LONDON (Alliance News) - Prairie Mining Ltd on Tuesday said it has been told it is the only company that has the exclusive right to take one of the concessions within the Lublin coal project through to production after a court in Poland dismissed claims made by another company.
Prairie is developing the Lublin coal project in the country but was facing opposition from Lubelski Wegiel Bogdanka AS, which was trying to obtain a mining concession over the K-6-7 concession within the project area.
However, the Warsaw Administrative Court has now ruled that Prairie is the only entity that has ever conducted exploration work on the concession, confirming Prairie's legal position as the only entity with the exclusive right to apply for a mining concession.
The Polish Ministry of Environment previously had made decisions regarding the concession in favour of Prairie Mining, but Lubelski Wegiel Bogdanka was attempting to fight those decisions in court.
"The court ruling stated that the complaint against the decision of the Ministry of Environment that denied Bogdanka's mining concession application is not legitimate and therefore not justifiable. In the verdict, the judges emphasized that granting a mining concession to Bogdanka would be a serious violation of the provisions of Poland's geological and mining law, and would be contrary to the rule of law as embodied in the Polish constitution," said Prairie.
"Most importantly, the court also stated that Bogdanka has no legal basis to obtain the granting of a mining concession or a priority right to be granted a mining concession," the company added.
However, the dispute may not be over as the current chief executive of Bogdanka, Zbigniew Stopa, is set to leave the company at the end of March and has "stated an intention to file further legal appeals", according to Prarie.
"Prairie notes that Bogdanka's claims have been consistently and vigorously rejected by the Polish government in multiple decisions and court rulings, and therefore any further pursuit of these claims would be merely ill-conceived," said Prairie.
Earlier this month, Prairie released the results of the pre-feasibility study for the Lublin coal project which confirmed the operation can be developed and deliver "robust economics".
The study estimates the project will have an average operating cost of around USD25 per tonne of coal, selling over 6.3 million tonnes a year to deliver an average of USD348.0 million in annual earnings before interest, tax, depreciation and amortisation over a 24-year mine life.
However, the project will come at a substantial cost. Prairie said total capital expenditure for Lublin is expected to amount to USD558.0 million.
Prairie shares were untraded in London on Tuesday morning, last trading at 8.45 pence per share two weeks ago.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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