Bandanna Energy Limited (ASX:BND) Receives Final Terms of Reference for the Arcturus and Springsure Creek Mine Projects

Brisbane, June 3, 2011 AEST (ABN Newswire) - Bandanna Energy Limited (ASX:BND) is pleased to advise that it has received its Final Terms of Reference for the Arcturus and Springsure Creek Coal Mine Project's environmental impact statements (EIS). These were finalised in accordance with section 46 of the Environmental Protection Act 1994 (EP Act).

Bandanna's Managing Director Dr Ray Shaw said "Finalisation of the TORs forms a key piece in the thorough and rigorous environmental assessments of Springsure Creek and Arcturus being undertaken to gain approvals in accordance with the relevant environmental legislation and approvals processes''.

Key Features of the Springsure Creek Project:

- The proposed mine will be an underground longwall mine with ROM coal production of nominally 5.5 Mtpa, increasing to 11.0 Mtpa over the remaining life of mine once a second longwall is installed.

- No washery will be required as the coal has less than 10% ash on an air dried basis.

- The mine will link to the Blackwater rail system via the Bauhinia branch line with coal exported via the Wiggins Island Coal export Terminal (WICET).

- Peak manning during construction will be approximately 300 personnel and an operations workforce of approximately 332 personnel will be required for mine operations, assuming two long wall units.

- During the initial 23 years of mine life 195.8 million tonnes of product coal are produced.

- Economic assessment for the Springsure Creek Project concludes with a material positive NPV.

- Subject to approvals first development coal could be mined during FY2014 with longwall coal in FY2015.

Key features of the Arcturus Project:

- The proposed mine will contain both limited open cut and longer term underground mines producing nominally 5 Mtpa product coal.

- The final open cut strip will provide access for the underground operation including highwall, and punch longwall mining of the seams.

- The export quality thermal coal has an ash content of 13% and is suitable to be sold raw. Therefore no coal preparation plant has been included in the mine design plan.

- As with Springsure Creek, Arcturus will link into the existing Blackwater rail system via the Bauhinia branch line, and the new proposed WICET infrastructure at Gladstone, to export thermal coal to international markets.

- During construction the mine will accommodate up to 240 personnel and some 200 personnel will be required during operational stage.

- Economic assessment for the first 17 years of mine life for the Arcturus Project envisages 70.1 Mt of product coal production and the project economic review concludes with a material positive NPV.

- Subject to approvals first coal could be mined during FY2014

Contact

Dr Ray Shaw Tel: +61-7-3041-4400 Andrew Crook Mob: +61-419-788-431 http://www.bandannaenergy.com.au