TIDMPDZ
RNS Number : 5130Z
Prairie Mining Limited
15 March 2017
PRAIRIE MINING LIMITED
NEWS RELEASE | 15 March 2017
SCOPING STUDY INDICATES DEBIENSKO MINE RESTART WILL DELIVER
LOWEST COST HARD COKING COAL INTO EUROPE
Scoping Study OUTCOMES:
-- Scoping Study illustrates potential technical viability and
robust economics for the fully permitted Debiensko mine to be a
large scale, lowest cost and long life premium hard coking coal
supplier
-- Globally significant project with 2.6 Mtpa hard coking coal
production from a JORC Resource of 301 Mt
-- Cash costs of approximately US$47 per tonne (steady state
average) potentially positions Debiensko as by far amongst the
lowest cost suppliers of hard coking coal into Prairie's key
European markets
-- High potential cash margins result in forecast EBITDA
(average steady state) of US$282 million by adoption of
international best practice in mine design
-- Key Scoping Study results for Debiensko are summarised as follows:
o Hard Coking Coal Production (Steady State Ave) up to 2.6 Mtpa
o Total Operating Costs FOR Mine Gate (Steady State Ave) estimated US$47 per tonne
o Annual EBITDA (Steady State Ave) up to US$282 million
o Life of Mine Cumulative Free Cash Flow estimated US$5.4
billion
o Initial Mine Life from First Production up to 26 years
o Life of Mine Saleable Hard Coking Coal Production up to 65 Mt
-- Highly favourable market fundamentals as Europe continues to
consume 47 Mt of hard coking coal annually, 85% of which is
imported; Debiensko coking coal is expected to enjoy strong demand
from steelmakers, with substantial netback pricing advantages given
proximity to regional customers
-- Access to well established and already connected regional
rail infrastructure with underutilised bulk cargo capacity for low
transportation costs within Poland to regional Central European and
wider European customers
-- Leveraging off existing infrastructure at the Debiensko mine
site potentially results in exceptionally low capital intensity of
US$197 per tonne of annual saleable production capacity compared to
an industry average of over US$401 per tonne for global hard coking
coal mines developed in the last decade
-- Significant positive social and economic benefits for regional development, jobs creation and re-industrialisation through re-development of a previously operating mine
-- Prairie's Polish and international management team with
experience in developing, operating and financing world-scale coal
projects, will now proceed with formal feasibility and other
technical studies
Prairie's Chief Executive Officer, Mr Ben Stoikovich, said: "The
Scoping Study results confirm Debiensko's potential as a Tier 1
premium hard coking coal asset by virtue of the significant
potential production scale and resource size, exceptionally low
estimated cash costs and low capital intensity of the mine. The
Study focused on the near-term development of highly profitable
coal seams at low capital and operating costs. The mine has the
potential to deliver 2.6 million tonnes per annum of premium
quality hard coking coal at US$47 per tonne placing it right near
the bottom of the global cost curve. Blessed with the presence of
existing rail, road, power, water and other mine infrastructure the
project has one of the potential lowest capital intensities for a
new hard coking coal mine and is fully permitted for development.
Preliminary analysis confirms that Debiensko hosts premium hard
coking coals of comparable quality to internationally traded
benchmark hard coking coals and the potential to obtain significant
pricing premiums against imported seaborne coals owing to transport
advantages (netbacks) of some US$15 per tonne. Our initial
marketing studies indicate that Debiensko hard coking coal will
likely be in strong demand in the Central European region, given
the highly favourable regional supply / demand dynamics.
It is time to re-affirm Poland's status as Europe's premier
exporter of hard coking coal, which is so vital for European
industry. By introducing international best practise into the
Debiensko project, Prairie's highly experienced management team is
well positioned to restart this Tier 1 asset, which will have huge
social and economic benefits for regional development."
For further information, contact:
Ben Stoikovich Artur Kluczny Sapan Ghai
Chief Executive Group Executive Corporate Development
Officer - Poland
+44 207 478 3900 +48 22 351 73 80 +44 207 478 3900
info@pdz.com.au
The Scoping Study is a preliminary technical and economic study
of the potential viability of Debiensko. In accordance with the ASX
listing rules, the Company advises that 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.
SCOPING STUDY RESULTS
Prairie Mining Limited ("Prairie" or "Company") is pleased to
report the results of the Scoping Study ("Study") for the Debiensko
Hard Coking Coal Project ("Debiensko") prepared by independent
consultants Royal HaskoningDHV, with input from other specialist
consultants and local experts. The Study utilised the maiden Coal
Resource Estimate ("CRE") for Debiensko which comprises a Global
CRE of 301 million tonnes ("Mt") including an Indicated Resource of
93 Mt from three coal seams; 401/1, 404/9 and 405 seams. Debiensko
is located in the Upper Silesian Coal Basin in the south west of
the Republic of Poland. Key results of the Study were as
follows:
Table 1: Strong Project Estimations and
Approximations
(to a maximum accuracy variation +/-
30%)
------------------------------------------------------
Cash flow
---------------------------------- ------------------
Average Operating Costs US$47 per tonne
Steady State
---------------------------------- ------------------
Long Term Hard Coking ("HCC") US$142 per tonne
Price Benchmark (FOB Australia (current Mar
- REAL 2016$) 2017 spot price:
+US$160/t)
---------------------------------- ------------------
Average Received HCC Price US$157 per tonne
FOR (including netback)
---------------------------------- ------------------
Average Steady State EBITDA US$282 million
(US$m)
---------------------------------- ------------------
Production
---------------------------------- ------------------
Average ROM* Coal Production 4 Mtpa
Steady State
---------------------------------- ------------------
Life of Mine Plant Feed 100.3 Mt
Coal Production ("LOM")
---------------------------------- ------------------
Average Effective Product
Yield LOM 67.8 %
---------------------------------- ------------------
Mine Life Following First 26 years
Production
---------------------------------- ------------------
Average Saleable HCC Production 2.6 Mtpa
Steady State
---------------------------------- ------------------
Total Saleable HCC Produced 65 Mt
LOM
---------------------------------- ------------------
Total Saleable Coal Produced 68 Mt
LOM (HCC + Middlings)
---------------------------------- ------------------
Capital Expenditure to First
Production
---------------------------------- ------------------
Shaft sinking US$208.5 million
---------------------------------- ------------------
Coal processing and surface US$102.5 million
facilities
---------------------------------- ------------------
Underground Infrastructure US$62.0 million
(Belts, Ventilation, Electrics)
---------------------------------- ------------------
Capitalised Pre-Production US$51.5 million
Expenses (Labour, Power,
Contractors etc.)
---------------------------------- ------------------
Contingencies, EPCM and US$79.5 million
owners costs
---------------------------------- ------------------
Start of Construction 2019
---------------------------------- ------------------
Start of Production Ramp-Up 2023
---------------------------------- ------------------
*Run of Mine
** FX rate assumed for the Study is PLN:USD - 4.0:1.0
POTENTIAL HIGH MARGIN, SIGNIFICANT CASH FLOW GENERATION
The results of the Study demonstrate the potential for
exceptionally high operating margins and cash flow generation given
the anticipated low operating costs for Debiensko. This is achieved
because Prairie is pioneering in Poland well established
international best practice in mine design, production organisation
and technology for the project. Debiensko benefits from being a
formerly operating mine, giving an excellent understanding of
geology and mining conditions with substantial existing
infrastructure available at site.
Based on an independent marketing study conducted by CRU
International ("CRU"), a long term hard coking coal benchmark price
forecast of US$142/t (FOB Australia, real 2016 $) has been used in
this Study. This compares to the current (March 2017) spot price of
over US$160/t and the 2017 Q1 quarterly contract price of US$285/t.
Due to the considerable transport cost advantages compared to
imported hard coking coal, the CRU study also identified that
Debiensko would potentially benefit from a substantial netback
premium of US$15/t above benchmark prices for coal sold to regional
Central European customers.
POTENTIALLY LOWEST GLOBAL CASH OPERATING COSTS DELIVERED INTO
EUROPE
Debiensko is projected to have an average steady state total
cash cost of approximately US$47 per tonne Free On Rail ("FOR") for
its premium hard coking coal, producing an average 2.6 Mtpa. Hard
coking coal product from Debiensko is anticipated to be at the
bottom of the global cost curve for hard coking coal delivered into
Central Europe, with a delivered cost of approximately US$51 per
tonne (FOR total cash cost including royalty + rail to typical
regional customer).
The Study assumes that a substantial portion of the mining
equipment fleet will be leased, which is common for underground
coal mines in the region. In addition, there is a royalty of
approximately PLN 2.80 (US$0.70) per saleable tonne, in-line with
the established Polish fiscal regime.
Table 2: Estimated Operating Costs
(to a maximum accuracy variation +/-
30%)
------------------------------------------------
Average Operating Costs US$ per tonne
(Steady State) Saleable
Coal
-------------------------------- --------------
Labour Costs 16.24
-------------------------------- --------------
Materials & Consumables 8.00
-------------------------------- --------------
Power 4.13
-------------------------------- --------------
Leased Equipment & Contractors 6.70
-------------------------------- --------------
Shaft 1.83
-------------------------------- --------------
Water 0.19
-------------------------------- --------------
Sub-total Direct Mining
Costs 37.09
-------------------------------- --------------
CHPP*, Waste Management
& Logistics 4.64
-------------------------------- --------------
Sub-total Direct Production
Costs 41.72
-------------------------------- --------------
SG&A 4.11
-------------------------------- --------------
Mine Closure Fund 0.33
-------------------------------- --------------
Average Operating Costs 46.16
-------------------------------- --------------
Royalty 0.70
-------------------------------- --------------
Average Total Cash Cost 46.86
-------------------------------- --------------
* Coal Handling & Preparation Plant
Low Capital Intensity
Debiensko is projected to have extremely low capital intensity
compared to other globally significant hard coking coal mines that
have been brought into production over the last decade. Debienkso
has a capital intensity of approximately US$197/t annual saleable
hard coking coal, compared to a peer group average of US$401/t.
Debienkso benefits from existing utilities and infrastructure on
site, given it is a brownfield project located in an area of heavy
industry. The project also enjoys access to well established
regional rail logistics with underutilised freight capacity,
providing an immediate route to regional customers. Hard coking
coal is a scarce commodity that is typically found in more complex
geological settings, which means that the capital costs to develop
genuine hard coking coal mines are generally higher than for mines
that produce lower rank coals.
PROJECT BACKGROUND
Debiensko is a fully permitted, hard coking coal project located
in the Upper Silesian Coal Basin in the south west of the Republic
of Poland. It is approximately 40 km from the city of Katowice and
40 km from the Czech Republic.
Debiensko is bordered by the Knurow-Szczyglowice Mine in the
north west and the Budryk Mine in the north east, both owned and
operated by Jastrz bska SpĆ³ ka W glowa SA ("JSW"), Europe's leading
producer of hard coking coal.
The Debiensko mine was originally opened in 1898 and was
operated by various Polish mining companies until 2000 when mining
operations were terminated due to a major government led
restructuring of the coal sector caused by a downturn in global
coal prices. In early 2006 New World Resources Plc ("NWR") acquired
Debiensko and commenced planning for Debiensko to comply with
Polish mining standards, with the aim of accessing and mining hard
coking coal seams. In 2008, the Minister of Environment of Poland
("MoE") granted a 50-year mine license for Debiensko.
