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#POW Power Metal Resources PLC – Commercial Update

Power Metal Resources PLC (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio announces a commercial update providing the latest position in respect of various corporate activities recently completed or underway.

Paul Johnson, Chief Executive Officer of Power Metal Resources PLC commented:

“I am a resolute believer in the junior resource sector and its ability to deliver considerable returns for investors. The sector is, ultimately, driven by cyclicity caused by shifting supply and demand fundamentals for the underlying metals.

Over the past 4 years, Power Metal has assembled a unique and diverse global project portfolio which is ready for what I believe will be a longstanding and robust bull market for junior resource companies.

After a long-sustained bear market for resource juniors, I believe that the sector recovery has now begun as demonstrated by rising metal prices and the evident growing demand for metals in most industrial settings and for investment security.

In the last 6 months we have seen the IPO of Power Metal investee company First Class Metals PLC and completion of the Kanye Resources disposal to Kavango Resources PLC. These two transactions alone brought additional listed securities into the Power Metal portfolio that are together currently worth c.£4.1m (at the mid-market price on 21.12.22 market close).

Below you will see a further five transactions which each have the potential to add considerably to the Power Metal balance sheet. This corporate activity will complement our ongoing and successful exploration work at the Molopo Farms Complex and Tati Gold projects both located in Botswana and our Athabasca Basin uranium interests in Canada.

I would like to thank our professional teams for working so diligently on multiple complex transactions and positioning us where we are today.  I also want to thank our shareholders who have stayed with us, through this challenging part of the cycle, patiently supporting us while we continue to push the business forward in advance of the next bull market.

We approach the Christmas and New Year break with a heightened sense of excitement and optimism for 2023 and beyond.”

 

Company/Operations

POW %

Status

First Class Metals PLC (LON:FCM)

Exploration in the Schreiber-Hemlo region of Ontario, Canada.

www.firstclassmetalsplc.com

27.91%

Following the disposal of Power Metal’s Schreiber-Hemlo interests to FCM in September 2021, FCM successfully secured admission to the Official List (by way of a Standard Listing under Chapter 14 of the Listing Rules), on 29 July 2022.

Power Metal holds a total of 18,516,097 FCM shares, which are subject to a hard lock-in agreement until 29 July 2023, with a further 12-month orderly market arrangement thereafter. The Company also holds 517,705 warrants to acquire new FCM ordinary shares at a price of 10p and with an expiry date of 29 July 2023.

At the closing market mid-price of 17p on 21 December 2022 the value of Power Metal’s shareholding in FCM is £3,194,027.

Kavango Resources PLC (LON:KAV)

Exploration in Botswana

www.kavangoresources.com

9.85%

Following completion of the disposal of Power Metal’s interest in the Kanye Resources joint venture back to partner KAV, as announced in November 2022, Power Metal’s interests in KAV, which is also on the Official List of the London Stock Exchange, include:

–           69,500,000 KAV ordinary shares.

–           Warrants to acquire 4,750,000 KAV ordinary shares at a price of 2.5p (expiry April 2023)

–           Warrants to acquire 30,000,000 KAV ordinary shares at a price of 4.25p (expiry January 2025)

–           Warrants to acquire 30,000,000 KAV ordinary shares at a price of 5.5p (expiry January 2025)

In addition, Power Metal holds a 1% net smelter return (“NSR”) royalty across all Kanye Resources properties as at 8 July 2022.

At the closing market mid-price of 1.5p on 21 December 2022 the value of Power Metal’s shareholding in KAV is £1,042,500.

Golden Metal Resources PLC (GMT)

Exploration and development in Nevada, USA.

www.goldenmetalresources.com

83.13%

During 2021, Power Metal acquired outright three projects located in Nevada, USA (Pilot Mountain, Garfield and Stonewall) and secured an option to acquire a 100% interest in a fourth project (Golconda Summit).

The projects were acquired through GMT, then a wholly-owned subsidiary of Power Metal and a vehicle incorporated in advance of a planned listing in the London capital markets.

A subsequent Pre-IPO financing for GMT raised £750,000 before expenses.

Power Metal currently holds 49,874,437 GMT shares or 83.13% of GMT issued share capital.

GMT has now completed the pre-IPO work required and a listing document has now been prepared (subject to final data additions) and the IPO financing is underway.

