NSL Consolidated Limited

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20 December 2011

ESSENTIALS FOR WORLD-CLASS QLD THERMAL COAL ASSETS

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HIGHLIGHTS

Updated technical modelling and interpretation by NSL Consolidated throughout

2H calendar 2011 has reinforced the strong project development potential for the

Company’s world-class thermal coal assets in Queensland.

Queensland Exploration Permit for Coal Applications (EPCA) 2198, 2336, 2337 &

2338 have a total defined Exploration Target of 6.6 – 18.7 Billion Tonnes1 of thermal

coal.

Additional Coal Quality Data, Coal Seam Thickness, Coal Seam Depth,

Infrastructure analyses completed.

Initial Exploration Drilling Programme set for 2012, including maiden 9 hole scoping

drill campaign as a precursor to full exploration programme.

Analysis further underpinned by recent drilling and discoveries on nearby or

adjoining EPC’s – EER, RMA, ICX and CBQ.

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Bulk commodities developer, NSL Consolidated Limited (ASX: NSL, Company) is pleased

to today release detailed analysis resulting from the Company’s new technical modelling

and interpretation work on its four thermal coal exploration tenements in Queensland.

The results are in addition

to the results of due

diligence via an

Independent Geologist’s

Report (Mark Biggs,

Moultrie Group, July

2011) on EPC

Applications 2198, 2336,

2337 & 2338 (Projects) in

Queensland and

released to the market

on 18 July this year.

The projects are located

in the Eromanga Basin in

south western

Queensland, adjacent

to similar projects held by East Energy Resources (ASX: EER), Sentry Petroleum Limited

(NASDAQ OTC – SPLM), International Coal Limited (ASX: ICX) and China National Rail’s

(CREC) RMA Energy (ASX: RMT).

1 It should be noted that the tonnages quoted above are conceptual in nature and there has been insufficient exploration to define a Mineral Resource

and it is uncertain if further exploration will result in the determination of a Mineral Resource.

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Economies of Scale – Substantial Exploration Target

Table 11 – Calculation of Exploration Target Tonnage Range for the Project Area

Tenement Formation Area (m2)

Average

Cumulative

Thickness

(m)

Relative

Density

(Kg/m3 ;adb)

Gross Tonnage

tonnes

Unexpect

ed

Geologic

al Loss %3

Exploration

Target 1

(Million tonne)

EPC 2198 Winton 200,000,000 2.4 1.5 820,800,000 30 500 – 600

EPC 2336 Winton 334,587,000 4 1.55 2,074,439,400 30 500 – 1,400

EPC 2338 Winton 270,190,000 6 1.55 10,555,402,500 30 2,000 – 7,400

EPC 2337 Winton 240,990,000 8.5 1.55 14,743,285,500 30 4,000 – 8,500

EPC 2198 Mackunda 105,000,000 1 1.5 63,000,000 40 0 – 50

EPC 2336 Mackunda 334,587,000 0.5 1.55 259,304,925 35 0 – 250

EPC 2338 Mackunda 270,190,000 1 1.55 418,794,500 35 100 – 400

EPC 2337 Mackunda 240,990,000 0.5 1.55 186,767,250 35 0 – 100

Total

6,000 – 18,700

Historical Petroleum Drilling Proof of Existing Coal

NSL has been able to further utilise historical data from petroleum exploration wells drilled

in close proximity to EPCA’s 2198, 2236, 2337 and 2338

The exploration petroleum wells surrounding the project area have been carefully

selected on the basis of proximity and distribution.

Most significantly, the wells drilled as outlined in Table 2, are within a sufficiently

reasonable distance for an Exploration Target for thermal coal to be estimated. This is

due to the consistency of coal seams and a coal profile evident in other resources drilled

in the area. Table 2 indicates the proximity and the distribution of these wells around the

project area.