In October 2016 Prairie, acquired Debiensko with a view that a
revised development approach would potentially allow for the early
mining of profitable premium hard coking coal seams, whilst
minimising upfront capital costs. Prairie has proven expertise in
defining commercially robust projects and applying international
standards in Poland. The fact that Debiensko is a former operating
mine and its proximity to two neighbouring coking coal producers in
the same geological setting, reaffirms the significant potential to
successfully bring Debiensko back into operation.
PREMIUM QUALITY HARD COKING COAL
Preliminary analysis indicates that a range of premium hard
coking coals that will be in high demand from European steelmakers
can be produced from Debiensko. This analysis is based on
historical data, neigbouring operational coking coal mines and the
results of a suite of modern coking tests performed on selected
seams from a fully cored borehole drilled by the previous owners in
2015/16. Two premium hard coking coal specifications have been
delineated from select seams at Debiensko, namely Medium volatile
matter hard coking coal ("Mid-vol HCC") and Low volatile matter
hard coking coal ("Low-vol HCC"). Future study phases will
determine the precise Debiensko premium hard coking coal quality
specification on a year by year basis depending on final adopted
mine plan, mining schedule and extent of coal blending.
Both Debiensko's 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 JSW - the largest coking coal producer in Europe.
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 low
sulphur levels. Prairie's assessment is that Mid-vol HCC from the
Debiensko project may receive premium pricing in European and
international markets.
Table 3: Debiensko Medium Volatile Matter Hard Coking
Coal Comparison to International Benchmarks
-------------------------------------------------------------------------------------------------------------------
Quality Debiensko* Goonyella Oaky Elkview Tuhup Pittston Borynia-JSW Pniowek-JSW
(Poland) (Australia) Creek (Canada) (Indonesia) (USA) (Poland) (Poland)
(Australia)
-------------- ---------- ------------ ------------ --------- ------------ -------- ----------- -----------
Ash (%) 3.2 8.9 9.5 9.5 7.0 8.0 8.5 8.5
-------------- ---------- ------------ ------------ --------- ------------ -------- ----------- -----------
Volatile
Matter
(%) 25.0 23.8 24.5 23.5 26.5 26.0 24.8 27.0
-------------- ---------- ------------ ------------ --------- ------------ -------- ----------- -----------
Sulphur
(%) 0.56 0.56 0.60 0.50 0.70 0.85 0.65 0.60
-------------- ---------- ------------ ------------ --------- ------------ -------- ----------- -----------
Phosphorous
(P) in
Coal (%) 0.025 0.025 0.070 0.07 0.02 0.019 0.059 0.050
-------------- ---------- ------------ ------------ --------- ------------ -------- ----------- -----------
Free Swelling
Index (FSI) 8 1/2 8 8 1/2 7 1/2 9 8 7 1/2 8 1/2
-------------- ---------- ------------ ------------ --------- ------------ -------- ----------- -----------
CSR (%) 63 66 67 70 60 - - -
-------------- ---------- ------------ ------------ --------- ------------ -------- ----------- -----------
Fluidity up to up to
(ddpm) 1200 1100 5000 150 450 - 2,300 3,000
-------------- ---------- ------------ ------------ --------- ------------ -------- ----------- -----------
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
-------------- ---------- ------------ ------------ --------- ------------ -------- ----------- -----------
Vitrinite
(%) 78 58 75 55 96 76 - -
-------------- ---------- ------------ ------------ --------- ------------ -------- ----------- -----------
* Indicative quality Debiensko Mid-vol HCC from washed sample
from 401/1 seam at floats <1.40kg/m3
Low Volatile Matter Hard Coking Coal
Debiensko's 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 JSW's 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 Debiensko* Peak German Hail Blue Buchanan Neryungri Jas-Mos
(Poland) Downs Creek Creek Creek (USA) (Russia) (Poland)
(Australia) (Australia) (Australia) - No.7
(USA)
-------------- ---------- ------------ ------------ ------------ ------- -------- --------- ---------
Ash (%) 9.5 10.0 9.5 8.9 9.0 5.3 10.0 7.8
-------------- ---------- ------------ ------------ ------------ ------- -------- --------- ---------
Volatile
Matter
(%) 20.5 20.5 19.0 20.5 19.9 18.7 19.3 21.4
-------------- ---------- ------------ ------------ ------------ ------- -------- --------- ---------
Sulphur
(%) 0.30 0.60 0.54 0.4 0.71 0.73 0.21 0.56
-------------- ---------- ------------ ------------ ------------ ------- -------- --------- ---------
Free Swelling
Index 7 1/2 8 1/2 8 1/2 7 8 1/2 8 1/2 8 7 1/2
-------------- ---------- ------------ ------------ ------------ ------- -------- --------- ---------
Fluidity
(ddpm) 128 275 400 300 1113 100 18 200
-------------- ---------- ------------ ------------ ------------ ------- -------- --------- ---------
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
-------------- ---------- ------------ ------------ ------------ ------- -------- --------- ---------
Vitrinite
(%) 59 68 73 54 70 76 81 -
-------------- ---------- ------------ ------------ ------------ ------- -------- --------- ---------
*Indicative quality Debiensko Low-vol HCC from unwashed sample
from 404/9 seam
NETBACK PRICING ADVANTAGE & MARKETING STRATEGY
CRU completed a review of the European coking coal market on
behalf of Prairie. The CRU study, together with various independent
and internal studies regarding coal quality and railway transport
indicates that premium hard coking coal produced at Debiensko will
attract strong regional demand and will benefit from a
significantly lower estimated cost of delivery to Central European
customers compared to coking coal imported from the international
seaborne market. Accordingly, hard coking coal sales from Debiensko
will likely secure a substantial "netback" price advantage.
Netback Pricing Advantage
The CRU study included a comparison of the cost of importing
hard coking coal from Australia, USA and Russia delivered into
Polish steelworks. CRU used ArcelorMittal's Zdzieszowice coke
plant, the largest coke plant in Central Europe, as representative
benchmark to estimate delivery costs.
Coal imported for delivery to Zdzieszowice from the
international seaborne market is purchased at the prevailing FOB
price at the country of origin. Transportation costs incurred to
deliver coal to the port of Swinoujscie, Poland include sea
freight, port handling, storage and forwarding costs. Subsequently,
the coal needs to be transported approximately 600 km by rail to
the Zdzieszowice coke plant which incurs further freight charges.
The coal requires up to 60 days to reach the coke plant from
Australia and approximately 30 days from the USA. It is also
handled multiple times, with greater potential for increased
degradation and fines generation.
In comparison, Debiensko is only 70 km from the Zdzieszowice
coke plant and directly linked by rail. Transportation costs for
Debiensko's coal to Zdzieszowice are estimated to be less than
US$4.60/t.
Due to their proximity to Central European coking plants,
regional producers such as NWR or JSW have traditionally gained a
"netback premium" over FOB Australia or USA benchmark prices, which
once adjusted for coal quality differences, equates to
approximately 50% of the total transport cost differential.
Essentially, an analysis of past practises shows that the coal
producer and steel maker "split the difference". Following this
approach for Debiensko would result in a potential netback premium
of US$15/t above prevailing benchmark prices for Debiensko coal
when sold to regional end users compared to imported hard coking
coal. However, Prairie believes there is significant potential to
increase this netback premium during future discussions with
offtakers.
Table 5: Total Freight to Zdzieszowice (Source: CRU)
------------------------------------------------------------------------------------------------------------------------------------------
Port of Sea freight Estimated Typical Typical Estimated Port Total Estimated Rail Total Freight
Origin distance to Shipping Vessel Vessel Sea Freight Handling, Sea Rail Freight Handling Costs
Swinoujscie Time Type Size Cost to Storage Freight Cost (US$/t & (US$/t 2017)
(dwt) Swinoujscie and Cost 2017) Parking
(US$/t 2017) Forwarding (US$/t) Fees
Fees (US$/t)
(US$/t)
------------ ------------ ---------- -------- -------- ------------- ----------- -------- ------------- --------- --------------
Debiensko n/a n/a n/a n/a n/a n/a n/a 3.00 1.60 4.60
------------ ------------ ---------- -------- -------- ------------- ----------- -------- ------------- --------- --------------
Hampton
Roads 3,958 16 days Panamax 70,000 11.50 6.00 17.50 11.90 1.60 31.00
============ ============ ========== ======== ======== ============= =========== ======== ============= ========= ==============
Murmansk 1,656 7 days Panamax 70,000 6.70 6.00 12.70 11.90 1.60 26.20
============ ============ ========== ======== ======== ============= =========== ======== ============= ========= ==============
Mobile 5,173 21 days Panamax 70,000 14.00 6.00 20.00 11.90 1.60 33.50
============ ============ ========== ======== ======== ============= =========== ======== ============= ========= ==============
Queensland 11.858 49 days Panamax 70,000 18.20 6.00 24.20 11.90 1.60 37.70
------------ ------------ ---------- -------- -------- ------------- ----------- -------- ------------- --------- --------------
MARKETING STRATEGY
Prairie intends to utilise the existing rail network to
transport its premium hard coking coal to regional steel mills and
coking plants, where coking coal demand of 15 Mtpa has been
identified by CRU. An independent study prepared by Politechnika l
ska (Silesian Technical University) for the Debiensko mine confirms
available rail capacity of 4 Mtpa on specific routes to be utilised
for delivery to European steelmakers.
Table 6: Select Steel Mills and Coking Plants Connected to Rail Network
----------------------------------------------------------------------------------------------------------------------
Owner Coking Plant Country Coke Making Capacity Coking Coal Estimated Rail
(Mt) Requirement (Mt) Distance from
Debiensko (km)
--------------- -------------- ---------- ----------------------- ----------------------- -----------------------
ArcelorMittal Ostrava Czech 1.53 2.14 60
=============== ============== ========== ======================= ======================= =======================
ArcelorMittal Zdzieszowice Poland 4.00 5.60 70
=============== ============== ========== ======================= ======================= =======================
ArcelorMittal Krakow Poland 0.70 0.98 125
=============== ============== ========== ======================= ======================= =======================
Carbo Koks Bytom Poland 0.24 0.34 50
=============== ============== ========== ======================= ======================= =======================
Zarmen Group Czestochowa Poland 0.65 0.91 90
=============== ============== ========== ======================= ======================= =======================
US Steel Kosice Slovakia 2.05 2.87 400
=============== ============== ========== ======================= ======================= =======================
Voestalpine Linz Austria 1.45 2.03 500
--------------- -------------- ---------- ----------------------- ----------------------- -----------------------
HIGHLY FAVOURABLE EUROPEAN COKING COAL MARKET FuNDAMENTALS
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 mega sectors, such as construction,
combined with its gross value added to EU GDP to define the overall
economic importance of a material; and
-- 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.
In 2016 Europe consumed over 75 Mt of coking coal, of which over
47 Mt was hard coking coal - the type of coal found at Debiensko.
Europe relies heavily on imports of coking coal primarily from
Australia, North America and Russia. Poland (11.9 Mt), Czech Rep.
(3.5 Mt), Germany (0.5 Mt), and Turkey (0.5 Mt) were the only
European producers, however their domestic production is in rapid
decline. In 2016, over 64 Mt (i.e. 85%) of total European coking
coal consumption was imported, including over 40 Mt of hard coking
coal and 10 Mt of semi-soft coking coal.
Central Europe - which encompasses Poland, the Czech Republic,
Slovakia, Hungary, Austria and Germany - accounts for approximately
50% of European coking coal consumption. In 2016, these countries
consumed over 25 Mt of hard coking coal of which over 17 Mt was
imported.