A series of roadshow meetings have been undertaken with interested parties including institutions based in Canada and the UK and to date the GMT business model and listing proposal has been well received. These meetings will continue over the coming weeks and into the new year, allowing those with conflicts during the holidays to finalise their interest in the IPO early in the new year.

GMT is looking to complete the IPO Financing and, subject to standard regulatory approvals, the final listing steps in early 2023.

First Development Resources PLC (FDR)

Exploration in Western Australia and the Northern Territory of Australia.

www.firstdevelopmentresources.com

62.12%*

During 2021. Power Metal acquired three exploration projects in Western Australia (Wallal, Braeside West and Ripon Hills),

The projects were acquired through FDR, then a wholly-owned subsidiary of Power Metal and a vehicle incorporated in advance of a planned listing in the London capital markets.

Subsequently, in 2021, FDR acquired an additional exploration project in the Northern Territory of Australia (Selta). 

Additional commercial transactions were undertaken by FDR in 2022 with the acquisition of a 100% interest in Pardoo Resources Pty Ltd (a project holding company) and the purchase of NSR royalties retained by the vendors of the vehicles holding the above projects.

Power Metal currently holds 38,605,697 FDR shares or 62.12%* of FDR issued share capital.

FDR is nearing completion of all the IPO work streams and is finalising the listing document in preparation for a planned IPO financing roadshow which is expected to commence in early 2023. 

New Ballarat Gold PLC (NBGC)

Exploration in the Victoria Goldfields of Australia.

https://www.powermetalresources.com/project/victoria-goldfields/.

49.9%

In 2020 Power Metal established a joint venture with Red Rock Resources PLC (LON:RRR) focused on exploration projects in the Victoria Goldfields, Australia.

The joint venture has secured a ground footprint in the Victoria Goldfields comprising 1,841km2 of granted licences and 493km2 of exploration licence applications awaiting grant.

The footprint includes two former high-grade working gold mines (Ajax and Berringa), with Berringa currently the subject of an ongoing diamond drilling programme.

A National Instrument 43-101 technical report has been prepared covering 7 of the licences, as an underlying document in preparation for listing of NBGC.

The joint venture has a local operational team and is based out of Ballarat, Victoria.

Across the footprint extensive evidence of historical gold workings exist, and outside of the footprint boundaries numerous positive exploration updates have been noted by fellow exploration companies. 

For example, we note recently the discovery of extensive gold mineralisation by Southern Cross Gold Ltd (a spin-out listing from Mawson Gold Ltd) included an intersection of 305.8m at 2.4g/t gold at their Sunday Creek project situated 5km east of the Kilmore project held by NBGC. Link here:

https://wcsecure.weblink.com.au/pdf/SXG/02612149.pdf

With the increasing confidence in the market and support for high-quality gold exploration investment opportunities, Power Metal is working with partner Red Rock Resources PLC to identify the best commercial structure and expeditious pathway to enable the planned listing to proceed.

NewCo

Exploration in Queensland’s Mount Isa copper belt and in South Australia.

NewCo to be incorporated shortly to allow the merger of three companies and their interests in South Australia and Queensland as per POW RNS 15.12.22).

NewCo website under development.

20%^

Power Metal announced on 15.11.22 the merger of its wholly owned Australian holding company which holds a 100% interest in the Wilan Project located in South Australia, with two other Australian exploration companies with 100% owned interests in the Mount Isa copper belt region of Queensland, Australia.

The intention is to secure a planned new listing on a recognised stock exchange of the new merger company NewCo, comprising the South Australia and Queensland interests, or to dispose of the new merger company into a currently listed or to be listed vehicle.

Work is underway now to consider all available options and updates will be provided to the market in due course.

Uranium Energy Exploration PLC (UEE)

Uranium exploration in the Athabasca region of Canada

www.uraniumenergyexploration.com

50-55%~

Power Metal has agreed the disposal of two uranium properties to UEE subject to completion of a planned listing of UEE.

Following discussions with UEE, Power Metal has agreed to extend the period for completion of the planned listing by 3 months to 31 March 2023. The intention is to list on a different exchange to that previously planned and to add further uranium projects to the UEE portfolio prior to the planned listing.

As a result, UEE is now actively reviewing additional opportunities within the uranium space to bolster their portfolio in advance of the planned listing.

