TIDMPDZ
RNS Number : 1976X
Prairie Mining Limited
30 April 2021
PRAIRIE MINING LIMITED
NEWS RELEASE | 30 April 2021
MARCH 202 1 QUARTERLY REPORT
Prairie Mining Limited (Prairie or the Company) is pleased to
present its Quarterly Report for the period ending 31 March
2021.
HIGHLIGHTS
-- International arbitration claims (Claim) against the Republic
of Poland under both the Energy Charter Treaty (ECT) and the
Australia-Poland Bilateral Investment Treaty (BIT) (together the
Treaties) continue.
Prairie alleges that the Republic of Poland has breached its
obligations under the Treaties through its actions to block the
development of the Company's Jan Karski and Debiensko mines in
Poland.
The Republic of Poland's actions have deprived Prairie of the
entire value of its investments in Poland.
The Claim for damages may include but is not limited to the
value of Prairie's historical expenditure in developing both the
Jan Karski and Debiensko mines, lost profits and damages, which is
linked to the net present value of both mines, and accrued interest
related to any damages.
-- The Company's Claim against the Republic of Poland will be
prosecuted through an established and enforceable legal framework
with both parties agreeing to apply the United Nations Commission
on International Trade Law Rules (UNCITRAL) to the proceedings.
-- The Company is well funded to pursue the Claim with the
US$12.3 million Litigation Funding Agreement (LFA) in place which
is currently being drawn down to cover legal, tribunal and external
expert costs and defined operating expenses associated with the
Claim.
-- During the quarter, the BIT claim Tribunal was constituted
and the Claim was registered with the Permanent Court of
Arbitration in the Hague.
-- Prairie continues its efforts to identify and assess other
suitable new business opportunities, focused on the resources
sector. The Company will make announcements to the market as
appropriate.
Enquiries
Prairie Mining Limited +44 20 7478 3900
Ben Stoikovich, Chief Executive Officer info@pdz.com.au
Sapan Ghai, Head of Corporate Development
Kazimierz Chojna, Commercial Officer
Dispute with Polish Government
The Company's Claim against the Republic of Poland is being
prosecuted through an established and enforceable legal framework,
with Prairie and Poland agreeing to apply the UNCITRAL rules to the
proceedings.
During the quarter, the BIT claim Tribunal was constituted and
the Claim was registered with the Permanent Court of Arbitration in
the Hague.
Prairie's claim for compensation may include, but will not be
limited to:
-- The value of Prairie's historic expenditure in developing
both the Jan Karski and Debiensko mines;
-- Lost profits and damages that the Company has suffered as a
result of Poland's acts and omissions which have resulted in the
expropriation of both the Jan Karski of Debiensko mines, which is
linked to the considerable Net Present Value of both mines at the
time of Poland's international treaty breaches; and
-- Accrued interest related to any damages award and all costs
associated with pursuing the Claims to Arbitration.
The Company is not able to make any further comment in relation
to the potential quantum of any claim for compensation at this
point. Please refer to ASX announcements dated 26 April 2018, 28
May 2018, 18 January 2019, 13 February 2019, 4 April 2019 and 31
December 2019 for further details regarding the Company's dispute
with the Republic of Poland.
In July 2020, the Company announced it had executed a litigation
funding agreement (LFA) for US$12.3 million with LCM. The facility
is currently being drawn down to cover legal, tribunal and external
expert costs and defined operating expenses associated with the
Claim.
In September 2020, Prairie announced that it had formally
commenced with the Claim by serving the Notices of Arbitration
against the Republic of Poland.
Prairie's dispute alleges that the Republic of Poland has
breached its obligations under the applicable Treaties through its
actions to block the development of the Company's Jan Karski and
Debiensko mines in Poland which effectively deprives Prairie of the
entire value of its investments in Poland.
In February 2019, Prairie formally notified the Polish
Government that there exists an investment dispute between Prairie
and the Polish Government. Prairie's notification called for prompt
negotiations with the Government to amicably resolve the dispute
and indicated Prairie's right to submit the dispute to
international arbitration in the event of the dispute not being
resolved amicably. The Company remains open to resolving the
dispute with the Polish Government amicably. However, as of the
date of this report, no amicable resolution of the dispute has
occurred, since the Polish Government has declined to participate
in discussions related to the dispute and accordingly the Company
has formerly submitted its Claim as discussed above.
