Prairie Mining Share Discussion Threads

[someuwin] 08/3/2017 08:08

The story here is compelling - on many levels.

Sooner or later peeps will wake up to this one!

"In 2016, Europe imported approximately 40Mt of hard coking coal, of which 49% came from Australia. It costs over US$37 per tonne to transport coal from Queensland in Australia and to deliver it into a steelworks in Central Europe can take up to 60 days. Coal from the Debiensko mine can be delivered to these same steelworks for less than US$5 per tonne in under 24 hours."

[someuwin] 08/3/2017 07:11

RNS Number : 7963Y
Prairie Mining Limited
08 March 2017


PRAIRIE MINING LIMITED

NEWS RELEASE | 8 March 2017 PDZ

MARKETING Study Confirms large Price AND COST Advantages for Debiensko's Premium Hard Coking Coal

HIGHLIGHTS:

· Marketing Study by CRU confirms Debiensko's premium hard coking coal will have large pricing and cost advantages when selling to steel makers across Central Europe and wider EU

· Estimated cost to deliver product from the Debiensko mine to a major regional customer in Central Europe of only US$4.60 per tonne, providing a large pricing and cost advantage compared to imported hard coking coal from:

o Australia (49% of European imports) - delivery cost of US$37.70 per tonne;

o USA (29% of European imports) - delivery cost of US$33.50 per tonne; and

o Russia (5% of European imports) - delivery cost of US$26.20 per tonne.

· 15Mt annual coking coal demand at nearby coking plants in Poland, Czech Republic, Slovakia and Austria

· Existing link to national rail network provides low cost transportation of Debiensko's premium hard coking coal to regional customers. Independent study also confirms that over 4Mtpa of rail transport capacity is immediately available on the existing railway network

· Coking coal remains third most economically important "Critical Raw Material" for the European economy based on the European Commissions' Critical Raw Material list

· Results of the Debiensko Marketing Study will be incorporated into the current Scoping Study, which is due to be published in the coming weeks



Prairie Mining Limited ("Prairie" or "Company") is pleased to announce a recently completed Marketing Study for the Company's 100% owned Debiensko Hard Coking Coal Mine ("Debiensko") has confirmed premium hard coking coal produced at Debiensko will attract strong regional demand and will benefit from a significantly lower cost of delivery to Central European customers compared to coking coal imported from the international seaborne market. Accordingly, hard coking coal sales from Debiensko will secure a substantial "netback" price advantage.

The Company recently commissioned CRU Consulting ("CRU") to complete a review of the European coking coal market. The CRU study, together with various independent and internal studies regarding coal quality and railway transport, will be incorporated into the ongoing Debiensko Scoping Study.

Commenting on the positive conclusions of the Marketing Study, Prairie's Chief Executive Officer Ben Stoikovich stated:

"In 2016, Europe imported approximately 40Mt of hard coking coal, of which 49% came from Australia. It costs over US$37 per tonne to transport coal from Queensland in Australia and to deliver it into a steelworks in Central Europe can take up to 60 days. Coal from the Debiensko mine can be delivered to these same steelworks for less than US$5 per tonne in under 24 hours.

This provides the Debiensko mine with a massive inherent cost advantage for delivery to target regional customers in Central Europe. These large transport costs savings have historically been shared between the producer and the steel maker, with the producer achieving a higher sales price than suppliers outside of Europe, with the steel makers benefitting from cost savings and reduced delivery time. On a like-for-like basis, hard coking coal from the Debiensko mine will enjoy netback pricing US$15 per tonne above typical FOB Australia or USA hard coking coal benchmarks, however there is potential to increase netback pricing even more during negotiations with offtakers. This is expected to significantly enhance the economics of the Debiensko mine, and indicates that Debiensko hard coking coal sales will enjoy strong demand among regional customers."



netback pricing advantage

The CRU study included a comparison of the cost of importing hard coking coal from Australia, USA and Russia delivered into Polish steelworks. CRU used ArcelorMittal's Zdzieszowice coke plant, the largest coke plant in Central Europe, as a representative benchmark to estimate delivery costs.