Regional Market
Debiensko's strategically competitive location means that about
half of Central Europe's coking plants and steelmaking capacity is
within 250 km of Debiensko 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.
-- Poland - has the largest coke capacity in Europe with 9 coke
plants in operation with total capacity of 10.4 Mtpa. ArcelorMittal
Poland produces coke at the 4 Mtpa capacity Zdzieszowice coke plant
(the largest in Europe) and Krakow which has a 0.7 Mt capacity. JSW
owns the Debiensko, Radlin, Jadwiga and Victoria coking plants and
the Przyja Å merchant coke plant with a total capacity of some 4.8
Mtpa coke.
-- Czech Republic - the largest coke plant is ArcelorMittal's
Ostrava which has a 1.2 Mt capacity.
-- Slovakia - hosts US Steel's Kosice works which has a coke capacity of 2.05 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 1.45 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.
MAIDEN COAL RESOURCE ESTIMATE
The maiden CRE, confirms that the coal seams within Debiensko
form an extensive, moderately dipping, and laterally consistent set
of coal seams containing high quality hard coking coal.
The CRE has been peer reviewed by Royal HaskoningDHV who has
over 135 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.
The CRE which was prepared by a Competent Person and reported in
accordance with the JORC Code (2012), comprises 93 Mt in the
Indicated Category as part of a total CRE of 301 Mt. The CRE is
based on seven of the thickest and most consistent hard coking coal
seams within the Debiensko licence area.
Table 7: 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
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 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. In-situ coal qualities for the target seams are given
in Table 8 below.
This CRE, which was first declared in February 2017 (refer to 1
February 2017 announcement 'Maiden 301 Million Tonnes Hard Coking
Coal Resource Confirmed at Debiensko'), underpins the production
target. Due to the substantial resource base of 301 Mt of coal
across the Debiensko concession, the Study has only considered a
mine plan with 26 years of saleable coal production of which 64% is
mined from within Indicated Resources. Of the 26 years of saleable
coal production in the mine plan (refer below), the first 14 years
of production is mined exclusively from Indicated Resources.
Table 8: Coal Quality Parameters at Debiensko*
---------------------------------------------------------------------------------------------
Seam Parameters Indicated Inferred
------ ----------- ----------------------------------- -----------------------------------
Range Weighted Average Range Weighted 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 26,478 34,082 31,416 26,543 33,584 32,881
------ ----------- ------- ------- ----------------- ------- ------- -----------------
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 - - - 23,547 33,797 30,538
------ ----------- ------- ------- ----------------- ------- ------- -----------------
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 - - - 27,511 32,627 31,017
------ ----------- ------- ------- ----------------- ------- ------- -----------------
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 - - - 22,328 33,760 30,581
------ ----------- ------- ------- ----------------- ------- ------- -----------------
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 - - - 25,432 33,025 30,012
------ ----------- ------- ------- ----------------- ------- ------- -----------------
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 29,145 32,516 31,269 29,067 32,748 30,604
------ ----------- ------- ------- ----------------- ------- ------- -----------------
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 29,760 34,137 32,198 31,538 34,113 32,427
------ ----------- ------- ------- ----------------- ------- ------- -----------------
*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. 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. Preliminary coal quality
analysis from this borehole indicates that a range of premium hard
coking coals can be produced from Debiensko that will be in high
demand from European steelmakers.
MINING METHOD
The four seams targeted for initial exploitation are 401/1,
403/1, 404/9 and 405. These are located at depths ranging from 750
m to 1,250 m. Target seam thicknesses range from 1.2 m to 4 m and
the seams dip between 2deg and 15deg. There are also known major
faults that block out the coal resource into relatively large
areas. These faults have been extensively mapped during mine
operations in the overlying 300 series coal seams. The two primary
methods for extraction of coal in an underground mining environment
of this nature are room and pillar ("R&P"), also called bord
and pillar ("B&P") mining, and longwall ("LW") mining.
Given the substantial history and experience of longwall mining
in this locality and internationally, along with the increased
productivity and cost-effectiveness of this this mining method,
longwall retreat mining has been selected as the primary means of
production. Other options may be further examined during the next
study stages.
Longwall mining is most efficient in large rectangular blocks of
coal with little or no internal geological discontinuities, such as
faults, dykes, or major washouts. This method provides a better
potential for recovery of the underground resource and can be more
productive and cost effective than R&P mining. Longwall mining
has long been applied in the Polish and International coal
industries, and its costs and effectiveness are well
documented.
MINE PLAN
The mine plan presented in this Study includes total predicted
production of 102 million raw tonnes and 68 million saleable tonnes
over a 26 year period from the 401/1, 403/1 404/9 and 405 coal
seams. The Study mine plan takes into account only four (4) of the
seven (7) coal seams within the global CRE, which contain
substantial resources in the Indicated category. Given the large
scale of the resource base for Debiensko, it is envisaged that
mining could continue, following the explicit period covered by the
Study model. Production could then potentially move to the residual
parts of the 401/1, 403/1, 404/9 and 405 seam resources not
included in the Study mine plan, as well as other target seams.
At the forecast rate of steady state production of approximately
4 Mtpa of Run of Mine ("ROM") coal, two longwall units would be
operating at the same time in different sections of the mine. Clean
coal recovery from the raw material production, including dilution,
is predicted to average approximately 68% during the Steady State
production period. Predicted annual production will average
approximately 2.69 Mt of saleable clean coal. Of the clean coal,
95% will be hard coking coal, with the remaining 5% a middlings
fraction that will be sold into the thermal coal market.
Due to the substantial resource base of 301 Mt of coal across
the Debiensko concession, the Study only considered a mine plan
with 26 years of saleable coal production of which 64% is mined
from within Indicated Resources identified in the 401/1, 404/9 and
405 coal seams. Seam 403/1 is included in the mine plan, but
currently only contains Inferred Resources. Of the 26 years of
saleable coal production in the mine plan, the first 14 years of
production is mined exclusively from Indicated Resources. In the
underground coal mining industry it would be normal for the
indicated resources to be expanded during production, by upgrading
Inferred Resources. This could greatly increase the coal available
to be added to the reserve base. The remaining Inferred Resources
within the 401/1, 403/1, 404/9 and 405 seams, should they be
converted to Measured or Indicated Resources, would add substantial
tonnages to Debiensko. Substantial Inferred Resources of other
target seams including the 402/1, 403/2, and 404/1 seams are
present across the Debiensko concession.
COAL SEAM ACCESS
Two shafts (designated Shaft I and Shaft VIII) will be used for
the mine development and production. Shaft I will be the main
production shaft fitted with modern winders and twin 35 tonne
skips. Shaft VIII will be a wholly new shaft used for men and
materials transport. Shaft I is an existing shaft previously
operated to a depth of 460 m and has a diameter of 7.5 m (it was in
use by the former operating Debiensko coal mine). It requires
rehabilitation and extension down to 944 m to allow for coal
winding from the 850 m level. Shaft VIII will be sunk with a
diameter of 9 m to a depth of 1,310 m. This shaft will be equipped
with three landings at 850 m, 1,050 m and 1,250 m.
Geotechnical, geological and hydrogeological conditions of the
planned shaft footprints are well understood to a depth of 1,300 m.
This is based upon former mining, boreholes sited close to the
shaft positions and information gathered during sinking of previous
shafts for the old mine.
The proposed location of the shafts took into account current
land use and ownership, as well as infrastructure support for the
mine and old mine workings. The existing Shaft I speeds up the
project timeline and the time to start underground development to
first coal.
Shaft I hoisting is designed to have a capacity of approximately
5 Mt ROM per year. Shaft VIII will be able to transport large loads
without dismantling and up to 30 tonnes.
Shaft I would undergo mechanical excavation and shaft
restoration from 0 m to 460 m and then be sunk using conventional
drill and blasting technology to a depth of 944 m. Shaft VIII will
be sunk with standard shaft sinking technology from the surface.
Based on the available hydrogeological data, in order to isolate
Shaft VIII from surface aquifers, construction of slurry walls down
to a depth of 60 m is planned.
A typical concrete lining that meets the strength requirements
related to the rock mass and hydrostatic pressure is designed for
both shafts. Sections of the shaft may require additional support,
such as double-layer lining or steel reinforcement, which has been
allowed for in the designs.
Table 9 presents the main parameters of each of the shafts.
Table 9: Main parameters of shafts
----------------------------------------------------------------------------------------------------------------------
Parameter Shaft I Shaft VIII
----------------------------- ------------------------------------------- ------------------------------------------
Use of shaft Production shaft, Men and materials shaft,
ventilation upcast ventilation intake
----------------------------- ------------------------------------------- ------------------------------------------
Diameter of shaft 7.5 m 9.0 m
----------------------------- ------------------------------------------- ------------------------------------------
Final depth of shaft bottom 944 m (including sump) 1,310 m (including sump)
----------------------------- ------------------------------------------- ------------------------------------------
Insets Ventilation and services duct 820 m Production level 850 m
Production level 850 m Level 1,050 m
Loading level 889 m Level 1,250 m
Inset cross section 30 m(2) Inset cross section 30 m(2)
----------------------------- ------------------------------------------- ------------------------------------------
Headframe Steel, with a single diagonal support, Steel, with a single diagonal support,
height: 72 m height: 43.5 m
----------------------------- ------------------------------------------- ------------------------------------------
Winding machine 4-rope, 4-rope,
Drum Ć 5,000 Drum Ć 5,000
----------------------------- ------------------------------------------- ------------------------------------------
Main fans 3 fans - 2 operational and one standby
----------------------------- ------------------------------------------- ------------------------------------------
Lining Concrete Concrete
----------------------------- ------------------------------------------- ------------------------------------------
Skip/cage guiding Rope Rigid
----------------------------- ------------------------------------------- ------------------------------------------
Capacity Twin 35 tonne skips 30 tonne cage
----------------------------- ------------------------------------------- ------------------------------------------
UNDERGROUND OPERATIONS
Following establishment of the shaft bottom areas and the
underground ventilation circuits, the main lateral roadways and
face gate-roads will be driven using road-header type machines
utilising arched roadway supports. The accepted practice in Poland
is to use 'TH' type yielding supports with ancillary lagging and
struts, and where required other supplementary support such as
roof-bolts.
The main lateral roadway developments will be undertaken using
external contractors, who will provide the personnel and
road-heading equipment necessary. Gate road developments will be
undertaken by Debiensko personnel, utilizing up to 4 road-header
based development systems.
The mining production operations will consist primarily of coal
mined from longwall panels with a small proportion from gateroads
developed in coal. Two faces are envisaged to be in operation at
any one time - one mining in the thicker section coals (High Seam -
"HS") and one in the lower section coals (Low Seam - "LS"). At the
end of each longwall panel run, each set of longwall equipment will
be recovered and transported to the next planned panel.
All the longwalls will be of retreating type, working 'skin to
skin' (with no pillars between adjacent panels), and keeping one of
the face roadways open by means of concrete pack-wall behind the
longwall face. The main gate is then re-used as the tail gate for
the next panel to reduce the total drivage necessary to develop
each longwall panel.
All longwall panels will utilise ranging drum shearers and
powered roof supports. Several manufacturers, including Polish
companies, produce the full range of equipment for shearer
longwalls, which are successfully operated by coal mines in Poland
and world-wide. There are a variety of options for the supply of
full longwall equipment packages suitable for the differing mining
conditions of the Debiensko seams.
Coal transport will be accomplished using the longwall armoured
face conveyor which loads into an in--gate stage loader/crusher.
