TIDMPDZ
RNS Number : 1850L
Prairie Mining Limited
17 July 2017
PRAIRIE MINING LIMITED
NEWS RELEASE | 17 July 2017
JUNE 2017 QUARTERLY REPORT
HIGHLIGHTS
Debiensko Hard Coking Coal Project
-- Following positive Scoping Study results, works at Debiensko
have continued to develop a globally significant hard coking coal
project with robust economics positioning Prairie to become a large
scale, low cost and long life premium hard coking coal supplier
-- With Debiensko now development ready, Prairie will focus on
planning the mine site's redevelopment program, including:
o preparation for an in-fill drill program to increase JORC
measured and indicated resources to support future feasibility
studies
o completion of a re-engineered mine plan to produce a
feasibility study to international standards with a focus on near
term production at Debiensko
o advancing discussions with regional steel makers and coke
producers for future coking coal sales and offtake
-- In preparation for the next phase of project studies,
pre-qualification of study contractors was initiated, demolition
works commenced in order to remove old structures from the
historical Debiensko surface facilities and a shallow geo-technical
drill program commenced for engineering design of foundations for
new surface structures
-- Highly favourable market fundamentals remain prominent 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
European steelmakers, with substantial netback pricing advantages
given proximity to regional customers
Jan Karski Mine
-- Recent coal quality analysis following the drilling of a new
exploration borehole re-affirms Jan Karski's potential to produce
high value ultra-low ash semi-soft coking coal and confirms Jan
Karski's status as a Tier One coking coal project of global
significance
-- Independent assessment by specialist coking coal market
consultants predicts that Jan Karski ultra-low ash semi-soft coking
coal would potentially realise a 10% premium to international
benchmark prices
-- China Coal has made substantial progress on the Bankable
Feasibility Study ("BFS") during the quarter. Continued discussions
were held with Chinese financing institutions which will progress
further towards completion of the BFS during the next quarter
-- The approval of the Deposit Development Plan ("DDP") at Jan
Karski by the Lublin Regional Mining Authority during the quarter
paves the way forward for a mining concession application. Prairie
will now focus on:
o furthering discussions with a select group of Chinese
financing institutions as China Coal nears completion of its
BFS
o continuing project permitting activities including obtaining
an Environmental Consent Decision, Spatial Planning consents
(rezoning) and land acquisition at Jan Karski
o formally lodging a mining concession application for Jan
Karski
-- The Strategic Co-operation Agreement with China Coal
demonstrates the increasing economic collaboration between Poland
and China following China's proposed "One Belt, One Road"
development strategy and highlights Poland's importance to China as
a "One Belt Economy" for accessing key European markets
-- Significant government support was received at the 2017 Jan
Karski Mine Development Conference as regional authorities, the
Australian Ambassador to Poland, the Vice Marshall of the Lublin
province and representatives from the Polish Investment and Trade
Agency and numerous other distinguished regional officials were
updated on Jan Karski's considerable progress to date
-- Conditions for power grid connection have been signed with
national power utility, PGE Dystrybucja S.A., which will provide
the 45MW bulk supply required for full scale mine production at Jan
Karski
-- Development activities have commenced with the appointment of
a leading contractor to design and supervise the bulk power supply
connections for the project, including power lines and
substations
Corporate
-- Prairie completed the successful placing of 11.5 million new
ordinary shares in the capital of the Company to a number of UK
based high quality institutional investors to raise approximately
GBP3.2 million (A$5.5 million) before costs
-- Prairie and CD Capital have agreed final terms for a further
investment of US$2.0 million (A$2.6 million) in the form of
non-redeemable, non-interest-bearing Convertible Loan Notes
-- Subject to Shareholder approval, the Notes issued will be
convertible into ordinary shares of Prairie at A$0.46 (28 pence)
per share and will be subject to a lock up period during which time
CD Capital may not convert the Notes prior to 1 April 2018
-- Following the successful placing of ordinary shares to UK
institutional investors, Prairie has cash reserves of A$16.8
million. With CD Capital's additional A$2.6 million investment
still to come and its right to invest a further A$68 million as a
cornerstone investor, plus with the Strategic Co-operation
Agreement Prairie has with China Coal for financing and
construction of Jan Karski, Prairie is in a strong financial
position to progress with its planned development activities at
Debiensko and Jan Karski
Ben Stoikovich, Chief Executive Officer commented "This quarter
has seen Prairie take another quantum leap as an emerging Tier One
coking coal company. Following the extremely positive Scoping Study
results at Debiensko, we have accelerated our development plans
with the commencement of limited demolition works on site and
shallow geotechnical drilling for foundation design to continue
over the coming months. At Jan Karski, enhanced coal quality
analysis from our recently drilled core borehole demonstrated the
potential to produce high value ultra-low ash semi-soft coking coal
which would attract a premium to benchmark from Europe's steel
makers. Jan Karski continues to gain strong governmental support as
Prairie obtained approval for the DDP in May and consequently
commenced preliminary development activities. During the quarter,
we also welcomed a number of high quality UK-based institutional
investors as shareholders of Prairie while CD Capital demonstrated
its continued support with additional funding to advance both of
our Tier One coking coal projects."