The proposed business model (Uranium exploration focused on the Athabasca Basin area of Saskatchewan, Canada) has the support in principle of proposed investors in an IPO financing and would bring the first Athabasca focused investment proposition to the London capital markets.

Further updates to follow as plans continue to advance.

^ subject to completion of Merger announced 15.12.22.

~ subject to completion of disposal of Reitenbach and E-12 properties, announced on 8.8.22 and 4.11.22, respectively.

* reducing to 58.59% on issue of equity for NSR buyout announced 5.12.22

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance with the Company’s obligations under Article 17 of MAR.

For further information please visit https://www.powermetalresources.com/ or contact:

Power Metal Resources plc

Paul Johnson (Chief Executive Officer)

+44 (0) 7766 465 617

SP Angel Corporate Finance (Nomad and Joint Broker)

Ewan Leggat/Charlie Bouverat

+44 (0) 20 3470 0470

SI Capital Limited (Joint Broker)

Nick Emerson                                                                                                           

+44 (0) 1483 413 500

First Equity Limited (Joint Broker)

David Cockbill/Jason Robertson

+44 (0) 20 7330 1883

 

 

#POW Power Metal Resources PLC – FDR Australia – Wallal Drill Clearance & Update

Power Metal Resources plc (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio, provides an update to shareholders in respect of its interests in the Paterson Province of Western Australia (the “Paterson Interests”) held through its 62.12% subsidiary First Development Resources PLC (“FDR”) which is seeking a planned listing on the London capital markets.

This update relates specifically to the Wallal Project (“Wallal” or the “Project”), one of three Paterson Province projects held by FDR and includes the Wallal Tenements (E45/5816, E45/5853 and E45/5880) (the “Tenements”).

Highlights

·    The Heritage Clearance Survey at Wallal, completed under the supervision of the Yamatji Marlpa Aboriginal Corporation and the Nyangumarta people in September 2022 has confirmed site establishment works for drilling may now proceed.

·    FDR have immediately mobilised an operational team to site to the  eastern magnetic bullseye anomaly identified during the in-depth desktop review (the “Eastern Anomaly) to establish access and to prepare the drilling pad, enabling the commencement of diamond drilling which is expected to follow immediately after the listing of FDR in the London capital markets.

·    The Phase I diamond core drilling programme has been designed to initially test the Eastern Anomaly, which is interpreted to consist of two lobes which result in a distinct target area of approximately 2.5km x 2.5km, targeting a large-scale gold-copper discovery.

Tristan Pottas Chief Executive Officer of First Development Resources plc commented:

“The completion of the Heritage Clearance Survey provides FDR with the final approval required to proceed with the Phase I diamond core drilling programme at FDR’s flagship Wallal Project in the Paterson province.

I would personally like to thank all the key stakeholders and consultants who have helped us get to this decisive point in the evolution of FDR, particularly the Nyangumarta people and Yamatji Marlpa Aboriginal Corporation.

On receipt of the final report, we have immediately engaged the services of an earthworks contractor to prepare the site to enable our drilling partner DDH1 to commence drilling at the earliest convenience following our planned UK listing.”

Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:

Without question this is an exciting time for the Power Metal and FDR teams as we close in on listing, an event which will be followed with drilling at Wallal targeting a large-scale gold-copper discovery. 

From day one to date, FDR have demonstrated their intention to deploy capital immediately into the ground to improve the understanding of the various targets across their project portfolio. This is a mindset that I expect to continue after the planned UK listing.”

FURTHER INFORMATION

FIGURE 1: Paterson Province Tenement Map

 

FIGURE 2: Wallal Geophysical Anomaly Map

Diagram, map Description automatically generated

FIGURE 3: 3D View to the North of the Eastern Anomaly

The diagrams and images presented above may be viewed on FDR’s website and may be reached through the following link:

https://firstdevelopmentresources.com/project/wallal-project/

Further photographs and videos are and will be available on FDR’s website gallery section, through the following link:

https://firstdevelopmentresources.com/investor-centre/gallery/

WALLAL HERITAGE CLEARANCE SURVEY

The Heritage Clearance Survey (the “Survey”) was completed at Wallal between 12-15 September 2022. The original Survey request which included a detailed description of the Phase I diamond core drilling programme and site-specific maps was submitted to Yamatji Marlpa Aboriginal Corporation (“YMAC”) by the Company’s appointed Exploration Manager on 31 January 2022. The Survey is a required precursor to the planned Phase I diamond core drilling programme at the company’s Wallal project located in the Paterson Province of Western Australia.

