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MARCH 2015 QUARTERLY REPORT

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Prairie Mining Limited (“Prairie” or the “Company”) is pleased to present its quarterly report for the period ending 31 March 2015.

Highlights during, and subsequent to, the quarter include:

HIGHLIGHTS:

Results of Completed Drilling Campaign – excellent final results from the last three holes of Prairie’s drilling campaign received which confirm the 391 coal seam hosts extensive metallurgical and premium thermal coal throughout the target mining areas;
Pre-Feasibility Study (“PFS”) – work continued on the PFS for the Lublin Coal Project (“LCP” or “Project”) with the study expected to be completed during 2015;
New Coal Exploration Concession – Prairie was awarded a 100% interest in the Sawin-Zachód concession, contiguous with the LCP, increasing the Project area by 54km² to over 234km²;
Coal Exploration Target - estimated at Sawin-Zachód which demonstrates the potential to increase the future mine life at the LCP;
Permitting – the Company is awaiting approval of Geological Documentation. The approval will trigger a three (3) year priority right for Prairie to apply for a Mining Concession for the LCP.
European Coal Marketing Studies – Wood Mackenzie continued with European coal marketing studies for the Project which will be completed alongside the PFS during 2015;
Environmental and Social Impact Assessment (“ESIA”) – Continued baseline studies for the ESIA, the completion of which is a pre-requisite for the grant of a mining concession over the LCP; and
New Agreement Signed over Australian Base Metals Projects -Prairie to potentially receive A$0.5 million cash in June 2015 and a further A$1 million in cash or shares (by September 2016) in consideration for JV partner, Marindi Metals, electing to acquire 100% of Prairie’s interest in its Base Metals Projects in the Pilbara region of Australia.
Working Capital – As at 31 March 2015, the Company had working capital (cash and listed securities) of approximately $9.3 million and no debt.

GOING FORWARD:

The Company will continue to work towards further development milestones at the Project including the following:

Advancement of the PFS with completion expected during 2015;
Completion of comprehensive thermal and metallurgical coal marketing studies encompassing export and domestic marketing opportunities for the LCP;
Completion of Environmental Baseline Studies which will feed into the ESIA; and
Approval of Geological Documentation by the Minsitry of Environment (“MoE”) and subsequent completion of the Deposit Development Plan which would form the key component of the Mining Concession Application for the LCP.

For further information contact:

*Ben Stoikovich*	*Hugo Schumann*
Chief Executive Officer	Business Development
+44 207 478 3900	+44 207 478 3900
info@pdz.com.au

LUBLIN COAL PROJECT

The Lublin Coal Project is a large scale metallurgical and premium thermal coal project located in the Lublin Coal Basin in south east Poland. The Lublin Coal Basin is an established coal producing province which is well serviced by modern and highly efficient infrastructure, offering the potential for low capital intensity mine development. The LCP is situated adjacent to the Bogdanka coal mine which has been in commercial production since 1982 and is the lowest cost hard coal producer in Europe.

Completion of Exploration Program and Results of Drilling

Prairie is pleased to announce the coal quality results from the final three holes of the seven hole drilling program at the Project which all show high core washability yields. Furthermore, the coal analysis results continue to show outstanding coal qualities across the Project with very high calorific values, very low ash and good coking properties which support the potential for large scale production of metallurgical and premium thermal coal products.

The LCP hosts a current JORC Coal Resource Estimate (“CRE”) of 1.6 billion tonnes across 21 coal seams, including 157 million tonnes in the Indicated category derived from two key coal seams, the 391 seam and the 389 seam. The 391 and 389 seams formed the basis of Prairie’s mine plan for the LCP in the Scoping Study that was published in April 2014 (refer ASX Announcement 28 April 2014). The 391 coal seam is considered the highest quality coal seam within the LCP area both in terms of coal quality and coal seam thickness.

During the second half of 2014, Prairie announced that it had completed the final hole of its seven-hole core drilling campaign at the LCP, satisfying all work program commitments under the terms of its Exploration Concessions with the Polish government, well ahead of schedule. The drilling campaign was designed to enhance the historical drill data and geological model at the LCP in line with internationally recognised standards for mine design and development, delineate outer boundaries of the various coal seams and to update the coal quality and washability database to determine potential product pricing and yields. Core drilling was carried out to allow for coal quality and washability testing to be performed, providing critical input into the coal wash plant design and product marketing strategy.

