(Alliance News) - Prairie Mining Ltd on Tuesday posted a broadly unchanged interim loss ahead of its international arbitration proceedings against the Polish government.
For the six months ended December 31, Prairie's pretax loss was USD2.33 million, marginally wider than the previous year's loss of USD2.27 million.
The firm incurred a 19% drop in revenue and other income to USD234,563 from USD290,957 as well as a reduction in share-based payment reversal to USD60,189 from USD162,766.
However, reductions in several expenses - including exploration and evaluation expenses, employment expenses, occupancy expenses, and business development expenses - meant that the difference in overall loss was minimal.
Prairie is currently embroiled in various disputes over the Debiensko and Jan Karski mines in Poland.
Prairie applied to the Polish Ministry of Environment in 2016 to amend the 50-year Debiensko mining concession to extend the time for first production to 2025 from 2018 but was denied. Prairie then appealed in and received a ruling in its favour in November 2019.
"The court verdict formally revokes the [Ministry of Environment]'s April 2018 decision denying the concession amendment, and requires the MoE to reassess the concession amendment application in light of the various defects in the MoE's original decisions as indicated by the court. The MoE now has the right to appeal this decision to Poland's Supreme Administrative Court. Despite Prairie holding a valid environmental consent decision enabling mine construction, the actions of the Polish government have effectively blocked any pathway to production for Prairie at Debiensko therefore making it impossible for the company to continue with development at Debiensko," Prairie said.
Concerning Jan Karski, Prairi filed a civil law claim against the MoE in April 2019 over its " its failure to grant Prairie a mining usufruct agreement over the Jan Karski concessions". While Prairie initially won an injunction preventing the ministry from granting concessions or concluding usufruct agreements with other parties until the matter was settles, this injunction was subsequently overturned.
As a result of the overturned injunction, the MoE awarded a mining concession over the disputed K6-7 deposit at Jan Karski to a third party, Lubelski Wegiel Bogdanka BSA.
"The MoE's decision to grant a mining concession over the K6-7 deposit to Bogdanka is further evidence of the unfair and inequitable treatment faced by Prairie as a foreign investor in Poland and these and other measures directed against Prairie by the Polish government, with respect to the company's permitting process and licenses, have entirely blocked Prairie's pathway to any future production from Jan Karski. As a result of this latest action by the Polish government, the company has taken the decision to discontinue the ongoing environmental permitting procedure for the Jan Karski mine," Prairie said.
Looking ahead, Prairie intends to "assess its options" over the dispute between itself and the Polish government and work with its lawyers on arrangements to begin international arbitration claims against Poland.
Prairie also said it will "strongly defend its position and take relevant actions to pursue its legal rights regarding both the Debiensko and Jan Karski projects" and "identify and assess other suitable business opportunities in the resources sector".
Shares in Prairie were untraded on Tuesday, last closing at 9.15 pence.
By Anna Farley; annafarley@alliancenews.com
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