NEWS RELEASE | 28 APRIL 2016‌‌‌‌‌

MARCH 2016 QUARTERLY REPORT

Prairie Mining Limited is pleased to present its quarterly report for the period ending 31 March 2016.

HIGHLIGHTS:

Lublin Coal Project

• Pre-Feasibility Study completed, confirming the robust economics and technical viability of the Project to be developed as an ultra-low cost supplier of hard coal into major European markets.

• Strong demand exists for high quality coal from a secure regional source within Europe, a region that consumes more than 300Mt of hard coal per annum, with imports of coal increasing year on year, declining domestic European production and growing concerns over energy security.‌‌

• Operating cash costs in the Study average only US$25 per tonne (steady state) which positions Prairie as the lowest cost supplier of coal into key target markets.

• Key study results include:

  • Annual Saleable Coal Production (Steady State Average) 6.34 million tonnes per year o Total Operating Costs FOR Mine Gate (Steady State Ave) US$25 per saleable tonne o Annual EBITDA (Steady State Average) US$348 million

  • Initial Mine Life from First Production (Ore Reserves Only) 24 years

  • Initial Marketable Ore Reserve 139.1Mt

• Bogdanka loses court case over K-6-7 - Warsaw Courts rejected outright Bogdanka's administrative complaints against Poland's Ministry of Environment in relation to Prairie's rights over the K-6-7 exploration concession of the Lublin Coal Project. The decision confirms Prairie's security of tenure and exclusive right to apply for a mining concession over the Project.

• Mining Concession Application - having completed the Pre-Feasibility Study, Prairie's focus is on obtaining a mining concession for the Project. During the quarter the Company:

  • Completed the draft Deposit Development Plan based on the results of the LCP PFS. An approved plan is a key component of the mining concession application.

  • Formally commenced the ESIA and spatial planning approvals process following completion of environmental baseline studies.

  • Continued the land acquisition process aimed at securing access to the planned surface infrastructure sites for Project development.

    Corporate

• Excellent Financial Position - Prairie holds cash reserves and listed securities in excess of A$18.8 million and is in a strong position to progress its planned development activities.

• Strong Warsaw market following - Prairie continues to receive extensive and positive media coverage as well as a strong following in the Warsaw market.

London Office Warsaw Office Registered Office

Unit 1C, 38 Jermyn Street | London | SWY1 6DN Ul. Wspólna 35 lok. 4 | Warsaw | 00-519

Level 9, BGC Centre, 28 Esplanade | Perth | WA | 6000

Email: Website: ABN:

ASX/LSE/WSE:

[email protected] www.pdz.com.au 23 008 677 852 PDZ

GOING FORWARD:

• Definitive Feasibility Study will commence after all Project options have been suitably examined and an ultimate "go forward" case has been selected.

• Completion of the Deposit Development Plan, which forms a key part of the Polish requirement for a mining concession application, and lodging it with the relevant government authorities for final review.

• Continuation of other required Project permitting activities including the ESIA, spatial planning and land acquisition.

• Continued development activity across the LCP specifically aimed at improving knowledge of hydrogeological conditions and confirming the definitive shaft site location.

Figure 1: 3D Render of LCP PFS Mine Site Design

For further information contact:

LUBLIN COAL PROJECT

Completion of Pre-Feasibility Study

During the quarter, Prairie Mining Limited ("Prairie" or "Company") completed a Pre-Feasibility Study ("Study" or "PFS") on the Lublin Coal Project ("Project" or "LCP"), located in the low cost and proven Lublin Coal Basin in south eastern Poland, in accordance with the JORC Code (2012 Edition).

Utilising the Project's initial Marketable Ore Reserve Estimate of 139.1 million tonnes ("Mt") of coal, the Project can support average steady state production of 8.0 million tonnes per annum ("Mtpa") Run-of-Mine ("ROM") coal, yielding an average of 6.34Mtpa of saleable clean coal. The LCP's fundamentals are extremely encouraging with average operating cash costs (inclusive of SG&A and royalties) during steady state production of US$24.96/tonne of saleable coal Free On Rail at the Mine Gate ("FOR"), indicating that the LCP would be the lowest cost supplier of coal into Prairie's key regional European target markets. The high margin LCP is expected to achieve average earnings before interest, taxes, depreciation, and amortization ("EBITDA") of US$348 million per annum (steady state).

At the time of announcing the results of the PFS, Prairie's Chief Executive Officer, Mr Ben Stoikovich, said "The PFS has confirmed the potential to develop a world scale, multi-generational coal mine with strong cash flows. In fact, we expect that the Lublin Coal Project would be the lowest cost global supplier of coal into Prairie's key regional European target markets."

Low Global Cash Operating Costs

Based on the results of the PFS, The LCP is projected to have an average operating cash cost of US$24.96 per tonne FOR at steady state production for all of its saleable coal products, producing an average 6.34Mtpa. Semi- soft coking coal product from the LCP is anticipated to be at the bottom of the global cash cost curve for semi-soft coking coal delivered into the European trading hub of Amsterdam, Rotterdam and Antwerp ("ARA") with a delivered cost of US$44.86 per tonne.

The LCP's API specification thermal coal delivered to ARA would also cost US$44.86/tonne, thus positioning the LCP in the lowest quartile of the global cash cost curve for export quality thermal coal delivered to ARA. This is a premium quality thermal coal for the combined heat and power plant ("CHP") and power generation sectors, with comparable or superior quality to the API2 (Argus Price Index) specification that is the key benchmark for export quality thermal coals traded into Europe. Due to proximity and freight cost advantages there are several key target markets where LCP export thermal coal will be significantly more cost competitive on delivered to power plant basis. In all likelihood, export thermal coal to be produced at the LCP would not be shipped to ARA, but could readily be sold by rail into the Czech Republic, Germany, Austria, Slovakia or Ukraine, and the LCP would be a lowest cost supplier into these key regional markets.

* Coal Handling & Preparation Plant