Prairie Mining : Debiensko - Premium Quality Hard Coking Coal

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NEWS RELEASE | 23 January 2017

PREMIUM QUALITY HARD COKING COAL CONFIRMED AT DEBIENSKO

HIGHLIGHTS:

• Following the acquisition of the fully permitted Debiensko Hard Coking Coal Project in October 2016, Prairie has recently received results from a fully cored borehole drilled at the Project
• The results confirm historical data for the Project which indicate that Debienkso hosts a range of premium quality hard coking coals comparable to internationally traded benchmark coking coals
• Given favourable regional supply and demand dynamics, coal of this quality will be in significant demand by steelmakers across Europe and attract premium pricing
• Coking coal is classified by the European Commission as a "Critical Raw Material" and of the 80Mt of coking coal consumed in Europe per year, 80% is imported
• A maiden JORC Resource Estimate for Debiensko will be announced in the coming weeks to support the Scoping Study mine plan which remains on track for completion during Q1 2017

Prairie Mining Limited ("Prairie" or "Company") is pleased to announce the results of preliminary coal quality analysis from a borehole drilled at the Company's Debiensko Hard Coking Coal Project ("Debiensko" or the "Project") during 2015/2016 by the previous owners.

Prairie's preliminary review of the Debiensko deposit indicates that a range of premium hard coking coals can be produced from the Project that will be in high demand from European steelmakers. Two premium hard coking coal specifications have been delineated at Debiensko, namely Medium volatile matter hard coking coal ("Mid-vol HCC") and Low volatile matter hard coking coal ("Low-vol HCC").

The borehole was fully cored to 30 m below seam 407/4. All core was subject to detailed logging and core photography. Seam thicknesses and depths have been confirmed by a suite of geophysical logs while coal seams were analysed by accredited laboratories in Poland.

Prairie's CEO Mr. Ben Stoikovich said "The excellent coking coal quality results from Debiensko further reinforce Prairie's potential to become a key premium hard coking coal supplier to European steelmakers. These initial results confirm that the Debiensko deposit hosts premium coking coals of comparable quality to internationally traded benchmark hard coking coals, and will achieve premium pricing in the market. As we continue to rapidly advance our assessment of Debiensko, we look forward to announcing the Project's maiden JORC Resource Estimate and subsequent Scoping Study results in the coming weeks."

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Debiensko Premium Hard Coking Coal Benchmarking

Both Debiensko's Mid-vol and Low-vol HCC lie within the range of premium hard coking coals produced globally. Indications are that the Mid-vol HCC at Debiensko is present between 850 m to 1,000 m from surface and the Low-vol HCC is present 1,000 m to 1,300 m below surface i.e. at depths similar to adjacent operating mines owned by Jastrzębska Spółka Węglowa S.A. ("JSW") - the largest coking coal producer in Europe.

100

90

Stratford

80

Gregory

Vitrinite %

Kestrel

70

Oaky Creek

Oaky Nth

Prime Hard Coking Coals

Saraji Norwich Park

Peak Downs

Australia Coking Coal Australia Hard Coking Coal Canadian Coking Coal New Zealand Coking Coal

MouraGoonyella

Nth Goonyella Goonyella

60 Riverside

Collinsville

US Coking Coal Debiensko Mid-vol HCC

Sth BlacBklwacaktewraLteorw Ash

Tahnoor

Illawarra

Debiensko Low-vol HCC

Sth Blackwater Met

Burton Premium

Burton Hard

Russel

Sth Bulli

MBeutrlolipolitan Hard

50

Bellambi SH

Brumby

40

0.70 0.80 0.90 1.00 1.10 1.20 1.30 1.40 1.50 1.60 1.70 1.80

Rv Max (Coal Rank)

Source: Industry Reports

Figure 1 - Premium Coking Coals

Medium Volatile Matter Hard Coking Coal

The quality of Mid-vol HCC from Debienkso compares favourably with the Australian Goonyella hard coking coal brand, and with medium volatile coals produced in Poland today by JSW. This coal features good rheological properties and coke yield, with reasonably low sulphur levels. Prairie's assessment is that Mid-vol HCC from the Debiensko project would receive premium pricing in European and international markets.

Table 1: Debiensko Medium Volatile Matter Hard Coking Coal Comparison to International Benchmarks
Quality	Debiensko* (Poland)	Goonyella (Australia)	Oaky Creek (Australia)	Elkview (Canada)	Tuhup (Indonesia)	Pittston (USA)	Borynia- JSW (Poland)	Pniowek- JSW (Poland)
Ash (%)	3.2	8.9	9.5	9.5	7.0	8.0	8.5	8.5
Volatile Matter (%)	25.0	23.8	24.5	23.5	26.5	26.0	24.8	27.0
Sulphur (%)	0.56	0.56	0.60	0.50	0.70	0.85	0.65	0.60

Table 1: Debiensko Medium Volatile Matter Hard Coking Coal Comparison to International Benchmarks
Quality	Debiensko* (Poland)	Goonyella (Australia)	Oaky Creek (Australia)	Elkview (Canada)	Tuhup (Indonesia)	Pittston (USA)	Borynia- JSW (Poland)	Pniowek- JSW (Poland)
Phosphorous (P) in Coal (%)	0.025	0.025	0.070	0.07	0.02	0.019	0.059	0.050
Free Swelling Index (FSI)	8½	8	8½	7½	9	8	7½	8½
CSR (%)	63	66	67	70	60	-	-	-
Fluidity (ddpm)	1200	1100	5000	150	450	-	up to 2300	up to 3000
C daf (%)	86	88.4	86.8	81.2	-	88.0	-	-
Rv Max	1.23	1.17	1.10	1.22	1.18	1.10	1.20	1.10
Vitrinite (%)	78	58	75	55	96	76	-	-

