The due diligence process is proceeding smoothly and Kangaroo Resources is on track to complete the acquisition of the Pakar Thermal Coal Project by June.

Kangaroo and Indonesian coal conglomerate PT Bayan Resources entered into an agreement in December 2010, whereby the companies would start to work together immediately to build up Kangaroo's Indonesian coal business.

The due diligence process has taken longer than expected due to regulatory requirements, however both companies reiterated that none of the requirements were of concern and each was proceeding with the full support and contribution of parties on both sides.

The companies also stress that the due diligence process is proceeding smoothly and both Kangaroo and Bayan are comfortable that completion of the deal will take place as anticipated.

Technical and operational work is underway on many fronts and the Pakar Project is expected to move into production later in 2011.

Meanwhile, Kangaroo has finalized a significant new coal sales contract with Bayan for coal sales of up to 300,000 tonnes from Kangaroo's Mamahak Coking Coal Project throughout 2011.

Operations are continuing to ramp-up at Mamahak with total sales of 9882 tonnes and 20,950 tonnes reported for the months of December 2010 and January 2011 respectively.

Kangaroo says the contract reflects the benefits of the strategic alliance and associated transaction with Bayan as Bayan is able to overcome operational and logistical issues to collect the coal at the Mamahak jetty.

www.kangarooresources.com

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