Update from our potential partner JSW from their website...

Update from our potential partner JSW from their website translated to English. Note the comments re increasing their coking coal resource base and increase in prices.

In the first quarter of 2018, coal production was more than 18 percent higher than in the previous quarter. Such high growth is the result of, inter alia, organizational transformations, new investments and the introduction of innovative solutions that improve the efficiency of extraction.

The JSW Capital Group closed the first quarter of 2018 with a net profit of PLN 757.9 million , ie at a slightly higher level than in the previous quarter. In the first three months of this year, the Group produced 4.1 million tons of coal, more than 18% more and 0.9 million tons of coke, an increase of almost 7 percent over the previous quarter.

- The results allow you to look optimistically into the future. We want and will continue to strengthen JSW's position as a leader in the production and sale of the best quality coking coal. In accordance with the adopted strategy, we will continue to invest in the available deposits and increase the resource base, especially in the case of coking coal, because it is the raw material on which we base the future of Jastrzębska Spółka Węglowa - said Daniel Ozon, JSW CEO and added: - Permanent, planned development of JSW is conducted taking into account strict procedures ensuring work safety, which is a key priority for me and the Management Board in the Company's operations. In accordance with the assumptions of JSW's strategy, we introduce modern solutions and devices that contribute to both security and production efficiency. We work, inter alia, to improve the underground communication system and constantly develop the Center for Advanced Data Analytics (CZAD). The modern center allows real-time monitoring of the operating parameters of machines and equipment used in coal mining processes, its transport and transport, preparation of the front of works and in the most important processes that increase the safety of mining crews.

In the period from January 1 to March 31, 2018, sales of coal to external recipients increased by over 14 percent and amounted to PLN 2,768.3 thousand. tons , in relation to the fourth quarter of 2017. The average sale price of coking coal for external customers increased by 7 percent and amounted to PLN 682.50 per ton . Whereas revenues from the sale of coal to external recipients increased by 24.6 percent and amounted to PLN 1 419,8 million .

Compared to the previous quarter, sales of coke to external recipients dropped by 4.8 percent and amounted to PLN 849,000. tons . The average coke sales price increased by 8.5 percent and amounted to PLN 1,052.10 per ton . Revenues from the sale of coke and hydrocarbons to external recipients increased by 4.1 percent and amounted to PLN 1 029.9 million in the first quarter of this year . Market conditions had a significant impact on the level of prices obtained by the JSW Capital Group.

As a result of the increase in average prices of coal and coke as well as a larger volume of coal sales in the first quarter of 2018, revenues were achieved at PLN 2,510.6 million , or PLN 317.8 million more than in the previous quarter.

The sales results for the first quarter resulted in the high EBITDA ratio of the JSW Capital Group, which for the three months of 2018 amounted to PLN 1 135.8 million and was higher by 1.5 percent compared to the previous quarter.