March 2018 Quarterly Report

12/2018 - 30 kwietnia 2018

Highlights from and subsequent to the quarter end:

Possible Co-Operation between Prairie and JSW

•During the quarter, Prairie noted press articles regarding possible co-operation between the Company and Jastrzębska Spółka Węglowa SA to progress the development and exploitation of the Company’s Polish coking coal assets. Prairie confirmed that meetings were held with JSW where preliminary discussions regarding co-operation took place.

•Prairie and JSW have since entered into a Non-Disclosure Agreement to allow for the exchange of technical and commercial information in order to facilitate substantial and more advanced discussions regarding any potential co-operation or transaction(s) options in respect of Prairie’s projects.

•Prairie has made available information in relation to both the Debiensko Mine and Jan Karski Project to allow JSW to conduct assessments of their feasibility and economics.

•The NDA provides for discussions to be conducted for an initial period up to 6 months, which may be extended by mutual agreement of both parties.

Jan Karski Mine

•As announced on 21 February 2018, Prairie continued to use modern exploration techniques to transform Jan Karski with latest drill results re-affirming the capability of the project to produce high value ultra-low ash semi-soft coking coal, known as Type 34 coal in Poland. Coking coal quality results announced during the quarter are superior to the drill results announced in May 2017, and further confirm that Jan Karski is a globally significant semi-soft coking coal / Type 34 coking coal deposit with the potential to produce a high value ultra-low ash SSCC with an exceptional CSR and a high 75% coking coal product split.

•However, on 3 April 2018, Prairie announced that it had commenced legal proceedings against Poland’s Ministry of Environment due to its failure to grant Prairie a Mining Usufruct Agreement over the concessions which form the Jan Karski Mine and in order to protect the Company’s security of tenure over the project.

•Pursuant to the initiated legal proceedings, the Company is pleased to announce that:

othe Polish Civil Court has ruled in Prairie’s favour by granting an injunction preventing the MoE from granting any prospecting, exploration or mining concession and concluding usufruct agreements with any other party until full court proceedings are concluded;

othis decision provides security of tenure over the Jan Karski concessions and effectively safeguards Prairie’s rights at the project until full court proceedings have concluded; and

othe Lublin Regional Director for the Environment has issued an official notification indicating that the process to establish an Environmental Consent decision for Jan Karski will be concluded by 30 June 2018, being the final approval required for Prairie to submit a Mining Concession application.

Corporate

•Prairie remains in a financially strong position with cash reserves of A$13 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 financially well positioned to progress with its planned development activities at Debiensko and Jan Karski.

Ben Stoikovich, Chief Executive Officer commented: „The latest drilling result continues to demonstrate that Jan Karski is a globally significant semi-soft / Type 34 coking coal project. This presents an outstanding economic development opportunity for the Lublin region, and Chelm province in particular, to become a leading European supplier of coking coal to the steel industry. At Jan Karski we are continuing with the Environmental Consent process, which is the final decision we require in order to apply for a Mining Concession. The injunction recently awarded in Prairie’s favor by the civil court in Warsaw against Poland’s Ministry of Environment effectively safeguards Prairie’s security of tenure at Jan Karski until full court proceedings have taken place. Our discussions with JSW are ongoing and we will continue to update the market in line with the relevant reporting requirements”.

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

JAN KARSKI MINE

The Jan Karski Mine („Jan Karski”) is a large scale semi-soft coking coal project located in the Lublin Coal Basin in south east Poland. The Lublin Coal Basin is an established coal producing province which is well serviced by modern and highly efficient infrastructure, offering the potential for low capital intensity mine development. Jan Karski is situated adjacent to the Bogdanka coal mine which has been in commercial production since 1982 and is the lowest cost hard coal producer in Europe.

Prairie Mining Limited’s („Prairie” or „Company”) use of modern exploration techniques continues to transform Jan Karski with latest drill results re-affriming the capability of the the project to produce high value ultra-low ash semi-soft coking coal, known as Type 34 coal in Poland.

