June 2017 Quarterly Report

24/2017 - 17 lipca 2017

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:

opreparation for an in-fill drill program to increase JORC measured and indicated resources to support future feasibility studies

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

oadvancing 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:

ofurthering discussions with a select group of Chinese financing institutions as China Coal nears completion of its BFS

ocontinuing project permitting activities including obtaining an Environmental Consent Decision, Spatial Planning consents (rezoning) and land acquisition at Jan Karski

oformally 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


•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 £3.2 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 Executive Officer info@pdz.com.au

Sapan Ghai, Head of Corporate Development