Bandanna Energy Limited (ASX:BND) Increases Reserve Capacity to 8Mtpa

Brisbane, July 12, 2011 AEST (ABN Newswire) - Bandanna Energy Limited (ASX:BND) is pleased to announce that it has acquired additional priority capacity rights which will underpin its current application for an allocation in Wiggins Island Coal Export Terminal (WICET) Stage 2.

Highlights

- Bandanna has acquired 6Mtpa of reserve capacity rights from third party WICET founding members of the Feasibility Funding Facility Agreement (FFFA).

- Together with Bandanna's already existing 2 Mtpa reserve capacity rights, the aggregate 8 Mtpa reserve capacity rights significantly improves the likelihood for Bandanna securing port allocation as part of WICET Stage 2.

- WICET Stage 2 port expansion is currently scheduled to commence in late 2015.

Bandanna's Access to Port Infrastructure

Access to port infrastructure at Gladstone's WICET is vital to the future expansion of Bandanna's development plans of its quality mining opportunities located within the Bowen Basin. Already Bandanna has a 4 Mtpa allocation secured for the proposed 27 Mtpa Stage 1 development, subject to signing a Take or Pay Agreement upon Financial Close, which will see first coal throughput in 2014. Stage 2 export coal throughout is expected to commence in late 2015.

Bandanna, together with other coal industry participants, has previously lodged an expression of interest for an additional port allocation, as part of the proposed WICET Stage 2. All Stage 2 allocations are currently being independently assessed and it is expected that those companies which meet the selection criteria will be notified later this year. Industry demand for WICET Stage 2 allocations is likely to exceed the nominal capacity of 25 to 30 Mtpa. In the event that the priority system under the WICET access policy is applied, those companies having reserve capacity rights will be given pro-rata priority on the basis of their number of reserve allocation tonnes.

Bandanna's 8 Mtpa reserve allocation tonnage now puts it in a stronger position to secure a Stage 2 allocation. Importantly, should demand not exceed the available Stage 2 capacity, Bandanna will not need to invoke its reserve allocation priority but may instead retain and utilise its 8Mt prority reserve tonnage in any subsequent WICET allocation rounds as part of future port expansions.

Commenting on the acquisition of this additional reserve allocation, Managing Director Dr Ray Shaw said that "this outcome was part of Bandanna's strategy of ensuring that the Company has a footing on future port infrastructure expansions in order to cement its growth plans and consolidate itself as a significant player in the Australian thermal coal export sector".

Contact

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