For further information, please contact:
Prairie Mining Limited +44 20 7478 3900
Ben Stoikovich, Chief info@pdz.com.au
Executive Officer
Sapan Ghai, Head of
Corporate Development
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.
Debiensko HARD Coking Coal Project
The Debiensko Hard Coking Coal Project ("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.
Scoping Study Results
In March 2017, Prairie announced the results of a scoping study
("Study") in accordance with the JORC Code 2012 and completed by
independent consultants Royal HaskoningDHV given their extensive
and recent track record of successful involvement in European
underground coal projects in the UK, Kazakhstan and Poland,
including Prairie's Jan Karski Mine ("Jan Karski").
The Study utilised a 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
---------------------------------- ------------------
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
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).
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.
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$15/t above prevailing benchmark prices for Debiensko coal
when sold to regional end users compared to imported hard coking
coal. However, Prairie believes there is significant potential to
increase this netback premium during future discussions with
offtakers.
Table 2: Total Freight to Zdzieszowice (Source: CRU)
------------------------------------------------------------------------------------------------------------------------------------------
Port of Sea freight Estimated Typical Typical Estimated Port Total Estimated Rail Total Freight
Origin distance to Shipping Vessel Vessel Sea Freight Handling, Sea Rail Freight Handling Costs
Swinoujscie Time Type Size Cost to Storage Freight Cost (US$/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
------------ ------------ ---------- -------- -------- ------------- ----------- -------- ------------- --------- --------------
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.
Preparation for the Next Phase of Project Studies
Pre-qualification of contractors for the major components of the
next phase of Debiensko studies were commenced including:
-- Drilling contractors for the planned in-fill drilling program
-- Coal Handling and Preparation Plant ("CHPP")
-- Shafts and bulk coal winder
-- Desalination plant
-- Surface facilities
Demolition of old surface structures of the former Debiensko
mine was commenced during the quarter, including the bathhouse,
switchgear building and locomotive garage. In addition, drilling of
28 shallow geotechnical holes for engineering design of foundations
for structures was commenced.
JAN KARSKI MINE
Coking Coal Quality Results Establish Jan Karski as a High Value
Ultra-Low Ash Semi-soft Coking Coal Mine
During the quarter, Prairie announced the results of enhanced
coal quality analysis and test work from the completed borehole,
Cycow 9, at the Jan Karski Mine ("Jan Karski"). Key results from
the expanded coke oven and washability test work indicated the
potential to produce a high value ultra-low ash Semi-Soft Coking
Coal ("SSCC") with a high Coke Strength after Reaction ("CSR") and
a high 75% product yield. Preliminary analysis by independent
consultants indicates that the Jan Karski ultra-low ash SSCC could
achieve a 10% premium to international SSCC benchmark prices, due
to several superior qualities.
Cycow 9 was a large diameter, PQ size borehole and the first of
its kind to be drilled at Jan Karski enabling sufficient quantities
and sized coal from the 391 seam to be collected to meet the
requirements for physical coke testing, specifically confirmation
of CSR and extended coal washability test work. The analysis and
testwork was conducted at leading fully accredited European
laboratories in Poland, Germany and the UK. The CSR test is
considered vital in testing for a coal's coking properties
important to steelmakers as it is an indicator of the performance /
strength of the coke produced from the coal. The full range of
standard coking tests were also conducted as shown in table 3
below:
Table 3: Analysis results from Cycow 9 borehole - 391 seam
TOTAL MOISTURE ar% 10-12% ULTIMATE ANALYSIS COKING PROPERTIES
Carbon daf% 81.90 FSI 5.5
--------------------------- -------
PROXIMATE ANALYSIS Hydrogen daf% 5.42 Gray King Coke G5
Inherent moisture adb% 3.4 Nitrogen daf% 1.91 Roga Index 69
Ash ar% 2.6 Sulphur ad% 1.16 CSR % 51.5
Volatile Matter ar% 33-36 Oxygen daf% 7.10 CRI % 39.1
Fixed Carbon ad% 57 Ash in Coke % 3.3
-------------------------- ----- ------
RO(MAX) & MACERAL
ANALYSIS Sulphur in Coke % 0.87
--------------------------- -------
ASH CHEMISTRY Vitrinite % 74.40
SiO(2) db% 33.32 Liptinite % 13.20 Giesler Plastometer
Al(2) O(3) db% 29.63 Inertinite % 12.40 Initial Softening degC 379
Fe(2) O(3) db% 20.30 Mineral Matter % 0.00 Max Fluidity temp degC 416
CaO db% 4.49 RoMax % 0.88 Resolidification degC 435
MgO db% 1.73 Max Fluidity ddpm 90