Table 2 - Summary of Previous Exploration Permits for Petroleum (see location map at Appendix 1)

Petroleum Well Proximity to

Project Area Total Depth (m) Total Depth (ft)

QDEX Report

No

Blondie 1 36 Km South 1,036.32 3,400.00 29872

Emu Creek 1 6 Km East 1,327.00 4,353.67 16868

Gillmore 2 11 km North 4,143.10 13,592.85 1863

Gumbaro 1 5.5 km West 3,944.10 12,939.96 1049

Kaloola 1 5 km North West 1,685.00 5,528.22 15641

Rolwegan Creek 1 8 km South East 1,240.00 4,068.24 13564

1 It should be noted that the tonnages quoted above are conceptual in nature and there has been insufficient

exploration to define a coal resource. No coal quality data for the project area was uncovered in previous reports.

Although a preliminary analysis was undertaken, insufficient data exists to confidently correlate coal seams and

generate a grid mesh model. Unexpected Geological loss is designed to account for seam splitting and thinning.

It is uncertain whether further exploration may lead to the reporting of JORC standard resources. However, there is

considerable evidence to support the current Exploration Tonnage calculations, and the sufficient coal thicknesses

interpreted from historical drilling warrant further investigation.

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Boreholes from the historical exploration programs in the vicinity of this project area are

clustered in two populations (Appendix 1). In the northern exploration area, the EPCs

include EPC 154, 165, 166 and 367. The EPCs in the southern exploration area include EPC

297 and 298. Borehole information has been collected from open file reports and

tabulated for analysis. These two areas are separated by just under 100km.

The northern EPCs 165 and 166 were explored by Thiess Bros. in the 1970s and are related

in character as they make up an extended exploration program (Thiess Bros., 1974; Thiess

Bros., 1975). EPC 367 was explored in 1982 by Langlo Downs. A review of this exploration

program drew the consensus that the drilling was too shallow to intersect all the coal

seams of the Winton Formation (Handke, 1982). Drill cores from the Winton Formation did

indicate that there are around four or five currently unnamed seams, one about 3 to 4m

thick, and the others, thinner, at about 1m.

The southern EPCs 297 and 298 were explored by Pacific Coal in the 1980s and can also

be viewed as an extended exploration program (Hewitt, 1981). These exploration

programs are located on an anticlinal feature. During these drilling programs, a total of

30 boreholes were drilled. Nine boreholes were partially cored, and a total of four

samples were sent for analysis. The cumulative thickness of the coal seams was around

10.9m.

The Winton Formation, within the Eromanga Basin, is the main targeted-formation over

NSL’s EPC Applications 2336, 2337, 2338 which contains some 15 coals seams from

surface to 130m at an average thickness of 3-5m per seam. Further coal seams continue

from 130m-250m and deepen to 480m in the north before petering out.

Figure 1 Source: Independent Geologist Report Moultrie Group July 2011 For

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Coal Quality Data Supports a Thermal Coal Product

Historical boreholes from EPC 165 and EPC 166 were analysed to determine the raw

quality of the samples. Analytical test work was carried out by the Australian Coal

Institute Research Laboratory (ACIRL Ltd). The samples were cumulatively floated at a

relative density of 1.80 to produce a simulated product.

Analytical test work on EPC 367 was carried out by ACIRL Ltd. Analysis was carried out on

a bulk sample over a thickness of 6.97m to determine the composite float and sink

fractions.

An indication of potential coal quality can be garnered from East Energy’s reported coal

quality shown in Table 3. These results indicate a possibility for a thermal coal product

from select working sections.

Table 3 – East Energy Blackall Coal Deposit washed Coal Qualities and Yields at F1.60 SD

Seam Group Yield F1.60 Ash1 F1.60 VM1 F1.60 CV1 F1.60 CV2 F1.60

% ad % ad % ad kcal/kg DAF kcal/kg

350kg Bulk Sample 70 12 31 5,000 6,755 VM Volatile Matter ad Air Dried basis 1Analysis on air dried basis F Float CV Calorific Value daf Air Dried Ash Free basis 2Analysis on dry ash free basis

Coal Seam Thickness

Based on historical drilling and data modelling by NSL’s independent geologist, Figure 2

below has been generated to show the contours of cumulative thickness of coal.