The Survey was completed in accordance with Section 18 of the Aboriginal Heritage Act 1972 and in accordance with the terms of the Heritage Agreement in place with YMAC as agent for the Nyangumarta Warrarn Aboriginal Corporation. The Survey was undertaken with the full involvement of Nyangumarta representatives. As native title holders the Nyangumarta possess rights and interests according to traditional law and custom including the right to be fully informed about activities on their country and to speak about their country.

The Survey team, appointed by YMAC, included representatives from Nyangumarta, a YMAC archaeologist, a consulting anthropologist, and members of FDR senior management team. Two 400m x 400m areas were surveyed covering the two planned drill locations designed to initially test the Eastern anomaly (“Area A”) and the secondary target, the Border anomaly (“Area B”). In addition to the drill sites, the Survey also covered the route of new tracks necessary to access the drill locations.  At both drill locations additional east-west orientated survey grids (measuring 2.73km x 4km at Area A and 1.27km x 4km at Area B) were delineated to facilitate potential future on-ground geophysical surveys.

Following the Survey, the Nyangumarta representatives asserted that the work programme proposed at Area A and Area B, was clear of ethnographic and archaeological sites or concerns and that the proposed works programme could proceed.

SITE ESTABLISHMENT AND ACCESS

Following receipt of the Heritage Clearance Survey Report a team led by the FDR’s Exploration Manager has been mobilised to Wallal to prepare the site in preparation for drilling which is scheduled to commence immediately following FDR’s proposed UK listing.  

 

To enable site works to proceed efficiently, the existing access track which links the drilling sites to the well-maintained Nyangumarta Highway, will require minor earthwork improvements and the drill pads and camp accommodation areas will be levelled and prepared ahead of drill contractor mobilisation

 

Both the access and the drill pad location were surveyed during the recent Heritage Clearance Survey. Site clearance is expected to take approximately three days to complete.

WALLAL PHASE I DIAMOND CORE DRILLING PROGRAMME

FDR’s Phase I diamond core drilling programme has been designed in conjunction with Perth based consultancy Resource Potentials Pty Ltd (“Resource Potentials”). The programme is targeting the Proterozoic basement rocks below the Permian Grant Group which are believed to host the sources of the magnetic bullseye anomalies identified during the completion of an in-depth review of all geological and geophysical data associated with the Wallal project area.

Three magnetic bullseye anomalies were identified in the review, the Western, Eastern and Border anomalies. The magnetic bullseye anomalies are of particular interest due to their possible geological similarities to the regionally significant Havieron discovery (Greatland Gold – Newcrest Joint venture).

The Havieron deposit is coincident with a magnetic bullseye anomaly detected by an airborne magnetic survey and has a similar amplitude to Wallal, approximately 100nanoTesla (“nT”) for the Eastern Anomaly and 80nT for Havieron.

The Phase I diamond core drilling programme has been designed to initially test the Eastern Anomaly. The Eastern Anomaly is interpreted to consist of two lobes which result in a distinct target area of approximately 2.5km x 2.5km. An estimate of depth of the cover sequence has been used to constrain the modelled depth of approximately 800 metres to the top of the Eastern magnetic source body.

The Phase I diamond core drilling programme will consist of a minimum of two sub-vertical boreholes totalling approximately 2,720 metres, which will be drilled using rotary open hole to about 150 metres downhole depth and then full core drilling techniques there onwards.

Depending on ground conditions encountered, it is expected that the holes will be commenced using reverse circulation drilling techniques, followed by 83mm (PQ3) or 61.1mm (HQ3) diameter core with a 50.5mm (NQ2) tail to total depth. The parameters for the planned boreholes are set out in Table 1:

Table 1: Planned Wallal Phase I diamond core drillhole parameters

DRILLHOLE ID

EASTING

NORTHING

AZIMUTH (°)

DIP (°)

NOMINAL DEPTH (m)

DH1

260325

7780690

90

80

1,220

DH2

259850

7780772

270

80

1,500

 

QUALIFIED PERSON STATEMENT

The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, MIMMM, MAusIMM, FGS), who is a qualified geologist and acts as the Qualified Person under the AIM Rules – Note for Mining and Oil & Gas Companies. Mr O’Reilly is a Principal consultant working for Mining Analyst Consulting Ltd which has been retained by Power Metal Resources PLC to provide technical support.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance with the Company’s obligations under Article 17 of MAR.