The stage loader then sizes and loads ROM coal onto the panel belt,
which feeds coal onto belts in the main roadways that transport ROM
coal to the shafts. ROM coal will be transported by the mine
conveying system to the shaft bottom bunkers for feeding into a
skip, before being brought to surface.
An overhead monorail system has been planned to transport
personnel and materials from the shaft bottom area throughout the
mine to the longwall panels and development sections. These systems
require the installation of a roof-mounted rail along the intended
transport routes, switching systems, transfer stations,
prime-movers and cars for personnel and materials. These systems
are commonly employed successfully in coal mines worldwide.
Ventilation and Gas Management
The ventilation circuit is based on Shafts I and VIII, which
have diameters of 7.5 m and 9 m respectively. Shaft VIII will be
the main down cast / intake shaft. Connection at 850 m to Shaft I
will be established at the earliest possible opportunity, thereby
establishing the primary ventilation circuit. Shaft I will be the
main upcast/ return shaft, served by three main fans on surface;
two operating and one on standby.
Based on previous ventilation analyses and simulations, it is
estimated that expected fan pressure requirement would be some
3,000 Pa. Table 10 summarises the build-up of the estimated
ventilation requirements:
Table 10: Estimated volumetric ventilation requirements
--------------------------------------------------------------------------------------------------
Operational area Quantity (m(3)/s) Total (m(3)/s) Comment
----------------------------- ----------------- -------------- --------------------------------
Longwall face 45 90 2 faces
----------------------------- ----------------- -------------- --------------------------------
New or salvage face 25 25 -
----------------------------- ----------------- -------------- --------------------------------
In-seam development face 20 80 4 faces
----------------------------- ----------------- -------------- --------------------------------
Cross-cut development face 20 60 3 faces
----------------------------- ----------------- -------------- --------------------------------
New development face 15 15 Spare location
----------------------------- ----------------- -------------- --------------------------------
Non production areas - 60 Work, pump and electrical areas
----------------------------- ----------------- -------------- --------------------------------
Losses - 45 10 - 15%
----------------------------- ----------------- -------------- --------------------------------
Total - 375 -
----------------------------- ----------------- -------------- --------------------------------
The target seams are to be regarded as containing moderate to
high methane gas, with a methane content between 6 m(3)/t and 13
m(3)/t. No Debiensko site-specific coal permeability information is
available, but from the surrounding mines it can be regarded as
low. The gas content will require pre-mine drainage and post
drainage of the goaf areas, which is a technically accepted
practice in Polish mines. The low permeability may be an indication
of potential outburst risk as the workings increase in depth,
however within the Upper Silesian coal basin, outbursts are
relatively uncommon. Proven operating procedures have been allowed
for within the design to effectively cope with such an eventuality.
The designed longwall ventilation system will meet all the Polish
safety regulations and operational requirements.
The development headings will be driven on auxiliary
ventilation, with fresh air being conveyed to the working places
through flexible ventilation ducting.
As the workings go deeper, the virgin rock temperature
increases. Ventilation is designed to comply with Polish working
temperature standards.
MINE DESIGN
The geotechnical characteristics of the mining horizons were
assessed for input into mine design based on neighbouring mines and
historical data. No geotechnical investigations or analyses have
been undertaken as part of this Study. However the former Debiensko
mine operated for over 100 years in the seams overlying the planned
mining area and there is data from surrounding mines that worked in
the upper target seams (401/1). Borehole data indicates that the
majority of mudstone in the immediate roofs has been classified as
Class III and IV under the Polish Mineability Index System; this
type of roof is easily caved. According to the Protodyakonov Method
used in Polish mining studies, target coal seams are classified
under "very easily mineable" to "easily mineable" categories.
The mine plan has been designed on the basis of proven
technology, incorporating longwall faces 250 m wide in general and
with an average panel length of 1,600 m working 'skin-to-skin'.
Planned face lengths and widths are well within the constraints of
well-established norms. Two longwalls will operate at any one time,
working the target seams 401/1, 403/1 404/9 and 405. Given the
variability of seam thickness, two approaches have been defined;
High Seam longwall ("HS") and Low Seam longwall ("LS"). The LS
longwall extracted heights range approximately 1.2 m to 2.5 m for
seams 401/1, 403/1 and 404/9. The HS longwall extracted heights
range from approximately 2 m to 4 m for seams 404/9 and 405.
Planned retreat rate of the faces will be approximately between 6 m
and 8 m per day. The first 14 years of potential production from
the LS longwalls occurs in Indicated Resources and the first 19
years of production from the HS longwalls occurs in Indicated
Resources.
The longwall panels will commence at 800 m depth, with maximum
depth to be worked at 1,250 m. In order to minimise the lead time
to first production, access would be gained from the 850 m level,
as soon as the ventilation circuit has been established between
Shaft I and Shaft VIII. To open up the mine and to allow full
production, a further two horizons will be constructed, at levels
1,050 m and 1,250 m.
The pit bottom area of Shaft I at the first main horizon (850 m)
will be developed to accommodate the coal handling infrastructure
and main underground bunkers.
From the pit bottom area, a system of main roadways will be
driven; one for transporting men and materials, and the other for
conveying ROM. The roadways will also provide the main air intake
and the return ventilation airways.
Mining layouts for each of the four target seams have been
derived, based on the above parameters and making allowance for the
assumed geology, lease boundaries and known infrastructure.
WORKFORCE AND ORGANISATIONAL STRUCTURE
The future workforce structure for the operational period of
Debiensko is designed to meet Polish legislative requirements for
coal mine statutory positions whilst also taking into account
modern mining practices and systems. Where practicable, it is
proposed to use contractors for certain services, such as the
development of the main lateral roadways. The mine is organised
under a CEO and a Head of Mine Operation. The CEO is responsible
for the health and safety oversight and financial aspects of the
mine, whilst the Head of Mine Operations or KRZG (Kierownik Ruchu
Zak adu GĆ³rniczego) is responsible for all other activities. The
mine will function with two operating longwalls supported by two
longwall gate road development teams per face. The mine will
operate 24 hours per day 7 days per week with coal production based
on operating 6 days per week in rotating shifts. It is envisaged
that Debiensko would utilise up to 1,370 directly employed workers
for both the surface and underground operations, which includes an
average 18% headcount provision for holidays and absenteeism. It is
estimated that an additional 150 contractors would work at
Debiensko. Underground production is planned on a 50 week per year,
six day per week basis with four operating shifts per day utilising
a five brigade system. The brigade system allows coverage for 6
days of operations while still limiting employee working hours to
40 a week in compliance with Polish labour regulations. Typically,
3 (surface) or 4 (underground) shifts are needed to cover a full
day of mine operations.
MINE PRODUCTIVITY
Debiensko borders with Knurow-Szczyglowice Mine to the north and
west, Budryk Mine to the North-East and the Boleslaw mia y Mine to
the East. The Budryk Mine, which operates at similar depths to the
proposed Debiensko target depths, has demonstrated that it is able
to achieve high productivity rates from its underground longwall
faces. After their shaft deepening program is completed, Budryk
will be producing from seams at a depth of 1,290 m. They have
historically achieved annualised ROM production rates from 4.2 Mtpa
to 4.6 Mtpa between 2010 and 2015 (GlobalData 2017). Results of the
Study indicate that the more modest annualised production rates are
potentially achievable for Debiensko given similar geological and
mining conditions across the concession.
Results of the Study also indicate that by incorporating
international best practice and modern mine design into Debiensko,
substantially better labour productivity may be achieved compared
to incumbent coal producers in Poland, which may lead to
substantially lower costs of production. Higher productivity is
anticipated at Debiensko by minimising the number of shafts and
keeping the mine works condensed into a smaller area allowing a
reduced workforce, utilizing the very latest mining technology
available, contractors for development, and aligning the workforce
to be consistent with modern international best practices. Current
labour management in Polish coal mines follows historical
practises; there is significant opportunity to improve the
efficiency of manpower by increasing automation, optimising
staffing levels and utilising appropriate shift patterns that
minimise down-time, as typical of coal mining operations in
Australia and the USA. The current envisaged labour productivity is
considered conservative with improvements anticipated in the next
stage of the project.
Table 11: International Longwall Coal
Mine Labour Productivity
---------------------------------------------------------
Country Tonnes/man/year
--------------------------------------- ----------------
USA 10,000
--------------------------------------- ----------------
Australia 7,000
--------------------------------------- ----------------
Jan Karski Project - Prairie
Mining (PFS) 3,750
--------------------------------------- ----------------
Debiensko - Scoping Study 1,920
--------------------------------------- ----------------
Bogdanka (compilation of available
data 2014 - 2016) 1,826
--------------------------------------- ----------------
Budryk Mine (compilation of
available data 2014 - 2016) 1,193
--------------------------------------- ----------------
Polish Coal Mine Average (compilation
of available data 2014 - 2016) 770
--------------------------------------- ----------------
(Source: Company analysis based on various sources)
PROJECT CONFIGURATION AND MINE SURFACE INFRASTRUCTURE
Best international design practices will be employed for the
Debiensko mine surface infrastructure whilst adhering to applicable
Polish regulations. Debiensko benefits from the incorporation of
existing mine surface infrastructure from the former Debiensko
mine. A number of existing buildings are identified for
refurbishment; office building & control room, lamp-house, mine
hall, surface rescue service building, water treatment plant
building, and mine railway sidings. Key surface infrastructure
components to be constructed are; the two shafts and their winding
facilities, workshops and stores, water treatment plant and
settling ponds, car parking and laydown areas, medical centre,
baths, main high voltage sub-station, and ROM stockpiles. The mine
site is currently protected by perimeter fence and security
personnel. Relic storage buildings, garages and settlement tanks
are proposed for demolition. The layout of the combined
refurbished-existing and new surface facilities is consistent with
a modern, efficient mine layout.
ROM TRANSPORT
Shaft I will wind the ROM from the mine to the surface using 35
tonne skips; from the skip discharge the ROM will be fed onto
vibrating feeders and conveyed to screens as estimated in the
Study. Oversized material will go through 200 mm and 50 mm sizers
to reduce to 50 mm top-size. The ROM will then be conveyed to a raw
coal stockpile by means of a luffing, slewing and traveling
stacker. A bridge reclaimer will remove the coal by slicing through
the stockpile, homogenising the feed to the coal processing
plant.
Coal products (primarily hard coking coal) will be conveyed from
the in-plant clean coal collection conveyor to the clean coal
stockpile. The coal will be stacked using a luffing, slewing and
travelling stacker. The design allows for the possibility of
storing differing coal qualities separately. The coking coal will
be reclaimed using a bridge scraper reclaimer. The reclaimer will
be able to access any area of the stockpile at any time. This will
permit loading of the two types of coking coal independently. The
coal will be loaded onto trains through a flask loading system, fed
directly from the stockpile at a rate of 1,500 tonne per hour.
Middlings for use as thermal coal will be stored as a conical
stockpile. The coal will be reclaimed by underground feeders and
conveyed to the common flask loading system.
Combined waste (coarse waste and filtered tailings) will be
conveyed to the coal wash emplacement. This material will be dumped
from a cantilever conveyor and pushed and compacted in position by
dozers.
The potential ROM transport process is shown in the schematic
Figure 26 in the full announcement on the website.
COAL HANDLING & PREPARATION PLANT
The coal handling & preparation plant ("CHPP") will be
located on the proposed mine site and will be capable of delivering
two types of coking coal, Low-vol HCC and/or Mid-vol HCC and a
small proportion of middlings for thermal power plant use.