The borehole Ping_R17 drilled on the southeastern corner of EPCA 2337 shows contours of

cumulative thickness of coal coloured dark red which represents a cumulative thickness

of 16-16.5 metres gradually becoming yellow 12.5-13 metres, light green 10-11 metres

and then light blue representing 7-8 metres to the west along the southern border of

EPCA 2337. Further historical coal exploration holes Ping_C2, Ping_C5 and Ping_16

support these contours of cumulative thickness of coal. We can reasonably conclude the

coal seams in this area (southern EPCA 2337) are between 7-15 metres cumulative

thickness, which is reflected in the Exploration Target of 4 – 8.5 Bt, where a conservative

8.5m was used in the calculation.

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Coal Seam Depth

Based on historical drilling and data modelling by NSL’s independent geologist, Figure 3

below has been generated to show the depth to the top of the first coal seam.

Again, borehole Ping_R17 drilled on the southeastern corner of EPC 2337 shows contours

coloured dark blue at 50-52 metres depth gradually becoming lighter in colour to

grey/white representing a depth of 30-32 metres to the west along the border of EPC

2337. Further historic coal exploration holes Ping_C2, Ping_C5 and Ping_16 support these

contours to the top of the coal. We can reasonable conclude that the uppermost coal

seams in this area (EPC 2337 south) are at a shallow depths, generally <50m.

On 26 October

2011, Coal Bank

Limited (CBQ) in

relation to drilling

at its Blackall

Project announced

that “Eighteen

holes have now

been completed

with coal seams

being intersected

at relatively shallow

depths over a

distance of

approximately 28

kilometres. Total

coal thicknesses

have exceeded 10

metres in several

holes, based on

analysis of wireline

geophysical logs”.

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Infrastructure Development Continues

Port Capacity Building

The Queensland government announced it 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.

The government had planned to add four terminals at Abbot Point but stronger than

expected interest from coalminers boosted numbers to six.

Indian port operator Adani Group earlier this year bought the existing 50- million-tonne

capacity terminal. BHP Billiton and Hancock Prospecting are developing the second and

third terminals.

The first coal is expected to be exported from the six new terminals in 2017, with total

capacity of 385 million tonnes.

Rail Capacity Building

Hancock Prospecting (Hancock Coal) is one of a number of interested parties that have

approached the Queensland

Government proposing two 60

Mtpa mining ventures consisting of

Galiliee Basin coal. Two mines (the

Alpha Coal Project and Kevin’s

Corner Coal Project, each of 30

Mtpa capacity) are proposed by

Hancock Coal. Both projects have

been declared “significant

projects” under the State

Development Public Works

Organisation (SDPWO Act) 1971.

The coal from both projects would

be exported through the Port of

Abbot Point. The Hancock Coal

Rail project includes the

construction and operation of a

new privately owned rail line to

transport coal 495km 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 SDPWO.

Blackall Rail

Calibre Rail was commissioned by East Energy Resources to undertake a preliminary

review of rail infrastructure options, including a 285km 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. East

Energy had made an initial Expression of Interest to secure 20 Mtpa export capacity at

the new T4-7 port expansion at Abbot Point (ASX release 17 May 2011).

Source: East Energy announcement 17 May 2011, Company Presentation

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NSL Coal Rail Link

NSL’s EPCA 2336 is approximately 62kms from the East Energy Blackall Project. NSL’s

EPCA’s 2337 and 2338 are adjoining 2336 to the south.

Initial Scoping Exploration Drilling Programme 2012

Upon granting of the 4 EPCs, NSL will be ready with a drilling contractor and other

services to commence immediate exploration on these highly prospective thermal coal

projects.

The objective of this initial scoping drilling program is to add value to the current

resources estimation and establish a general continuity of the deposit over the project

area. The initial scoping Exploration Plan is based on drilling and downhole geophysics.