For further information please visit https://www.powermetalresources.com/ or contact:

Power Metal Resources plc

Paul Johnson (Chief Executive Officer)

+44 (0) 7766 465 617

SP Angel Corporate Finance (Nomad and Joint Broker)

Ewan Leggat/Charlie Bouverat

+44 (0) 20 3470 0470

SI Capital Limited (Joint Broker)

Nick Emerson                                                                                                           

+44 (0) 1483 413 500

First Equity Limited (Joint Broker)

David Cockbill/Jason Robertson

+44 (0) 20 7330 1883

Prairie Mining (PDZ) December 2018 Quarterly Report

Highlights from and subsequent to the quarter end:

Possible Prairie and JSW Co-Operation

·    During the quarter, Prairie and JSW jointly reported that JSW’s due diligence had confirmed semi-soft coking coal quality at Jan Karski which JSW could potentially utilise, and had also indicated the technical feasibility and potential synergies in accessing Debiensko via JSW’s existing infrastructure. JSW estimates such synergies could potentially enable production within 18 months from all relevant permits and concession amendments being granted.

·    There can be no certainty as to whether any transaction(s) will be agreed, or the potential form of such transaction(s). The Company will continue to comply with its continuous disclosure obligations and will make announcements to the market as required.

Debiensko Mine

·    In December 2016, following the acquisition of Debiensko, Prairie applied to the Ministry of Environment to amend the 50-year Debiensko mining concession to extend the time stipulated in the mining concession for first production of coal from 2018 to 2025. In January 2019, Prairie received a final “second instance” decision from the Ministry of Environment that has denied the amendment application.

·    Prairie will strongly defend its position and continue to take relevant actions to pursue its legal rights regarding the Debiensko concession, including filing an appeal.

Jan Karski Mine

·    Poland’s Supreme Administrative Court finally and fully rejected Bogdanka’s administrative complaints against Poland’s Ministry of Environment regarding the refusal of Bogdanka’s 2013 application for a mining concession over the K-6-7 deposit at Jan Karski.

·    The Supreme Administrative Court has also upheld the 2016 Regional Administrative Court decision that obliged the Ministry of Environment to approve Prairie’s Addendum No.3 for the K-6-7 deposit. Addendum No.3 is a detailed resource estimate for the K-6-7 deposit according to Polish geological reporting standards and is based on the results of Prairie’s exploration program at the deposit.

Corporate

·    Prairie remains in a financially strong position with cash reserves of A$8.6 million on hand.

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

 

DEBIENSKO MINE

The Debiensko Mine (“Debiensko”) is a 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 Ministry of Environment (“MoE”) granted a 50-year mining concession for Debiensko.

In October 2016, Prairie Mining Limited’s (“Prairie” or “Company”) 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.

Update on Concession Amendment Application

In December 2016, following the acquisition of Debiensko, Prairie applied to the MoE to amend the 50-year Debiensko mining concession.

The purpose of the concession amendment was to extend the time stipulated in the mining concession for first production of coal from 2018 to 2025. Prairie has now received a final “second instance” decision from the MoE that has denied the Company’s amendment application. Not meeting the production timeframe stipulated in the concession does not automatically infringe on the validity and expiry date of the Debiensko mining concession, which is June 2058. Prairie also holds a valid environmental consent decision enabling mine construction and continues to have valid tenure and ownership of land at Debiensko. However, the concession authority now has the right to request the concession holder to remove any infringements related to non-compliance with the conditions of the mining concession and determine a reasonable date for removal of the infringements. In accordance with Polish law, the concession authority is required to provide an achievable and reasonable timeframe to remedy any non-compliance taking into account the nature of the non-compliance. Nevertheless, the second instance decision may result in the commencement of proceedings by the MoE to limit or withdraw the Debiensko mining concession.

The MoE has taken over 24 months to finalise the concession amendment proceedings, including seven months to issue a second instance decision, whereas under Polish administrative law there is a maximum statutory deadline of two months for the MoE to issue such decisions.