Metallurgical smalls will represent 95% of the total output and
will produce between 4% to 8% ash, according to individual customer
requirements. Based on actual results in neighbouring mines, the
total product yield is expected to be approximately 68% LOM.
Middlings may be produced for local power plant consumption at
approximately 25% ash and calorific value 5,200 kcal/kg or 21.8
MJ/kg. All products will be low sulphur.
The plant is designed as a 750 tonne per hour facility air dried
basis. ROM coal will be reduced to 50 mm top size and stored in an
automated open stockpile. Coal of 50 mm x 1 mm will be cleaned in
dense medium cyclones to produce coking coal, middlings and waste.
Coal of 1 mm x 0.1 mm will cleaned in a hydrosizer to produce
coking coal and waste. Coal less than 0.1 mm will be cleaned by
froth flotation to produce coking coal and waste. All coking coal
products will be stored by coal type and loaded onto trains for
dispatch.
Waste from the flotation process will be filtered and combined
with the coarse waste from the other processes. The combined waste
will be placed in the adjacent coal waste disposal area. The total
waste capacity available to Debiensko is 18 million m(3) and is
adequate for the life of the project.
POWER
The Debiensko mine site is currently serviced by an existing
high voltage power grid. There is already a 6 kV line with 13 MW
capacity connected to site, with two additional 110 kV, 25 MW
incoming lines available ready to feed into and connect to the
planned new 110 kV / 6 kV substation.
There is an existing power supply and connection agreement in
place for Debiensko with Tauron Dystrybucja GZE S.A. ("Tauron"),
the local power grid operator. This agreement provides for a
maximum of 30 MW of power to be supplied to the mine. This supply
is sufficient for full scale mine production at Debiensko for the
life of the project and it fulfils all Polish statutory
requirements requiring both a primary and back-up power supply.
The proposed protection schemes and energy monitoring systems
are adequate and appropriate for this type of environment. It has
been designed with safety and continuity of service in mind.
The estimated electricity cost for Debiensko is approximately
PLN270 /MWh (USc6.8 /kWh) based on standard tariffs.
Tauron supplies over 49 TWh of electricity to over 5.4 million
customers per year which makes it the largest distributor of
electricity in Poland. It is also the second largest electricity
generator and supplier in Poland and the largest supplier of heat
in Upper Silesia.
POTABLE WATER SUPPLY
Potable water supply is available at Debiensko via an existing
500 mm main water line, with available water supply of 400m(3)/day
officially confirmed by PWiK Czerwionka-Leszczyny, the local water
authority. Initial estimates are that the Debiensko mine will
require no more than 350 m(3)/day at steady state production for
the life of the project.
MINE WATER
Over 200 years of mining around the project area provides a good
understanding of the regional hydrology and hydrogeology.
Hydrogeological flow rate monitoring between 1990 and 2009 at the
former Debiensko mine shows a reduction with time, alongside lower
inflow rates at deeper mining levels. This is also expected at the
proposed new mine; no groundwater was reported in the prospecting
boreholes drilled over 700 m depth. It is expected that, as the
water inflow into the former Debiensko mine will continue to be
pumped out by Centralny Zak ad Odwadniania KopalÅ ("CZOK"), the
Central Mine Drainage Department, and due the decreased porosity
and permeability of rocks at depths, the Debiensko mine will
experience relatively small groundwater inflow. The total inflow
into the drainage system of the planned Debiensko mine is estimated
to be approximately 1.5 m(3)/min (90 m(3)/hour) on average, but
allowance has been made for increased water inflow later in the
mine life of up to 2.5 m(3)/min (150 m(3)/hour).
The Debiensko mine and processing plant will be designed for
zero discharge; consequently, Debiensko will have no impact on
surface water flows and surface water qualities. Water for use at
Debiensko will be received from three potential sources,
namely:
-- Local municipality supply (PWiK Czerwionka-Leszczyny);
-- Recycled process water from the underground mine; and
-- Groundwater.
DESALINATION
All mine water pumped from the Debiensko mine will report to the
desalination plant. The desalination plant will process the
expected high total dissolved solids and salt content in the mine
inflow water. The salt remaining from desalination could be sold
for use as roadway salt for de-icing during winter.
RAILWAY INFRASTRUCTURE
Prior to 2000, when the former Debiensko mine was still in
production, the mine was connected to the main Polish rail network.
The majority of the mine rail infrastructure is still in place and
based on previous specialist studies, minimal capital expenditure
would be required for refurbishment. As a result, Debiensko is well
connected with the regional rail network in the east-west direction
through the Katowice - Rybnik railway track. This connects to the
regional north-south interconnection of the Zabrze - Makoszowy -
Rybnik main rail network. The planned CHPP site is also directly
connected to the existing rail track and siding network.
No significant new rail infrastructure or major up-gradings will
be required, except for some additional sidings which will be added
to the network. The existing main rail infrastructure and transport
network are adequate to provide full operational capacity and
product distribution support for Debiensko.
ROADS
The Debiensko mine site is connected by public roads to the
major road network and importantly, directly connected to Poland's
north-south motorway, Highway A1, which runs from the port of
Gdansk on the Baltic Sea through the Upper Silesian Industry Area
to the Polish-Czech border where it is connected with the Czech
motorway, D1. There are existing asphalt minor roads which surround
and connect the Debiensko mine site to the major road network.
Access to Debiensko will be from Road 924, bordering the site on
the northern and western boundaries. This existing road network
provides immediate access for commencement of development activity
at the mine, delivery of equipment and access for the
workforce.
AIRPORT
The Debiensko mine is serviced by two nearby international
airport, Katowice and Krakow. Katowice International Airport (KTW)
is an international airport, located in Pyrzowice, 30 km north of
city of Katowice, Poland. The airport has the fourth biggest
passenger flow in Poland and is approximately 60 km by road from
the Debiensko mine site.
Krakow International Airport (KRK) is an international airport
located near Krakow, in the village of Balice, 11 km west of the
Krakow city centre, in southern Poland. It is approximately 100 km
by road from the Debiensko mine site.
CAPITAL DEVELOPMENT COSTS
Debiensko is located in one of the best serviced and
infrastructure advantaged coal regions globally. Capital intensity
of Debiensko is estimated to be low for a project of this scale
with the added advantage of having low cash costs.
Table 12: Direct Capital Cost Estimations
to First Production
(to a maximum accuracy variation +/-
30%)
--------------------------------------------------------
Capital Item US$ million
------------------------------------------ ------------
Shaft Costs (Sinking, Furniture,
Pit Bottom and Bunkers) 208.5
------------------------------------------ ------------
CHPP & Waste Management 34.5
------------------------------------------ ------------
Mine Surface Facilities & Infrastructure
(Buildings, Roads, Railway, Bulk
Power and Materials Handling) 68.0
------------------------------------------ ------------
Underground Infrastructure (Belts,
Ventilation, Electrics) 62.0
------------------------------------------ ------------
Capitalised Pre-Production Expenses
(Labour, Power, Contractors etc.) 51.5
------------------------------------------ ------------
Provision has been made for a further US$79.5 million for EPCM,
owners' costs, and contingency (generally 15% contingency applied,
though varied depending on the capital item and basis of
estimate).
Data used in the calculation of the capital costs for Debiensko
has been provided by a number of local and international suppliers
who have given budget cost estimates, and has also been benchmarked
against similar underground mines in the region.
RAILWAY NETWORK
Prairie intends to utilise the existing rail network to
transport its premium hard coking coal to regional steel mills and
coking plants. An independent study prepared by Politechnika l ska
(Silesian Technical University) for the Debiensko mine confirms
available rail capacity of 4 Mtpa on specific routes to be utilised
for delivery to European steelmakers. The vast railway network in
Poland extends over some 20,000 km of operated railway lines and
includes more than 3,000 railway stations and 2,700 sidings and
loading points. Over 95% of rail track in Poland is 1,435 mm
("standard-gauge") which is the most common gauge used in Europe
including in potential target markets such as Germany, the Czech
Republic and Austria. Poland is the second largest rail freight
market in the EU after Germany, and it is also highly competitive
as a result of 2003 legislation that allowed foreign competitors to
enter the market.
Available capacity within the Polish railway system has been
increasing rapidly since the 1980s as a result of road
transportation taking market share away from the railways.
Independent operators active in the Polish coal rail freight market
now include Freightliner (UK) and DB Schenker (Germany), Europe's
largest rail freight operator.
Freight charges are determined by competitive open tender
between independent rail freight operators, ensuring competitive
freight rates. Based on the analysis of rail freight charges for
coal over the last few years in Poland, and specifically in the
Upper Silesian region, charges are USc2.0-2.5 / km for distance
>100 km and USc5.0-6.0 for < 100 km, with actual prices being
route and carrier specific.
ENVIRONMENTAL & SOCIAL IMPACT ASSESSMENT
The development of the Debiensko mine involves underground
mining works and the construction of new surface supporting
facilities developed on an existing industrial mine site. Extensive
and various studies covering land use, waste management, noise,
habitat, water and air pollution have been conducted since 2007 and
were incorporated into a Polish compliant Environment Impact
Assesment ("EIA"). The approval of this EIA resulted in the award
of mining concession in 2008. A new and revised Environmental
Consent was granted in July 2015, modifying some aspects of the
previous consent facilitating a more flexible and efficient mine
plan. Accordingly, Debiensko is a fully permitted
"development-ready" project with an initial mining license issued
for 50 years.
The new proposed mine facility is to be developed on an area
previously utilised for over 100 years for mining. Debiensko has
benefited from baseline data for the region which represent actual
mining conditions. The location contains old buildings and
equipment associated with the closed mine. Refurbishment of the
current infrastructure is planned where practical, alongside
construction of new buildings to minimise the impacts of the
development. As a result, the development will not encroach on
greenfield land or result in further visual intrusion. The new mine
will also make use of existing road and rail services that connect
with this industrial area where the former Debiensko mine used to
operate.
Social impact studies previously undertaken assessed the project
as positive due to employment prospects and economic benefits to
the community. Debiensko will be the key economic driver of the
municipality for decades and will be the heart of a community that
fully accepts and is supportive of the planned mine.
ECONOMIC BENEFITS STUDY
The Debiensko mine is located in the the urban-rural
municipality of Czerwionka-Leszczyny, part of the Silesian
Voivodship, Rybnik district. The municipality is inhabited by
40,647 citizens, who represent approximately 54% of the Rybnik
district population. The area of the Commune is 114.6 km(2) and
population density is 367 people / km(2). The seat of the
municipality is the town of Czerwionka-Leszczyny. The former
Debiensko mine had operated from 1898 to the year 2000 when it was
closed by the Polish government following the last major round of
mine restructuring in Poland. There remains considerable potential
resources of hard coking coal at the Debiensko mine. Up until the
year 2000 the Debiensko mine was largest local employer.
Following mine closure, 2,400 local jobs were lost, which was
reflected in an increase in the unemployment rate in the
municipality. As a consequence, the depopulation of the
municipality has occured. In the period 1999-2001 the number of
inhabitants in the municipality fell by approximately 400 people.
Moreover, since 2000 the balance of migration in the municipality
recorded negative values. A significant increase in the number of
families using various forms of social aid funded by the
municipality was observed. Furthermore, municipality budget
revenues decreased significantly.
Prairie intends to follow internationally accepted standards of
corporate social responsibility in redeveloping and operating the
Debiensko mine. For example Prairie runs a support program for the
local school located in Czerwionka-Leszczyny.
