Fundamentals of PDZ’s Jan Karski Project enhanced by latest study

By Trevor Hoey. Published at May 2, 2017, in Small Caps

In the last six weeks, Prairie Mining’s (ASX:PDZ) share price has increased circa 30% from 47 cents prior to the release of its Debiensko coking coal project Scoping Study to hit a high of 60 cents, but there appeared to be some profit-taking occurring last week as the company’s shares closed at 52 cents on Friday. This could represent a buying opportunity, particularly in light of the promising news released by the company today in relation to its Jan Karski ultra-low ash coking coal project located in Poland.

PDZ’s shares traded approximately 4% higher in the first hour of trading on Monday morning in response to the Jan Karski study.

There could be more upside to come given that the consensus price target is $1.45, representing a premium of approximately 170% to this morning’s opening price of 54 cents.

However it should be noted that price targets are only estimates and may not be met. Also, share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.

Strong fundamentals of Jan Karski further enhanced by latest study

To provide some background, in March 2016, PDZ announced the results of a Prefeasibility Study (PFS) for the Jan Karski mine, confirming the technical viability and robust economics of the project, as well as highlighting its potential to become one of the lowest cost, large-scale strategic coal suppliers to be developed in Europe.

The strong project fundamentals and significant margins above steady-state operating costs are demonstrated below, but it needs to be borne in mind that SSCC that commands a premium price would substantially bolster the average annual free cash flow indicated in the following table.

The study utilised an updated coal resource estimate (CRE) for the project which comprised a global CRE of 728 million tonnes including an indicated resource of 181 million tonnes from two coal seams. The PFS incorporated a mine plan based on an initial marketable ore reserve estimate generated from the indicated resources within seams 389 and 391 as shown below.

How Jan Karski stacks up against its peers

Being competitive and realising above-average prices in the coal industry is very much a function of quality of product.

The independent analysis of Jan Karski semi-soft coking coal (SSCC) demonstrated that it has the ability to produce ultra-low ash (less than 3%), making it highly sought after by steelmakers due to the considerable commercial advantages of enhanced value in use and lower carbon dioxide emissions.

As well as demonstrating low ash qualities, coke oven tests demonstrated exceptional results with Coke Strength after Reaction (CSR) of 51.5, exceeding typical CSR parameters of internationally traded semi-soft coking coals.

Preliminary discussions with select European steelmakers have confirmed the suitability of Jan Karski’s ultra-low ash, high CSR SSCC to be utilised in coke oven blends.

Benchmarking against similar products currently produced by OKD in the Czech Republic (as indicated below) demonstrates the potential of the Jan Karski product to replace these coals in the regional market.

The key features to focus on in the table above are the percentage ash and CSR numbers. The percentage ash of 2.6 is well below coal produced from the two OKD mines, and the CSR of 51.5 is significantly above the midpoint of coal produced from both Darkov (46.5) and Karvina CSA (47.5).

Jan Karski could come into production as supply of SSCC contracts

The next step for PDZ is to conduct additional drilling at Jan Karski in order to provide more detailed coking coal analysis and develop a comprehensive marketing strategy around its premium product.

With the project only in the early stages it is important to consider the medium-term supply demand outlook for this coal. Importantly, the two Czech Republic mines produce approximately 1.8 million tonnes per annum of semi-soft coking coal, but reportedly these mines will cease production by 2022.

This would see Jan Karski potentially enter the market as supply, particularly to the heavy industrial hubs in Europe, is contracting.

Where to invest $1,000 right now

When the experts at Next Investors have a stock pick, it may pay to listen.

The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.

They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.

Click the link below to see what they are currently investing in.


S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why is Australia’s leading small cap publication

Founded seven years ago, is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise. provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more. is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!