Coal imported for delivery to Zdzieszowice from the international seaborne market is purchased at the prevailing FOB price at the country of origin. Transportation costs incurred to deliver coal to the port of Swinoujscie, Poland, include sea freight, port handling, storage and forwarding costs. Subsequently, the coal needs to be transported approximately 600km by rail to the Zdzieszowice coke plant which incurs further freight charges. The coal requires up to 60 days to reach the coke plant from Australia and approximately 30 days from the USA. It is also handled multiple times, with greater potential for increased degradation and fines generation.

In comparison, Debiensko is only 70km from the Zdzieszowice coke plant and directly linked by rail. Transportation costs for Debiensko's coal to Zdzieszowice are estimated to be less than US$5/t.

Due to their proximity to Central European coking plants, regional producers such as NWR or JSW have traditionally gained a "netback premium" over FOB Australia or USA benchmark prices, which once adjusted for coal quality differences, equates to approximately 50% of the total transport cost differential. Essentially, an analysis of past practises shows that the coal producer and steel maker "split the difference". Following this approach, Debiensko would receive in a netback premium of ~US$15/t above prevailing benchmark prices for Debiensko coal when sold to regional end users compared to imported hard coking coal. However, Prairie believe there is significant potential to increase this netback premium during future discussions with offtakers...

[someuwin] 07/3/2017 09:32

"Since the publication of its PFS, PDZ has moved onto obtaining more certainty in its operations at Jan Karksi, which brings us onto PDZ’s cornerstone deal with China’s largest coal mine developer China Coal.

China Coal is a $10 billion goliath (China’s second largest coal miner) that builds more coal mines than the rest of the world’s coal developers combined.

China Coal has built more than 300 major shafts around the world, including shaft sinking at Vedanta’s Sindesar Khurd Lead-Zinc Mine in India.

PDZ has signed a provisional agreement with China Coal that will see the two companies complete a BFS at Jan Karski by mid-2017, in order to entice a consortium of Chinese banks to fund the project further into infrastructure construction and eventually, coking coal sales."

[someuwin] 06/3/2017 21:26

FINALISED: 03-03-17 PUBLISHED: 03-03-17

Could this Emerging Stock Deliver a Major European Coking Coal Hub?

[someuwin] 03/3/2017 15:00

Keep buying the cheap stock before peeps realise how good this opportunity is - imo.

[someuwin] 02/3/2017 11:24

2017 - two very important catalysts

The two key catalysts in 2017 are Debiensko’s scoping study due this month (March) and China Coal’s Jan Karski BFS due 3Q. We expect the Debiensko study to be a major catalyst, showing attractive economics and a much higher value than is priced-in by the market. Jan Karski’s Chinese BFS is a major milestone towards financing and construction.

[someuwin] 02/3/2017 09:39

This from last mont is extremely positive too...

"Prairie Mining has announced excellent results from an infrastructure study of Debiensko (its 100% owned coking coal project) which show a capital cost of only $10m to deliver water, power, road and rail for commercial scale coking coal production. This extremely low capital cost is the result of historical production at Debiensko (pre-2000) and infrastructure investments by the previous owner. For example Debiensko already has a rail siding which connects directly to the national rail network. During the recent analyst site visit we saw freight wagons travelling along the rail only a few hundred yards from the new wash plant location.

Our view: Debiensko is a premium hard coking coal project with valuable infrastructure already in place, the most important of which is rail with sufficient spare capacity. Having rail so close saves large amounts of capex and avoids permitting challenges. It also links Debiensko to the European steel industry, much of which is within a 200km radius and currently relies on imports of coking coal from overseas. There are very few if any new coking coal projects with the same infrastructure benefits as Debiensko. In some ways it is akin to a mine expansion project, except where the best coal seams are still available for extraction. Plus it sits in the middle of one of the largest coking coal markets."

[keya5000] 02/3/2017 09:09

That is one Broker note I expect will get hit this year.

