Bandanna Energy Limited (ASX:BND) Indicated Resources Doubled To 324.2Mt At Springsure Creek Project

Brisbane, Oct 22, 2010 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 324.2 million tonnes in its JORC compliant Resources at EPC 891 (Springsure Creek). This Resource comprises Inferred Resources of 252 million tonnes and Indicated Resources of 72.2 million tonnes. The Indicated Resource represents an increase of 108% compared to the last Resource Statement in March 2010.

The new Resource Statement follows the completion of 17 chip and 20 cored boreholes and subsequent detailed analyses, including coal quality, of the targeted Aries 2 seam. Additionally, geological consultant, Resolve Geo, has conducted a review of recently released seismic coverage, as well as undertaken a complimentary geostatistical review of all available data. The seismic review has repositioned the limiting Albinia Fault further to the east in EPC 891 and confirmed that there is no discernable faulting within the Resource domains.

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 March 2010 is relatively modest, the corresponding increase of Indicated Resource, from 34.7 Mt to 72.2 Mt, is significant. This increase also coincides with the completion of Bandanna's underground concept mining study and the move to prefeasibility studies.

The Resource upgrade comes despite extended periods of wet weather and poor ground conditions which have severely hampered drilling on the project.

Springsure Creek is 100% owned by Bandanna's wholly owned subsidiary Springsure Creek Coal Pty Ltd.

The Springsure Creek increase brings the total of JORC compliant Resources net to Bandanna to 1.385 billion tonnes.

Springsure Creek is located within Bandanna's so called "Golden Triangle" of projects.

Bandanna recently released updated JORC compliant Resources of 206 million tonnes and an inaugural JORC compliant Marketable Reserve of 44.3 million tonnes at its Arcturus Project. This project is located only 14 km to the southeast of the Springsure Creek project. The close proximity of these projects to each other and to major infrastructure are critical factors as Bandanna Energy progresses the potential development of the province.

Bandanna has recently announced it 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 the end of April 2011.

Dr Ray Shaw, Managing Director of Bandanna Energy, concluded "this resource increase at our Springsure Creek Project clearly vindicates Bandanna's successful participation in the WICET allocation process".

Contact

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