-------------------------- ----- ------
TiO(2) db% 0.98 OTHER COAL PROPERTIES
NaO(2) db% 0.96 Sulphur ar% 1.09 ASTM Dilation
K(2) O db% 1.10 HGI average ad% 44 Softening Temperature degC 370
P(2) O(5) db% 3.41 Phosphorus ad% 0.034 Max Contraction Temp degC 408
SO(3) db% 2.36 Max Dilation Temp degC 433
Other db% 1.72 Max Contraction % C 32
Max Dilation % D 35
--------------------------- ------- -------------------------- ----- ------ ---------------------- ----- -----
Jan Karski Coking Coal Key Quality Advantages
Ultra-low Ash
Washability analysis from the Cycow 9 borehole and previous
boreholes drilled by Prairie across Jan Karski has demonstrated
that due to the low inherent ash and excellent washability
characteristics of the 391 seam, Jan Karski SSCC coal is unique
with typical ash product level of less than 3% (air dried) and far
superior to typical ash levels for major coking coal brands (both
hard and soft) traded internationally and produced domestically in
Europe. Figure 7 shows there is a range of ash specifications for
SSCCs. With an average ash specification of 2.6%, the Jan Karski
SSCC is an ultra-low ash product compared to all the comparison
coals. Low ash provides a number of technical benefits including
improved coke strength and caking properties, and reduced fuel rate
in the blast furnace.
The ultra-low ash content increases the coals value-in-use to
steel and coke makers, making the product highly saleable in both
the domestic European and international markets. One of the key
outcomes of utilising ultra-low ash coking coal to produce low ash
coke ash is the resulting decreased fuel rate. This has a key
environmental benefit for steel makers that results in a reduction
in CO(2) emissions per tonne of hot metal produced.
Prairie's analysis predicts increasing global demand for
ultra-low ash coking coal for blending with HCC, because of a
continuing trend of rising average ash levels in globally traded
hard coking coals. Premium hard coking coal resources with low ash
are becoming increasingly scarce, forcing consumers to make
concessions on HCC ash levels. Ultra-low ash coking coals for
blending are becoming increasingly sought after by consumers
seeking to "blend-down" the ash levels in their coke blends. This
is a particular advantage for European steelmakers where EU
regulations focus on reduced CO(2) emissions. This trend has
important implications for the future marketability of Jan Karski
ultra-low ash SSCC.
Coke Strength After Reaction
Figure 8 shows the measured CSR (51.5) of the 391 seam from
Cycow 9 borehole at Jan Karski is at the top end of the range for
semi-soft coking coal. A CSR figure of 51.5 shows the coal has the
ability to form a coherent coke mass. The Jan Karski coal has a
number of features conducive to forming good coke for a semi-soft
type coal:
1. the coal is ultra-low ash and low inertinite, meaning the coke has few inertinites to bind;
2. the coal has higher rank for a semi-soft compared to typical
Hunter Valley and Maules Creek semi-soft coking coals; and
3. the coal exhibits moderate fluidity and reasonable total dilatation.
Further CSR analysis will be undertaken as part of future
drilling programs.
Other Positive Attributes
Other Jan Karski ultra-low ash SSCC quality positives are its
high vitrinite content, and low phosphorous levels, mid-range FSI
(5.5), Gray King Index (G5). The volatile matter is in the range
typical for Australian traded SSCCs, with the rank of the Jan
Karski coal being slightly higher and closer to a semi-hard coking
coal specification.
Price Benchmarking
Independent coal market specialists CRL Energy Ltd ("CRL") were
appointed by Prairie to analyse the potential value of Jan Karski
ultra-low ash SSCC in the market. CRL took two approaches to price
benchmarking. The first approach applied the method used by the
Platts publication of international benchmark coal prices. The
second was a proprietary approach adopted by CRL based on value in
use assessment incorporating assumptions regarding a typical
Western European coking coal blend used by steel makers and
proportions of Jan Karski ultra-low ash SSCC included in the
blend.
The Platts coal market publication shows a number of
penalty/premium factors that can be used to calculate relative
value of coking coals against a stated benchmark (Figure 9). The
limit of this method is that it assumes all markets would derive
the same value from a particular coal; this is not strictly
applicable in all cases, since value is also a function of the
other coals in the blend, coke versus PCI rate and plant
configuration. The "benchmark" coal used in this evaluation is the
Rio Tinto Hunter Valley semi-soft, hence this coal is calibrated at
100% of the benchmark. The Platts benchmarking shows the Jan Karski
coal specification is valued at 112.7% of the Rio Tinto semi-soft
specification. The only comparable coal is the Blackwater coking
coal (which is more of a semi-hard type specification) and the NZ
SSCC (a low ash semi-soft coking coal).