Prairie's investment dispute with the Republic of Poland is not
unique, with international media widely reporting that the
political environment and investment climate in Poland has
deteriorated since the change in Government in 2015. As a result,
there are a significant number of International Arbitration claims
being brought against Poland in the natural resources and energy
sectors with damages claims ranging from US$120 million to over
US$1.3 billion and includes Bluegas NRG Holding (Gas), Lumina
Copper (Copper) and InvEnergy (wind farms).
CORPORATE
Business Development
A number of opportunities have been reviewed during the quarter,
and the Company will continue in its efforts to identify and
acquire suitable new business opportunities. The Company is
currently focusing on new opportunities in the resources
sector.
However, no agreements have been reached or licences granted,
and the Company is not able to assess the likelihood or timing of a
successful acquisition or grant of any opportunities.
Balance Sheet
At 31 March 2021, the Company is in a strong financial position
to pursue the Claim and continue with business development
activities with the US$12.3 million LFA and cash reserves of A$5.3
million.
Resignation of Alternate Director
During the quarter, Mr Todd Hannigan resigned as Alternate
Director to Mr Tom Todd to pursue other business and investment
opportunities. Mr Tom Todd will continue to serve as a
Non-Executive Director of the Company.
Forward Looking Statements
This release may include forward-looking statements. These
forward-looking statements are based on Prairie's expectations and
beliefs concerning future events. Forward looking statements are
necessarily subject to risks, uncertainties and other factors, many
of which are outside the control of Prairie, which could cause
actual results to differ materially from such statements. Prairie
makes no undertaking to subsequently update or revise the
forward-looking statements made in this release, to reflect the
circumstances or events after the date of that release.
APPIX 1: TENEMENT INFORMATION
As at 31 March 2021, the Company has an interest in the
following tenements:
Location Tenement Percentage Status Tenement Type
Interest
------------------- ----------------------- ----------- -------------- ---------------------
Jan Karski, Poland Jan Karski Mine 100 In dispute(1) Exclusive Right
Plan Area (K-4-5, to apply for
K6-7, K-8 and K-9)(1) a mining concession
Debiensko, Poland Debiensko 1 100 Granted(1) Mining
Debiensko, Poland Kaczyce 1 100 Granted Mining & Exploration
(includes gas
rights)
------------------- ----------------------- ----------- -------------- ---------------------
Notes:
(1) Prairie was commenced international arbitration claims
against the Republic of Poland under both ECT and the BIT. Prairie
alleges that the Republic of Poland has breached its obligations
under the Treaties through its actions to block the development of
the Company's Jan Karski and Debiensko mines in Poland.
The Company's Claim against the Republic of Poland will be
prosecuted through an established and enforceable legal framework
with both Prairie and Poland agreeing to apply the UNCITRAL rules
to the proceedings.
The Company is well funded to pursue the Claim with the US$12.3
million LFA in place which is currently being drawn down to cover
legal, tribunal and external expert costs and defined operating
expenses associated with the Claim.
Appendix 2: Related Party Payments
During the quarter ended 31 March 2021, the Company made
payments of $167,028 to related parties and their associates. These
payments relate to existing remuneration arrangements (director
fees, consulting fees and superannuation of $127,028) and the
provision of a serviced office and company secretarial and
administration
services ($40,000).
Appendix 3: Exploration and Mining Expenditure
During the quarter ended 31 March 2021, the Company made the
following payments in relation to exploration activities:
Activity $000
------------------------------------------------------------ -----
Legal and permitting related expenditure 172
Consultants - technical and Debiensko statutory operations
personnel 105
Other 54
Total as reported in the Appendix 5B 331
------------------------------------------------------------ -----
There were no mining or production activities and expenses
incurred during the quarter ended 31 March 2021.