Prairie has already released the results of the first four drill holes previously (refer ASX Announcements 31 October 2013 and 13 March 2014) and, following completion of the final three holes (namely Cycow7, Cycow 8 and Syczyn 8) and assaying at labs in Poland and the UK, is pleased to now report the results of the final three completed holes.

The composite results are highly encouraging as they confirm the 391 coal seam hosts extensive metallurgical and premium thermal coal throughout the planned target mining areas of the Project where the 391 coal seam is thickest. The 391 seam thickens towards the west of the Project area, as it approaches the border with the Bogdanka mine. In these areas, coal seam thicknesses extend up to 3.2 metres in the 391 seam.

The metallurgical coal analysis from the composite results shows Free Swell Index (“FSI”) numbers of 3.5 – 6.0 in all target mining areas of the 391 seam, comparable to international benchmark semi-soft coking coals as well as semi-soft coking coals already produced in Poland. In addition, the coal quality results indicate the potential for other metallurgical usage including as a PCI coal

Exceptional washed coal qualities were demonstrated with clean coal seam calorific values ranging from 7,500 kcal/kg to 7,800 kcal/kg and very low ash contents of 2.0 – 2.7% on an air dried basis. In relation to thermal coal specifications, the 391 seam washed coal quality compares exceptionally well to the globally recognised thermal coal ARA benchmark, offering a significant premium both in terms of calorific value (heat content) and ash content. It also compares well to both Russian and Colombian thermal coals, which account for over 60% of Europe’s thermal coal imports.

Table 1: 7 Hole Coal Quality Analysis – Zone C of 391 Coal Seam
Drill Hole ID	Washed Coal Quality (Air Dried Basis)
Drill Hole ID	Calorific Value	FSI	Ash	Volatile Matter	Moisture	Sulphur	Yield @ 1.35 Float
Kulik	7,806 kcal/kg	6.0	2.2%	36.4%	2.7%	1.0%	94%
Cycow 7	7,832 kcal/kg	5.5	2.3%	37.6%	2.2%	1.06%	71.5%
Kopina 1	7,526 kcal/kg	4.0	2.0%	35.6%	2.3%	0.9%	95%
Cycow 8	7,618 kcal/kg	2.0	2.4%	34.3%	4.0%	0.60%	91%
Syczyn 7	7,830 kcal/kg	6.0	2.4%	36.7%	3.3%	0.7%	97%
Syczyn 8	7,798 kcal/kg	4.5	1.5%	36.7%	3.8%	0.66%	84%
Borowo	7,809 kcal/kg	5.0	2.7%	33.2%	2.4%	1.0%	75%

Figure 3: Drill Hole Locations & 391 seam 1m thickness contour

Pre-Feasibility Study

During the quarter the Company progressed past the mid-way point of the PFS. A joint team of consultants from Golder Associates (UK) Ltd (“Golder”) and Royal HaskoningDHV (“RHDHV”) are managing the PFS which has been designed to comply with international best practise in all study areas in order to support detailed technical and financial due diligence by strategic equity partners, offtakers, financial institutions and to promote a seamless transition to the Definitive Feasibility Study stage (“DFS”).

During the quarter the Company completed the following work streams:

Review of transport options from mine site(s) to main railway line;
Commissioning of a review of the main power grid network and supply options;
Translation and review of Polish Regulations and Norms to understand where critical design limitation might exist;
Alignment of Polish “Geological Documentation” and “Deposit Development Plan” requirements with the PFS and subsequent DFS;
Discussions with longwall manufacturers and planned meetings with major equipment suppliers;
Listing and review of Polish/International suppliers to the mining industry to maximise local supply of consumables;
Commissioning of a review of salary structures to support the PFS cost base;
Commissioning of a review of accounting practices for the PFS financial model;
Set up of a document control hub in the Lublin project office; and
- Input to spatial planning and environmental impact requirements for re-zoning.

Going forward, Prairie’s PFS team will now focus on the completion of the PFS during 2015 including the following study requirements:

Drafting of the resource report for the “Update” to the current Coal Resource Estimate;
Shaft sinking and hoisting design;
Geotechnical parameters for roof support system and optimised longwall panel layouts;
Mine development and production scheduling;
Finalisation of all surface engineering and transport systems;
Finalising CHPP design;
Waste management;
Staffing requirements;
Estimates of capital and operating costs; and
Study reporting.

