Coal Exploration Program
The Company is focusing its exploration activities on its key Bowen Basin opportunities – Dingo West, Springsure Creek, Arcturus and Arcadia. AMCI, as operator of the South Galilee Coal Project, will continue to undertake the exploration program on behalf of the Joint Venture, in which Bandanna has a 50% participating interest. Additional exploration, including drilling and field geological studies, is also being undertaken in our other tenements, in conformity with work program requirements.
Arcturus, EPC 1221 (Bandanna 100%)
The focus for exploration in this Project is to investigate a shallow thermal coal deposit located around a northerly trending Arcturus Anticline. During the 2009-2010 financial year 2,973 m of drilling was completed. This involved 27 holes of which 11 were cored. A further 5 coal quality holes, totaling 728m, were drilled during the following 2010 - 2011 financial year. Details of exploration results, including a maiden mineable reserve of 44.3 Mt, were announced in October 2010. Total JORC compliant resources are 206.3 Mt; of which 103.7 Mt is in the Inferred category and 102.6 Mt in the Indicated. Strategically located with respect to existing rail infrastructure, Arcturus has the potential for development of a shallow open-cut and/or underground thermal coal mine to produce between 3-5 Mtpa of thermal lower calorific bituminuous product coal. Following receipt of the terms of reference an Environmental Impact Statement process is currently underway. As feasibility study was completed in April 2011.
Springsure Creek EPC 891 (Bandanna 100%)
This tenement covers an area of approximately 462 km2 and abuts the Arcturus Project in the west. The target Aries 2 Seam lies at depths of approx 200 m across the crest of a broad (6-8 km wide) anticline where it averages thicknesses of approximately 3 m. An Exploration Target of 417 – 600 Mt has been identified and on 25 July 2011 Bandanna announced to the ASX, following a review of additional drilling results, that the total JORC compliant Resource of EPC 891 had increased to 374.5 million tonnes, comprising Indicated Resources of 129.5 million tonnes (up by 79.3%) and Inferred Resources of 245.0 Million tonnes (up 15.5%). This was followed with an announcement of an increase in Marketable Reserves - to 102.6 Mt. Further drilling during the last six months of 2011, in the Springton Domain portion of EPC 891, enabled resources to be further increased to a total JORC Resource of 490.5 Mt - comprising Inferred Resources of 262.5 Mt and Indicated Resources of 228.0 Mt. Limited coal quality information suggests that Springsure Creek is a low ash (<10%) low moisture bituminuous coal which could be sold as a raw thermal product. Following receipt of the final terms of reference an Environmental Impact Statement and Bankable Feasibility Studies are currently underway and an application for a mining lease was made in October 2011.
Dingo West EPC 881 (Bandanna 100%)
Dingo West is located near the township of Dingo where it occupies a position close to infrastructure. It is situated on the Blackwater to Gladstone railway corridor some 200 km from port. During the 2009-2010 financial year Dingo West has been the focus of both drilling and seismic exploration. Some 1112 m of drilling was undertaken, together with the acquisition of 53 km of seismic during the 2010 financial year. In 2011 activity has increased and drilling for the past 6 months of the calendar year involved some 6392m for 52 holes. The primary exploration target is the Rangal Coal Measures, in particular the Aries, Castor, Pollux, Orion and Pisces seams. Coal quality data indicates a potential PCI/thermal product. Previously the Company has announced a JORC Compliant Inferred Resource of 91 Mt. The current drilling program is designed to further delineate the potential of a number of satellite open cut pits in an area where during the year a application for a Mining Lease was made. Environment processes and bankable feasibility studies are currently underway, following completion of a feasibility study earlier in 2011.
South Galilee Project (EPCs 1048, 1049, 1179, 1180)
The South Galilee Coal Project (formerly Alpha Project) consists of EPC1048, EPC1049, EPC1179 and EPC1180 and an MLA which was applied for over portion of EPC 1049 in July 2011. It is currently held by a 50 - 50 joint venture between Alpha Coal Pty Ltd, which is a wholly owned subsidiary of Bandanna, and AMCI (Alpha) Pty Ltd (AMCI). This project is one which has now been declared a Project of State Significance by the Queensland Government. On 8 February 2011 the Joint Venture provided a resource update to the market which included a maiden Measured Resource of 166.6 Mt, Indicated Resources 206.3 Mt and total Resources of 1,178 Mt*. These resources pertain to the northern portion of EPC 1049 covering a strike length of 15 km, primarily in an area where previous Concept Study results indicated was most suitable for open cut development.
During the 2010-2011 financial year a pre-feasibility study was completed. This proposed an average ROM production rate of 15.2 Mtpa over a 33 year mine life.
Oil and Gas Exploration
Following the announcement in September 2010 the Company has now divested all of its conventional oil and gas interests.
Minerals Tenements
Bandanna, through its various subsidiaries, holds a number of mineral tenements for the purpose of pursuing bentonite and oil shale exploration. Although non-core activities these opportunities have been identified in EPM 17568 (Planet Creek) and EPM 17932 (Planet Creek 2) tenements.
Bandanna, through its various subsidiaries, also holds a number of oil shale tenements. The company continues to maintain a no on-site activities status for these tenements given the State Government's decision to effectively suspend the development of the oil shale industry pending a thorough investigation of the industry's economic, environmental and social impacts.