During the December 2011 quarter, Kangaroo signed a five year mining contract with Putra Perkasa Abadi to mine up to 4.5Mtpa of coking coal from the mine.

The contract, worth $A265 million, is designed to take the mine from a small-scale operation to a full-scale commercial operation.

The mine currently produces approximately 250,00tpa.

The contract began on January 1 and includes the removal of up to 90 million bank cubic metres of overburden.

Kangaroo said it had commenced mobilisation of key coal equipment and overburden removal at Mamahak during the December quarter, with mobilisation expected to continue throughout 2012.

Coal sales for the mine reached $588,000 for the quarter ending December 31.

Meanwhile, Kangaroo has planned a stage one drilling program at Mamahak, designed to increase the current coal resource and provide the basis for definition of a coal resource.

Kangaroo said it was in the process of selecting a drilling contractor to mobilize to site.