Ann: Market Update , page-2

Hi all,

Righto, where to begin with this one.

It`s great to get an announcement that they have been able to produce saleable iron ore, and is on time with their previous forecasts.
While this is great to see and hats off to management for this achievement, there was nothing in the announcement about quantities produced and the time it took to produce these first quantities.
It is for this reason that we are not seeing the share price appreciate like we would like to see as holders and supporters of this emerging company.
The days of speculative companies, ( and NSL is still just in that bracket ) share prices rising to heady levels without solid results and sales leading to cash being received by the company, are long gone. The financial word of today is not in a bull market.

But this is not a bad thing for a company like NSL who has so far, of recent times, stuck to it`s announced commitments. There is alot of investment money sitting on the sidelines, waiting to be placed into companies that consist of more than just bly sky.

NSL still have the big hurdle to jump over that all emerging producers face. That is, to be able to sell their (our) product to someone else for a profit.

Now this is where it gets interesting for NSL and more to the point, the shareholders of NSL. (And lets also remember that the directors own heaps of shares in this company.)
There has been no announcement of any off take agreement as yet. Not even a mention of who they are intending to sell their product to. Only a guide as to what the price might be achieved selling from the gate, and that is positive based on their figures so far.

So why haven`t they announced an off take agreement yet? Well the obvious answere is that they do not have one yet and perhaps selling benificated Iron Ore at a profit is not as simple as loading the waiting trucks at the front gate and collecting a fist full of cash for the much prized product. Well it could be the case and if this is so, then we have all (directors included) done our dough.

Or there could be another reason why an off take agreement has not been announced yet.

Now we must remember back to when NSL first entered into their coal exploration permits in SW Queensland. They have stated that they are wanting to eventually produce saleable Thermal Coal for the Indian market, namely, the steel mills of India. Yep, that`s right, the steel mills that need Iron Ore to produce their product, steel.

Now i`m sure that tonnage of benificated Iron Ore cannot be that hard to sell in a growing economy like India. NSL are working towards a stated 400,000 tonnes by the end of 2013 of between 58% and 62% fe

Forget China, their economy is pulling back, and rightly so. Growth cannot continue at previous levels while the rest of the world`s economies are showing little to no growth.

India is an emerging superpower when it comes to their domestic economy. They need raw materials for their own growth, and grow they will in time.

Now this is where i`m hoping NSL have seen the big picture, and i think they have and are setting themselves up perfectly in a growing economy. In my view only, i hope and think that they are concentrating on getting an off take agreement for their (our) Iron Ore with an Indian company that is also looking for a source of Thermal Coal far into the future. A condition to supplying the Iron Ore will be to help finance the Thermal Coal projects in Queensland.

It is a big IF, but IF it happens this way, then that is when shareholders will see the large gains in NSL`s share price that they have been waiting for.

The money that is waiting on the investment sidelines, looking for a company that can produce and deliver a saleable item to market, will have found it`s home.

This is when current holding sharholders will make big money.

At the moment this company is still in my mind very speculative, but they are ticking the boxes on the road to success.

All the best to long term holders,

Regards The Tinhopper