LONDON (Alliance News) - Praire Mining Ltd on Monday said coal is "the best performing commodity" this year following steep increases in prices as it moves toward securing a maiden resource estimate for the Debiensko project that it is hoping to bring into production sooner rather than later.
Prairie Mining shares were up 11% to 23.78 pence per share on Monday morning.
The company's primary development was the Jan Karski mine in Poland, formerly known as the Lublin coal mine, but attention has now turned to the Debiensko hard coking coal project after Prairie acquired the asset earlier this year.
Jan Karski is still at the forefront of its plans as Debiensko is also located in Poland and meant to complement Jan Karski as Prairie looks to create a multi-project coal development to pierce the European steel-making industry, where about 80% of current coking coal is imported, according to the company.
A pre-feasibility study for Jan Karski was published in March and the company is currently talking to potential engineering, procurement and construction contractors, project finance banks and potential future customers whilst it awaits to be awarded the all-important mining concession by authorities.
At Debiensko, which is a brownfield development, Prairie believes it can become a near-term regional hard coking coal producer by publishing a maiden resource estimate for the operation as soon as possible, followed by drilling to then upgrade as much of that resource as it can to support feasibility study work.
"Following detailed technical due diligence by Prairie, the company is confident that a revised development approach would allow for the early mining of profitable coal seams, whilst minimising upfront capital costs. This is likely to include focusing on a smaller area of Debiensko to target coal seams that are more readily accessible," said the miner.
"Coal is widely recognised to be the best performing commodity in 2016, with prices forecast to stabilise at higher levels over the medium term," the miner said. "Coking coal continues to be classified by the European Commission as the third most economically important "critical raw material" for the European economy."
Cash at the end of September stood at AUD16.8 million, falling from AUD18.1 million at the end of June after cash outflows from spending on operating activities totalled AUD1.6 million versus inflows of AUD325,000 from disposing of one of its tenements.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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