The WK No. 9 Seam is a well-known and highly productive seam in the Western Kentucky portion of the Illinois Basin, and, in conjunction with the WK No. 11 Seam, represents the overwhelming majority of production produced in the West Kentucky region.

In the area of the Buck Creek Complex, the rock strata above the WK No. 9 Seam generally consists of the Turner Mine Shale (“TMS”), a thin, black shale immediately above the coal which is overlain by the Canton Shale and Vermillionville Sandstone. Immediately below the WKY No. 9 Seam is claystone followed by shale and sandy shale.

Coal seam thickness of the WK No.11 seam averages 4.2 feet with clean coal quality characteristics similar to the Poplar Grove Mine’s WK No.9 seam. Mining conditions for the WK No.11 coal seam appear to be excellent with the immediate roof consisting of a thin black shale horizon overlain by limestone. The roof conditions in the WK No. 11 seam result in lower operating cost compared to the WK No. 9 because the density of roof support materials is less.

Both the WK No. 9 and No. 11 seams are relatively flat with a dip towards the northwest. The dip of the coal, because it is shallow, will not have an adverse impact on mine productivity.

Paringa utilises room and pillar operations at Poplar Grove, an efficient and low-cost mining method widely employed in coal mines around the world. Room and pillar mining is undertaken by continuous mining units (“Unit”), with each Unit consisting of two CMs and other ancillary equipment.

Mining began utilising the two CMs which form Unit 1, with ramp-up activities progressing well and productivity increasing. Construction of the ventilation overcasts are complete and the split ventilation system is commissioned, enabling the concurrent operation of both CMs in Unit 1. Regulatory approval has also been received for an extended cut plan for Unit 1.

Unit 2 entered production in July 2019 and the split ventilation system has also been completed, enabling the concurrent operation of two continuous miners in Unit 2, taking the total number of CMs in operation to four and significantly increasing the total quantity of coal mined per shift of operation. Unit 2 will progressively ramp-up over the coming months, with testing activities for the Unit 2 extended cut plan underway.

Paringa plans to operate three Units at Poplar Grove, with each Unit projected to produce approximately 0.9 Mt tons of clean coal per annum at full capacity. Unit 3 is scheduled for commissioning in 2020, enabling total Poplar Grove production of up to 2.8 Mtpa of clean coal on an annualised run-rate basis.

In order to optimize product yields and to conform with market needs and specifications, the Poplar Grove preparation plant will be designed and equipped to incorporate direct ship ROM coal blended with fullywashed product. Based on customer coal quality needs, 100 percent of the marketable coal will be a blend of raw and processed coal that will have a heating content of 11,200 Btu/lb. The plant is designed as a 400-raw-ton-per-hour facility. Approximately 40% to 70% (depending on the proportion of WK #11 seam in the plant feed) of the minus half-inch ROM coal will bypass the plant and be blended back with the washed product to meet the 11,200 Btu/lb customer specification. The balance of the minus two- inch ROM coal will be separated into coarse and fine material at a one-millimeter size separation as it crosses one double-deck raw coal de-slime screens. The coarser material (plus one-millimeter size fraction) will be processed in a heavy media cyclone; the finer coal (minus one millimeter) will be processed by classifying cyclones and spirals. The minus 150-micron material is lost as effluent. Coarse and fine refuse will be combined and subsequently exit the plant on a 36-inch refuse collecting conveyor at an anticipated rate of 123 tons per hour with a surface-moisture of 9.4 percent. Course refuse will be dewatered utilizing drain & rinse and high frequency screens. Fine refuse will be dewatered using plate and frame presses.

CHPP operations continued to perform well, with yields increasing to ~55% as the amount of out- of-seam material being cut reduces as underground development activities wind back.

The finished product produced during the initial months of operations contains an energy content significantly higher than 11,200 – 1,300 Btu/lb, with the Company receiving a pricing premium for the sale of these tons. Paringa has commenced introducing bypass tons to the final product mix as underground construction activities are completed and the amount of waste rock received by the CHPP reduces.

Paringa plans to operate three Units at Poplar Grove, with each Unit projected to produce approximately 0.9 Mt tons of clean coal per annum at full capacity. Unit 3 is scheduled for commissioning in 2020, enabling total Poplar Grove production of up to 2.8 Mtpa of clean coal on an annualised run-rate basis.