analysis

LOCAL EXPLORER CONFIRMS BIG COAL PROSPECT IN POLAND

Sydney - Tuesday - April 29: (RWE Australian Business News) - PRAIRIE DOWNS METALS (PDZ) has reported a positive scoping study which has confirmed potential for the Lublin Coal Project in Poland.

The study outlines the development large-scale, long-life mine with attractive fundamentals and the ability to produce both semi-soft coking and premium thermal coal.

It says the scoping study confirms the potential for the Lublin Coal Project to be developed as a large scale, long life mine with attractive fundamentals and the ability to produce both semi-soft coking and premium thermal coal

Highlights of the study includes

* Average annual operating cash costs of US$37 per tonne (steady state), which would place the project on the lowest position on the global cost curve for coal delivered into Europe

* EBITDA of up to US$391 million utilising conservative sales ricing assumptions (average US$332 million per annum steady state)

* Up to 6.7 million tonnes per annum of saleable coal over a minimum 22 year mine life with production from the first two target seams (average 6.0 million tonnes per annum steady state)

* In-situ coal quality provides flexibility to produce exceptionally high quality, low ash semi-soft coking and premium thermal coals, with attractive coal specifications expected to lead to premium pricing

* Access to well established regional rail and port infrastructure with underutilised bulk cargo capacity for low transportation costs within Poland, to regional European markets by rail, and to the seaborne export market through underutilised ports in the north of Poland

* Massive 1.6 billion tonne JORC Resource confirms that the Lublin Coal Project is a world scale, multigenerational asset with potential for significant expansion of production beyond the proposed Scoping Study mine plan which incorporates only two of 21 coal seams within the concessions

* Significant positive social and economic benefits for the Lublin region, including the potential to double FDI and create new jobs

* Prairie continues to build an exceptional Polish and international management team with experience in designing and developing world-scale strategic coal projects

* The company will continue drilling at the Lublin Coal Project and will commence a Pre-Feasibility Study over the coming weeks with anticipated completion of the study during the first half of 2015.

Strong fundamentals, low operating cost base, existing infrastructure advantage, strategic location and scalability confirms the potential for the Lublin Coal Project to bring on line a significant new supply of coal in the heartland of industrial Europe.

Prairie Downs Metals announced the results of a Scoping Study which has been prepared in accordance with the JORC Code (2012 Edition).

The study has been conducted on the company's Lublin Coal Project located in the low cost and proven Lublin Coal Basin in south eastern Poland.

The study confirms that the LCP can support production of up to 8.8 million tonnes per annum Run-of-Mine coal yielding up to 6.7 Mtpa of saleable clean coal at steady state production.

The LCP's fundamentals from this initial development are extremely encouraging with average annual operating cash costs during steady state production of US$37/tonne of saleable coal Free On Rail at the Mine Gate which places the LCP on the lowest position on the global cost curve for thermal coal delivered into Europe.

The LCP has the potential to achieve EBITDA of up to US$391 million per annum, with steady state EBITDA of US$332 million per annum.

The LCP is located in the Lublin Province in Poland, which is well serviced by modern and highly efficient infrastructure, offering the potential for low capital intensity mine development.

Mining services, construction personnel, contractors and equipment are expected to be supplied and/or built by a combination of Polish firms and international firms.

SHARE PRICE MOVEMENTS

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Shares of Prairie Downs Metals yesterday rose 4c to 50c.Rolling high for the year is 50c, the same price as yesterday. Low was 24c. The company has 132.3 million shares on issue with a market cap of $66.1 million.

Prairie Downs Metals reported that the that technical review was completed by Golder Associates (UK) Ltd which confirmed that the geology of Prairie's Lublin Coal Project LC or Project is potentially suitable for the deployment of modern, high productivity international mining methods which could significantly reduce operating costs and achieve high safety standards.

The company appointed Golder to complete a desktop review of the geology of the Lublin Coal Basin to provide an initial evaluation of the suitability of roof bolting as a mine development option for the project.

The review indicated that the geology and mining conditions in the LCB compare favourably to deep mines in the UK, in which Golder technical personnel were previously involved in successfully implementing high productivity longwall mining methods in the late 1980s and early 1990s.

Golder concluded that the LCP has the potential to support these high productivity mining techniques as are commonly practised in Australian, USA and deep UK coal mines.

Prairie CEO Ben Stoikovich said: "The Golder review highlights the favourable geology and its amenability to modern high productivity longwall mining methods which further demonstrates the potential for a lowest quartile cost base at the Project.

The results of this review will now be incorporated into proposed mine design alternatives in the Scoping Study, which is intended to showcase the world class potential for a new generation of coal mines in the Lublin Coal Basin with Prairie developing one of the most advanced and prospective regional exploration projects."

BACKGROUND

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Prairie Downs Metals (PDZ) is an emerging Polish coal developer focused on the exploration, evaluation, appraisal and development of the Lublin Coal Project.

The project, located in South East Poland, is being aggressively fast-tracked in order to fulfill the company's vision of being Europe's next strategic thermal coal supplier.

The company has a Maiden Resource Estimate for the project that comprises 1.6 billion tonnes (inferred).

The resource is based on the review and modelling of over 200 boreholes in and around the company's coal exploration concessions.

Recent coal quality test work has demonstrated potential for semi-soft coking coal from the main 391 coal seam which hosts a current inferred resource of 327 million tonnes.