18 January 2016 PHASE TWO WET BENEFICIATION PLANT UPDATE, ISSUE...

18 January 2016
PHASE TWO WET BENEFICIATION PLANT UPDATE, ISSUE OF SECURITIES & S.708A NOTICE & APPENDIX 3B
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HIGHLIGHTS

•   Significant potential to improve wet plant capital payment terms, cost position and cash flows
•   Offtake agreements already in place with India’s JSW Steel and BMM Ispat for Phase Two product
•   Commissioning expected to commence in Q2 2016 ______________________________________________________________________________________
  Perth-based iron ore miner, NSL Consolidated Limited (Company, ASX: NSL, NSLO), is pleased to provide an update on the progress of the Phase Two wet beneficiation plant program.
  Over the Christmas period the Company has further progressed discussions in China with equipment suppliers.
  Due to the changed manufacturing environment in China, this has allowed the Company to negotiate and potentially significantly improve on the cost and payment terms associated with the wet plant. These negotiations are continuing, and when complete, have the potential to significantly improve the payment terms, associated cash flows and cost positions of the Phase Two wet beneficiation plant and the Company.
  The outcome of these negotiations may mean there is not the requirement to fully draw down and place into escrow the $1.1 million as announced previously. Therefore, to ensure costs are kept to a minimum with the Phase Two wet beneficiation plant project continuing to progress, the Company has drawn down and received a further A$300,000 of its A$5 million conventional secured loan, as announced in August 2015.
  Phase Two will be a wet beneficiation process, allowing NSL to produce a high grade premium price iron ore product grading between 58-62% Fe at around 200,000 tonnes p.a.
  The Company has already successfully negotiated offtake agreements for Phase Two’s high grade iron ore product with the US$9 billion Indian global conglomerate, JSW Steel, also that country’s leading private sector steel producer; and BMM Ispat, a leading pellet, power and steel producer.
  The Company, the only Australian or foreign company to own and operate in India’s massive iron ore market, has an established dry processing plant operation for iron ore product at Kurnool and which is serviced by two of its local mines nearby, Kuja and Mangal. These mines will also provide the feedstock for the Phase Two wet beneficiation plant.

The Company looks forward to further updating the market accordingly on the status and progress of the Phase Two wet beneficiation plant.
ISSUE OF SECURITIES
The Company also advises that it has today issued a total of 11,837,121 shares in the Capital of the Company, in accordance with a conversion noticed received to convert US$40,000 of the last remaining US$125,000 Convertible Loan from Magna.
As announced in August 2015, the Convertible Loan Agreement has been replaced with the $5m conventional secured loan agreement.
S.708A(5)(e) NOTICE & APPENDIX 3B
This notice is issued pursuant to section 708A(5)(e) of the Act and the Company advises that to the best of its knowledge, information and belief as at the date of this certificate the following statements are true and not misleading:

1. The relevant securities are in a class of securities that were quoted securities at all times in the 12 months before the day on which the relevant securities were issued.
2. The Company issued the relevant securities without disclosure to investors under
   Part 6D.2 of the Act, in reliance on section 708.
3. As at the date of this Notice, the Company has complied with:
   1. The provisions o Chapter 2M of the Act as they apply to the Company; and
   2. Section 674 of the Act (as it applies to the Company).
4. As at the date of this Notice, there is no excluded information (as that expression is defined in sections 708A(7) and 708A(8) of the Act) in relation to the Company.

The relevant Appendix 3B is attached to this announcement.
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