The coking coal quality results are superior to the drill results announced in May 2017, and further confirm that Jan Karski is a globally significant semi-soft coking coal („SSCC”) / Type 34 coking coal deposit with the potential to produce a high value ultra-low ash SSCC with a coking coal product split of up to 75%.

Key benefits for the local community and the Lublin and Chelm regions associated with the development, construction and operation of Jan Karski have been recognised as the following:

•creation of 2,000 direct employment positions and 10,000 indirect jobs for the region once operational;

•increasing skills of the workforce and through the implementation of International Standard training programmes;

•stimulating the development of education, health services and communications within the region; and

•building a mine that creates new employment for generations to come and career paths for families to remain in the region.

Polish Civil Court Grants Injunction in Prairie’s Favour against Poland’s Ministry of Environment

On 3 April 2018, Prairie announced that it had commenced legal proceedings against Poland’s Ministry of Environment („MoE”) due to its failure to grant Prairie a Mining Usufruct Agreement over the concessions which form the Jan Karski Mine and in order to protect the Company’s security of tenure over the project.

Pursuant to the initiated legal proceedings, the Company is pleased to announce that:

•the Polish Civil Court has ruled in Prairie’s favour by granting an injunction preventing the MoE from granting prospecting, exploration or mining concessions and concluding usufruct agreements with any other party until full court proceedings are concluded;

•this decision provides security of tenure over the Jan Karski concessions and effectively safeguards Prairie’s rights at the Project until full court proceedings have concluded; and

•the Lublin Regional Director for the Environment has issued an official notification indicating that the process to establish an Environmental Consent decision for Jan Karski will be concluded by 30 June 2018, being the final approval required for Prairie to submit a Mining Concession application.

The Regional Civil Court in Warsaw has issued a verdict that forms an injunction preventing the MoE from concluding exploration or mining usufruct agreement(s) regarding the Jan Karski Mine area (including the „Lublin” deposit, as well as the former K-4-5, K-6-7, K-8 and K-9 concession areas) with any party, other than PD Co Sp. z. o.o. (Prairie Mining’s wholly owned Polish subsidiary). The Court has also ordered that the MoE does not grant any concessions (for prospecting, exploration and/or mining) to any party other than PD Co Sp. z. o.o. This highly favourable court ruling was issued in response to Prairie’s application submitted as part of the legal proceedings commenced by Prairie to protect its tenure at Jan Karski.

As a result of the ruling by the Regional Civil Court in Warsaw, security of tenure over the Jan Karski concessions will be safeguarded until full court proceedings have concluded. It is anticipated that full court proceedings could take 12 months or more to complete.

In the justification to the Court’s ruling, the judge stated that: „Based on the evidence one may at this point state that the plaintiff [Prairie Mining] enjoys the right to request conclusion of the requested mining usufruct agreement for the „Lublin” hard coal area (otherwise known as Jan Karski) resulting from Article 15 of the Geological and Mining Law.”

As discussed above, in April 2018, Prairie commenced legal action against the MoE for breaching the Polish Geological and Mining Law (2011) („GML”) in relation to the award of a Mining Usufruct Agreement to Prairie at Jan Karski.

Prairie has provided the MoE with all documents required by Polish Law to conclude a Mining Usufruct Agreement, including the Geological Documentation approval and an official application for a Mining Usufruct Agreement.

To date the MoE has still not provided Prairie with a Mining Usufruct Agreement for Jan Karski.

Based on professional advice, Prairie considers that the MoE breached the GML and Polish law and is defending its position having commenced legal proceedings against the MoE through the Polish courts to protect its tenure at Jan Karski.

The Company will also consider any other actions necessary to ensure its concession rights are reserved which may result in the Company taking further action against the MoE including invoking the protection afforded to the Company under any relevant bi-lateral or multi-lateral investment treaties or such other actions as the Company may consider appropriate at the relevant time.

