Initial Coal Quality Testing Indicates Metallurgical Coal Potential

Transcription

1 ASX RELEASE 31 October 2013 Initial Coal Quality Testing Indicates Metallurgical Coal Potential Highlights: Initial coal quality test results conducted on the recent drill cores from the Company s 100% owned Lublin Coal Project ( LCP ) have confirmed the potential for metallurgical coal Metallurgical coal quality test results included Free Swell Index number of 5.5 for the 391 coal seam which hosts an Inferred Coal Resource Estimate of 327 Million Tonnes Additionally the 391 seam displayed exceptional, air dried basis, raw coal seam calorific values of 7,558 kcal/kg and very low ash contents of 4.4% Coal quality test results confirm the historical data with the Company now conducting further washability and coal quality testing to provide confirmation of potential product specifications Prairie s LCP is one of the largest and most advanced developments in the Lublin Coal Basin ( LCB ) with an Inferred JORC Compliant Coal Resource Estimate of ~1.6 Billion Tonnes Prairie Downs Metals Limited ( Prairie or the Company ) (ASX: PDZ) is pleased to announce that it has received excellent initial coal quality test results from the analysis of cores from the first phase drilling program at the LCP. These results have indicated that the 391 coal seam, and certain other target economic seams, contain a very high quality coal with the potential for benchmark quality semi-soft coking coals. These results will significantly expand the potential market and strategic interest beyond the European power generation sector to now include steel sectors within Europe and internationally. Table 1: 391 Coal Seam Quality & Comparisons Semi-Soft Coking (Typical) Thermal Hunter Valley Russia Poland ARA Russia South Africa Ash (% AD) < Calorific Value kcal/kg (GAD) 7,558 7,320 7,426 n/a ~6,700 7,100 6,126 FSI ) Average of 2 samples from Kopina 1 core coal quality results Commenting on the initial coal quality results, Ben Stoikovich, Chief Executive Officer said The LCP is already recognised as one of the largest remaining untapped coal deposits in Europe that is also located in a proven low cost coal basin. These coal quality test results enhance the potential marketability of our target products and indicate that the LCP will appeal to a much wider strategic investor base. We will continue to further delineate the metallurgical coal potential of the LCP with a view to including these new coal quality results in our upcoming Scoping Study which is due to be completed by early to mid For further information contact: Ben Stoikovich Anastasios Arima Chief Executive Officer Executive Director Prairie Downs Metals Limited Level 9, BGC Centre, 28 The Esplanade, Perth WA 6000 Ph: Fax:

2 Coal Quality Specifics New comprehensive coal quality testing of the 391 seam from the first two core drill holes completed has resulted in considerably lower ash content and demonstrates similar fixed carbon, volatile matter and free swell index qualities to typical Hunter Valley semi-soft coking coal and the semi-soft coking coals already produced in Poland. In relation to thermal coal specifications, the 391 seam coal quality compares favourably against the globally recognised thermal coal Amsterdam-Rotterdam-Antwerp ( ARA ) benchmark, offering a significant premium both in terms of calorific value (heat content) and ash content. Table 2: Coal Quality Analysis 391 Coal Seam Proximate Analysis (air dried basis) Moisture Ash Volatile Matter Fixed Carbon Total Sulphur Calorific Value (gross air dried) FSI 3.1% 4.4% 34.6% 57.9% 0.88% 7,558kcal/kg 5.5 Both semi-soft coking and thermal coal specifications were derived from the 391 coal seam on a raw basis. Coal core washability testing of the representative mining section of the 391 seam is currently being carried out. A more detailed product specification will be determined post completion of core analysis in relation to further drill holes. Figure 1 - LCP 391 Seam Contour Map (Seam thickness isopachs based on observed core and geophysical logs) Page 2

3 Updated Coal Quality Database The Company first noted the potential for metallurgical coal in the Lublin coal basin following the translation of the original historical documentation from the drilling campaign conducted by the Polish government in the 1970 s and 80 s. These documents referenced parts of the 391 and other target economic seams to contain Polish designation type 34 coal, which is locally referred to as gas-coking coal, or more commonly known as semi-soft coking coal. Although this reference was made in the historical documents, no comprehensive coal quality data was available to the Company. Figure 2: 391 Coal Seam Core Utilised for Coal Quality Testing Following coal quality analysis from the first core drill hole, the Company will recalibrate the historical coal quality data into an internationally recognised format, enhancing the Company s understanding of the metallurgical coal properties of the LCP. Specifically, the Company is conducting the following coal quality analysis on samples obtained from the current core drilling program: Coal Chemical Properties: Calorific Value (heat content); Proximate Analysis (Ash, Volatile Matter, Moisture etc); Ultimate Analysis (Carbon, Hydrogen, Oxygen, Sulphur etc); Chlorine; Phosphorous; and Ash Composition (major oxides and trace elements) Rheological Properties (flow characteristics with a view to how coals swell, soften and then resolidify to form Coke): Roga Index Free Swelling Index (agglomerating potential of the coal); Gray King Coke Type; Audibert-Arnu Dilatometer (swelling characteristics); Gieseler Plastometer (plastic behaviour); and Ash Fusion temperature Petrographic Analyisis: Maceral Content (Vitrinite, Liptinite, Inertinite etc); and Mean Max Reflectance Physical Properties (Hardgrove Grindability) Core Washability (float/sink analysis) Page 3

4 First Phase Drilling Campaign and Scoping Study The Company recently completed the first two core drill holes, Borowo and Kopina 1, as part of an ongoing drilling program. The Company is progressing with coal quality testing on the completed second core drill hole. Drilling has now commenced on the third (Syczyn 7) and fourth (Kulik) drill holes with both holes reaching the Carboniferous formation (host to the coal measures) and are now coring. Drilling results are expected to be announced progressively and will allow for a full suite of coal quality and washability testing to be performed, providing critical input into the potential yields and product quality used for the Scoping Study. Results from this exploration program will also be used in updating the geological model resulting in a potential upgrade of category of the Coal Resource Estimate. Figure 3 - Coal Concessions in Poland and Location of Planned Drill Holes Page 4

5 ABOUT THE LUBLIN COAL PROJECT The LCP consists of four coal licences covering 182km 2 located in South East Poland in the Lublin Coal Basin. The Lublin Coal Basin is an established coal province with coal mining activities dating back to 1982 with established infrastructure, including power and rail. The Project is situated adjacent to the Bogdanka coal mine which is operated by Lubelski Węgiel Bogdanka S.A. A maiden Inferred Coal Resource of 1.6 billion tonnes of high quality thermal coal has been estimated at the LCP. Figure 4 LCP Location Map Competent Person Statements The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code ) sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves. The information contained in this announcement has been presented in accordance with the JORC Code (2004) and any references to Measured, Indicated and Inferred Resources are to those terms as defined in the JORC Code (2004). Information in this announcement that relates to Exploration Results and Mineral Resources is based on information compiled by Dr Richard Lowman (an employee of independent consultant Wardell Armstrong LLP which owns Wardell Armstrong Limited) who is a Fellow of the Geological Society of London. Dr Lowman has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person under the 2004 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Lowman consents to the inclusion of the data in the form and context in which it appears. Page 5