* Indicative quality Debiensko Mid-vol HCC from washed sample from 401/1 seam at floats

Ash

10.0

%

5.0

0.0

3.2

7.0 8.0 8.5 8.5 8.9 9.5 9.5

Debiensko

(Poland)

Tuhup

(Indonesia)

Pittston

(USA)

Borynia

(Poland)

Pniowek

(Poland)

Goonyella

(Australia)

Oaky Creek

(Australia)

Elkview

(Canada)

Volatile Matter

30.0

%

25.0

20.0

23.5 23.8 24.5 24.8 25.0 26.026.5

27.0

Elkview

(Canada)

Goonyella

(Australia)

Oaky Creek

(Australia)

Borynia

(Poland)

Debiensko

(Poland)

Pittston

(USA)

Tuhup

(Indonesia)

Pniowek

(Poland)

Sulphur

1.00

%

0.50

0.00

0.50 0.56 0.56 0.60 0.60 0.650.70

0.85

Elkview

(Canada)

Debiensko

(Poland)

Goonyella

(Australia)

Oaky Creek

(Australia)

Pniowek

(Poland)

Borynia

(Poland)

Tuhup

(Indonesia)

Pittston

(USA)

P in Coal

0.100

%

0.050

0.000

0.019 0.020 0.025 0.025

0.050 0.059 0.070 0.070

Pittston

(USA)

Tuhup

(Indonesia)

Debiensko

(Poland)

Goonyella

(Australia)

Pniowek

(Poland)

Borynia

(Poland)

Oaky Creek

(Australia)

Elkview

(Canada)

Free Swell

Index

10.0

Index

9.0

8.0

7.0

6.0

9 8 1/2 8 1/2 8 1/2

8 8 7 1/2 7 1/2

Tuhup

(Indonesia)

Debiensko

(Poland)

Pniowek

(Poland)

Oaky Creek

(Australia)

Goonyella

(Australia)

Pittston

(USA)

Borynia

(Poland)

Elkview

(Canada)

Low Volatile Matter Hard Coking Coal

Debiensko's Low-vol HCC is similar to other internationally traded low volatile matter hard coking coals, including brands such as Peak Downs (BHP Billiton Mitsubishi Alliance - BMA) and Hail Creek (Rio Tinto) produced in Australia. Whilst the Coke Strength after Reaction (CSR) is anticipated to be slightly lower than these Australian coals, the quality of Debiensko Low-vol HCC is anticipated to be in-line with coal produced at JSW's Jas-Mos mine in Poland, which is used as a stabilizing and leaning component of nearly every coal blend for production of blast furnace coke in the region.

Table 2: Debiensko Low Volatile Matter Hard Coking Coal Comparison to International Benchmarks
Quality	Debiensko* (Poland)	Peak Downs (Australia)	German Creek (Australia)	Hail Creek (Australia)	Blue Creek - No.7 (USA)	Buchanan (USA)	Neryungri (Russia)	Jas-Mos (Poland)
Ash (%)	9.5	10.0	9.5	8.9	9.0	5.3	10.0	7.8
Volatile Matter (%)	20.5	20.5	19.0	20.5	19.9	18.7	19.3	21.4
Sulphur (%)	0.30	0.60	0.54	0.4	0.71	0.73	0.21	0.56
Free Swelling Index	7½	8½	8½	7	8½	8½	8	7½
Fluidity (ddpm)	128	275	400	300l	1113	100	18	200
C daf (%)	80	89.1	88.6	88.2	91	-	80.8	-
Rv Max	1.5	1.40	1.45	1.26	1.48	1.63	1.50	1.40
Vitrinite (%)	59	68	73	54	70	76	81	-

*Indicative quality Debiensko Low-vol HCC from unwashed sample from 404/9 seam

Ash

15.0

%

10.0

5.0

0.0

5.3 7.8 8.9 9.0 9.5 9.5

10.0 10.0

Buchanan

(USA)

Jas-Mos

(Poland)

Hail Creek

(Australia)

Blue Creek 7

(USA)

Debiensko

(Poland)

German Creek

(Australia)

Neryungri

(Russia)

Peak Downs

(Australia)

Volatile Matter

25.0

%

20.0

15.0

18.7 19.0 19.3 19.9 20.5 20.5 20.5 21.4

Buchanan (USA)

German Creek (Australia)

Neryungri (Russia)

Blue Creek 7 (USA)

Debiensko (Poland)

Hail Creek (Australia)

Peak Downs (Australia)

Jas-Mos (Poland)

Sulphur

%

0.50	0.21	0.30	0.40
0.00
Neryungri	Debiensko	Hail Creek	German Creek	Jas-Mos	Peak Downs	Blue Creek 7	Buchanan
(Russia)	(Poland)	(Australia)	(Australia)	(Poland)	(Australia)	(USA)	(USA)

1.00

Free Swell Index

Index

10

5

0

0.54 0.56 0.60 0.71 0.73

8 1/2 8 1/2 8 1/2 8 1/2 8 7 1/2 7 1/27

Buchanan

(USA)

Blue Creek 7

(USA)

German Creek

(Australia)

Peak Downs

(Australia)

Neryungri

(Russia)

Debiensko

(Poland)

Jas-Mos

(Poland)

Hail Creek

(Australia)