Both Platts benchmarking and value in use modelling show Jan
Karski is a high value semi-soft, driven substantially by the
ultra-low ash. The Platts specification benchmarking suggests Jan
Karski should be priced at a 10% premium above the benchmark Rio
Tinto Hunter Valley semi-soft coal.
Washplant Design Update And Coking Coal Yield
Dargo Associates, specialist coal handling and preparation
consultants were appointed to re-evaluate the potential yields of
ultra-low ash coking coal from the Jan Karski mine, and develop a
conceptual washplant flow sheet. To evaluate the yield of ultra-low
ash coal, the washability tests were extended to give more
information on separation in the lower density ranges. Separating
at low density increases the quantities of near density material
and the extended washability test work was used to identify the
most efficient wash plant process. The washability results from the
recently drilled Cycow 9 borehole were consistent with the results
from washability analysis conducted for all of the eight boreholes
Prairie has drilled across Jan Karski, demonstrating exceptionally
high yields of ultra-low ash (<3%) product coal at RD1.35
float.
Because the Prairie coal will be washed at a lower density to
achieve the ultra-low ash product, higher ash coal will report to
the residual thermal coal which is washed at a higher density, and
typically sold into the steam coal market.
Preliminary analysis has shown that the production of ultra-low
ash SSCC (<3%) results in an overall yield of saleable coal of
82%, which is similar overall yield as indicated in the original
Jan Karski Pre-Feasibility Study ("PFS") published in March 2016.
Overall mine yields are hardly impacted by the ultra-low ash
beneficiation as any coal lost due to the lowering of ash on the
ultra-low ash SSCC product reports to the thermal product.
The predicted ratio of ultra-low ash SSCC to thermal coal is 75%
coking coal to 25% thermal coal. The thermal coal product is
anticipated to have 13% ash, and will be in line with typical API2
specification export quality thermal coal. Should Prairie decide to
sell a typically higher ash Polish domestic thermal coal of up to
25% ash, the overall yield will increase further.
China Coal Bankable Feasibility Study, EPC Contract and
Financing
During the quarter, China Coal No.5 Construction Company Ltd
("China Coal") provided Prairie Mining with a draft of the Jan
Karski BFS and discussions were held with Chinese financing
institutions. China Coal and Prairie continue to advance towards
completion of the BFS during the upcoming quarter, which will
provide the basis for an Engineering, Procurement, Construction
("EPC") contract and finalising a term sheet with Chinese financing
institutions for a construction funding package for Jan Karski.
In November 2016, Prairie and China Coal, the second largest
coal mining company in China and one of the world's most advanced
and prolific shaft sinking and total underground coal mine
construction companies, signed a landmark Strategic Co-operation
Agreement to advance the financing and construction of Prairie's
Jan Karski Mine in Poland.
Prairie and China Coal have been in discussions since 2014
regarding the potential for collaboration in designing and
constructing Jan Karski.
Since 2014, Prairie's senior management and technical team have
met with China Coal numerous times in China and inspected China
Coal's various shaft sinking projects, mine construction sites and
state of the art longwall coal mines operated by China Coal.
The Strategic Co-operation Agreement was signed confirming the
intention of the parties to, on a best efforts basis:
(i) complete a BFS by mid-2017, which will form the basis of
Chinese bank credit approval for project finance;
(ii) based on the results of the BFS, enter into a complete EPC
contract under which China Coal will construct the Jan Karski Mine;
and
(iii) incorporate relevant Polish content into the design and
construction phases, which will include working with a range of
Polish specialists, sub-contractors and business partners.
It is the intention of the parties to enter into future binding
agreements for China Coal to construct Jan Karski once the BFS is
completed successfully and financing terms are agreed with Chinese
financing institutions.
China Coal International Strategy and "One Belt, One Road"
Initiative
China Coal has been internationally active since 1988. China
Coal expedited the implementation of its strategy to become an
internationally competitive project contractor. Globally, China
Coal has undertaken and continues to develop several projects
across Morocco, Bangladesh, Turkey, Vietnam, India, and Ecuador for
clients and partners including:
-- Vedanta Resources plc - a London-listed, global diversified natural resources group; and
-- JSW Group - a leading Indian conglomerate part of the O.P. Jindal Group.
In 2013, Chinese President Xi Jinping proposed the "One Belt,
One Road" development strategy and framework which calls for
greater economic cohesion between China and 60 countries throughout
Europe, Asia and Africa through building infrastructure, increasing
cultural exchanges, and broadening trade.
