Prairie Mining Limited Align Research Initiation of Coverage
September 05 2017 - 1:15AM
RNS Non-Regulatory
TIDMPDZ
Prairie Mining Limited
05 September 2017
Prairie Mining - Initiation of Coverage. Conviction Buy. Target
price 118p
"Under the radar" potential world-class hard coking coal
supplier with two low-cost projects in Poland to supply Europe's
leading steel makers & a likely acquisition target
Prairie Mining listed in London in 2015 to bring its hard coking
coal interests in Poland to the attention of European investors.
The company is currently moving its two-impressive large Tier-1
low-cost coking coal projects towards production as early as
2023.
- Enviable high margin projects at currently strong coking coal
prices
Prairie is continuing to advance its two projects towards
production and has a world-class partner in China Coal, the second
largest coal miner in China. In the current strong coking coal
price environment, Prairie looks likely to be an M&A target in
our opinion as majors are seeking such world class Tier-1 projects
and midcap producers need growth options.
- Close to Europe's steel makers who rely on imports for 85% of
supplies
Europe is a big importer of coking coal from Australia and the
US. Coking coal from Prairie's low-cost Polish projects should
attract a premium price due to its quality comparable to coal
produced by the majors and far lower transportation costs being on
the doorstep of big European steel makers.
- Management has proven expertise in project development &
financing
CEO Ben Stoikovich is an ex-BHP coal mining engineer/investment
banker whose skills have helped get Prairie where it is today.
Managing operations in Poland is Miroslaw Taras, the ex-CEO of the
neighbouring Bogdanka coal mine which he turned into Europe's
lowest cost coal producer.
- DCF analysis reveals potential upside of 250%
Discounting forecast cash flows from the two planned coking coal
mines and assigning what we consider to be highly conservative risk
factors gives a target price of 118p. We thus initiate coverage of
Prairie Mining with a Conviction Buy stance.
To read the full note visit
http://www.alignresearch.co.uk/cpt-company/prairie-mining/
This information is provided by RNS
The company news service from the London Stock Exchange
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