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NSL achieves iron ore beneficiation grades in excess of expectations

Published 31-JAN-2017 16:05 P.M.


2 minute read

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NSL Consolidated (ASX: NSL) has released promising data in relation to the development of its iron ore treatment plant located in India. The news relates to developments regarding phase 2 of its wet beneficiation process which will allow the group to produce a high grade premium price iron ore product grading between 58% and 62% Fe at around 200,000 tonnes per annum.

Results released on Tuesday indicate process flow optimisation results have exceeded expectations with full plant process beneficiation in low-grade iron ore waste from as low as 14% Fe feed up to as high as 65.3% Fe.

Optimisation results indicate potential upside to metallurgical test work and results conducted for the wet beneficiation plant previously advised to the market.

This news has been well received by the market with the company’s shares trading as high as 4.4 cents, representing an increase of nearly 20% compared with the previous day’s close of 3.7 cents.

It should be noted that broker historical data in terms of earnings performance and/or share trading patterns should not be used as the basis for an investment as they may not be replicated. Those considering this stock should seek independent financial advice.

Run of mine material grading to commence in the coming week

As a result of these developments NSL expects to commence run of mine material grading between 25% and 35% Fe in the coming week, and sales from wet beneficiation are anticipated to commence in February.

This will represent a major milestone for the group, and may potentially be a share price catalyst.

Building on previous wet plant commissioning updates, management commented on recent progress in saying, “Utilising very low grade waste iron ore feed to test the process boundary limits, the company has been able to exceed expectations with full plant process beneficiation low-grade iron ore waste from as low as 14% Fe feed regularly to in excess of 62% Fe and up to 65.3% Fe”.

The fact that grades ‘in excess’ of the top end of management’s initial estimated range of 62% have been achieved on a regular basis is promising in terms of the company’s outlook.

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Outperformance points to improved sale prices and potential expansion of customer base

Management highlighted that the potential upside from better than expected grades included both improved sale prices, as well as the prospect of a broader range of commercial opportunities in terms of expanding and diversifying its customer base.

With production due to commence in February, NSL is in discussion with a number of customers with negotiations in their final stages.

The outcome of these discussions will be material in terms of prospective revenues, earnings and asset valuations, and consequently could impact the company’s share price.

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S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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