MTT Metal-Tech

RNS Number:7705Q
Metal-Tech Ltd
26 March 2008


26 March 2008
                                 Metal-Tech Ltd
                        ("Metal-Tech" or "the Company")

                                 Trading Update

Metal-Tech Ltd, the metal-based hydrometallurgy and chemical company focusing on
the production and recycling of speciality metals such as Tungsten and
Molybdenum, announces a trading update in advance of its results which are
expected to be announced 11 May 2008. The Company expects to meet market
expectations in respect of revenues but to fall significantly short of profit
expectations.

While virtually all revenues are denominated in US Dollars, most costs (other
than the cost of raw materials) are denominated in other currencies which have
appreciated considerably against the US Dollar. This has led to an increase in
both cost of sales and operating costs.

In addition to the falling US Dollar, and as previously announced, the Company
has been fighting what it considers to be an illegal attempt to take control of
its unit in Uzbekistan. As a result, the Company has incurred considerable
costs, both legal and other costs as well as management time. A one-off
write-off of USD8.3m has been taken to reflect a complete write-off of the Uzbek
investment. The Company is contemplating further legal action, in an attempt to
recover its investment in Uzbekistan. The cost of this potential additional
legal action has been reflected in the Company's forecasts for the current year.

During the year, Metal-Tech also encountered a production problem in Mongolia
that resulted in a by-product it could not immediately sell (Calcium Molybdenum,
or CaMo). A solution has been developed to re-process the CaMo to separate the
Molybdenum in saleable form, which is currently in experimentation. By December,
the build-up of CaMo inventory was USD12m. To be prudent, and to prepare for the
possibility of having to sell the CaMo as it is (un-beneficiated), which would
require a substantial discount from the market price of the contained
Molybdenum, the Company decided to write down the value of this inventory.

In 2007, the Company also increased its spending on R&D, with considerable
investment in both hydrometallurgical technology and unique equipment design,
which, if successful, should improve opportunities for growth. In addition to
this, Metal-Tech has recently restructured its management team and intensified
its investment in its organisational structures in preparation for future
growth.

As well as the additional investment outlined above, the Company has also
increased its investment in business development activities. Prospective
opportunities include potential primary and secondary mining opportunities (such
as metal recovery from slag dumps, tailings and industrial waste, for which
industrial pilot tests have been conducted) and metal recycling initiatives.

Aik Rosenberg, Executive Chairman of Metal-Tech commented: "Market conditions
for the Company remain favourable, with demand for Molybdenum and Tungsten
remaining strong and with stable prices. We have continued to invest in the
fabric of the business and in our organisation structures and management team.
Metal-Tech's relationships with its customers are resilient and the medium-term
outlook for this industry remains positive."

Metal-Tech
Aik Rosenberg, Executive Chairman         +972 8 657 2332, +972 544 215454

Panmure Gordon
Grant Harrison, Jonathan Lack, Stuart
Gledhill                                  +44 20 7459 3600

Corfin Communications
Harry Chathli, William Cullum             +44 20 7977 0020




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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