Poland is considered a key "One Belt Economy" important to
Chinese economic access to Europe, most recently demonstrated by
meetings between the Chinese and Polish Leaders in June 2016
including signing of cooperative treaties, the opening of a
China-Poland trade forum and welcoming of freight trains linking
Chengdu and Ć³d , carrying goods between the capital of Sichuan
Province and Poland's third-largest city.
Prairie's and China Coal's Strategic Co-operation Agreement
demonstrates the increasing economic collaboration between Poland
and China.
Strong Regional Government Support
The Project received exceptionally strong support from regional
authorities and local communities at the 2017 Jan Karski Mine
Development Conference held in Lublin during May. The Conference
received wide coverage in both local and national media, including
major newspapers and television, and was attended by senior Polish
and Australian officials including:
-- Mr Paul Wojeciechowski, Australian Ambassador to Poland
-- Mr Anthony Weymouth, Senior Trade Commissioner and Commercial Counsellor - Austrade
-- Mr Krzysztof Grabczuk, Vice Marshal of Lublin Province
-- Mr Tomasz Sonntag, Director of the Lubelskie Province Governor's Office
-- Mr Tomasz Szczepaniak, Vice Governor of Chelm Shire/County
-- Mr Waldemar Bia ow s - Vice Governor of widnik Shire/County
-- Mr Stanis aw Bodys - Mayor of Rejowiec Fabryczny
-- Mr. Hieronim Zonik - Mayor of Siedliszcze
-- Mr ukasz ChrabaÅski - Representative of the Polish Investment and Trade Agency ("PAIH").
Numerous community leaders from municipalities around the Jan
Karski location also attended.
Mr Paul Wojciechowski, Australian Ambassador to Poland gave his
strong support for development of the Jan Karski mine. Regional
politicians confirmed their support for Jan Karski, which will be
located in Siedliszcze municipality in the Chelm Shire, and its
potential to create a large number of jobs and bring significant
economic benefits to the regional and national economy.
Permitting Milestones
Prairie is currently working towards completing a mining
concession application which, in Poland, comprises the submission
of a DDP, an Environmental Social Impact Assessment ("ESIA") that
is to be approved by regional authorities and approval of a spatial
development plan (rezoning of land for mining use). The Company
intends to formally lodge a mining concession application for Jan
Karski in early 2018.
Prairie achieved a significant permitting milestone during the
quarter following official approval by the Lublin Regional Mining
Authority of the Jan Karski DDP, which now paves the way forward
for the Company to submit a formal mining concession
application.
The DDP is a mine technical-economic study which is prepared
according to Polish government standards. Prairie is expecting
Environmental Consent and an approved spatial development plan
during the second half of 2017. A granted mining concession will be
valid for up to 50 years.
Power Supply
Prairie has now initiated works aimed at obtaining power grid
connection for Jan Karski having obtained the appropriate network
connection conditions from PGE Dystrybucja S.A. ("PGED"), a
subsidiary of one of Poland's major state-owned power utility PGE
Group, the largest power producer and supplier in Poland. Under the
agreement, PGED has confirmed the conditions of connection to
provide 45MW bulk power supply required for full scale mine
production. Power supply will be made available in two phases;
firstly, 20MW for the mine construction and shaft sinking phase,
and then full mine power supply of 45MW for steady state
production. The respective high voltage network power lines are in
close proximity to the project and a strategic plan to expand the
high-voltage power network across the region has already been
adopted by relevant state authorities.
To initiate the power line connections, Prairie has appointed
SAG Elbud Gdansk S.A. ("SAG"), to design and complete all the
permitting and engineering preparation for the connection and
construction of a 10 km long 110kV power line from a nearby power
substation to the Jan Karski Mine site. SAG is a Polish subsidiary
of the SAG Group, one of Europe's leading service and system
supplier for electrical power, gas and water networks, as well as
installations for generating, providing and applying electricity.
The SAG Group currently has over 8,000 employees across Europe in
offices in Germany, France, Poland, Czech Republic, Slovakia,
Hungary and the Netherlands.
CORPORATE
Placing to UK Based Institutional Investors
In April 2017, Prairie completed the placing of 11.5 million new
ordinary shares in the capital of the Company at a price of 28
pence per share (A$0.46 per share), to raise approximately GBP3.2
million before expenses ("Placing").
The net proceeds from the Placing, which was in response to
demand for the Company's shares from UK based institutional
investors, will be used for the further development of the
Company's Polish coal development projects. In particular, the
Placing will enable Prairie to accelerate the development of
Debiensko, including additional drilling in support of future
feasibility study work. In parallel, Prairie is also on track to
complete a BFS in the second half of 2017 for Jan Karski, for which
the proceeds of the Placing will be partly applied to advance
pre-construction engineering works such as the provision of high
voltage power supply to the mine site area, and the permitting
processes.