Prairie will strongly defend its position and continue to take relevant actions to pursue its legal rights regarding the Debiensko concession, including filing an appeal. Preliminary legal advice obtained by Prairie indicates that the MoE’s decision is fundamentally flawed, fails to comply with Polish, EU and international law, and demonstrates yet further evidence of the discriminatory treatment faced by Prairie as a foreign investor in Poland.

The Company will consider any other actions necessary to ensure its concession rights are preserved, 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.

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 Lubelski Węgiel BOGDANKA S.A.’s (“Bogdanka”) Bogdanka coal mine which has been in commercial production since 1982 and is the lowest cost hard coal producer in Europe.

Prairie’s 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 (“SSCC”), known as Type 34 coal in Poland whilst confirming Jan Karski as a globally significant 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.

 

Positive Rulings in Supreme Administrative Court

Poland’s Supreme Administrative Court has finally and fully rejected Bogdanka’s administrative complaints against Poland’s MoE regarding the refusal of Bogdanka’s 2013 application for a mining concession over the K-6-7 deposit at Jan Karski.

This Supreme Administrative Court decision is final, cannot be appealed and has upheld the 2016 Regional Administrative Court decision that confirms the original 2015 decision, which denied Bogdanka’s mining concession application. It has been concluded that granting a mining concession to Bogdanka would be a serious violation of the provisions of Poland’s Geological and Mining Law (“GML”), and would be contrary to the rule of law as embodied in the Polish constitution.

In a second ruling, the Supreme Administrative Court has upheld the 2016 Regional Administrative Court decision that obliged the MoE to approve Prairie’s submitted Addendum No.3 for the K-6-7 deposit. Addendum No.3 is a detailed resource estimate for the K-6-7 deposit according to Polish geological reporting standards and is based on the results of Prairie’s exploration program at the deposit. This complaint was bought against the MoE by Prairie in 2015.

The Court’s ruling will now be passed back to the MoE, and the MoE is obliged to promptly reassess the original decision taking into account the court’s verdict i.e., to issue a positive decision approving Addendum No.3.

The significance of this Supreme Administrative Court decision is that Bogdanka’s 2018 application for a mining concession over K-6-7 is now entirely inadmissible under Polish law (Bogdanka’s application was suspended following an injunction awarded in Prairie’s favour (see news release dated 26 April 2018) and requires the MoE to reject Bogdanka’s mining concession application).

The Supreme Administrative Court’s rulings re-affirm, beyond doubt, that Bogdanka’s claims over K-6-7 are without merit and inadmissible. The Board notes that Bogdanka’s claims have been vigorously rejected by the Polish courts in multiple rulings. Furthermore, the Court’s decision obliging the MoE to approve Addendum No.3 demonstrates that the MoE has acted illegally and failed to correctly implement Poland’s own mining laws.

Injunction against Poland’s Ministry of Environment Remains in Force

In April 2018, Prairie commenced legal proceedings against the 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 Polish Civil Court 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; and

·      the 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.

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’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] 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.”

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 Poland’s 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.

CORPORATE

Possible Co-Operation between Prairie and JSW

Discussions continued throughout the quarter and remain ongoing between Prairie and JSW. JSW’s due diligence process at Jan Karski has confirmed that part of the “Lublin” deposit contains semi-soft coking coal (Type 34), which can be potentially utilised by JSW.

JSW has stated that due diligence at Debiensko has also indicated the technical feasibility and potential synergies of accessing initial seams at the Debiensko deposit utilising the existing infrastructure at JSW’s adjacent Knurow-Szczyglowice mine. Exploiting those synergies would require modifications to project configuration and obtaining relevant approvals, including concession modifications. JSW estimates that access via the Szczyglowice mine potentially enables the production of hard coking coal (Type 35) from Debiensko in up to 18 months from the time that relevant administrative permits and concession amendments are granted.

There can be no certainty as to whether any transaction(s) or co-operation will be agreed, or the potential form of such transaction(s) or co-operation. It is emphasised that any potential transaction(s), should they occur, may be subject to a number of conditions including, but not limited to, obtaining 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 the respective issuers.

Financial Position and Balance Sheet

Prairie has cash reserves of A$8.6 million. With CD Capital’s right to invest a further A$68 million as a cornerstone investor, Prairie is in a strong financial position to progress with its planned 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.

