Transcription of Finance News Network interview with NSL Consolidated Limited (ASX:NSL) Managing Director and CEO, Cedric GoodeCarolyn Herbert: Hello, I’m Carolyn Herbert for the Finance News Network. Joining me from junior resources developer, NSL Consolidated Limited
(ASX:NSL) is Managing Director and CEO, Cedric Goode. Cedric, welcome to FNN.
Cedric Goode: Thank you very much for having me.
Carolyn Herbert: Can you start by giving us an introduction to NSL Consolidated?
Cedric Goode: NSL is a listed company in Australia, also dual listed in Frankfurt Germany. We’re focused on iron ore production in India. We’re the only foreign company to own and operate iron ore mines in India. We’ve been working through this process for just over seven years now.
We have a very well credentialed Board. We have Peter Richards who’s our Non-Executive Chairman, who has a significant amount of industry experience and is on the Boards of Graham Corp (NYSE:GHM) and Emeco Holdings Limited
(ASX:EHL). We have Peter Linford, who was the previous trade commissioner to India and a Consul General for Middle East/North Africa. So we have a lot of understanding of the business on our Board level.
Carolyn Herbert: As you say, the company’s projects are predominantly focused in India. So why India, and not China?
Cedric Goode: That’s a good question. Most people in Australia are focused on exporting to China. In India there’s an opportunity whereby India has its own very large domestic steel industry. So it is now the third largest steel producer in the world. So a strong growing industry, it has a very strong economy. The economy’s been growing at plus seven per cent, for the last few years and is forecast to grow around the eight per cent mark, for the next five years. So there’s a significant amount of demand domestically for steel, on the back of that economic growth. And there’s an opportunity for us to mine and sell domestically to the Indian steel industry.
Carolyn Herbert: Can you tell us a little bit more about the company’s projects?
Cedric Goode: As I said before, we’re the only foreign company to own and operate iron ore mines in India. We’ve been in India now for just over seven years, understanding the Indian market, and progressing our projects through the approvals. We have five projects in India. At this stage, we are finalising the construction of our Phase Two wet beneficiation plant, to be able to produce 60-grade Fe (Iron) for domestic sale.
Carolyn Herbert: Turning to financials now. Is the company fully funded for 2016?
Cedric Goode: We’re in the very fortunate situation to be fully funded through to cash flow. We’ll be commencing commissioning of our plant in September, end of this month, and we’ll be cash flow positive before the end of Q4 this year.
Carolyn Herbert: And what are your financial targets for the next 12 months?
Cedric Goode: So this first plant that we’re commissioning produces 200,000 tonnes per annum, as our first step in our production ramp up. $30 per tonne (ex mine gate) is the current margin for India, so we’ll be looking at producing $6 million in free cash. And we’ll then be going through the ramp up phase of adding additional plants, and ramping up the production and the cash flow generation.
Carolyn Herbert: Finally Cedric. Where would you like to see NSL in 12 months’ time, and what are your long-term ambitions for the company?
Cedric Goode: In 12 month’s time, I’d like to see: (a) the existing plant fully commissioned, operating, generating positive cash flow, (b) our second plant being constructed and operating, generating positive cash flow, and (c) then moving into our third and fourth plants, with a target of achieving eight million tonnes per annum of iron ore sales, domestically in India.
We’re also working with the Indian Government and Chinese companies. We have a binding joint venture agreement to develop a greenfields steel plant, in India. So we’re working closely, going through the prefeasibility process with the Chinese companies and Indian Government, to be able to complete that prefeasibility for the pilot plant, by the end of this year.
Carolyn Herbert: Cedric Goode, thanks for the introduction to NSL Consolidated.
Cedric Goode: No problems, thank you very much for having me.
Ends
