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NSL Consolidated Advances Closer To First Iron Ore Sales From Its Indian Projects

NSL Consolidated (ASX: NSL) is nearing completion of the commissioning of its US$2.3 million Kurnool iron ore beneficiation plant project in India ahead of first iron ore sales.

During the December quarter, site works and the installation of a phase one conventional three stage crushing and dry separation plant progressed at the 200,000 tonne per annum beneficiation plant.

Importantly, there is potential for saleable product to be produced during the first quarter commissioning cycle which would generate the first of anticipated wider sales and maiden revenue.

As part of the phase two beneficiation process, the wet beneficiation plant will continue to be constructed and commissioned through the first half of 2012.

Work is underway to determine the potential to increase the production over and above the targeted rate of 200,000 tonnes per annum with the incorporation of phase one and two production.

Thermal Coal

NSL has released an updated technical modelling and interpretation document that demonstrates strong project development potential for the company's Queensland thermal coal assets.

An indicator of the potential of the newly acquired projects is the strategic location adjacent to East Energy Resources' (ASX: EER) Blackall Coal Project and International Coal's (ASX: ICX) South Blackall Project.

An exploration target of between 6.6 billion tonnes and 18.7 billion tonnes of thermal coal has been defined for the projects, which cover an extensive 2,261 square kilometres.

New analysis of historical boreholes supports the presence of a quality thermal coal product, with coal seams in the area generally 7-15 metres cumulative thickness. The uppermost coal seams are as shallow as 50 metres or less from surface.

NSL is considering a maiden nine hole scoping drill campaign as a precursor to a full exploration drilling schedule once the permit applications have been formally granted.

Queensland Infrastructure Development

Commercialisation of the region's coal is being propelled by substantial new investment in export infrastructure, including rail and port.

The Queensland Government has given provisional approval to build six new coal terminals as part of a $9 billion expansion of the Port of Abbot Point.

The expansion of the North Queensland port will boost its capacity to almost 400 million tonnes a year, making it one of the largest coal export facilities in the world.

Meanwhile, the Hancock Coal Rail project includes the construction and operation of a new privately owned rail line to transport coal 495 kilometres from the Galilee Basin to Abbot Point coal terminal, north of Bowen.

The stand alone, standard gauge line will be open for third party access due to its classification as a significant project by the State Development Public Works Organisation.

Calibre Rail was commissioned by East Energy Resources to undertake a preliminary review of rail infrastructure options, including a 285 kilometre extension of Hancock Alpha Railway to Blackall.

Queensland Transport Department permission was provided to access existing rail corridor from Jericho to Blackall for the Preliminary Rail Study.

NSL's EPCA 2336 is about 62 kilometres from the East Energy Blackall Project. The company's EPCA's 2337 and 2338 are adjoining 2336 to the south.

Potential for Growth

NSL is continuing to assess complimentary new bulk commodity mining opportunities to expand its potential production base in Andhra Pradesh.

During the December quarter the company continued to progress several opportunities for either outright acquisition and/or joint venture structured agreements over multiple projects across India, together with additional Australian coal tenements.

The company's dual bulk commodity focus provides it with the opportunity to link its maiden iron ore start-up operations and first revenues with its exploration and development of the Queensland thermal coal assets.

Cashed Up

NSL is well funded to continue advancing its operations in India and Australia, with nearly $3.2 million cash in the bank, boosted by proceeds from the successful $4.3 million capital raising completed in July and September last year.