulphur% 0.37 1.60 0.74 0.48 1.58 0.63
GCV 26,47834,08231,416 26,54333,58432,881
402/1 Moisture% - - - 0.10 1.02 0.62
Ash% - - - 3.47 29.68 11.49
VM% - - - 19.36 31.61 25.28
Sulphur% - - - 0.27 2.18 0.72
GCV - - - 23,54733,79730,538
403/1 Moisture% - - - 0.35 1.02 0.66
Ash% - - - 3.73 23.74 11.52
VM% - - - 16.73 32.13 25.83
Sulphur% - - - 0.29 0.75 0.49
GCV - - - 27,51132,62731,017
403/2 Moisture% - - - 0.35 1.12 0.73
Ash% - - - 3.25 33.36 11.38
VM% - - - 23.64 31.28 26.75
Sulphur% - - - 0.40 1.87 0.67
GCV - - - 22,32833,76030,581
404/1 Moisture% - - - 0.25 1.10 0.65
Ash% - - - 6.50 27.38 12.89
VM% - - - 17.81 31.58 25.04
Sulphur% - - - 0.35 0.81 0.54
GCV - - - 25,43233,02530,012
404/9 Moisture% 0.56 0.76 0.68 0.53 0.86 0.69
Ash% 9.45 19.54 11.75 9.65 19.89 13.80
VM% 20.97 32.95 26.80 15.57 31.05 23.20
Sulphur% 0.20 1.14 0.60 0.20 1.14 0.41
GCV 29,14532,51631,269 29,06732,74830,604
405 Moisture% 0.35 1.09 0.65 0.48 0.87 0.65
Ash% 5.63 17.40 9.61 5.42 12.47 9.17
VM% 19.40 28.33 23.52 15.33 28.70 22.47
Sulphur% 0.29 0.48 0.35 0.27 0.93 0.37
GCV 29,76034,13732,198 31,53834,11332,427
All analyses are given on an air dried basis except for volatile matter which is on a dry ash free basis.

A fully cored borehole was drilled by the previous owners in 2015/2016 and a suite of modern coking tests were performed on select seams. Preliminary coal quality analysis from this borehole 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.

http://www.irw-press.at/prcom/images/messages/2017/38759/170201 Debiensko Maiden JORC Resource Announcement_draft_boardprcom.002.png

Source: Industry Reports
Figure 2 - 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 3: 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 - -
(%)

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 4: 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 7½ 8½ 8½ 7 8½ 8½ 8 7½
Swelling
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 -
(%)


Summary of Resource Estimate and Reporting Criteria

Geology and Geological Interpretation

The Upper Silesian Coal Basin covers approximately 7,400km2 in the south west of Poland on the border with the Czech Republic. The Basin formed in the Upper Carboniferous and contains an exceptional thick sequence of Namurian and Westphalian sediment formed in paralic and deltaic environments. The Basin was uplifted and faulted during the Variscan Orogeny and subsequently subject to erosion. In the south the Carboniferous strata are covered by Miocene clays and sands and in the north by Permian and Jurassic strata. At Debiensko shaft the Carboniferous strata are covered by about 50 m of Miocene strata.

Over 300 coal seams are known and individual seams can exceed 9 m in thickness. Coal type (rank) is strongly depth dependent and varies from high volatile bituminous to semi anthracite.

The Debiensko structure is largely controlled by the Orlova Structure to the west of the licence and strata is found to be either shallowly or moderately dipping (predominantly to the south east).

The coal sequence within the Debiensko Licence comprises approximately 24 designated seams, from Seam 401/1 at the top to Seam 410 at the base. The Carboniferous interburden is made up of sedimentary lithologies ranging from claystones to mudstones to sandstones and some minor calcareous units. The 400 Series Seams within the licence are overlain by the 300 Series Coals of which over 30 have been worked providing an exceptional degree of structural control. In addition, the seams with designated Indicated resources have or are being, worked adjacent to the licence at the neighbouring mines.

Drilling and Sampling Techniques

Some 25 historic boreholes were drilled within the licence and surrounding area and most were subject to down-hole geophysical logging, geotechnical testing and coal quality analysis (the results from boreholes with no geophysics were removed from the database). The drilling was conducted by various Polish government agencies between the 1960s and 1980s.

Historical drilling was conducted using a combination of open hole and strata core drilling in every borehole. All historical boreholes are assumed to have been drilled vertically.

Coal samples for laboratory analysis were obtained from the solid core, cleaned and sealed in individually labelled plastic bags to prevent contamination or excessive moisture loss before being sent to a laboratory. Coal quality analysis was conducted by the Analytical Tests Department of Katowice Geological Enterprise although exact testing procedures are not available. Coal seams 40cm thick were analysed and dirt/non-coal bands 5cm thick were not analysed.

In 2015/ 2016 the previous owner drilled a technical borehole to provide high resolution data for geological, geotechnical, hydrogeological, and other purposes including washability test work. The core drilling method deployed was wire line rotary drilling using double tube core barrels.

Geological logging of solid core and chip samples was performed by Polish Consultants. Detailed lithological descriptions were used as the basis for graphic logs.,

Core and associated samples were stored in robust, marked, wooden boxes at site. Core was sealed in plastic sheeting and stored at a controlled temperature to prevent damage and excessive moisture loss or core deterioration. In order to ensure consistency core was photographed through by a camera attached and all suitable core was scanned to produce 3D images.

The boreholes were subject to detailed down-hole geophysical logging to confirm the depths and thicknesses of the coal seams, together with geotechnical and hydrogeological parameters. The suite of geophysical testing includes 4-arm calliper, dual-spaced density, temperature, natural gamma, resistivity and verticality. All coal seams > 0.60m were sampled for coal quality testing and roof and floor strata of the target economic seams), was sampled for geotechnical laboratory testing.