Additional Investment by CD Capital
On 17 April 2017, Prairie announced that an agreement for
further investment from its cornerstone investor CD Capital Natural
Resources Fund III LP ("CD Capital") subject to shareholder
approval and completion of final formal documentation. In July
2017, final terms were agreed whereby the funding will take the
form of non-redeemable, non-interest-bearing convertible loan notes
("Notes") for an aggregate principal amount of US$2.0 million
(A$2.6 million). The Notes are convertible into ordinary shares of
the Company at A$0.46 per share representing the price of the
Placing announced in March 2017.
Financial Position
Prairie has cash reserves of A$16.8 million. With CD Capital's
additional U$2 million (A$2.6 million) investment still to come and
their right to invest a further A$68 million as a cornerstone
investor, plus with the Strategic Co-operation Agreement Prairie
has with China Coal for financing and construction of Jan Karski,
Prairie is in a strong financial position to progress with its
planned development activities at Debiensko and Jan Karski.
Remuneration of Chief Executive Officer
The Board has resolved that Mr Ben Stoikovich, Director and
Chief Executive Officer of the Company, and Windellama Capital
Limited, will be entitled to the following consulting fees
effective 1 July 2017 due to the increased responsibilities of
having to manage two tier 1 coking coal projects, namely Debiensko
and Jan Karski:
-- Mr Stoikovich signed an appointment letter with an effective
appointment date of 17 June 2013, under the terms of which he has
agreed to serve as a Director of the Company. Mr Stoikovich's
appointment may be terminated pursuant to the Company's
Constitution, by giving the Company notice in writing. Mr
Stoikovich continues to receive a fixed fee of GBP25,000 per annum
pursuant to this appointment letter.
-- Windellama Capital Limited, a company of which Mr. Stoikovich
is a director and shareholder, has a consulting agreement with the
Company to provide project management and capital raising services
(CEO services) related to Debiensko and Jan Karski. Under this
agreement, Windellama Capital Limited will be paid a fixed annual
consultancy fee of GBP225,000 per annum and an annual incentive
payment of up to GBP100,000 payable upon the successful completion
of key project milestones as determined by the Board. In addition,
Windellama Capital Limited, subject to meeting the requirements of
the Corporations Act and where necessary receiving the appropriate
approvals, will be entitled to receive a payment incentive worth
the annual fixed directors fees and consultancy fee in the event of
a change of control clause being triggered with the Company. The
consulting contract may be terminated by either Windellama Capital
Limited or the Company by giving twelve months' notice. No amount
is payable to Windellama in the event of termination of the
contract arising from negligence or incompetence in regard to the
performance of services specified in the contract.
-- Subject to shareholder approval, Windellama Capital Limited
will also be granted 640,000 Performance Rights which vest after
delivery of a positive feasibility study at Debiensko (expiring 31
December 2019) and 960,000 Performance Rights which vest after the
Board resolves to commence construction at Debiensko (expiring 31
December 2020).
EXPLORATION TENEMENT INFORMATION
As at 30 June 2017, the Company has an interest in the following
tenements:
Location Tenement Percentage Interest Status Tenement Type
------------------- ------------------------------- -------------------- -------- --------------------------------
Jan Karski, Poland Jan Karski Mine Plan Area 100 Granted Exclusive Right to apply for a
(K-4-5, K-6-7, K-8 and K-9)* mining concession
Jan Karski, Poland Kulik (K-4-5) 100 Granted Exploration
Jan Karski, Poland Syczyn (K-8) 100 Granted Exploration
Jan Karski, Poland Kopina (K-9) 100 Granted Exploration
Jan Karski, Poland Sawin-ZachĆ³d 100 Granted Exploration
Debiensko, Poland Debiensko 1 100 Granted Mining
Debiensko, Poland Kaczyce 1 100 Granted Mining & Exploration (includes
gas rights)
------------------- ------------------------------- -------------------- -------- --------------------------------
* On 1 July 2015, the Company announced that it had secured the
Exclusive Right to apply for, and consequently be granted, a mining
concession for Jan Karski.
As a result of its geological documentation for Jan Karski
deposit being approved, Prairie is now the only entity that can
lodge a mining concession application over Jan Karski within a
three (3) year period.
The approved geological documentation covers an area comprising
of all four of the original exploration concessions granted to
Prairie (K-4-5, K-6-7, K-8 and K-9) and includes the full extent of
the targeted resources within the mine plan for Jan Karski. In this
regard, no beneficial title interest has been surrendered by the
Company when the K-6-7 exploration concession expired during the
quarter. The Company intends to submit a mining concession
application, over the mine plan area at Jan Karski (which includes
K-6-7) within the next 12 months. Under Polish mining law, and
owing to the Exclusive Right the Company has secured, Prairie is
the only entity that may apply for and be granted a mining
concession with respect to the K-6-7 area (the Exclusive Right also
applies to the K-4-5, K-8 and K-9 areas of Jan Karski). There is no
requirement for the Company to hold an exploration concession in
order exercise the Exclusive Right and apply for a mining
concession.