As part of the PFS work program, Prairie’s team is also compiling a detailed schedule of works required for the DFS for the Project.

New Coal Exploration Concession

During the quarter, Prairie announced that it had secured a 100% interest in a significant new coal exploration concession contiguous to the LCP. The new concession, known as Sawin-Zachód (“Sawin”), covers an area of 54km² (total Project area now over 235km²) of prime ground within the Lublin Coal Basin and has the potential to increase Prairie’s coal resource and increase future mine life at the LCP.

Prairie’s wholly owned polish subsidiary company, PD Co Sp. z o.o (“PD Co”), applied for Sawin from the MoE in Poland and was awarded the concession with the publication of a Positive Concession Decision. The Sawin concession is valid until 31 December 2017, with the right to obtain further extensions upon satisfying a drilling program as outlined by the MoE.

Figure 4: Prairie’s Exclusive Concessions

The Sawin area was subject to exploration activities undertaken by the Polish Government and its agencies during the 1970’s and 1980’s that consisted of regional geological mapping and drilling programs which demonstrated the region is highly prospective for coal.

Within the Sawin concession area a total of 22 fully cored boreholes were completed at 1,200 to 2,700m line spacing which identified more than 17 potentially recoverable coal seams with the potential to host significant coal resources.

Coal Exploration Target

Having been awarded Sawin, Prairie then announced a coal exploration target of 90 to 130 Million Tonnes (Mt) (“Coal Exploration Target”) for the concession based on the modelling of historical data. (The potential quantity and grade of the exploration targets are conceptual in nature and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.)

A three dimensional model was created using Minex software with coal seams from 369 to 397, a total of 28 seams, being modelled.

For the assessment of the Coal Exploration Target, coal within 100 metres of the base of the Jurassic Strata was excluded. Coal in seams thinner than 1.2 meters was also excluded.

The table below contains estimates of the Coal Exploration Target tonnages for the seams that have been assessed and for which there has been insufficient exploration to consider as resources at the present time. The figures therefore represent the potential which is dependent on further exploration and reviews of the area. Please note all tonnages below have been rounded.

Table 2: Potential Range of Coal Exploration Target Tonnages
Seam	Average thickness (m)*	Average parting thickness (m)*	Exploration Target Range (Mt)
Seam	Average thickness (m)*	Average parting thickness (m)*	80%	120%
375A	1.53	0.03	8	12
376	1.41	0.02	4	6
377A	1.68	0.10	17	23
380	1.50	0.14	13	18
382	1.45	0.03	4	6
389	1.91	0.11	33	47
394	1.41	0.21	8	12
397	1.31	0.01	4	6
Total			90	130

*Averages are arithmetic and are not weighted

In-situ coal qualities range from 5,030 kcal/kg to 7,330 kcal/kg (net) on an Air Dried basis.

Having estimated a Coal Exploration Target for the Sawin, the Company will now look to undertake geological mapping and core drilling.

Under the terms of the Sawin concession with the MoE, Prairie is required to complete one (1) bore hole at a pre-determined location within the Sawin area. The activities for this one borehole must commence before 31 December 2015. Prairie can also complete a further seven (7) holes at its sole discretion although this is not required under the work program for the Concession Agreement.

Approval of Geological Documentation

In December 2014, Prairie completed a major project development milestone with the formal submission of Geological Documentation to the MoE for the LCP (excluding Sawin).

Geological Documentation is a resource estimate prepared according to the standards prescribed in the Polish resource reporting code.

Prairie is now awaiting approval of its Geological Documentation by the MoE which, once provided, would trigger a three (3) year priority right for Prairie to apply for a Mining Concession for the LCP (excluding Sawin). The approval would mean that Prairie would be the only legal entity able to apply for a Mining Concession over the LCP during this time, to the exclusion of any other party.

A Mining Concession application in Poland comprises the submission of a Deposit Development Plan along with an Environmental & Social Impact Assessment (for the award of an Environmental Consent Decision) and a rezoning plan that has been approved by local authorities. The Deposit Development Plan is a Polish standard mine technical-economic study as prescribed in the Polish mining regulations. The Deposit Development Plan for the LCP is being prepared by Polish consultancy GEO-EKO-WIERT and is due for completion in 2015.

