LONDON (Alliance News) - Prairie Mining Ltd on Tuesday said it has purchased the Debiensko hard coking coal project in Poland for an upfront cash consideration of EUR500,000 and a deferred cash consideration of EUR1.5 million.
Prarie purchased the project through the acquisition of New World Resources PLC subsidiary NWR Karbonia SA after the requisite majority of the lenders under New World's EUR35.0 million super senior credit facility issued enforcement instructions over the shares.
The lenders instructed Citibank NA to take control of the shares and transfer them to Prairie Mining, New World said in a separate statement on Tuesday.
This instruction came after New World in May confirmed it was on the brink of collapse as its shares were suspended from trading on the London Stock Exchange after its only operating subsidiary filed for insolvency.
As a result of the insolvency proceedings, the company's senior credit facility lenders and holders of the senior secure PIK notes issued a demand upon the guarantees given by OKD for payment of liabilities. The lenders also instructed Citibank to take a number of enforcement actions, including taking control of New World Resources' accounts.
On Tuesday, New World said this had led to its shares in NWR Karbonia being transferred to Prairie Mining, and following completion of the transaction, the outstanding balance of its super senior credit facility will be around EUR20.0 million.
Prairie on Tuesday said its acquisition of the project marked its entry into the hard coking coal sector and said the project was fully permitted with a 50-year mining concession, established on-site facilities and all environmental consents.
Prairie said it will undertake a work program to review all historic data of the site and undertake an in-fill drill program. The company said it will also provide an updated resource to Joint Ore Reserves Committee Code standards and deliver a re-engineered mine plan to produce a feasibility study.
Shares in Prairie were up 39% at 16.65 pence on Tuesday morning, whilst shares in New World are still suspended.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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