To view all figures and illustrations in this announcement
please refer to version on the Company's website at
www.pdz.com.au.
Competent Person Statements
Debiensko
The information in this announcement that relates to Mining,
Coal Preparation, Infrastructure, Production Targets and Cost
Estimation was extracted from Prairie's announcement dated 16 March
2017 entitled "Scoping Study Indicates Debiensko Mine Restart Will
Deliver Lowest Cost Hard Coking Coal into Europe". The information
in this announcement that relates to Exploration Results and Coal
Resources was extracted from Prairies announcement dated 1 February
2017 entitled "Maiden 301 Million Tonnes Hard Coking Coal Resource
Confirmed at Debiensko". Both announcements referred to above are
available to view on the Company's website at www.pdz.com.au.
The information in the original 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 andto the activity being undertaken
to qualify as a Competent Person as defined in the 2012 Edition of
the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves.
The information in the original announcement that 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 announcements and; b) all material assumptions and
technical parameters underpinning the Production Target, Coal
Resource and related forecast financial information derived from
the Production Target included in the original announcements
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 announcements.
Jan Karski
The information in this announcement that relates to Exploration
Results was extracted from Prairie's announcement dated 1 May 2017
entitled "Coking Coal Quality Results Establish Jan Karski as A
High Value Ultra-Low Ash Coking Coal Mine" which is available to
view on the Company's website at www.pdz.com.au.
The information in the original announcement that relates to
Exploration Results 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.
Mr O'Dell is a part time 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 announcements; b) all material assumptions and technical
parameters of the Exploration Results included in the original
announcements continue to apply and have not materially changed;
and c) the form and context in which the relevant Competent
Persons' findings are presented in this presentation have not been
materially modified from the original announcements.
Forward Looking Statements
This release may include forward-looking statements. These
forward-looking statements are based on Prairie's expectations and
beliefs concerning future events. Forward looking statements are
necessarily subject to risks, uncertainties and other factors, many
of which are outside the control of Prairie, which could cause
actual results to differ materially from such statements. Prairie
makes no undertaking to subsequently update or revise the
forward-looking statements made in this release, to reflect the
circumstances or events after the date of that release.
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
------ --------------- -------------- --------------------
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 - -
-------------- ---------- ------------ ------------ ------------ ------------ -------- ----------- -----------
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 -
-------------- ---------- ------------ ------------ ------------ ------------ -------- ----------- -----------
+Rule 5.5
Appendix 5B
Mining exploration entity and oil and gas exploration entity
quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97,
01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16
Name of entity
-------------------------------------------
PRAIRIE MINING LIMITED
-------------------------------------------
ABN Quarter ended ("current
quarter")
--------------- ------------------------
23 008 677 852 30 June 2017
--------------- ------------------------
Consolidated statement Current quarter Year to date
of cash flows $A'000 (12 months)
$A'000
--------------------------------------- ---------------- -------------
1. Cash flows from operating
activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation (1,277) (5,475)
(b) development - -
(c) production - -
(d) staff costs (725) (2,694)
(e) administration
and corporate costs (366) (930)
1.3 Dividends received - -
(see note 3)
1.4 Interest received 76 350
1.5 Interest and other - -
costs of finance paid
1.6 Income taxes paid - -
1.7 Research and development - -
refunds
Other (provide details
1.8 if material) (290) (617)
(a) Business development
costs (15) (659)
(b) Karbonia acquisitions
costs 194 495
(c) Property rental
and gas sales
---------------- -------------
Net cash from / (used
1.9 in) operating activities (2,403) (9,530)
----- -------------------------------- ---------------- -------------
2. Cash flows from investing
activities
2.1 Payments to acquire:
(a) property, plant
and equipment (231) (231)
(b) tenements (see
item 10) - (742)
(c) investments - -
(d) other non-current - -
assets
2.2 Proceeds from the disposal
of:
(a) property, plant
and equipment - -
(b) tenements (see
item 10) - 650
(c) investments - -
(d) other non-current - -
assets
2.3 Cash flows from loans - -
to other entities
2.4 Dividends received - -
(see note 3)
Other (provide details
if material)
(a) Recovery of pre-paid
2.5 land deposit - 1,998
---------------- -------------
Net cash from / (used
2.6 in) investing activities (231) 1,675
------- ------------------------------ ---------------- -------------
3. Cash flows from financing
activities
Proceeds from issues
3.1 of shares 6,935 6,935
3.2 Proceeds from issue - -
of convertible notes
