Prairie Downs Metals has been granted 4 exploration licences in Poland, adjacent to the 8 million tonne per annum Bogdanka coal mine, which hosts one of the largest coal reserves in the country. The licences cover 182 square kilometers of the Lublin Coal Basin and have shown the potential to host a large scale thermal coal deposit through historical exploration and technical data.

The licences are valid for three years and Prairie has the right to obtain further extensions upon satisfying a drilling program. The Lublin Coal Basin is an established coal province with coal mining activities dating back to 1982 and established infrastructure, including power and rail. The Bogdanka coal mine is currently the only operation in the area and is operated by Lubelski Węgiel Bogdanka SA which has a market cap. of over AUD 1 billion.

The mine is targeting production of 11.5 million tonnes per annum of high quality thermal coal with an average calorific value of around 6,200 kilocalories per kilogram by 2014. Prairie will now focus on evaluating the large amount of data available from exploration activities undertaken by the Polish Govt and its agencies during the 1970s and 1980s. Once the available data has been reviewed over the coming months, the company will look to undertake further exploration activities.

Poland’s coal industry contributes 55% to the country’s energy supply and is now the ninth largest hard coal producer in the world and the largest coal producer in the European Union. In 2011, the Polish coal industry extracted around 77 million tonnes of hard coal, of which about 5 million tonnes was exported. At the same time about 13 million tonnes of coal was imported. Poland is also the eighth largest coal consumer globally and the second largest in the European Union, requiring over 85 million tonnes of coal per annum.

Over 90% of electricity and 89% of heat in Poland is generated from coal with coal set to remain the key element of the country’s energy security until at least 2030. With a large domestic market for coal in Poland and the potential for increased export markets, Poland’s coal industry is expected to expand in the coming years.

Following the grant of the licences Prairie will issue key consultants and their nominee’s 3 million shares. The company will also issue 2.5 million shares to these parties on the definition of a Measured and/or Indicated Resource of at least 500 million tonnes on or before December 31st 2014. A further 3 million shares will be issued on the definition of a Measured and Indicated Resource of at least 1 billion tonnes on or before 31 December 2015.

Source - Proactive Investors

(www.coalguru.com)

Logistic, Steam CIS