Bandanna Energy Limited (ASX:BND) Resumes South Galilee Drilling Program

Brisbane, April 30, 2010 AEST (ABN Newswire) - Bandanna Energy Limited (ASX:BND) is pleased to announce a drilling program has resumed at its Joint Venture coal tenements in the Galilee Basin in Central Queensland.

Bandanna Managing Director Dr Ray Shaw said the drilling program in the South Galilee Project Joint Venture with AMCI (Alpha) Pty Ltd recommenced on Wednesday, April 28, 2010, after being put on hold during the summer wet season.

Dr Shaw said Bandanna and AMCI's drilling program was part of the South Galilee Project's pre-feasibility study (PFS) and would involve drilling a total of approximately 145 holes.

"The PFS follows the successful completion of a concept study by the Joint Venture which identified a conceptual open cut and underground mine development with a 43 year mine life and annual average production of 15 to 20 million tonnes (Mt) of thermal coal," he said.

Dr Shaw said the South Galilee project lies adjacent to Clive Palmer's Resourcehouse China First Project and south of Hancock Prospecting Kevin's Corner and Alpha Projects.

"Bandanna is the only ASX-listed company to have an interest in a project in this newly emerging, world class, thermal coal province and to have completed a concept study and moved through to PFS status," he said.
"The drilling program should deliver a substantial increase in the confidence level of the South Galilee resource which currently stands at 922 Mt of JORC compliant inferred and 60 Mt of JORC compliant indicated.*"

Dr Shaw said the PFS was an important milestone for the future development of a significant coal asset and was expected to be completed by first quarter 2011.

He said MB Mining had been contracted to undertake mining scenarios for open cut and underground mine projects, while an Environmental Impact Statement (EIS) and a study of site infrastructure requirements had also commenced.

"Resourcehouse and Hancock Prospecting are both currently submitting EIS with a view to fast-tracking development of their projects with targets for coal production by late 2013," he said.

"With our own activity as well as an expected IPO from Resourcehouse and Hancock's commencing a significant bulk handling program, 2010 will prove to be a significant year for Galilee Basin stakeholders.

"The importance of the Galilee Basin has been highlighted by BHP Billiton (ASX:BHP) and Hancock Prospecting being awarded preferred developer status of the multi-billion dollar Abbot Point coal port expansion."

*Statement of Compliance
The information compiled in this release from Bandanna Energy Limited, including any relating to resources, is based on information compiled by Gordon Saul, who is a member of the Australian Institute of Geoscientists and who is employed by Resolve Geo Pty Ltd. Gordon Saul has sufficient experience which is relevant to the style of mineralization and types of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the "Australian Code for reporting of Exploration

Results, Mineral Resources and Ore Reserves". Gordon Saul consents to the inclusion in this report of the matters based on his information and in the form and context in which it appears. Resolve Geo Pty Ltd is a shareholder in Bandanna Energy Limited.

In the case of South Galilee (formerly Alpha) Project the range of exploration target was determined by projecting D1 and D2 seam intersections from the eastern indicated and inferred resource area to the western boundary of EPC 1049. Supported by petroleum holes to the west, a 9966 Ha area has been estimated to contain an average of 5.6m of coal, providing a target tonnage of between 570 and 960 Mt.

Contact

Dr Ray Shaw Managing Director Bandanna Energy Limited Tel: +61-7-3041-4400 Andrew Crook Mob: +61-419-788-431