Redevelopment of the Debiensko mine has the potential to:
-- Positively impact the Czerwionka-Leszczyny Municipality
budget, with enhanced revenues stemming from public payments
related to mine operational activities will lead to a decrease in
unemployment. After restarting the mine, there will be up to 1,500
new workplaces for the local citizens. Priority in terms of
employment will belong to young people from the area of
Czerwionka-Leszczyny.
-- The employees' income will translate into increased demand
for services provided by local entities, which in turn increases
their revenues and creates additional indirect employment. As a
result of realizing the investment, it should be expected that the
consumer market in the Municipality of Czerwionka-Leszczyny will
improve and stabilize.
-- Additional expected economic benefits include; development
and improvement of local infrastructure, reduction of social costs
associated with unemployment and an increase local real-estate
values
FISCAL REGIME & PROJECT PERMITTING
Poland has a highly favourable fiscal regime for coal mining.
Polish concession activities are predominantly regulated by
Poland's MoE under the provisions of the Act of 9 June 2011
Geological and Mining Law. Current legislation provides for the
following key terms:
-- Corporate tax rate: 19%;
-- Royalty on Coal Revenues: assessed at up to PLN2.8 (US$0.70) per tonne for Debiensko;
-- An annual contribution to a mine decommissioning fund
equivalent to 3% of the annual depreciation and amortisation value
of the fixed assets of the mining plant;
-- No requirement for Government equity participation.
-- The Debiensko mine is a fully permitted and under Polish
mining law is considered a fully fledged mining operation.
The Debiensko mine was originally opened in 1898 and was
operated by various Polish mining companies until 2000 when mining
operations were terminated due to a major government lead
restructuring of the coal sector caused by a downturn in global
coal prices. In early 2006 NWR acquired Debiensko and commenced
planning for Debiensko to comply with Polish mining standards, with
the aim of accessing and mining hard coking coal seams. In 2007,
the MoE of Poland approved the Group's development plan and in 2008
granted NWR a 50 year mine license for Debiensko. All environmental
consents are in place, with the EIA conducted and approved
according to Polish domestic standards.
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, Debiensko is considered by Prairie to be
"development-ready". Since, under Polish Law, Debiensko is
designated as a fully fledged mining operation, Prairie retains the
employment of key statutory officials required under Polish mining
law, including a dedicated mine manager and chief engineer, amongst
other statutory positions.
Prairie recently applied to the MoE for an amendment of the
Debiensko mining concession to extend the start date of
commencement of mining operations from beyond 2018 to 2025, and
therefore facilitating Prairie's forward work program aimed at
defining a "bankable" project at Debiensko according to
international standards. Prairie expects such approval in due
course and to commence infill drilling and the next stage of
technical/ economic studies.
NEXT STEPS
The Study is a preliminary project phase completed to a level of
acuracy of +/- 30%. The ultimate goal is to complete a Definitive
Feasibility Study ("DFS") to a level of accuracy of +/- 10 to 15%,
which by international standards should be of sufficient detail for
project development financers to base an investment decision (a so
called "Bankable Feasibility Study").
Prairie will commence an infill drilling program of up to six
(6) boreholes during 2017. This will enable further delineation of
measured and indicated resources to support the next stage of
project studies, as well as provide comprehensive coking coal
quality analysis for more detailed marketing studies to support
offtake negotiations. Prior to commencing the next stage of
technical/ economic studies, the Company will conduct additional
optimisation and trade off studies to determine optimum mine
development alternatives and project configuration. Further
analysis will include mine access, mine scheduling, workforce
optimisation, project infrastructure and dewatering.
Prairie will also continue to build the Debiensko project team
focusing on highly skilled coal professionals with expertise in
developing large scale and highly efficient modern longwall coal
mining operations. The majority of longwall coal mines currently
operating in Poland today were designed in the 1970's, with the
most recent greenfield mines commissioned in the mid 1980's.
Prairie aims to set new benchmarks in the Polish coal industry for
developing modern, low cost, high productivity longwall operations
incorporating international best practice and proven technology
currently in use within the global coal mining industry.
NET PRESENT VALUE
The (ungeared) pre-tax Net Present Value ("NPV") is US$1.503
billion at an 8% discount rate (real), and the (ungeared) IRR is
27.2%. Debiensko is expected to exhibit levels of profitability
that would contribute value to Prairie shareholders.
Table 13: Debiensko Net Present Value
----------------------------------------------
NPV (8% real, ungeared) IRR
----------- ------------------------- ------
Pre-Tax US$1.503 billion 27.2%
----------- ------------------------- ------
Post-Tax* US$1.158 billion 24.0%
----------- ------------------------- ------
*Current Polish corporate tax rate of 19% has been assumed
SENSITIVITY ANALYSIS
Sensitivity of the (ungeared) pre and post tax NPV to changes in
the key drivers of the Debiensko model are presented in Table 14
and Table 15 respectively.
Table 14: Debiensko Pre-Tax NPV Sensitivity Analysis
-----------------------------------------------------------------
Pre-Tax (ungeared) NPV at 8% discount
rate (US$ billion)
----------------- ----------------------------------------------
-20% -10% Base Case +10% +20%
----------------- -------- ------ ------------ ------ ------
Coal Prices 0.89 1.19 1.50 1.81 2.12
----------------- -------- ------ ------------ ------ ------
Opex 1.70 1.60 1.50 1.40 1.30
----------------- -------- ------ ------------ ------ ------
Capex 1.59 1.55 1.50 1.46 1.41
----------------- -------- ------ ------------ ------ ------
Table 15: Debiensko Post-Tax NPV Sensitivity Analysis
------------------------------------------------------------------
Post-Tax (ungeared) NPV at 8% discount
rate (US$ billion)
----------------- -----------------------------------------------
-20% -10% Base Case +10% +20%
----------------- -------- ------- ------------ ------ ------
Coal Prices 0.66 0.91 1.16 1.41 1.66
----------------- -------- ------- ------------ ------ ------
Opex 1.32 1.24 1.16 1.08 1.00
----------------- -------- ------- ------------ ------ ------
Capex 1.25 1.20 1.16 1.11 1.07
----------------- -------- ------- ------------ ------ ------
STUDY CONSULTANTS
The Study is being managed by independent consultants Royal
HaskoningDHV with further contributions from a range of industry
consultants with specialist expertise in underground coal mine
development. The Study Team has substantial practical, financial
and management experience working in the international and Polish
mining industries and markets, and comprises key participants as
follows:
Table 16: Debiensko Hard Coking Coal Project
Scoping Study Consultants
-------------------------------------------------------------
Consultant Activity
-------------------------- ---------------------------------
Royal HaskoningDHV Geology, Geotechnical and
Hydrogeology Analysis,
Mine Planning, Production
& Development, Ventilation
& Gas Management, Underground
Operations, Financial Modelling
& Cost Estimation, and
Environmental & Social
Appraisal
------------------------ ---------------------------------
Dargo Associates CHPP Design and Cost Estimation
-------------------------- ---------------------------------
Ryszard Ucieszynski Shaft Design and Cost Estimation
(Associate)
-------------------------- ---------------------------------
Delta Built Environment Transport, Communication
Consultants & Amenities, Mine Surface
Infrastructure Design and
Cost Estimation
-------------------------- ---------------------------------
CRU International Market Price Forecasts
and Logistics Cost Estimation
-------------------------- ---------------------------------
Deloitte Poland Economic Benefits Study
-------------------------- ---------------------------------
The Study also considers information utilized in previous
feasibility studies and assessments, technical works completed by
NWR Karbonia, and official Polish geological documentation, as well
as input from the Prairie team and associates.
Royal HaskoningDHV is an independent, international engineering
and project management consultancy. The company has over 135 years'
experience, providing expertise in the fields of aviation,
buildings, energy, industry, infrastructure, maritime, mining,
transport, urban and rural planning and water. As a
multidisciplinary firm Royal HaskoningDHV employs approximately
7,000 staff in 100 offices over 35 countries and has a turnover in
excess of EUR700 million.
The global mining team has core offices in London, Johannesburg,
and Jakarta, and has an established reputation providing quality
advisory services to the mining industry; from feasibility studies
and mine optimisation to due diligence.
Modifying Factors Summary
The Modifying Factors included in the JORC Code have been
assessed as part of the Study, including mining, processing,
infrastructure, economic, marketing, legal, environmental, social
and government factors. The Company has received advice from
appropriate experts when assessing each Modifying Factor.
A summary assessment of each relevant Modifying Factor is
provided below. The Company has taken relevant advice in relation
to the relevant Modifying Factors.
Mining and Processing - refer to sections entitled 'Mining
Method', 'Mine Plan', 'Coal Seam Access', 'Underground Operations',
'Mine Design' and "Coal Handling and Processing Plant' in the
Announcement.
The Company has engaged Royal HaskoningDHV, an independent
consultant with expertise in deep coal mining in Poland, the UK and
Kazakhstan, to complete and manage the Study which includes
identification of the mining method and processing assumptions for
Debiensko.
As disclosed in this Announcement, the Study anticipated that
access to the coal seams will be via two shafts. One existing shaft
(No I) will be reopened and deepened and the other will be a new
shaft (No VIII) sunk to a terminal working horizon of 1,250 m
(depth 1,310 m). The shafts would be 7.5 m and 9 m diameter
respectively. Coal would be wound in the No I shaft and men and
materials wound in the No VIII shaft. The shafts would be connected
at the 850 m horizon where the main pit bottom infrastructure would
be sited. Coal would be wound from this production level. Insets
would also be constructed at 1,050 m and 1,250 m levels in the No
VIII shaft to provide ventilation and access to seams as the mine
is developed. These represent normal operating depths for the mines
in the Upper Silesian region of Poland, and mines currently
operating adjacent to Debiensko today.
The Study plans to mine coal from the 401/1, 403/1, 404/9 and
405 seams during a planned 26 years production life. A number of
other seams would be available for extraction that would extend the
life of the mine well beyond this period.
Main development roadways would initially be driven in rock to
access the coal seams. From which two gate road developments would
be driven in-seam for each longwall face. All roadways would be
supported on steel arches. The faces would employ modern,
conventional longwall technology and proven equipment as used
successfully worldwide and within Poland. The two longwall faces
would target a production of 2.6 Mtpa of hard coking coal, in
addition, a small middlings fraction would also be produced, that
will be sold into the power generation sector.
Underground access and development to first production would be
some 4.5 years with full production being achieved at year 5 from
start of shaft sinking.
As discussed above, Debiensko's mining and processing method was
developed by Royal HaskoningDHV who are experts in deep coal mining
in Europe and Poland, and who are well experienced from having
worked on similar projects. Debiensko borders with
Knurow-Szczyglowice Mine to the north and west, Budryk Mine to the
North-East and the Boleslaw mia y Mine to the East. The Budryk Mine
has demonstrated that it is able to achieve high productivity rates
from its underground longwall faces. They have historically
achieved annualised ROM production rates from 4.2 Mtpa to 4.6 Mtpa
between 2010 and 2015 (GlobalData 2017).
Estimated results of the Study indicate that the more
conservative annualised production rates are readily achievable for
Debiensko given similar geological and mining conditions across the
concession. The Production Target referred to in this announcement
is based on 64% Indicated Resources and 36% Inferred Resources for
the mine life covered under the Study. In accordance with the 26
year mine plan incorporated into the Study, the first 14 years of
production will come exclusively from Indicated Resources.
Infrastructure - refer to section entitled 'Mine Surface
Infrastructure' and 'Coal Seam Access' in the Announcement.
