MTT Metal-Tech

 

TIDMMTT 
 
RNS Number : 8454P 
Metal-Tech Ltd 
31 March 2009 
 

31 March 2009 
Metal-Tech Ltd 
('Metal-Tech' or 'the Company') 
 
 
Trading Update 
 
 
Metal-Tech Ltd., the metal-based hydrometallurgy and chemical company, which 
focuses on the recycling and production of specialty metals powders such as 
Tungsten and Molybdenum, provides the following trading update ahead of its full 
year results announcement for the year to 31 December 2008 which is expected to 
be made before the end of April. 
 
 
Further to the announcement of 5 December 2008, the Company reports that the 
substantial downturn in the metals, construction and manufacturing sectors 
worldwide has continued to impact the Company negatively. Molybdenum Oxide, one 
of Metal-Tech's principal products, is used extensively in the production of 
steel, and this global industry has seen a major downturn in activity with its 
market price reaching an all time low since 2004. As a result, reduced sales, 
revaluation of inventory to reflect current market prices, and higher 
costs indicate that the projected loss for the year 2008 will be greater than 
current market expectations. Despite this, current liabilities at the end of 
2008 were substantially lower than those at the end of 2007 and bank obligations 
remained at the same level as at the end of 2007. 
 
 
The Board is confident that the Company is responding appropriately to the 
challenges it is facing and that the steps taken by management position the 
Company favourably to improve production efficiency, capacity and 
quality, and 
to deliver increased revenues when market conditions allow. As at 20 March 2009, 
the net cash balance of the Company was $12 million (30 November 2008: $11.3 
million) which is sufficient to meet the Company's current financing costs and 
expected operating expenses. 
 
 
As announced at the time of the interim results on 17 September 2008, 
Metal-Tech's Mongolian plant, which produces Molybdenum Oxide, continued to 
experience operational challenges. This reduced production volumes, relative to 
the plant's designed capacity, and negatively impacted quality. While some 
progress has been made in improving product consistency, this has not been 
sufficient. Hence, due to slowing demand and the continued weakness in 
Molybdenum prices, the Company has decided to temporarily suspend production in 
the Mongolian plant and rearrange credit lines with the local supplier. This is 
in order to cut costs and utilise a special workforce to implement a series of 
technical upgrades to the plant which will lead to improvements in Molybdenum 
production efficiencies, quality and capacity and to reduce production 
costs. These technical upgrades include the establishment of a new line to 
recover most of the Rhenium from the existing feedstock. Rhenium is a rare metal 
with high demand and is used in aerospace industries selling at prices in excess 
of $7,500/kg. Most of the Rhenium was not recovered in the past years and was 
lost in wastage. The Company estimates that this temporary suspension of 
Molybdenum operations will not have a material negative effect on its cash 
balances however the Company anticipates that this may negatively impact 
turnover for the year ending 31 December 2009. 
 
 
The Company's Tungsten operations, which are located in Israel, are continuing 
as before, with Tungsten prices reduced slightly but remaining relatively 
stable. The Company is actively engaged in cost reduction and measures to 
improve production efficiency at the plant in Israel while seeking to capture 
new business opportunities that arise as a result of the continued turmoil in 
the sector. 
 
 
Good progress is being maintained in R&D on a unique and strategically 
significant technology development, aimed at increasing recovery rates in the 
production of certain key metals, whilst reducing waste and environmental impact 
of large-scale operations. An industrial pilot plant has been commissioned and 
is testing various raw materials from different interested companies. 
 
 
Aik Rosenberg, Chairman of Metal-Tech said: "The Company continues to be 
impacted by the global downturn affecting its end-markets. We are taking action 
to resolve those issues under the Company's direct control and are seeking to 
mitigate, where possible, external challenges such as changes in currencies and 
general cost-inflation in the industry. During 2009 the Company expects to 
implement some of its new technologies in the expansion of its recycling and 
efficient production at its Israeli plant which will enable it to increase its 
competitive edge and financial strength. We are committed to continuing to drive 
the business forward, to seeking new opportunities where possible and to 
delivering sustained shareholder value in the future." 
 
 
 
 
Enquiries: 
 
 
Metal-Tech Ltd. 
Ariel (Aik) Rosenberg, Chairman  +972 544 215454 
 
 
Panmure Gordon 
Edward Farmer, Stuart Gledhill  +44 20 7459 3600 
 
 
Corfin Communications 
Harry Chathli, Victoria Ward +44 20 7977 0020 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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