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
-----------------------------------------------------
Prairie Mining Limited
ABN Quarter ended ("current quarter")
--------------- ----------------------------------
23 008 677 852 31 March 2021
----------------------------------
Consolidated statement of cash Current quarter Year to date
flows
$A'000 (9 months)
$A'000
1. Cash flows from operating
activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation (331)* (942)*
(b) development - -
(c) production - -
(d) staff costs (133) (412)
(e) administration and corporate
costs (201) (770)
1.3 Dividends received (see note - -
3)
1.4 Interest received 7 17
1.5 Interest and other costs of - -
finance paid
1.6 Income taxes paid - -
1.7 Government grants and tax - -
incentives
Other (provide details if
1.8 material)
(a) Business Development (14) (66)
(b) Property rental and gas
sales 84 231
(c) Arbitration related expenses (287) (713)
(d) Receipt of arbitration
funding 241 494
---------------- -------------
Net cash from / (used in)
1.9 operating activities (634) (2,161)
------ ----------------------------------- ---------------- -------------
*relates to legal and permitting expenditure and payments made
to consultants (Debiensko technical statutory operations personnel).
----------------------------------------------------------------------------
2. Cash flows from investing
activities
2.1 Payments to acquire or for:
(a) Entities - -
(b) tenements - -
(c) property, plant and equipment - -
(d) exploration & evaluation - -
(e) investments - -
(f) other non-current assets - -
2.2 Proceeds from the disposal
of:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment 172 1,047
(d) investments - -
(e) other non-current assets - -
2.3 Cash flows from loans to other - -
entities
2.4 Dividends received (see note - -
3)
2.5 Other (provide details if
material) - -
---------------- -------------
Net cash from / (used in)
2.6 investing activities 172 1,047
------ ----------------------------------- ---------------- -------------
3. Cash flows from financing
activities
Proceeds from issues of equity
securities (excluding convertible
3.1 debt securities) - 4,020
3.2 Proceeds from issue of convertible
debt securities - -
3.3 Proceeds from exercise of - -
options
Transaction costs related
to issues of equity securities
3.4 or convertible debt securities (8) (116)
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - -
Transaction costs related
3.7 to loans and borrowings - (57)
3.8 Dividends paid - -
3.9 Other (provide details if - -
material)
---------------- -------------
Net cash from / (used in)
3.10 financing activities (8) 3,847
------ ----------------------------------- ---------------- -------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 5,762 2,562
Net cash from / (used in)
operating activities (item
4.2 1.9 above) (634) (2,161)
Net cash from / (used in)
investing activities (item
4.3 2.6 above) 172 1,047
Net cash from / (used in)
financing activities (item
4.4 3.10 above) (8) 3,847
Effect of movement in exchange
4.5 rates on cash held (3) (6)
---------------- -------------
Cash and cash equivalents
4.6 at end of period 5,289 5,289
------ ----------------------------------- ---------------- -------------
5. Reconciliation of cash and Current quarter Previous quarter
cash equivalents $A'000 $A'000
at the end of the quarter
(as shown in the consolidated
statement of cash flows) to
the related items in the accounts
5.1 Bank balances 5,289 5,762
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
---------------- -----------------
Cash and cash equivalents
at end of quarter (should
5.5 equal item 4.6 above) 5,289 5,762
---- ----------------------------------- ---------------- -----------------
6. Payments to related parties of the entity Current quarter
and their associates $A'000
Aggregate amount of payments to related
parties and their associates included in
6.1 item 1 (167)
-----------------
6.2 Aggregate amount of payments to related
parties and their associates included in
item 2 -
-----------------
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly
activity report must include a description of, and an explanation
for, such payments.
7. Financing facilities Total facility
Note: the term "facility' amount at quarter Amount drawn
includes all forms of financing end at quarter end
arrangements available to $A'000 $A'000
the entity.
Add notes as necessary for
an understanding of the sources
of finance available to the
entity.
7.1 Loan facilities 16,000* 2,832
------------------- ----------------
7.2 Credit standby arrangements - -
------------------- ----------------
7.3 Other (please specify) - -
------------------- ----------------
7.4 Total financing facilities 16,000* 2,832
------------------- ----------------
Unused financing facilities available at
7.5 quarter end 13,168
----------------
7.6 Include in the box below a description of each facility
above, including the lender, interest rate, maturity date
and whether it is secured or unsecured. If any additional
financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing
details of those facilities as well.
