Bandanna Energy Limited (ASX:BND) Doubles Marketable Reserves at Springsure Creek Project

Brisbane, July 27, 2011 AEST (ABN Newswire) - Bandanna Energy Limited (ASX:BND), through its wholly owned subsidiary Springsure Creek Coal Pty Ltd, is pleased to announce a 109% increase in Marketable Reserve at its Springsure Creek Project in the southern Bowen Basin south of Emerald, Qld.

The JORC compliant Marketable Reserve at EPC 891 (Springsure Creek) has increased from 49.2 Mt to 102.6 Mt as part of a high capacity underground longwall mine concept designed by independent Brisbane based mining consultants Minecraft Pty Ltd. The Marketable Reserve is derived from JORC compliant Probable Reserves of 108 million tonnes and deemed "marketable" by Minecraft following reviews of mining, economic and marketing data.

Minecraft has designed the longwall panels to specifically target the high quality Aries 2 seam which hosts the JORC compliant Reserves and Resources. The Reserves are underpinned by a recently updated total JORC compliant Resource of 374.5 million tonnes comprising Indicated Resources of 129.5 million tonnes and Inferred Resources of 245.0 million tonnes.

Bandanna Energy now has a total of 1,534 billion tonnes JORC compliant resources and 146.9 million tonnes of Marketable Reserves in its project portfolio.

Drilling continues at Springsure Creek with two drill rigs programmed to expand resources to the north and west on patterns looking to upgrade new and existing resources to Indicated and Measured status prior to production commencing in FY2014.

Bandanna has initially targeted a high quality unwashed product for the East Asia markets. The option to upgrade the product specification (and revenue component) is also under consideration.

Bandanna Energy has already secured 4 Mtpa of port capacity, at the soon to be constructed Wiggins Island Coal Export Terminal (WICET) Stage 1, subject to signing a Take or Pay Agreement and WICET achieving financial close, which is scheduled for Q3 2011. The Company recently announced that it had increased its nominated annual capacity under the Feasibility Funding Facility Agreement to 8Mtpa and is currently pursuing a Stage 2 allocation for the expansion of Springsure Creek from a single to dual longwall mine.

Dr Ray Shaw, Managing Director of Bandanna Energy, declared "The expansion of Marketable Reserve for the Springsure Creek Project will certainly underpin Bandanna's bid for increased WICET capacity and provide certainty for the entire project.

Bandanna Energy is now in a definitive feasibility stage which will involve direct dialogue with government, community and other stakeholders and a stringent environmental and social impact assessment."

The EPC 891 Springsure Creek Reserve Statement by Minecraft can be viewed at the Company website http://www.bandannaenergy.com.au

For the complete Bandanna Energy announcement including figures and tables, please refer to the following link:
http://media.abnnewswire.net/media/en/docs/ASX-BND-183841.pdf

Contact

Dr Ray Shaw Bandanna Energy Limited Tel: +61-7-3041-4400 http://www.bandannaenergy.com.au