The information gained will allow the correlation of the seams the determination of the

precise extent of the coal, indicate the relative quality of the coal and will form the basis

for a future drilling program. This exploration program relies on the results of each hole to

provide data to define the successive holes. Nine (9) rotary chip holes have been

planned that are located over four (4) EPCA’s (Appendix 2 – NSL’s Exploration Plan).

All the holes in this program require downhole surveying of the drilled holes with the

standard geophysical tools: density, gamma, sonic and calliper. These holes would

require geophysical surveys to determine the roof and floor of the coal seams; verify the

lithology present and indicate the quality of coal that is present.

Results of the initial scoping exploration programme will contribute data to plan the full

exploration drilling programmes throughout the projects.

Predictions

Table 4 below, shows the predicted top of coal and predicted base of the sequence

(Winton Formation) with recommended total depth for each borehole.

Table 4 – Predictions of total depths based on proximal Petroleum Wells and surface elevation

Borehole Target

EPCA X (mE) Y (mN) Col Elev (m) TOC (m) BOS (m) TD (m)

BH1 2337 280157.2 7091653 284 20 175 185

BH2 2337 294615.3 7091691 307 15 175 185

BH3 2337 287272.1 7101013 286 35 175 185

BH4 2336 307394.5 7165723 319 90 300 315

BH5 2338 277869.6 7154460 270 120 250 265

BH6 2338 278743.1 7128942 278 75 160 175

BH7 2198 376635.0 7167377 372 20 180 200

BH8 2198 381072.5 7167429 386 24 200 220

BH9 2198 389328.4 7159379 406 30 200 220

Co-ordinates are in MGA94 (SS) Total Depth (m) 1950

The nine (9) holes, once setup, could be drilled within 3-4 days each, making the total

continuous drilling time estimate thirty six (36) days.

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Recent Announcements Show Further Known Resources Near By

Sentry Petroleum Limited - NASDAQ Listed EPP862

and EPP864 quoted a “2000 square mile coal

deposit”

Coal Bank Limited - Listed on the ASX. (Tambo Coal

& Gas Pty Ltd) EPC 1719 and EPC1993

• Eighteen holes have now been completed

with coal seams being intersected at

relatively shallow depths over a distance of

approximately 28 kilometres.

• Total coal thicknesses have exceeded 10

metres in several holes, based on analysis of

wireline geophysical logs.

RMA Energy Limited - Listed on the ASX (EPC 1125,

1127 1128, 1942)

• Announced 30 Oct 2011, drilling

programme planned for the Bulburrum Coal

Project

International Coal Limited - Listed on the ASX (EPC

2197)

• Drilling underway with significant coal seams

intersected at 45 metres with other seams

encountered at 70 and 145 metres,

• Programme has been expanded from an

originally proposed 9 holes to up to 20 holes

covering an area of up 400 km2,

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For more information:

Cedric Goode Julian Tambyrajah

Managing Director/CEO Chief Financial Officer

NSL Consolidated Limited NSL Consolidated Limited

+61400 408 477 +61 419 900 369

COMPETENT PERSON’S STATEMENT

Technical information relating to the coal projects in this announcement has been compiled by Mr Mark Biggs,

Principal Geologist of Moultrie Database and Modelling. Mr Biggs is a member of the Australasian Institute of Mining

and Metallurgy and has over 24 years of experience relevant to the style and type of coal mineralisation under

consideration and to the activity which is being undertaken to qualify as a Competent Person as defined by the

Australasian Code for Reporting of Minerals Resources and Reserves (JORC) 2004. The estimates of the Coal

Resources presented in this Report are considered to be a true reflection of the Coal Resources as at 1st July 2011 and

have been carried out in accordance with the principles and guidelines of the Australian Code for Reporting of Coal

Resources and Coal Reserves published in September 2004 (JORC Code). Mr Mark Biggs consents to the inclusion in

this announcement of the matters based on this information in the form and context in which it appears.

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APPENDIX 1

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APPENDIX 2

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