The funds from the low cost unsecured Convertible Note with Resources First Pte Ltd, a company related to a major Singapore-based bulk commodities investment and trading house and an Indian bulk commodities trading house, will be used to further underpin and expand NSL's iron ore production in India.
The second US$1.25 million payment is expected to be received in the coming days, adding to the $1.45 million NSL had in cash reserves at the end of the June 2012 quarter.
At the same time the funding deal was announced, NSL also revealed it had entered into a marketing agreement with Resources First to market its iron ore and procure sales contracts.
This can include Resources First directly purchasing the iron ore.
Resources First has considerable experience in supplying Indian steel mills with iron ore through its related companies.
Its related companies also export a considerable amount of iron ore to China, both from India and Australia.
In recent weeks, NSL has achieved full commissioning of its new phase one iron ore dry separation plant at Kurnool in the southeast Indian state of Andra Pradesh.
The company is working to ramp up towards the plant's anticipated nameplate capacity of 200,000 tonnes per annum during the September quarter.
A second stage, phase two wet beneficiation plant for Kurnool, capable of producing final product grades of between 58-62% iron, is anticipated to be brought into operation later in 2012 with completion and anticipated sales in the first half of 2013.
This is targeted to increase production capacity by an additional 200,000 tonnes per annum to an anticipated total of 400,000 tonnes per annum from Kurnool.
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