Prairie will continue to update the market in relation to this matter as required.

Regional Director for the Environment sets a new deadline for issuing an Environmental Consent Decision

Prairie completed an Environmental and Social Impact Assessment and made submissions to the Lublin Regional Director for the Environment („RDOS”) for an Environmental Consent decision for Jan Karski in October 2017. RDOS has issued a notice indicating that the Environmental Proceedings in order to issue a decision for Environmental Consent will be concluded by 30 June 2018. RDOS also confirmed receipt of all necessary opinions from other government agencies, including the Regional Water Management Board in Lublin.

Subsequent to the commencement of legal proceedings, Prairie’s team has received a request for additional information from RDOS and, together with the appointed environmental consultants, are working to provide this information, which is expected to be completed within the coming weeks.

Latest Drill Results Affirm Jan Karski as a Semi-Soft Coking Coal Project

During the quarter, Prairie announced the results of enhanced coal quality analysis and test work from a recently completed borehole (Kulik 1) at Jan Karski. The coking coal quality results are superior to the drill results announced in May 2017, and further confirm that Jan Karski is a globally significant semi-soft coking coal („SSCC”) / Type 34 coking coal deposit with the potential to produce a high value ultra-low ash SSCC with an exceptional CSR and a high 75% coking coal product split.

The Kulik 1 borehole was a large diameter borehole enabling sufficient quantities of coal from the 391 seam to be collected to meet the requirements for physical coke testing, specifically confirmation of Coke Strength after Reaction („CSR”) and extended coal washability test work. Coke testing was conducted at Centralne Laboratorium Pomiarowo-Badawcze Sp. z o.o. („CLPB”) laboratories in Poland which is controlled by JSW and is internationally accredited as a commercial coal and coke testing laboratory. Washability and other basic coal quality analyses were conducted in the UK.

CSR analysis is considered vital in testing for a coal’s coking properties and is 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 1 below.

Table 1: Analysis results from Jan Karski Kulik 1 borehole – 391 seam

COKING PROPERTIES

FSI 7.0

Roga Index 82

CSR % 54.0

CRI % 36.5

Ash in Coke % 5.8

Sulphur in Coke % 0.78

Giesler Plastometer

Initial Softening °C 404

Max Fluidity temp °C 440

Resolidification °C 463

Max Fluidity ddpm 268

ASTM Dilation

Softening Temperature °C 380

Max Contraction Temp °C 420

Max Dilation Temp °C 450

Max Dilation % D 64

PROXIMATE ANALYSIS

Inherent moisture adb% 1.73

Ash adb% 3.45

Volatile Matter adb% 35.5

OTHER COAL PROPERTIES

Sulphur ar% 1.00

Rank (Ro) 0.85

Vitrinite % 84

Washability analysis from the Kulik 1 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 is unique with ash product levels of 3.45% or less (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. Further, the exceptionally high CSR (54) of the 391 seam from Kulik 1 borehole at Jan Karski is at the very top end of the range for globally traded SSCC.

The ultra-low ash content increases the coal’s 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 as it reduces CO2 emissions per tonne of hot metal produced.

Prairie’s analysis predicts increasing global demand for ultra-low ash coking coal for blending with hard coking coal („HCC”), due to a continuing trend of rising average ash levels in globally traded hard coking coals. Premium HCC 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 an advantage for European steelmakers where EU regulations focus on reduced CO2 emissions and compliance with other EU emissions directives. The trend of ever more stringent emissions standards for steelmakers imposed by the EU indicates a positive future for marketability of Jan Karski ultralow ash semi-soft / Type 34 coking coal.

Increased European Demand for Semi-Soft / Type 34 Coal

Polish demand for hard coal remained strong during 2017, with Poland being forced to import 13.3 million tonnes of hard coal to meet its own needs – an increase of 60% in hard coal imports year on year. This follows a steady trend in Poland over the last few years with domestic production of hard coal declining and increased reliance on imports.

