RENTAILS

Metals X reported to have signed a Heads of Agreement (“HoA”) with Yunnan Tin Group of China to form a Joint Venture to advance its Tin interests in the state of Tasmania. Under the agreement, MLX will sell to YTG up to a 60% interest in all the assets for A$60m. The first stage being an unconditional 50% interest for A$50m followed by a conditional 10% for a further A$10m. MLX will form an unincorporated joint venture with YTG to continue to develop and advance the Tasmanian Tin Assets.

Detailed engineering and targeted metallurgical test work continued throughout the quarter to optimise the selected flow sheet and plant design. Gravity test work completed during the quarter confirmed an increase in overall recovery for the proposed flow sheet from 55% to 62%.

The scale-up processing of the sulphide flotation circuit was successfully completed and a 300 tonne trial commenced. The key objectives of the trial were to validate the process and to produce a sufficient amount of concentrate to perform tin fuming trials. Subsequently, the pilot stages of grinding and sulphide flotation were completed without issue and continue to meet all expectations. The Company has also now taken delivery of two High G gravity machines to complete the scaled up gravity recovery parts of the process. Fuming trials are scheduled to be commence in the last quarter of 2007 and a schedule to complete engineering and feasibility studies by the end of March 2008. A pre-feasibility study was completed in 2005, which concluded that a viable project development could be established. The principle of the process is to generate a low grade concentrate by reprocessing of the tailings which is upgraded by a downstream tin fumer to a saleable tin product.