Jastrzebska Spolka Weglowa : Current Report No. 15/2019

Body of the report:

The Management Board of Jastrzębska Spółka Węglowa S.A. ('JSW', 'Company') reports that today JSW and Prairie Mining Limited ('Prairie') effected an amendment to the Non-Disclosure Agreement ('NDA'), about which the Company originally reported in its current report dated 28 March 2018, in such a manner that the term of validity of this NDA has been extended for 6 months until 28 September 2019, for the purpose of conducting further talks.

JSW has conducted preliminary due diligence on Prairie and its projects. The findings are still intact that confirmation has been obtained in the Jan Karski project that a portion of the 'Lublin' deposit contains type 34, gas and coking (semi-soft) coal, which may potentially be utilized by JSW. Due diligence has also confirmed the technical capabilities and potential synergies associated with opening up coal seams in the Dębieńsko deposit by using the infrastructure of the neighboring Knurów-Szczygłowice mine. Utilizing these synergies would entail the necessity of modifying the undertaking's technical conditions and obtaining amendments to administrative decisions, including concessions. According to JSW, the infrastructure of the Szczygłowice Section may potentially facilitate the mining of type 35 orthocoking coal from the seams of the Dębienśko deposit within 18 months from the time of obtaining the required adiminstrative decisions and changes of concessions.

The Parties have deemed that they need more time to discuss the deal structure and its commercial terms and conditions. It is the intention of both Parties to continue negotiations in subsequent months, in particular in the following area:

1) potential deal structure and the business terms and conditions for cooperation or the transaction;

2) alignment of the Dębieńsko and Jan Karksi projects to JSW's concept and to maximize potential synergies.

There is no certainty that the talks willl lead to the execution of any contract(s), nor is there any certainty as to the form of a possible deal(s).

It should be emphasized that a potential deal or deals, insofar as they take place, may hinge on the fulfillment of a number of conditions, inter alia,: the indispensable corporate consents, funding consents and approvals, consents of the Office of Competition and Consumer Protection (UOKiK), insofar as they are required, and the fulfillment of all other requirements related to the strategy, objectives and regulations applicable to each one of the issuers.

For the avoidance of doubt, JSW has represented that even though the State Treasury is a shareholder holding a 55.16% equity stake in JSW's share capital, while Prairie has launched an investment dispute with the Republic of Poland, JSW will act merely as a reasonable investor adhering to the principle of treating all shareholders equally in identical circumstances as referred to in Article 20 of the Commercial Company Code.

The Company will adhere to its duties concerning the mandatory disclosure of information to the market.

Legal basis: Article 17 Section 1 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on Market Abuse and Repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC