Indonesian Projects

INDONESIAN PROJECTS

PAKAR PROJECT(99%)* – thermal coal

MAMAHAK PROJECT(100%) – coking coal & high quality thermal coal

GPK PROJECT(84.82%) – thermal coal

KUBAH INDAH PROJECT(100%)* – coking coal

MBK PROJECT(up to 100%)* – high quality thermal coal

BP PROJECT(100%)* – high quality thermal coal

JAWANA PROJECT(100%)* – coking coal

BORAMI PROJECT(100%)* - coking coal

APPENDIX

* Subject to Shareholder Approval

The location of KRL’s coal project areas in Indonesia are shown on the map below.

KRL Indonesian Project Location Map

PAKAR COAL PROJECT (KRL 99%)

Pakar Project - In Development

Potential for large-scale, long-life thermal coal production close to existing infrastructure
Substantial infrastructure (up to ~15Mtpa capacity) in place with production targeted to commence in 2011
3,019Mt JORC Code Total Coal Resources^1
Inclusive of 442Mt JORC Code Total Coal Reserves^1
Thick seams of up to 20m with shallow dips (5-15°)
Off-take agreement available
Subject to shareholder and regulatory approval

¹ Please refer to Appendix for JORC Code Competent Persons Statements

MAMAHAK PROJECT (KRL 100%)

Kangaroo Resources Limited announced on 16th December 2009 an agreement with TSX-listed mining company South Gobi Energy Resources Ltd for KRL to acquire all of SGER's mining assets in Indonesia, including in the Mamahak Coking Coal Project.

Mamahak Coking Coal Project - In Production

High-margin, long-life coking coal production – KRL holds 100% interest
Four concessions with ~22,000Ha landholding
Operations commenced in Feb 2010
Currently producing at rate of up to 0.25Mtpa
JORC Resource of 10.49Mt^2
>95% of project area unexplored – KRL targeting significant increase to JORC resources in 2011

² Please refer to Appendix for JORC Code Competent Persons Statements

GPK COAL PROJECT (KRL 84.82%)

Kangaroo Resources Limited has entered into an agreement with the concession owner - PT Graha Panca Karsa, under which it will be granted the exploration, mining and selling rights to an 84.82% interest in the GPK Project - a significant thermal coal project in East Kalimantan. This interest has now been earned via the terms of the agreement and KRL has an 84.82% interest in the GPK Project.

GPK - In Production

Long life thermal coal project with mining operations targeted to re-commence in 2011
Off-take agreement available
KRL interest 84.82%
Located average 15km from Mahakam River
117Mt JORC resource^3
Commencing drilling programme to prepare a JORC Reserve Statement to support the planned development of mining operations

³ Please refer to Appendix for JORC Code Competent Persons Statements

KUBAH INDAH COAL PROJECT (KRL 100%)

The Kubar Indah Coking Coal Project is located approximately 100km from the Mahakam River in East Kalimantan.

Kubah Indah Project (KI) - Resource Development

Targeting a hard coking coal project
KRL earning into 100% interest (subject to shareholder approval)
Exploration licenses located ~100km from Mahakam River
Historical drilling, seven main coal seams identified
Targeting commencement of mining in 2013
Capex estimate ~US$100m to production

Other Projects - Exploration

JAWANA & BORAMI PROJECTS

KRL earning into 100% interest (subject to shareholder approval) in both coal concessions
Coking and thermal coal
Operational synergies and contiguous with Mamahak Project & associated infrastructure

MBK AND BP COAL PROJECTS

KRL earning into 100% interest (subject to shareholder approval) in both coal concessions
MBK located ~20km from Mahakam River, whereas BP <2km from Mahakam River
Strategic/niche production opportunity
Minimal infrastructure requirement

* It is common practice for a company to comment on and discuss its exploration in terms of target size and type. The information above relating to the exploration target should not be misunderstood or misconstrued as an estimate of Mineral Resources or Ore Reserves. Hence the terms Resource(s) or Reserve(s) have not been used in this context. The potential quantity and quality/grade is conceptual in nature, since there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource.

# The 3.15 billion tonne Coal Resource & Reserve Inventory is comprised of a 3.019 billion tonne total Coal Resource with an average calorific value range of 5,215 – 5,230 kcal/kg (adb) at Pakar1; a 10.49 million tonne total Coal Resource with an average calorific value range of 6,991 – 7,793 kcal/kg (adb) at Mamahak2; and a 117 million tonne total Coal Resource with an average calorific value of 3,584 kcal/kg (gar) at GPK3.

The Pakar Project has an updated JORC Code estimated Total Coal Resource of 3,019 million tonnes1, comprising 111Mt of Measured Resources, 1,092Mt of Indicated Resources and 1,816Mt of Inferred Resources. The Total Coal Resources comprise an average coal quality with CV range of 5,215-5,230kcal/kg (adb) and 3,100-3,775kcal/kg (gar), TM range of 41.1-48.6% (ar), IM range of 12.6-18.6% (adb), ash range of 5.5-5.7% (adb), sulphur range of 0.13-0.20% (adb) and RD range of 1.36-1.48 (adb).
The total coal resource includes Total Open Cut Coal Reserves comprising 442 million tonnes1, of which 16Mt are Proved Coal Reserves and 426Mt are Probable Coal Reserves. The Open Cut Coal Reserves average coal quality is CV 3,350kcal/kg (gar), TM 44.7% (ar), ash 5.3% (ar), sulphur 0.14% (ar) and RD 1.42 (ar).

The Mamahak Project has an updated JORC Code estimated Total Coal Resource of 10.49 million tonnes2, comprising 6.85Mt Measured Resources, 3.11Mt Indicated Resources and 0.53Mt Inferred Resources. The total coal resources comprise an average coal quality with CV range of 6,991-7,793kcal/kg (adb), TM range of 2.2-4.1% (ar), IM range of 1.5-2.0% (adb), ash range of 6.0-14.9% (adb), sulphur range of 0.49-3.85% (adb), RD range of 1.28-1.37 (adb), and CSN range of 3.5-5.5.

The GPK Project has an updated JORC Code estimated Total Coal Resource of 117 million tonnes3, comprising 58Mt Indicated Resources and 59Mt Inferred Resources. The total coal resources average coal quality is CV 3,854kcal/kg (gar), ash 3.3% (ar) and sulphur 0.12% (ar).

COMPETENT PERSON STATEMENTS:

¹ Pakar Project: The Statement has been issued under the MMC name. MMC is an associated entity of PT Runge Indonesia. The MMC report should be read in its entirety. The resource was estimated in accordance with the guidelines of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2004). The Coal Resource estimates in the report were estimated by Mr. William Park, BSc (Geology), BEcon, MAIG who is a Member of the Australian Institute of Geoscientists. The estimates are based on information compiled and reviewed by Mr Park. He is a full time employee of MMC and has sufficient experience which is relevant to the style and type of deposit under consideration and to the activity undertaken to qualify him as a Competent Person as defined in the 2004 Edition of the JORC Code. Mr. Park consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. The Coal Reserve estimates in the report were estimated by Mr Michael Trainor BE (Mining), MAusIMM, a Member of the Australasian Institute of Mining and Metallurgy. The estimates are based on information compiled and reviewed by Mr Trainor. He is a full time employee of MMC and has sufficient experience which is relevant to the style and type of deposit under consideration and to the activity undertaken to qualify him as a Competent Person as defined in the 2004 Edition of the JORC Code. Mr. Trainor consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

² Mamahak Project: The resource estimate has been prepared in accordance with the 'JORC code' by PT SMG Consultants Pty Ltd (PT SMGC). The estimate of the Mamahak resources has been calculated and reviewed by Mr. Mark J Manners, B.Sc (Geology), an employee of PT SMGC, who was responsible for all content within the Technical Report titled "Resource Report – Mamahak Coal Project, Long Bagun District, Kutai Barat Regency, East Kalimantan – Indonesia, 2nd February, 2011", and is a Competent Person in accordance with the requirements of the 2004 Australasian Code for Reporting of Mineral Resources and Ore Reserves (the JORC Code). Mr Manners is a Member of the Australasian Institute of Mining and Metallurgy. Mr. Manners consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

³ GPK Project: The information in this report that relates to the coal resources of the Graha (GPK) Project is based on information that was compiled by Mr. Robert de Jongh and a professional team under his supervision. Mr. de Jongh is a Member of The Australasian Institute of Mining and Metallurgy and is a full-time employee of ASEAMCO Pty Ltd. Mr. de Jongh has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity undertaken to qualify him as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. de Jongh consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

AUSTRALIAN PROJECTS

MT RUBY