APPENDIX 1 – EXPLORATION TENEMENT INFORMATION

As at 31 December 2018, the Company has an interest in the following tenements:

Location

Tenement

Percentage Interest

Status

Tenement Type

Jan Karski, Poland

Jan Karski Mine Plan Area (K-4-5, K-6-7, K-8 and K-9)*

100

Granted

Exclusive Right to apply for a 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

Debiensko, Poland

Debiensko 1**

100

Granted

Mining

Debiensko, Poland

Kaczyce 1

Granted

Mining & Exploration (includes gas rights)

 

*  In July 2015, Prairie announced that it had secured the Exclusive Right to apply for a Mining Concession for Jan Karski as a result of its Geological Documentation for the Jan Karski deposit being approved by Poland’s MoE. The approved Geological Documentation covers areas of all four 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. As a result of the Exclusive Right, Prairie was the only entity with a legal right to lodge a Mining Concession application over Jan Karski for the period up and until 2 April 2018. Under the Polish GML, a Mining Concession application comprises the submission of a Deposit Development Plan (“DDP”), approval of a spatial development plan (rezoning of land for mining use) and an Environmental Consent decision. Prairie has previously announced that the DDP and spatial development plans for Jan Karski have already been approved. 

However, as of the date of this report, Prairie has not yet received the required Environmental Consent decision, which remains pending. Prairie completed an Environmental and Social Impact Assessment and made submissions to RDOS for an Environmental Consent decision in October 2017. Prairie has not been able to apply for a Mining Concession for Jan Karski due to the delay in the issuance of an Environmental Consent decision. However, the Environmental Consent proceedings continue to progress and the Company has provided to RDOS supplementary information to the originally submitted Environmental & Social Impact Assessment, as requested by RDOS.

The approval of Prairie’s Geological Documentation in 2015 also conferred upon Prairie the legal right to apply for a Mining Usufruct Agreement over Jan Karski for an additional 12-month period beyond April 2018, which precludes any other parties being granted any licence over all or part of the Jan Karski concessions. Under Polish law, the MoE is strictly obligated, within three months of Prairie making an application for a Mining Usufruct Agreement, to grant the agreement. It should be noted that the MoE confirmed Prairie’s priority right in two written statements (i.e. in a final administrative decision dated 11 February 2016 and in a formal letter dated 13 April 2016). Prairie applied to the MoE for a Mining Usufruct Agreement over Jan Karski in late December 2017. As of the date of this report the MoE has not made available to Prairie a Mining Usufruct Agreement for Jan Karski, therefore breaching the three-month obligatory period for the agreement to be concluded. Legal advice provided to Prairie concludes that failure of the MoE to grant Prairie the Mining Usufruct Agreement is a breach of Polish law. Accordingly, the Company commenced legal proceedings against the MoE through the Polish courts in order to protect the Company’s security of tenure over the Jan Karski concessions. Since the MoE has not provided a decision within three months regarding Prairie’s Mining Usufruct application, the Polish civil court has the power to enforce conclusion of a Usufruct Agreement in place of the MoE. In the event that a Mining Usufruct Agreement is not made available to the Company on acceptable terms or the Company does not enter into a Mining Usufruct Agreement for any other reason, other parties may be able to apply for exploration or mining rights for all or part of the Jan Karski concession area. However, given that the Civil Court has approved Prairie’s motion for an injunction against the MoE, as described above, the MoE is now prevented from entering into a Usufruct agreement or concession with any other party besides Prairie until the full court proceeding has concluded (which is expected to take 12 months to conclude).

**             Under the terms of the Debiensko Mining Concession issued in 2008 by the MoE (which is valid for 50 years from grant date), commencement of production was to occur by 1 January 2018. In December 2016, following the acquisition of Debiensko, Prairie applied to the MoE to amend the 50 year Debiensko Mining Concession. The purpose of the concession amendment was to extend the time stipulated in the Mining Concession for first production of coal from 2018 to 2025. Prairie has now received a final “second instance” decision from the MoE that has denied the Company’s amendment application. However, Prairie does still continue to have valid tenure and ownership of land at Debiensko. Not meeting the production timeframe stipulated in the concession does not automatically infringe on the validity and expiry date of the Debiensko mining concession, which is June 2058. Prairie also holds a valid environmental consent decision enabling mine construction. However, the concession authority now has the right to request the concession holder to remove any infringements related to non-compliance with the conditions of the mining concession and determine a reasonable date for removal of the infringements. In accordance with Polish law, the concession authority is required to provide an achievable and reasonable timeframe to remedy any non-compliance taking into account the nature of the non-compliance. Nevertheless, the second instance decision may result in the commencement of proceedings by the MoE to limit or withdraw the Debiensko mining concession. Prairie will strongly defend its position and continue to take relevant actions to pursue its legal rights regarding the Debiensko concession, including filing an appeal to Poland’s Administrative Courts and pursuing safeguards and protections under international law. Preliminary legal advice obtained by Prairie indicates that the MoE’s decision is fundamentally flawed, fails to comply with Polish, EU and international law, and demonstrates yet further evidence of the discriminatory treatment faced by Prairie as a foreign investor in Poland. The Company will consider any other actions necessary to ensure its concession rights are preserved, which may result in the Company taking further action against the MoE and the Government of Poland, including invoking the protection afforded to the Company under relevant bi-lateral or multi-lateral investment treaties.