Concurrently, declining production of Czech and Polish semi-soft / Type 34 coking coal has resulted in steel makers becoming more aware of the importance of security of supply of the raw material. Over the last 12 months, lack of delivery of semi-soft / Type 34 coking coal has forced some Central European steel makers to introduce urgent measures including changes in the coking charge mix and increased imports, thus generating additional costs and disturbing normal production.

Comparison of Jan Karski’s latest coking coal quality results to other mines in Poland and the Czech Republic that have historically produced SSCC or Type 34 coking coal show the great potential that Jan Karski has to meet European market demand for Type 34 semi-soft coking coal as production from other Czech and Polish mines continues to diminish over the coming years.

DEBIENSKO MINE

The Debiensko Mine („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 Jastrzębska Spółka Węglowa 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.

Preparation for the Next Phase of Project Studies

Prairie continued to analyse the drill hole data which will be used for engineering design of foundations of structures associated with the shafts, coal handling and preparation plant („CHPP”) and other surface facilities. These holes are essential in order to assess the soil conditions, properly design structural foundations and thus provide more accurate pricing in the tenders as required for a feasibility study.

Pre-qualification of contractors for the major components of the next phase of Debiensko studies also continued throughout the quarter.

Prairie’s team have also designed an infill drilling program that when undertaken will upgrade more of the resource base at Debienkso to the Measured and Indicated resource categories and support JORC compliant reserve estimation.

CORPORATE

Possible Co-Operation between Prairie and JSW

Prairie and JSW have entered into a Non-Disclosure Agreement („NDA”) with respect to potential co-operation regarding Prairie’s two Polish coal projects. The purpose of the NDA is to allow for the exchange of technical and commercial information in order to facilitate substantial and more advanced discussions regarding any potential transaction(s) options in respect of Prairie’s projects.

Prairie will make available information in relation to the hard coking coal project under the Debiensko concession, to allow JSW to conduct an assessment of its feasibility and economics, taking into consideration factors including, but not limited to: its stage of development, conditions of the mining concession, environmental permits, and the mining usufruct contract. JSW will also assess other various risks and opportunities, including JSW’s existing infrastructure at the neighbouring Knurów-Szczygłowice mine.

Prairie will also make available to JSW information in relation to the Jan Karski project in the Lublin Coal Basin, to allow JSW to conduct an assessment of the project’s feasibility and economics regarding coking coal, taking into consideration factors including, but not limited to: its phase of development, the physical and chemical parameters of the coal (in particular its coking parameters), the timeframe and conditions with regards to obligations to obtain a mining concession, as well as other various risks and opportunities.

It is emphasised that discussions are at a preliminary stage and that even if they move onto discussions of specific transactions terms, any potential transaction(s), should they occur, may be subject to a number of conditions including, but not limited to, obtaining positive evaluations and expert opinions, necessary corporate approvals, consents and approvals related to funding, consents from Poland’s Office of Competition and Consumer Protection (UOKiK) if required, and any other requirements that may relate to the strategy, objectives and regulatory regimes applicable to either Prairie Mining or JSW.

There can be no certainty as to whether any transaction(s) will be agreed, or the potential form of such transaction(s).

The NDA provides for discussions to be conducted for an initial period up to 6 months, which may be extended by mutual agreement of both parties. The companies will continue to comply with their respective disclosure obligations to the relevant markets, as required.

Financial Position

Prairie has cash reserves of A$13 million. With CD Capital’s 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.

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.

Competent Person Statements

The information in this announcement that relates to Exploration Results was extracted from Prairie’s announcement dated 21 February 2018 entitled „Drill Results Affirm Jan Karski’s Status as a Globally Significant Semi-Soft (Type 34) Coking Coal Project”. The information in the original announcement 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 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.