As Debiensko was an operating mine until 2000 when mining
operations were terminated due to a major government lead
restructuring of the coal sector, Debiensko already has existing
site facilities and necessary infrastructure including power,
water, rail and road. Debiensko was also 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 km 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 site to the major road network.
With a well-established rail network providing ease of transport
to end users based in close proximity to Debiensko, Prairie is
likely to benefit from a significant pricing "netback" advantage
over USA and Australian imported hard coking coal.
Transport cost estimates were provided by CRU. CRU are
independent coal market and freight specialists who have expertise
in mining and metals. They provide independent and proprietary
advice to the world's leading mining companies, governments and
banks on all techno-economic and commercial aspects of the
industry, ranging from mine to market. Further data was provided on
rail freight capacity and costs were provided by independent Polish
experts. The Marketing Study conducted by CRU was announced to the
ASX by Prairie on 8 March 2017 entitled, 'Marketing Study Confirms
Large Price and Cost Advantages for Debiensko's Premium Hard Coking
Coal'.
Marketing - refer to sections entitled 'Netback Pricing
Advantage & Marketing Strategy' and 'Marketing Strategy' in the
Announcement.
As discussed in the section above, independent market forecasts
and assessments were provided by experts CRU. The assessment of
local and regional markets indicates that various markets in the EU
and particularly the regional area surrounding Debiensko including
wider Poland, Czech Republic, Slovakia, Hungary, Austria and
Germany would absorb the planned production output of the
Project.
Debiensko's strategically competitive location means that about
half of Central Europe's coking plants and steelmaking capacity is
within 250 km of Debiensko and connected by existing road and rail
infrastructure.
Prairie intends to utilise the existing rail network to
transport its premium hard coking coal to regional steel mills and
coking plants, where coking coal demand of 15 Mtpa has been
identified by CRU. A further independent study prepared by
Politechnika l ska (Silesian Technical University) for the
Debiensko mine confirms available rail capacity of 4 Mtpa on
specific routes to be utilised for delivery to European
steelmakers.
Furthermore, the European industry relies on imports for
approximately 85% of its coking coal needs, and with the price rise
of more than 150% for hard coking coal experienced 2016, security
of supply is a growing concern.
In 2010 and 2014, the EC carried out a criticality assessment at
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; and
-- 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.
In 2016 Europe consumed over 75 Mt of coking coal, of which over
47 Mt was hard coking coal. Europe relies heavily on imports of
coking coal primarily from Australia, North America and Russia.
Poland (11.9Mt), Czech Rep. (3.5Mt), Germany (0.5 Mt), and Turkey
(0.5 Mt) were the only European producers, however their domestic
production is in rapid decline. In 2016, over 64 Mt (i.e. 85%) of
total European coking coal consumption was imported, including over
40 Mt of hard coking coal and 10 Mt of semi-soft coking coal.
CRU has also:
-- Provided the long term benchmark hard coking coal price
assumed for the Study is USD142/t FOB Australia (in US$ 2017 Real
terms) with an additional USD15/t "netback" due to lower delivery
cost of Debiensko product to regional customers; and
-- Confirmed that there is a reasonable expectation that the
Company will be able to execute off-take agreements with customers
in the future.
Prairie has also had initial discussions with local and
international coal and steel industry participants, who have
indicated substantive interest in a new and stable supplier of
coking coal from within Europe, given the level of coking coal
currently imported to the EU and the potential cost savings
discussed above for end users of locally sourced product.
Economic - also refer to sections entitled 'Costs Summary', 'Net
Present Value' and 'Sensitivity Analysis' in the Announcement.
A detailed financial model and discounted cash flow ("DCF")
analysis has been prepared in order to demonstrate the economic
viability of Debiensko. The financial model and DCF were modelled
with conservative inputs to provide management with a baseline
valuation of Debiensko. Sensitivity analysis was performed on all
key assumptions used. Key inputs and assumptions are outlined in
Table 17 to allow analysts and investors to calculate project
valuations based on their own revenue assumptions.
The Production Target referred to in the Study is based on 64%
Indicated Resources and 36% Inferred Resources for the mine life
covered under the study. Furthermore, under the mine plan schedule
the first 14 years of production will be based exclusively on
Indicated Resources, with Indicated resources only being exhausted
by year 19 of a 26 year mine life. As a result Debiensko's economic
viability is not dependent on Inferred Resources.
The Company engaged the services of a specialist equity capital
markets and advisory firm, Tamesis Partners ("Tamesis") who are
specialists in the mining sector and based in London. Tamesis is
well regarded as a specialist capital markets service provider with
over 30 years' experience in mining finance who has raised project
development funding (including, equity and hybrid instruments and
strategic capital/partners) for companies across a range of
commodities in the mining sector. Prior to founding Tamesis the
partners played a central role in the expansion of GMP Securities
Europe LLP ("GMP"); together working on more than 65 mining
transactions led by GMP over a five year period, including over 50
equity financings totalling over US$2.0 billion, five debt
financings totalling over US$1.2 billion and more than ten M&A
advisory and strategic investment transactions totalling over
US$500 million. Following the assessment of a number of key
criteria, Tamesis has confirmed in writing that provided a DFS
arrives at a result not materially worse than the Study, the
Company should be able to raise sufficient funding to develop
Debiensko.
The Company also engaged the services of a London based, funding
and debt advisory mining boutique consultancy which specialises in
the resources sector, Terrafranca Advisory Limited ("Terrafranca").
The consultancy is well regarded as a specialist capital markets
and mining debt finance consultancy who has been involved in recent
transactions for project development funding (including debt,
equity, royalty financing and hybrid instruments) for companies in
the resources sector across a range of commodities. Following a
comprehensive finance sounding exercise to a number of European
banks and funds, feedback received was that Debiensko, largely due
to its potential for low operating cost, forms a viable debt
financing case. It is envisaged that multi-tranche senior project
financing can be appropriately structured and executed, and there
should be sufficient market appetite for such a transaction,
especially given inclusion of coking coal in the EU list of
Critical Raw Materials as discussed above in the Marketing section.
Terrafranca has and continues to be highly involved in the
international debt and royalty financing for major development
projects around the world.
The assessment of various funding alternatives available to the
Company was also made based on precedent transactions that have
occurred in the mining industry, including an assessment of
alternatives available to companies that operate in industrial and
specialty minerals sector. The assessment indicates that financing
for mining companies often involves a broader mix of funding
sources rather than just traditional debt and equity, and the
potential funding alternatives available to the Company including,
but not limited to are: funding from regional development banks;
royalty financing; mezzanine finance; prepaid off-take agreements;
equity; joint venture participates; strategic partners/investors at
project or company; senior secured debt/project finance; secondary
secured debt; and equipment leasing. It is important to note that
no funding arrangements have yet been put in place, as these
discussions will usually commence upon completion of further
feasibility studies with results not worse than this Study. The
composition of the funding arrangements ultimately put in place may
also vary, so it is not possible at this stage to provide any
further information about the composition of potential funding
arrangement. However the Company has commenced initial discussion
with a number of European financing institutions regarding the
financing of Debiensko but as at the date of this release, no
agreements have been concluded.
Since the acquisition of Debiensko only five months ago in
October 2016, the Company has completed its maiden CRE plus it has
received results from a fully cored borehole which confirmed that
Debiensko hosts a range of premium quality hard coking coal. Over
this short period, the Company's fully diluted market
capitalisation has increased by 114% from A$49m to over A$106m. As
discussed below, Debiensko is in a favourable position of being
fully permitted with a 50 year mining licence and having been a
previously operational mine, benefits from significant historical
capital investment in on-site facilities, existing rail-siding near
to site and existing shaft infrastructure. Going forward, the
Company intends to complete a number of future development
activities at Debiensko including but not limited to a focused
in-fill drill program to increase JORC Measured and Indicated
Resources and to deliver a re-engineered mine plan to produce a
feasibility study to international standards with a focus on near
term production. As advised by Tamesis, the completion of these
future key project development activities at Debiensko is likely to
increase the Company's share price and market capitalisation as
they represent key development and de-risking events. This share
price appreciation and the resulting increase in market
capitalisation reduces the dilution from further equity financings
and allows larger funding scenarios, improving the potential
ability of the Company to finance Debiensko into production in the
future.
In September 2015, the Company completed an investment agreement
with CD Capital to raise up to $83 million with CD Capital
committing to being a key strategic funding partner of the Company.
As part of the investment agreement, CD Capital secured a priority
right to invest A$55 million in the future funding required by the
Company which provides a solid platform for the Company to progress
with project financing and development of Debiensko. CD Capital
currently manages three private equity investment funds with assets
under management of US$600 million and has also provided the
Company with a letter of financial support to advance Debiensko in
their capacity as a cornerstone investor.
Prairie has a high quality Board and management team comprising
highly respected resource executives with extensive finance,
commercial and capital markets experience. The Company's Chairman
has previously raised more than A$600m from capital markets for a
number of exploration and development companies while Messrs Tom
Todd (non-executive director) and Todd Hannigan (alternate
director) raised A$855 million debt and A$1.1 billion equity to
acquire and fund the Maules Creek coal project in Australia through
to production.
The Company's CEO, Mr Ben Stoikovich and Corporate Development
Officer, Mr Sapan Ghai were both formerly investment bankers at a
leading investment bank who raised substantial development capital
for mining projects around the world. Mr Stoikovich has extensive
experience in debt and off-take financing and mergers and
acquisitions while Mr Ghai's expertise lies in equity financing and
mergers and acquisitions.
Sitting on the board of Prairie's Polish subsidiaries is Mr
Miroslaw Taras who has worked in mining for more than 30 years,
commencing as an underground coal mine operator and rising to the
rank of Chairman of the Management Board of LWB Bogdanka where he
successfully oversaw the privatisation of Bogdanka by way of an
Initial Public Offering on the WSE, including a US$160m fundraise
to develop two new shafts.
Environmental - refer to section entitled 'Environmental &
Social Impact Assessment' in the Announcement.
In 2007, the Polish MoE approved the Debiensko's development
plan and in 2008 granted Debiensko with a 50-year mine license. The
mine licence also incorporates an approved Environmental Consent
Decision made in 2008 which is necessary to commence mining at
Debiensko. An amendment to the existing Environmental Consent was
granted in July 2015; as a result, the Debiensko Mine is already
fully permitted to comply with applicable environmental
requirements and "development-ready".
The scope of the environmental studies conducted at Debiensko
were designed to meet Polish environment standards meaning the
Environmental Consent is compliant with the Equator principals as
required of Equator Principles Financial Institutions to support
the future financing of Debiensko.
Social, Legal and Governmental - refer to sections entitled
'Permitting and Fiscal Regime' and 'Environmental & Social
Impact Assessment' in the Announcement.
As discussed above, Debiensko is fully permitted with the Polish
MoE having already granted Debiensko with a 50 year mine licence
and approved Environmental Consent Decision making it development
and mine ready. Debiensko also has established on-site facilities
including rail, road and power infrastructure when significant
historical capital investment was made by the previous owners.
As a result, the Company has received all the necessary mining,
environmental and government approvals required to commence
development and mining operations at Debiensko.
There is strong local community and political support for the
project in an area that has suffered from high unemployment from
previous mine closures in the surrounding areas. Debiensko will be
the key economic driver of the municipality for decades and will be
the heart of a community that fully accepts and is supportive of
the planned mine.
The Company has recently applied to the MoE for an amendment of
the Debiensko mining concession to extend the start date of
commencement of mining operations from beyond 2018 to 2025. Based
on advice received to date, the Company expects that the amendment
of the mining concession will be granted.
