PRAIRIE MINING LTD. (13/2017) March 2017 Quarterly Report

Podstawa prawna: PRAIRIE MINING LIMITED

NEWS RELEASE | 28 April 2017

MARCH 2017 QUARTERLY REPORT

HIGHLIGHTS:

Debiensko Hard Coking Coal Project

•Scoping Study illustrates potential for Debiensko to be a globally significant hard coking coal project with robust economics positioning the Company to become a large scale, low cost and long life premium hard coking coal supplier

•Drilling results indicate that Debiensko can produce a range of premium hard coking coals comparable to internationally traded benchmark coking coals

•Maiden Coal Resource Estimate of 301 Mt hard coking coal comprises 93 Mt Indicated and 208 Mt Inferred coal resources and is based on seven seams with proven potential to produce high quality hard coking coal

•Infrastructure Study confirmed significant cost and timing benefits of existing and immediately available infrastructure at Debiensko with total estimated upgrade costs of only ~US$10 million

•Independent Marketing Study confirmed large price and cost advantages for Debiensko's premium hard coking coal with estimated cost of delivery to major steel works in Central Europe of only US$4.60 per tonne compared to costs of imported hard coking coal of up to US$37.70 per tonne

•Highly favourable market fundamentals as Europe continues to consume 47 Mt of hard coking coal annually, 85% of which is imported

•Debiensko coking coal expected to enjoy strong demand from European 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 Debiensko 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

•Significant positive social and economic benefits for regional development, jobs creation and re-industrialisation through re-development of a previously operating mine

Jan Karski Mine

•China Coal and Prairie continue to advance towards completion of a Bankable Feasibility Study in the second half of the year, which will provide the basis for an EPC contract and a construction-funding package 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

•China Coal is 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

•Permitting processes and land acquisition for the mining concession application continues

Corporate

•Completed a 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 £3.2 million (~A$5.5 million) before costs

•Following the Placing, CD Capital agreed terms for an additional A$2 million of non-redeemable, non-interest bearing convertible loan notes thereby continuing its support to accelerate the development of Prairie's Tier One premium coal projects

•Following the successful placing of ordinary shares to UK intuitional investors subsequent to quarter end, Prairie has cash reserves of A$17 million. With CD Capital's additional A$2 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

NEXT STEPS:

Debiensko Hard Coking Coal Project

•Commence a focused in-fill drill program to increase JORC measured and indicated resources to support future feasibility studies for Debiensko

•Deliver a re-engineered mine plan to produce a feasibility study to international standards with a focus on near term production at Debiensko

•Commence discussion with regional steel makers and coke makers for future coal sales and offtake

Jan Karski Mine

•China Coal continuing with completion of the Bankable Feasibility Study and ongoing discussions with a group of Chinese financing institutions

•Continue project permitting activities including, approval of the Deposit Development Plan by the regional mining authority in Lublin, obtaining an Environmental Consent Decision, Spatial Planning consents (rezoning) and land acquisition at Jan Karski

•Formally lodge a mining concession application for Jan Karski

For further information on the Company's activities conducted during the quarter, please refer to the full March 2017 Quarterley Report and attached as an annex to this report.

For further information contact:

Ben Stoikovich

Chief Executive Officer

+44 207 478 3900

Sapan Ghai

Corporate Development

+44 7557 055 166

info@pdz.com.au

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