[someuwin] 02/3/2017 09:05

Prairie Mining (PDZ.L)

Buy at 27p

Target Price: 90p

Prairie owns two coking coal projects in Poland, both of which have the potential to become tier one mines. Jan Karski is semi-soft coking, Debiensko is premium hard-coking. Both projects will supply the European steel industry and benefit from high-value coal, very high margins, existing infrastructure (e.g. rail) and established regional markets.

In terms of project economics, both Jan Karski and Debiensko are expected to produce excellent long-term returns, something which is not reflected in Prairie’s £41m market cap. Jan Karski’s prefeasibility study showed a >25 year mine life, a post tax NPV8 of $1.4 billion and a 26% IRR. Debiensko’s value is also not remotely reflected in the current share price. A scoping study is due later this month which should act as a major catalyst. Meanwhile, our Debiensko model produces an NPV8 of circa US$750m and a 23% IRR.

A key element to realizing Prairie’s value is de-risking through bankable project studies, culminating in mine construction. The excellent returns and strategic importance of both projects should ensure they get financed. Prairie’s management is dominated by very experienced international and Polish coal mine builders and operators. We see limited downside risk to Prairie and believe it has slipped through the net. We initiate coverage with a BUY and 90p TP. Read the full report...

[someuwin] 02/3/2017 08:03

Published On: Thu, Mar 2nd, 2017

Analysts At Beaufort Securities Indicated Prairie Mining Ltd (LON:PDZ) As Buy

Today analysts at Beaufort Securities indicated Prairie Mining Ltd’s (LON:PDZ) shares as ‘Buy’ in a report released to investors.

According to Beaufort Securitiess price target of 90p on the company’s stock this indicates the broker now believes there is an increase of 188% from Prairie Mining Ltd’s current price of 31.25.

[lord gnome] 01/3/2017 13:14

90p will do nicely. Thanks for that.

[sportbilly1976] 01/3/2017 11:36

Beaufort Securities email sent at 9:40....tipped with TP of 90p

[lord gnome] 01/3/2017 11:28

In demand today. Lots of small PI buys going through. Has this been tipped somewhere?

[runwaypaul] 22/2/2017 07:36

can someone post rns pls-cant get it

[someuwin] 15/2/2017 10:06

Yup - load up. Sit back. and wait.

[keya5000] 15/2/2017 09:57

Just in the long term pot (sipp).

Think its a safe bet for 2017/8

[someuwin] 15/2/2017 09:56

You still holding here keya?

This has to re-rate massively over the course of 2017 surely.

[keya5000] 15/2/2017 09:49

Thats my understanding, maybe a turnkey debt system.

China coal build and fund then on completion debt assumes back to PDZ but CC have an offtake.

[someuwin] 15/2/2017 09:45

Remember that the Chinese will be funding and constructing the mine.

PDZ can only increase in value from here.


"...Prairie Mining and China Coal, the second largest coal mining company in China and one of the world's most advanced and prolific shaft sinking and total underground coal mine construction companies, have signed a landmark Strategic Co-operation Agreement to advance the financing and construction of Prairie's Jan Karski Mine in Poland.

Under the terms of the agreement, China Coal and Prairie intend to complete a Bankable Feasibility Study by mid-2017, which will provide the basis for an EPC contract and a construction-funding package for the Jan Karski Mine."



"...Deputy General Manager of China Coal No.5 Construction Company, Mr. Sang Hua said, "The Jan Karski Mine is managed by a highly experienced team in Prairie Mining and, with CC5C's shaft sinking and coal mine construction expertise, will no doubt be developed into a world class coal mine. We are excited to have entered into this co-operation agreement with Prairie Mining and see the Jan Karski Mine as a flagship overseas development project for China Coal as part of our strategy to increase China Coal's international presence as a major mine development contractor."

[someuwin] 15/2/2017 09:12

...And there's the tick up.

Major move coming soon imo.

[someuwin] 15/2/2017 09:06

Edit: can now only buy £1k worth.