3.3 Proceeds from exercise - -
of share options
Transaction costs related
to issues of shares,
convertible notes or
3.4 options (306) (332)
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - -
3.7 Transaction costs related - -
to loans and borrowings
3.8 Dividends paid - -
3.9 Other (provide details - -
if material)
---------------- -------------
Net cash from / (used
3.10 in) financing activities 6,629 6,603
------- ------------------------------ ---------------- -------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 12,813 18,062
Net cash from / (used
in) operating activities
4.2 (item 1.9 above) (2,403) (9,530)
Net cash from / (used
in) investing activities
4.3 (item 2.6 above) (231) 1,675
Net cash from / (used
in) financing activities
4.4 (item 3.10 above) 6,629 6,603
Effect of movement
in exchange rates on
4.5 cash held 1 (1)
---------------- -------------
Cash and cash equivalents
4.6 at end of period 16,809 16,809
------- ------------------------------ ---------------- -------------
5. Reconciliation of cash Current quarter Previous
and cash equivalents $A'000 quarter
at the end of the quarter $A'000
(as shown in the consolidated
statement of cash flows)
to the related items
in the accounts
---- ------------------------------- ---------------- ---------
5.1 Bank balances 4,809 4,813
5.2 Call deposits 12,000 8,000
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
---------------- ---------
Cash and cash equivalents
at end of quarter (should
5.5 equal item 4.6 above) 16,809 12,813
---- ------------------------------- ---------------- ---------
6. Payments to directors of the entity Current quarter
and their associates $A'000
----------------
Aggregate amount of payments to
these parties included in item
6.1 1.2 (99)
----------------
6.2 Aggregate amount of cash flow Nil
from loans to these parties included
in item 2.3
----------------
6.3 Include below any explanation necessary
to understand the transactions included
in items 6.1 and 6.2
---- --------------------------------------------------------
Payments include executive remuneration (including
bonuses), director fees, superannuation and
provision of a fully serviced office.
--------------------------------------------------------------
7. Payments to related entities of Current quarter
the entity and their associates $A'000
----------------
7.1 Aggregate amount of payments to -
these parties included in item
1.2
----------------
7.2 Aggregate amount of cash flow -
from loans to these parties included
in item 2.3
----------------
7.3 Include below any explanation necessary
to understand the transactions included
in items 7.1 and 7.2
---- ---------------------------------------------------------------
Not applicable
---------------------------------------------------------------------
8. Financing facilities Total facility Amount drawn
available amount at at quarter
Add notes as necessary quarter end end
for an understanding $A'000 $A'000
of the position
--------------- ----------------
8.1 Loan facilities - -
--------------- ----------------
8.2 Credit standby arrangements - -
--------------- ----------------
8.3 Other (please specify) - -
--------------- ----------------
8.4 Include below a description of each facility
above, including the lender, interest rate
and whether it is secured or unsecured.
If any additional facilities have been entered
into or are proposed to be entered into
after quarter end, include details of those
facilities as well.
---- ---------------------------------------------------------------
9. Estimated cash outflows $A'000
for next quarter
---- ------------------------------ --------
9.1 Exploration and evaluation (1,500)
9.2 Development -
9.3 Production -
9.4 Staff costs (500)
Administration and corporate
9.5 costs (200)
Other (provide details if
material)
(a) Business development
9.6 costs (150)
--------
9.7 Total estimated cash outflows (2,350)
---- ------------------------------ --------
10. Changes in Tenement Nature of Interest Interest
tenements reference interest at beginning at end
(items 2.1(b) and location of quarter of quarter
and 2.2(b)
above)
----- ---------------------- -------------- ---------- -------------- ------------
10.1 Interests - - - -
in mining
tenements
and petroleum
tenements
lapsed, relinquished
or reduced
----- ---------------------- -------------- ---------- -------------- ------------
10.2 Interests - - - -
in mining
tenements
and petroleum
tenements
acquired
or increased
----- ---------------------- -------------- ---------- -------------- ------------
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
[lodged electronically without signature]
Sign here:
............................................................ Date:
17 July 2017
(Director/Company secretary)
Print name: Dylan Browne
Notes
1. The quarterly report provides a basis for informing the
market how the entity's activities have been financed for the past
quarter and the effect on its cash position. An entity that wishes
to disclose additional information is encouraged to do so, in a
note or notes included in or attached to this report.
2. If this quarterly report has been prepared in accordance with
Australian Accounting Standards, the definitions in, and provisions
of, AASB 6: Exploration for and Evaluation of Mineral Resources and
AASB 107: Statement of Cash Flows apply to this report. If this
quarterly report has been prepared in accordance with other
accounting standards agreed by ASX pursuant to Listing Rule 19.11A,
the corresponding equivalent standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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