December 2017 Quarterly Report

2/2018 - 31 stycznia 2018

HIGHLIGHTS FROM AND SUBSEQUENT TO THE QUARTER END:

Debiensko Mine (Premium Hard Coking Coal)

•During the quarter Poland’s newly appointed Prime Minister, Mr Mateusz Morawiecki, officially presented the Ministry of Development’s „Program for Silesia” in December 2017 which included a strategy for the re-start of a major coking coal mine in the Upper Silesian region, where Prairie’s Debiensko project is located, and highlighted the positive social and economic impacts that mine development would have on the region

•Mine site redevelopment planning continued to advance with completion of initial demolition works, pre-qualification of study contractors, and preparation for an infill drill program to increase JORC Measured and Indicated Resources

•Prairie continued discussions with steel makers and coke producers throughout the quarter for future coking coal sales and offtake

Jan Karski Mine (Semi-Soft Coking Coal)

•Environmental permitting for Jan Karski advanced following successful submission of the Environmental and Social Impact Assessment to the Lublin Regional Environment Directorate for Environmental Consent

•Preparation of the Mining Concession application is underway and anticipated to be lodged during the first quarter of 2018

•Prairie initiated public consultations in local municipalities for the development of the Jan Karski Mine, demonstrating that a new mine would bring significant employment opportunities and economic development

•China Coal’s technical studies for the construction of the Jan Karski Mine have significantly advanced and Prairie is currently reviewing study documents provided by China Coal. The studies will be revised to incorporate the latest coal quality results from drilling at Jan Karski as well as any conditions stipulated in the Environmental Consent and the Mining Concession to be granted for Jan Karski

•During the quarter, Prairie hosted a delegation in Poland including China Coal and Jinan Mine Design Institute during which offers for project works involving Polish subcontractors were finalised

Robust Coking Coal Fundamentals

•Hard coking coal prices continued to trade at price levels above US$225/t FOB Australia

•Market analysts forecast underinvestment in new coking coal mine development has potential to result in sustained high coking coal prices

•European Commission continues to designate coking coal as a Critical Raw Material in its 2017 review

•The Polish Government strongly supports development of new, modernised coal mines, as announced in the „Program for Silesia” produced by Poland’s Ministry for Development

Corporate

•Prairie remains in a financially strong position with cash reserves of A$15.1 million

•With CD Capital’s right to invest a further A$68 million as a cornerstone investor, plus with the Strategic Co-operation Agreement between Prairie and China Coal for financing and construction of Jan Karski, Prairie is well positioned to progress with its planned development activities at Debiensko and Jan Karski

Ben Stoikovich, Chief Executive Officer commented „Following the submission of the ESIA and initiation of public consultations, Prairie continues towards applying for a Mining Concession to commence construction of the Jan Karski Mine together with our strategic partner China Coal. China Coal’s Technical and Economic Studies have progressed positively, and our team is in the process of preparing a full Mining Concession application for Jan Karski. At Debiensko, we continue to plan our mine site redevelopment program in a positive market environment with increased coking coal demand from Europe’s steel producers coupled with reducing European supply. We welcome the news that the Polish government have officially included the re-start of a coking coal mine in the „Program for Silesia”, the region where our Debiensko project is located.”