 

+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

31 December 2018

Consolidated statement of cash flows

Current quarter $A’000

Year to date
(6 months)
$A’000

1.

Cash flows from operating activities

1.1

Receipts from customers

1.2

Payments for

(676)

(1,456)

(a)   exploration & evaluation

(b)   development

(c)   production

(d)   staff costs

(299)

(635)

(e)   administration and corporate costs

(206)

(498)

1.3

Dividends received (see note 3)

1.4

Interest received

61

123

1.5

Interest and other costs of finance paid

1.6

Income taxes paid

1.7

Research and development refunds

1.8

Other (provide details if material)

(a)  Business development costs

(b)  Property rental and gas sales

(35)

86

(92)

180

1.9

Net cash from / (used in) operating activities

(1,069)

(2,378)

2.

Cash flows from investing activities

2.1

Payments to acquire:

(a)   property, plant and equipment

(b)   tenements (see item 10)

(c)   investments

(d)   other non-current assets

2.2

Proceeds from the disposal of:

(a)   property, plant and equipment

(b)   tenements (see item 10)

(c)   investments

(d)   other non-current assets

2.3

Cash flows from loans to other entities

2.4

Dividends received (see note 3)

2.5

Other (provide details if material)

2.6

Net cash from / (used in) investing activities

3.

Cash flows from financing activities

3.1

Proceeds from issues of shares

3.2

Proceeds from issue of convertible notes

3.3

Proceeds from exercise of share options

3.4

Transaction costs related to issues of shares, convertible notes or options

(29)

(67)

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)

3.10

Net cash from / (used in) financing activities

(29)

(67)

4.

Net increase / (decrease) in cash and cash equivalents for the period

9,670

11,016

4.1

Cash and cash equivalents at beginning of period

4.2

Net cash from / (used in) operating activities (item 1.9 above)

(1,069)

(2,378)

4.3

Net cash from / (used in) investing activities (item 2.6 above)

4.4

Net cash from / (used in) financing activities (item 3.10 above)

(29)

(67)

4.5

Effect of movement in exchange rates on cash held

1

4.6

Cash and cash equivalents at end of period

8,572

8,572

5.

Reconciliation of cash and cash equivalents
at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts

Current quarter
$A’000

Previous quarter
$A’000

5.1

Bank balances

1,572

2,170

5.2

Call deposits

                       7,000

7,500

5.3

Bank overdrafts

5.4

Other (provide details)

5.5

Cash and cash equivalents at end of quarter (should equal item 4.6 above)

8,572

9,670

6.

Payments to directors of the entity and their associates

Current quarter
$A’000

6.1

Aggregate amount of payments to these parties included in item 1.2

(183)

6.2

Aggregate amount of cash flow from loans to these parties included in item 2.3

Nil

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 the entity and their associates

Current quarter
$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 available
Add notes as necessary for an understanding of the position

Total facility amount at quarter end
$A’000

Amount drawn at quarter end
$A’000

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 for next quarter

$A’000

9.1

Exploration and evaluation

(500)

9.2

Development

9.3

Production

9.4

Staff costs

(300)

9.5

Administration and corporate costs

(200)

9.6

Other (provide details if material)
(a)        Business development costs

(50)

9.7

Total estimated cash outflows

(1,050)

10.

Changes in tenements
(items 2.1(b) and 2.2(b) above)

Tenement reference and location

Nature of interest

Interest at beginning of quarter

Interest at end of quarter

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: 31 January 2019

(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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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