Bandanna Energy Limited (ASX:BND) Significant Increase in Indicated Resources for Springsure Creek Project

Brisbane, July 25, 2011 AEST (ABN Newswire) - Bandanna Energy Limited (ASX:BND), through its wholly owned subsidiary Springsure Creek Coal Pty Ltd, is pleased to announce an increase to 374.5 million tonnes in its JORC compliant Resources at EPC 891 (Springsure Creek). This Resource comprises Inferred Resources of 245.0 million tonnes and Indicated Resources of 129.5 million tonnes. The Indicated Resource represents an increase of 79.3% compared to the last Resource Statement issued in October 2010. The new Resource Statement follows the completion of 3 chip and 14 cored boreholes of the targeted Aries 2 seam.

The aim of the drilling program was to concentrate on increasing geological confidence levels of the delineated resources. As such whilst the overall increase in resource tonnages since October 2010 is relatively modest at 15.5%, the corresponding increase of Indicated Resource, from 72.2 Mt to 129.5 Mt, being 79.3%, is significant.

The Resource upgrade comes despite extended periods of wet weather and poor ground conditions which have severely hampered drilling on the project, as was the case last year.

Bandanna Energy Managing Director, Dr Ray Shaw commented "this resource increase highlights the quality asset that our Springsure Creek Project clearly represents". This resource increase will form the basis for a corresponding review of our reserve inventory and potential mine development plans".

Bandanna has secured 4 Mtpa export capacity through Stage 1 of the Wiggins Island Coal Export Terminal (WICET) at Gladstone, subject to signing a Take or Pay Agreement and WICET reaching financial close, which is scheduled for Q3 2011.

The full version of the EPC 891 Springsure Creek Resource Statement can be viewed at the Company website http://www.bandannaenergy.com.au.

For the complete Bandanna Energy announcement inlcuding images, please view: http://media.abnnewswire.net/media/en/docs/ASX-BND-183804.pdf

Contact

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