Core recovery (%) was calculated after drilling with comparison to coal seam depths and thicknesses as interpreted from the geophysical logs.

Classification Criteria

The current CRE has been carried out in accordance with the guidelines set out within the Joint Ore Reserves Committee of Australia Code 2012 and the associated Australia Guidelines for the Estimation and Classification of Coal Resources 2014. In addition, the CP has consulted the templates set out by the Committee for Mineral Reserves International Reporting (CRIRSCO).

Sample Analysis Method

Coal seams > 0.40m thick were sampled and tested from the historic boreholes, however dirt beds >0.05m were not tested. The sampled coal was subject to highly detailed coal quality testing in accordance with Polish Standards. A varied suite of analyses was carried out including, standard proximate analysis and coking properties, which formed the basis of the study.

The recent 2015/2016 cored borehole was subject to detailed coal quality testing undertaken by accredited laboratories in Poland. The testing included standard proximate analysis and detailed tests, including float and sink analysis, coking parameters and washability.

Resource Estimation Methodology

In 2016, Prairie announced an Exploration Target range of 210 - 260 Mt tonnes of coal (refer ASX announcement 11 October 2016). The CRE was defined within 16 coal seams found at depths to 1,100 m within the Companys license.

For this estimation, the company has focussed on seven of the thicker more laterally consistent and extensive seams.

The CP has scrutinised the historical data, including the borehole and historical overworkings and in addition the statutory plans for workings in the 401/1, 404/9 and 405 Seams adjacent to the north west of the Debiensko Licence.

GEOVIA MINEX modelling software was used to undertake modelling as it is particularly adept at modelling stratiform deposits such as coal. The model is based on the database prepared for NWR Karbonia SA (NWRK) by their consultants KPG which contains all necessary borehole data (collar location, seam depth and thickness, coal quality data). Prairie has conducted detailed verification on the data base to ensure data veracity including checking correlations and entries against original documentation.

3D modelling procedure was conducted in following stages: 1. Raw data loading and validation; 2. Interpolation of borehole data; 3. Seam structure and coal quality modelling; 4. Fault modelling (3D faulting with various throws); 5. Final model validation; 6. Resource estimation. For basic modelling fault location and throw was adopted from latest deposit documentation. The basic Minex model provides information relating to coal extent, quality and quantity and allows a CRE to be reliably estimated.

Cut-off Grade

No cut-off grades (qualities) were applied during the estimate. Coal was modelled on a gross tonnage basis, including dirt partings within the seam. Coal seams are generally distinct and homogenous. Coal will not be selectively mined and Run-of-Mine coal will undergo beneficiation, and as such, estimation does not warrant application of grade cut-off. Physical/spatial cut-offs were applied, including the pillar of support under the shafts/township and a depth limit of 1,100 m below datum.

Forward Looking Statements
This release 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.

Competent Person Statements

The information in this announcement that relates to Exploration Results and Coal Resources is based on, and fairly represents information compiled or reviewed by Mr Jonathan ODell, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy who is is a consultant of the Company. Mr ODell has sufficient experience that 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. Mr ODell consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.


ABOUT THE DEBIENSKO HARD COKING COAL PROJECT

Debiensko is fully permitted with a 50-year mining concession, established on-site facilities including rail, road and power infrastructure, comprehensive historical drilling data and all environmental consents. As a brownfield development project, significant historical capital investment positions Debiensko to become a meaningful, near-term regional hard coking coal producer.

Following detailed technical due diligence by Prairie, the Company is confident that a revised development approach would allow for the early mining of profitable coal seams, whilst minimising upfront capital costs.

This is likely to include focusing on a smaller area of Debiensko to target coal seams that are more readily accessible. Prairie has proven expertise in defining commercially robust projects and applying international standards in Poland.

http://www.irw-press.at/prcom/images/messages/2017/38759/170201 Debiensko Maiden JORC Resource Announcement_draft_boardprcom.003.jpeg

Figure 3 - Debiensko Project Licence and Target Area

Infrastructure

As part of the transaction, Prairie has acquired approximately 15Ha of land and all related facilities critical to the development of the Project. Significant historical capital investment positions Debiensko to become a meaningful and near term regional hard coking coal producer.
http://www.irw-press.at/prcom/images/messages/2017/38759/170201 Debiensko Maiden JORC Resource Announcement_draft_boardprcom.004.jpeg
http://www.irw-press.at/prcom/images/messages/2017/38759/170201 Debiensko Maiden JORC Resource Announcement_draft_boardprcom.005.jpeg

Figure 4 - Aerial view of the Figure 5 - Rail Yard next to
Debiensko Mine Debiensko
Site

With existing site facilities and necessary infrastructure including power, water, rail and road in addition to the mining concession, environmental consent and local planning all being in place, the Project is considered development-ready.

The Debiensko mine was previously connected to the main Polish rail network and a currently inactive railway siding is still in place and in sound condition. Poland is served by ~23,420 kilometres (14,550 mi) of railway tracks using standard international gauge, and provides rail connections to major regional end users of coking coal and for export. Further, asphalt roads surround and connect the Debiensko mine site to the major road network.
http://www.irw-press.at/prcom/images/messages/2017/38759/170201 Debiensko Maiden JORC Resource Announcement_draft_boardprcom.006.jpeg


Figure 6 - Existing Site Facilities and Infrastructure

Here the Link to the News Release: http://www.asx.com.au/asxpdf/20170201/pdf/43fpypklknn5jz.pdf

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Datum: 01.02.2017 - 07:28 Uhr
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