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Bandanna Energy advances Wiggins Island Port and Bowen Basin developments

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Bandanna Energy (ASX: BND) has provided an update on progress at its Wiggins Island Coal Export Terminal (WICET) and Bowen Basin developments in Queensland.

Exploration and resource/reserve delineation drilling for Bandanna’s WICET Stage 1 source mines in the Bowen Basin remain on target, with drilling continuing in the Springsure Creek and Dingo West tenements.

With exposure to two distinct infra-structure scenarios, one in the Galilee Basin and the other in the Bowen Basin, Bandanna is well positioned to undergo significant growth in the coming years.

Bandanna has more than 1,500 million tonnes of JORC coal Resources in its 16 exploration permits, the largest thermal coal inventory for any exploration company in Australia.

The WICET Stage 1 construction at Gladstone remains on schedule for first export coal in mid 2014. Bandanna is a 14% owner shareholder and has a 4 million tonnes per annum (Mtpa) allocation.

WICET’s Gladstone port facilities will provide port access to Bandanna’s Bowen Basin located source mines and not those of any future mine development in the Galilee Basin.

The company said the failure of the South Galilee Coal Project Joint Venture to gain Preferred Status for 15 Mtpa of port allocation at Abbot Point, has no bearing on the Wiggins Island 4 Mtpa WICET allocation, nor on the current construction and development schedules of WICET. Bandanna has a 50% interest in the JV.

The planned expansion of Abbot Point and the EOI sought for a 15 Mtpa coal export allocation in that proposed T4-T9 expansion relates solely to optionality for future port solutions by the South Galilee Project JV in the Galilee Basin and not to Bandanna’s major Bowen Basin projects.

At the invitation of Northern Queensland Bulk Port (NQBP) authority, representatives of the South Galilee Coal Project JV will meet with NQBP early next week in order to discuss other options for securing capacity at the T4-T9 Abbot Point Expansion through nominated preferred respondents.

Following a capital raising in August 2011 and, with about $130 million in cash, Bandanna remains fully funded to meet all of its obligations to the WICET port and corresponding rail including bank guarantees for $52 million under the agreement with WICET and $15.3 million to QRN.

Bandanna will make no further capital contributions for the proposed WICET port funding under the $2.5 billion privately funded financing package of senior and subordinated debt arranged by ANZ bank.

Environmental Impact Studies for Arcturus, Springsure Creek, Dingo West and South Galilee Basin projects remain on target.

Bandanna will shortly be moving into larger offices in order to accommodate its increasing activities, and in particular those related to its on-going Bankable Feasibility Studies for its Bowen Basin Springsure Creek and Dingo West projects.

Bandanna is in discussions with a number of parties concerning farmins, and the formation of joint ventures, in key Bowen Basin projects in order to provide project funding solutions for major project capital expenditure.

The announcement of a new CEO reflecting the transition of the company into its current development phase is expected shortly.

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