Coal Marketing Studies

Prairie has access to multiple potential markets for the sale of its coal products given the location of the LCP in the heartland of industrial Europe, with excellent rail and port access. In addition, Prairie’s coal quality and coal washability testing program has indicated the potential to produce both metallurgical coals for the steel industry and premium thermal coal for the power industry.

Prairie appointed global energy, metals and mining research and consultancy group Wood Mackenzie to conduct European coal marketing studies for the LCP.

The marketing studies have reached the midway point and the results will be released to the market when finalised.

The studies have been designed to incorporate the Project’s competitive advantage of being able to offer both metallurgical coal and premium thermal coal products from the same operation and to assess market opportunities that would maximise the revenue potential of coals from the LCP, with this analysis to be included in the PFS. Prairie intends to use the marketing studies to:

Identify and screen market opportunities;
Assess competitors;
Refine product and marketing strategy;
Inform elements of project design including coal handling and preparation plant;
Support potential due diligence processes by project financiers, strategic equity partners and offtakers; and
Provide price forecasts for coal products from the LCP for use in the PFS financial model.

Environmental & Social Impact Assessment

Prairie recently completed a number of major work program items in relation to its ongoing ESIA for the LCP. Prairie’s ESIA, being conducted by Multiconsult (formerly WS Atkins), is an extensive study that includes a wide range of environmental monitoring programs, field surveys, ecosystem sensitivity assessments, socio-economic surveys and a detailed community study and stakeholder engagement plan. The scope of Prairie’s ESIA has been defined to meet Polish, European Union and international standards, including compliance with the Equator Principles as required by Equator Principles Financial Institutions, to support the future financing of the Project.

Prior to the commencement of the environmental baseline field work studies for the LCP, Prairie’s ESIA study team completed a desktop review of the available environmental and social data for its concession areas. Given the fact that existing mining operations exist adjacent to Prairie’s concessions, Prairie has benefitted by having access to a significant quantity of existing data for the region which represent actual mining conditions, including surface water flows and quality, some information on groundwater and ground levels after subsidence, noise and waste characteristics. This data, where it relates to areas already affected by the existing mine; will assist Prairie in the accuracy of its predictions of impacts resulting from new mining activity.

Following completion of this desktop review, Multiconsult has immediately commenced with the required baseline studies to obtain data that was not already publicly available. The baseline studies are now underway for all concession areas at the LCP, and will continue for some time to capture seasonal differences.

The Company has also completed its internal Stakeholder Engagement Plan which is a key component of the ESIA process, and will ensure that the Company communicates effectively with all relevant stakeholders of the Project.

Prairie is on track to complete all environmental baseline studies by the middle of 2015 and submit its completed ESIA report(s) to the Polish authorities before the end of 2015. The submitted ESIA will provide the Polish authorities with sufficient information to award an Environmental Consent Decision, which is a pre-requisite for the granting of a Mining Concession over the Company’s concessions.

New Agreement Signed over Base Metals Projects

During the quarter Prairie announced that it had entered into a new agreement (“New Agreement”) with Marindi Metals Pty Ltd (“Marindi”) in relation to Prairie’s 100% owned Base Metals Project (“BMP”), located approximately 60 kilometers southwest of Newman in the Pilbara region of Western Australia.

Since October 2013, Marindi has been conducting an exploration work program at the BMP under a Farm-In Agreement with Prairie (“Original Farm-in Agreement”). Under the Original Farm-In Agreement, Marindi was required to keep the licences in good standing for a period of three (3) years to earn a 51% interest in the BMP and could then meet a series of expenditure commitments to earn up to a 100% interest in the BMP.

The Original Farm-In Agreement was replaced with the New Agreement during the quarter whereby Marindi can earn a 100% interest in the BMP by electing to pay Prairie A$0.5 million in cash by June 2015 and a further A$1 million in cash or shares by 30 September 2016 (“Election”), with Prairie retaining a 2.5% Net Smelter Royalty. In the event that Marindi chooses not to make its Election, the terms of the Original Farm-In Agreement will remain.

The New Agreement allows Prairie to focus 100% of its time, energy and resources on the world class Lublin Coal Project and provides the incentive for Marindi, which is led by highly experienced base metal mining executives, to rapidly advance the development of the Base Metals Project.

