Prairie Mining Ltd has announced the results of a pre-feasibility study (PFS) – prepared in accordance with the JORC Code (2012 Edition) – conducted on its Lublin coal project (LCP), located in the low cost and proven Lublin Coal Basin in south eastern Poland.
Utilising the project’s initial marketable ore reserve estimate of 139.1 million t of coal, the project can support average steady state production of 8.0 million tpa ROM coal, yielding an average of 6.34 million tpa of saleable clean coal.
Prairie’s Chief Executive Officer, Ben Stoikovich, said “The PFS has confirmed the potential to develop a world scale, multi-generational coal mine with strong cash flows.”
Prairie has indicated the LCP’s fundamentals are extremely encouraging with average operating cash costs (inclusive of SG&A and royalties) during steady state production of US$24.96/t of saleable coal Free On Rail at the Mine Gate (FOR), which would postion the LCP to be the lowest cost supplier of coal into Prairie’s key regional European target markets.
The high margin LCP is expected to achieve average earnings before EBITDA of US$348 million per annum (steady state). According to Prairie, this provides for high cash margins from the adoption of international best practice for the design and operation of the mine and coal processing.
According to the company, there is potential for significant expansion of production beyond the proposed PFS marketable reserve, by inclusion of some 87 million t of inferred resource from the 391 seam, or inclusion from other new coal seams, which will be examined as part of upcoming technical studies to enhance the project.
Stoikovich believes the LCP is a highly advanced project, which has “the potential to become a significant new coal producer within the industrial heartland of Europe and offer a strategic supply of high quality coal to regional European markets, and for seaborne export.” He believes this could grow in importance as security of energy supply concerns increase.
Miroslaw Taras, a Prairie executive and former CEO of Lubelski Wegiel Bogdanka, further said: “The Lublin coal project is the first coal mining investment in Poland in line with international standards such as JORC or the Equator Principles. The new Jan Karski mine at the Lublin Coal Project will be the first, but hopefully not last in Poland to introduce advanced roof bolting technology for roadway primary support, which will lower costs, increase productivity and improve safety. I believe that the world-class Lublin coal project can contribute to Poland reclaiming its position as a reliable coal exporter in Europe and bring enhanced energy security to the region. I am strongly connected to the Lublin region as I have already built one mine in Lublin and seen the prosperity it bought to the community. I will now take even greater satisfaction in working on a similar project, except that this project will have the benefits of being more technologically advanced, thoroughly planned and run according to international best practice. I’m proud to see the Lublin Coal Project continue to receive strong support from the local community and government who recognise its potential to provide a tremendous boost in local employment opportunities in both the regional and national economy.”
Prairie’s Polish and international management team with experience in developing, operating and financing world-scale coal projects, will now commence discussions with potential off-takers and EPC contractors as well as focus on Project permitting.
Edited from press release by Harleigh Hobbs