ferrets stock to watch: ammtec limited

Ferrets Stock to Watch: AMMTEC LIMITED
07:55, Thursday, April 12, 2007

LOCAL COMPANY NOW ABLE TO EXTRACT METALS FROM SOLUTIONS

Sydney - Thursday - April 12: (RWE Aust Business News)
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OVERVIEW
********

Anything to do with soft water these days should be an omen for
a good investment.

This week, Ammtec (ASX:AEC) reported to the ASX that it has
reached agreement to acquire a majority interest in Purity Systems Inc
(PSI).

The US-based PSI produces resins which extract metals from
solutions and have widespread application to the mining sector.

Ammtec is already highly regarded for its metallurgical and
mineral testing services.

It owns a string of laboratories which cover Perth, Sydney,
Adelaide and more recently in Tasmania.

Today this is big business in light of the national resources
boom and the demand for its services.

Ammtec's latest expansion fits in nicely with its existing
operations.

In October Redbank Mines announced the first Australian
commercial application of the resin technology to recover 300 tonnes of
copper from the previously mined Sandy Flat Open Pit in the Northern
Territory.

Ammtec has exercised an existing option to acquire a further 20
per cent of PSI and under the agreement will increase its interest from
45 per cent to 68.5 per cent at the completion of financial and legal
due diligence.

First discovered in 1845 and commercialised in 1913 by the
Permuit Company for water softening, the industry is currently dominated
by Styrene resin producers.

Styrene resins function by exchanging ions on the resin with
oppositely charged ions in the solution.

They lose loading capacity over time and have limited
selectivity and need to be regenerated with ions after elution.

The PSI resins, developed by the University of Montana, last
longer than Styrene resins, do not drop off significantly in loading
capacity over time and exchange ions by a reversible chemical reaction
rather than by replacement of ions after elution.

The Board considers this a strategic acquisition that will see
Ammtec significantly diversify its operations base.

Additional commercial facilities are expected to utilise the
resin technologies in Australia, China and Taiwan in 2007.

Ammtec will also generate additional revenues from resin-related
metallurgical test work, the report to the ASX disclosed.

SHARE PRICE MOVEMENTS
*********************

Shares of Ammtec yesterday dipped 4c to $3.74. Rolling high for
the year is $5.08 and low $3.50. Dividend is a handy 22c to yield an
attractive 5.88 per cent. Earnings per share is 23.12c and
price/earnings ratio is a sound 16.18. The company has 20.5 million
shares on issue with a market cap of $76.8 million.

Results for the December half showed a net profit of $2.2
million, down 25 per cent on the same period a year earlier.

The company spent $2.3 million on property, plant and
acquisitions against $856,167 in the previous corresponding period.

Revenue for the period was $13.5 million, up 12 per cent
compared with the 2005 half.

In the interim statement directors pointed to the implementation
of pilot plants, the expansion of the facilities at Balacatta and Burnie
and the continuous implementation of new and improved equipment which
has helped Ammtec to become a world leader in its field.

These developments will continue to contribute to the strong
growth and continued success of Ammtec expected over the coming months,
directors believe.

Interim dividend was a steady 10c fully franked.

BACKGROUND
**********

Ammtec (Australian Metallurgical & Mineral Testing Consultants)
was established in 1979 and has steadily grown to become one of the
largest metallurgical and mineral testing consultancies in the world.

The company was listed on the Australian Stock Exchange in 1994.

Metallurgical testing consultancies distinguish themselves from
mineral assay laboratories by employing testwork processes which require
far higher resources of skilled staff and facilities.

Accordingly, unlike the mineral assay industry, there is only a
limited number of comprehensive metallurgical facilities world wide.

Ammtec's success in this niche market is attributable to a
philosophy of creating the highest possible service levels in terms of
providing accurate and timely testwork coupled with extremely high
levels of interpretation and reporting.

This has been achieved as a result of creating a core of skilled
and experienced specialists equipped with an extensive range of testing
facilities.

Ammtec's clientele are diverse and include many of Australia's
major mining groups in addition to a number of emerging resource
companies.

The company's reputation has attracted work to Ammtec from
multi-national mining groups with projects located throughout the world.

Overseas contracts have provided an important contribution to
the company's earnings in recent years.

From an iron ore beginning, Ammtec has steadily expanded its
testing facilities to an extent where it is now one of the very few
metallurgical consultancies world wide to offer a complete and
comprehensive testwork service.

Ammtec, through laboratory and large scale testing of ore
samples taken from the resource, provides advice as to how the ore will
respond to extractive processing.

ENDS

Copyright © 2007 RWE Australian Business News. All rights reserved.