Corporate

Shareholding in B2Gold

As at the 31 March 2015, the Company held 3.75 million fully paid shares in B2Gold Corp. (TSX:BTO) (“B2Gold”). During the quarter, the Company sold 1.2 million shares held in B2Gold for net proceeds of approximately $2.7 million ($0.5 million is receivable as at 31 March 2015). The B2Gold shares are classified as available-for-sale current financial assets in Prairie’s Statement of Financial Position.

Financial Position

As at 31 March 2015, the Company had working capital (which includes cash and cash equivalents, trade and other receivables and listed securities) of approximately $9.3 million and no debt, placing the Company in an excellent position to complete its planned development activities at the LCP.

Exploration Tenement Information

The management team and the financial capital of Prairie are 100% focused on the development of the Lublin Coal Project in Poland. The Company holds an historical interest in a base metals project, being the BMP (during the quarter the Company surrendered the Perenjori project). During the quarter, a New Agreement was signed with third party developer Marindi Metals in relation to the Prairie Downs project and as a result, this project does not require the commitment of Prairie’s financial or managerial resources, however, it does provide the Company with exposure to potential cash and share receipts and a future net smelter royalty should exploration programs at the project prove to be positive. As at 31 March 2015, the Company has an interest in the following projects:

Location	Tenement	Percentage Interest	Status
Lublin Coal Project	Kulik (K-4-5)	100	Granted
Lublin Coal Project	Cycow (K-6-7)	100	Granted
Lublin Coal Project	Syczyn (K-8)	100	Granted
Lublin Coal Project	Kopina (K-9)	100	Granted
Lublin Coal Project	Sawin-Zachód	100	Granted
Prairie Downs	E52/1758	100*	Granted
Prairie Downs	E52/1926	100*	Granted

* The Company has entered into a farm-in agreement to assign up to 100% interest in the Prairie Downs Project.

Forward Looking Statements

This announcement 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.

The Company advises that the information relating to the Scoping Study referred to in this announcement is based on lower-level technical and preliminary economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.

Competent Person Statements

The information in this announcement that relates to the Exploration Results (drill holes: Syczyn 7, Kopina 1, Kulik and Borowo), Coal Resources, Production Targets and the Scoping Study was extracted from Prairie’s ASX announcements dated 23 September 2014 entitled ‘Annual Report to shareholders’, 28 April 2014 entitled ‘Scoping Study Confirms Potential for World Class High Margin Met and Thermal Coal Project’ and 13 March 2014 entitled ‘Initial Washability Results Display Exceptionally High Yields’ which are available to view on the Company’s website at www.pdz.com.au.

Prairie confirms that: (a) it is not aware of any new information or data that materially affects the information included in the original ASX announcements; (b) all material assumptions and technical parameters underpinning the Coal Resource, Production Target, and related forecast financial information derived from the Production Target included in the original ASX announcements continue to apply and have not materially changed; and (c) the form and context in which the relevant Competent Persons’ findings are presented in this presentation have not been materially modified from the original ASX announcements.

The information in the original ASX announcements that related to Exploration Results (drill holes Syczyn 7, Kopina 1, Kulik and Borowo) and Coal Resources is based on information compiled or reviewed by Dr Richard Lowman, a Competent Person who is a Fellow of the Geological Society of London. Dr Lowman is employed by independent consultants Wardell Armstrong LLP which owns Wardell Armstrong Limited. 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 as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.

Information in the original ASX announcement that relates to Production Targets and the Scoping Study is based on information compiled or reviewed by Mr Robin Dean who is a Competent Person and is a member of the Institute of Materials, Minerals and Mining (UK). Mr Dean is employed by independent consultants Wardell Armstrong LLP which owns Wardell Armstrong Limited. Mr Dean has sufficient experience that is relevant to the type of mining operation under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.

The information in this announcement that relates to Exploration Targets and Exploration Results (drill holes: Cycow 7, Cycow 8 and Syczyn 8) is based on information compiled or reviewed by Mr Jonathan O’Dell, a Competent Person who is a Member of the Australian Institute of Mining and Metallurgy. Mr O’Dell is a consultant employed full time by Prairie Mining Limited. Mr O’Dell has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr O’Dell consents to the inclusion in this release of the matters based on this information in the form and context in which it appears.

Lublin Coal Project - Coal Resource Estimate (based on net coal seam thickness)
Coal Seam	Indicated (Mt)	Inferred (Mt)	Total (Mt)
391	137	177	314
389	20	84	104
Other Seams	-	1,141	1,141
Total – Project Area	157	1,402	1,559

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