Material Assumptions
The Production Target contained in this announcement, and the
forecast financial information derived from the Production Target
contained in this announcement, are based on the material
assumptions contained within this announcement which are summarised
below:
Table 17: Material Assumption Estimations
----------------------------------------------------------------------------------------------------------------------
Maximum Accuracy Variation +/-30%
-------------------------------------------------------------- ------------------------------------------------------
Minimum LOM 26 years
-------------------------------------------------------------- ------------------------------------------------------
Mining Method Underground Longwall
-------------------------------------------------------------- ------------------------------------------------------
Average Seam Thickness 401/1 = 1.5 m
403/1 = 1.48 m
404/9 = 2.6 m
405 = 3.16 m
-------------------------------------------------------------- ------------------------------------------------------
Average Mining Height 401/1 = 1.8 m
403/1 = 1.8 m
404/9 = 3.0 m
405 = 3.7 m
-------------------------------------------------------------- ------------------------------------------------------
Production Days per Year 300
-------------------------------------------------------------- ------------------------------------------------------
Longwall Production rate Productivity Up to 4.2 Mtpa (2 x longwalls in operation)
-------------------------------------------------------------- ------------------------------------------------------
Longwall Retreat Rate 6 - 8 m/day
-------------------------------------------------------------- ------------------------------------------------------
Development Rate - Coal 12 m/day
-------------------------------------------------------------- ------------------------------------------------------
Development Rate - Rock 5 m/day
-------------------------------------------------------------- ------------------------------------------------------
Steady State Average ROM Coal Production 4 Mtpa
-------------------------------------------------------------- ------------------------------------------------------
Capacity CHPP 750 raw tonnes per hour
-------------------------------------------------------------- ------------------------------------------------------
Utilisation CHPP 90%
-------------------------------------------------------------- ------------------------------------------------------
Average Effective Project Yield Life of Mine - 67.8%, Steady State - 67.9%
-------------------------------------------------------------- ------------------------------------------------------
Processing Method Dense Media Plant
-------------------------------------------------------------- ------------------------------------------------------
Average Steady State Saleable Coal Production (tonnes) 2.69 Mtpa (2.56 Mtpa Hard Coking Coal, 0.135 Mtpa
Middlings)
-------------------------------------------------------------- ------------------------------------------------------
Average Direct Mining Costs (Steady State) US$37.09 per tonne saleable coal
-------------------------------------------------------------- ------------------------------------------------------
Average CHPP, Waste Management & Logistics Costs (Steady US$4.64 per tonne saleable coal
State)
-------------------------------------------------------------- ------------------------------------------------------
Average SG&A and Mine Closure Fund Costs (Steady State) US$4.44 per tonne saleable coal
-------------------------------------------------------------- ------------------------------------------------------
Royalty US$0.70 (PLN2.8) per tonne saleable coal
-------------------------------------------------------------- ------------------------------------------------------
Average Total Cash Operating Cost (Steady State) US$46.86 per tonne saleable coal
-------------------------------------------------------------- ------------------------------------------------------
Initial Capital Costs to First Production US$424.7million
-------------------------------------------------------------- ------------------------------------------------------
Contingency (approximately 15%), EPCM and owners costs (to US$79.4million
First Production)
-------------------------------------------------------------- ------------------------------------------------------
Average Sustaining Capital Cost (Steady State) US$$6.96 per tonne saleable coal
-------------------------------------------------------------- ------------------------------------------------------
Leased Equipment - Operating Lease Costs included in Average Direct Mining Costs
-------------------------------------------------------------- ------------------------------------------------------
Leased Equipment - Interest Rate (Real) 7.0% per annum
-------------------------------------------------------------- ------------------------------------------------------
Leased Equipment - Term 8 years
-------------------------------------------------------------- ------------------------------------------------------
Leased Equipment - Residual Value 20% of Capital Cost
-------------------------------------------------------------- ------------------------------------------------------
Poland Corporate Tax Rate 19%
-------------------------------------------------------------- ------------------------------------------------------
Assumed PLN: USD Exchange Rate (LoM) 4.0:1.0
-------------------------------------------------------------- ------------------------------------------------------
Discount Rate 8% (real, unlevered)
-------------------------------------------------------------- ------------------------------------------------------
Average Volume (Steady State) Long Term FOB Benchmark Long Term FOR Received
Price (Real) Price - with Netback (Real)
------------------------------------------------------------- ------------------------ ----------------------------
Hard- Coking Coal 2.56 Mtpa US$142/t US$157/t
------------------------------ ------------------------------ ------------------------ ----------------------------
Middlings (Thermal) 135 ktpa --- US$45/t
------------------------------ ------------------------------ ------------------------ ----------------------------
Mine rehabilitation and closure costs have been included in the
cost estimates for this study.
Corporate
As part of an incentive to key employees and consultants of the
Company, Prairie will grant the following incentive options in
order to attract and retain their services and to provide an
incentive linked to the performance of the Company:
-- 200,000 incentive options exercisable at A$0.50 each on or
before 31 March 2020, vesting after 6 months of service or a change
in control of control in the Company occurring;
-- 400,000 incentive options exercisable at A$0.60 each on or
before 31 March 2020, vesting after 12 months of service or a
change in control of control in the Company occurring; and
-- 700,000 incentive options exercisable at A$0.80 each on or
before 31 March 2020, vesting after 18 months of service or a
change in control of control in the Company occurring.
Cautionary Statement
The primary purpose of the Scoping Study is to establish whether
or not to proceed to the next stage of feasibility studies and has
been prepared to an accuracy level of +/-30%. The Scoping Study
results should not be considered a profit forecast or production
forecast.
The Scoping Study is a preliminary technical and economic study
of the potential viability of Debiensko. In accordance with the ASX
listing rules, the Company advises that 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.
The Production Target referred to in this announcement is based
on 64% Indicated Resources and 36% Inferred Resources for the mine
life covered under the Scoping Study. In accordance with the 26
year mine plan incorporated into the Scoping Study, the first 14
years of production will come exclusively from Indicated Resources.
There is a low level of geological confidence associated with
Inferred Mineral Resources and there is no certainty that further
exploration work will result in the determination of Measured or
Indicated Mineral Resources or that the Production Target or
preliminary economic assessment will be realised.
The Scoping Study is based on the material assumptions outlined
elsewhere in this announcement. These include assumptions about the
availability of funding. While the Company considers all the
material assumptions to be based on reasonable grounds, there is no
certainty that they will prove to be correct or that the range of
outcomes indicated by the Scoping Study will be achieved.
To achieve the potential mine development outcomes indicated in
the Scoping Study, additional funding will be required. Investors
should note that there is no certainty that the Company will be
able to raise funding when needed however the Company has concluded
it has a reasonable basis for providing the forward looking
statements included in this announcement and believes that it has a
"reasonable basis" to expect it will be able to fund the
development of Debiensko.
Given the uncertainties involved, investors should not make any
investment decisions based solely on the results of the Scoping
Study.
Further Important Information for this Announcement
This Study has been prepared and reported in accordance with the
requirements of the JORC Code (2012) and relevant ASX Listing
Rules.
The Study has been prepared to an accuracy level of +/-30%. The
primary purpose of the Study is to establish whether or not to
proceed to the next stage of feasibility studies. The Study results
should not be considered a profit forecast or production forecast.
As defined by the JORC Code, a "Scoping Study is an order of
magnitude technical and economic study of the potential viability
of Mineral Resources. It includes appropriate assessments of
realistic assumed Modifying Factors together with any other
relevant operational factors that are necessary to demonstrate at
the time of reporting that progress to a Pre-Feasibility Study can
be justified."
The Modifying Factors included in the JORC Code have been
assessed as part of the Study, including mining, processing,
infrastructure, economic, marketing, legal, environmental, social
and government factors. The Company has received advice from
appropriate experts when assessing each Modifying Factor.
Following an assessment of the results of the Study, the Company
has formed the view that the next stage of feasibility studies is
justified for Debiensko. Feasibility Studies will provide the
Company with far more comprehensive assessment of a range of
options for the technical and economic viability of Debiensko which
by international standards should be sufficient detail for project
development financers to base an investment decision.
The Company has concluded it has a reasonable basis for
providing any of the forward looking statements included in this
announcement and believes that it has a reasonable basis to expect
that the Company will be able to fund its stated objective of
completing feasibility studies for Debiensko. All material
assumptions on which the forecast financial information is based
are set out in this announcement.
This release contains 'forward-looking information' that is
based on the Company's expectations, estimates and projections as
of the date on which the statements were made. This forward-looking
information includes, among other things, statements with respect
to pre-feasibility and definitive feasibility studies, the
Company's business strategy, plans, development, objectives,
performance, outlook, growth, cash flow, projections, targets and
expectations, mineral reserves and resources, results of
exploration and related expenses. Generally, this forward-looking
information can be identified by the use of forward-looking
terminology such as 'outlook', 'anticipate', 'project', 'target',
'potential', 'likely', 'believe', 'estimate', 'expect', 'intend',
'may', 'would', 'could', 'should', 'scheduled', 'will', 'plan',
'forecast', 'evolve' and similar expressions. Persons reading this
news release are cautioned that such statements are only
predictions, and that the Company's actual future results or
performance may be materially different. Forward-looking
information is subject to known and unknown risks, uncertainties
and other factors that may cause the Company's actual results,
level of activity, performance or achievements to be materially
different from those expressed or implied by such forward-looking
information. Forward-looking information is developed based on
assumptions about such risks, uncertainties and other factors set
out herein.
Competent Person Statements
The information in this announcement that relates to Mining,
Coal Preparation, Infrastructure, Production Targets and Cost
Estimation is based on, and fairly represents, information compiled
or reviewed by Mr Maarten Velzeboer, a Competent Person, Member of
the Institute of Materials, Minerals and Mining (MIMMM). Mr
Velzeboer has worked in deep coal mines in New South Wales and
Queensland in Australia and the Karaganda Coalfield in Kazakhstan.
Mr Velzeboer has been engaged in a senior capacity in the design
and development of proposed mines in Queensland, Australia,
Botswana and Venezuela. Mr Velzeboer is employed by independent
consultants Royal HaskoningDHV. Mr Velzeboer 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 Velzeboer consents to the
inclusion in the report of the matters based on their information
in the form and context in which it appears.
The information in this announcement that relates to Exploration
Results and Coal Resources was extracted from Prairie's ASX
announcement dated 1 February 2017 entitled 'Maiden 301 Million
Tonnes Hard Coking Coal Resource Confirmed At Debiensko' which is
available to view on the company's website at www.pdz.com.au. 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 O'Dell, a Competent
Person who is a Member of The Australasian Institute of Mining and
Metallurgy who is a consultant of the Company. Mr O'Dell 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'.
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 and; b) all material assumptions and
technical parameters underpinning the Coal Resource included in the
original ASX announcement continue to apply and have not materially
changed; c) the form and context in which the relevant Competent
Persons' findings are presented in this announcement has not been
materially modified from the original ASX announcement.
To view a full version of this announcement including all
figures and illustrations please refer to the Company's website at
www.pdz.com.au
This information is provided by RNS
The company news service from the London Stock Exchange
END
DRLGGUUUWUPMUMA
(END) Dow Jones Newswires
March 15, 2017 03:05 ET (07:05 GMT)
Prairie Mining (LSE:PDZ)
Historical Stock Chart
From Apr 2024 to May 2024
Prairie Mining (LSE:PDZ)
Historical Stock Chart
From May 2023 to May 2024