---- ------------------------------------------------------------------------
On 30 June 2020, the Company executed a Litigation Funding
Agreement ( LFA ) for US$12.3 million (*now worth A$16
million with the appreciation of the A$ compared to the
$US) with LCM Funding UK Limited a subsidiary of Litigation
Capital Management Limited ( LCM ), to pursue damages
claims in relation to the investment dispute between Prairie
and the Polish Government that has arisen out of certain
measures taken by Poland in breach of the Energy Charter
Treaty and the Australia - Poland Bilateral Investment
Treaty ( BIT ). LCM will provide up to US$12.3million
(A$16 million), denominated in US$, in limited recourse
financing which is repayable to LCM in the event of a
successful Claim or settlement of the Dispute that results
in the recovery of any monies. If there is no settlement
or award, then LCM is not entitled to any repayment of
the financing facility. In return for providing the financing
facility, LCM shall be entitled to receive repayment of
any funds drawn plus an amount equal to between two and
five times the total of any funds drawn from the funding
facility during the first five years, depending on the
time frame over which funds have remained drawn, and then
a 30% interest rate after the fifth year until receipt
of damages payments.
----
8. Estimated cash available for future operating $A'000
activities
Net cash from / (used in) operating activities
8.1 (item 1.9) (634)
8.2 (Payments for exploration & evaluation classified
as investing activities) (item 2.1(d)) -
8.3 Total relevant outgoings (item 8.1 + item (634)
8.2)
8.4 Cash and cash equivalents at quarter end 5,289
(item 4.6)
8.5 Unused finance facilities available at quarter 13,168
end (item 7.5)
-------
8.6 Total available funding (item 8.4 + item 18,457
8.5)
-------
8.7 Estimated quarters of funding available
(item 8.6 divided by item 8.3) >10
-------
Note: if the entity has reported positive relevant outgoings
(ie a net cash inflow) in item 8.3, answer item 8.7 as
"N/A". Otherwise, a figure for the estimated quarters
of funding available must be included in item 8.7.
8.8 If item 8.7 is less than 2 quarters, please provide answers
to the following questions:
8.8.1 Does the entity expect that it will continue to
have the current level of net operating cash flows for
the time being and, if not, why not?
--------------------------------------------------------------------------
Answer: Not applicable
--------------------------------------------------------------------------
8.8.2 Has the entity taken any steps, or does it propose
to take any steps, to raise further cash to fund its operations
and, if so, what are those steps and how likely does it
believe that they will be successful?
--------------------------------------------------------------------------
Answer: Not applicable
--------------------------------------------------------------------------
8.8.3 Does the entity expect to be able to continue its
operations and to meet its business objectives and, if
so, on what basis?
--------------------------------------------------------------------------
Answer: Not applicable
--------------------------------------------------------------------------
Note: where item 8.7 is less than 2 quarters, all of questions
8.8.1, 8.8.2 and 8.8.3 above must be answered.
--------------------------------------------------------------------------
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: 30 April 2021
Authorised by: Company Secretary
(Name of body or officer authorising release - see note 4)
Notes
1. This quarterly cash flow report and the accompanying activity
report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and
the effect this has had on its cash position. An entity that wishes
to disclose additional information over and above the minimum
required under the Listing Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions
in, and provisions of, AASB 6: Exploration for and Evaluation of
Mineral Resources and AASB 107: Statement of Cash Flows apply to
this report. If this quarterly cash flow report has been prepared
in accordance with other accounting standards agreed by ASX
pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
4. If this report has been authorised for release to the market
by your board of directors, you can insert here: "By the board". If
it has been authorised for release to the market by a committee of
your board of directors, you can insert here: "By the [ name of
board committee - eg Audit and Risk Committee ]". If it has been
authorised for release to the market by a disclosure committee, you
can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the market
by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance
Council's Corporate Governance Principles and Recommendations , the
board should have received a declaration from its CEO and CFO that,
in their opinion, the financial records of the entity have been
properly maintained, that this report complies with the appropriate
accounting standards and gives a true and fair view of the cash
flows of the entity, and that their opinion has been formed on the
basis of a sound system of risk management and internal control
which is operating effectively.
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