Kangaroo Resources aims to join the ranks of leading coal producers after receiving final shareholder approval to complete its $277 million acquisition of the Pakar Coal Project from leading Indonesian coal conglomerate PT Bayan Resources.

Kangaroo shareholders voted overwhelmingly in favour of the transformational transaction at an extraordinary general meeting in Perth, Western Australia. The vote marks the final required approval to complete the deal, which was first announced in December 2010.

Pakar, which is in East Kalimantan, is one of Indonesia’s largest thermal coal projects, with an estimated JORC Code total coal resource of 3.019 billion tonnes of thermal coal with an average calorific value range of 5215-5230 kcal/kg (adb).

Under the terms of the transaction, Kangaroo has issued 2.305 billion new shares to Bayan and other parties in order to acquire Pakar, giving Bayan a controlling shareholding in Kangaroo of about 56%.

The transaction complements and enhances Kangaroo’s existing portfolio of thermal and coking coal projects in Indonesia, providing it with additional size and scale as it moves towards its goal of becoming a significant Indonesian coal producer. It is already in limited production at its Mamahak Coking Coal Project in East Kalimantan.

Bayan is a significant coal producer in its own right, with 2010 production of up to 12 million tonnes coal. In addition, Bayan owns the Balikpapan Coal Terminal, one of the largest terminals in Kalimantan with up to a 15 million tonnes throughput capacity, and other key infrastructure including the floating transfer stations and a substantial fleet of barges.

Kangaroo plans to bring the Pakar project into initial production in 2011, with ramp up thereafter, seeking to ultimately become one of the larger stand-alone coal operations in Indonesia.

While the quality is low ranking thermal coal, there is existing infrastructure on site which comes at no further cost to Kangaroo, and this will significantly reduce the cost of new capital required to move into production.

www.kangarooresources.com

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