Pala Announces Premium Partial Offer for Shares of Neo Material Technologies Inc.

The offer represents a significant premium of 27% over the closing price of the Neo common shares on the TSX on February 6, 2009, the last trading day prior to the date of this announcement. It also represents a premium of approximately 24% over the volume-weighted average trading price of Neo shares on the TSX's last 20 trading days.

"Pala's offer will give shareholders liquidity at a significant premium," said Jan Castro, Managing Director of Pala Investments AG, advisor to Pala. "Neo is at a crossroads in its development. Since the majority of Neo's earnings are generated through key patents set to expire in 2014, Neo needs to expand and diversify its business now, during what is expected to be a protracted downturn. This requires that Neo implement a growth strategy during the next three to four years while its end customers, in the consumer electronics and automotive sectors, are facing the most severe demand contraction since the 1940s. For those shareholders whose investment horizon does not extend so far, Pala's offer provides liquidity today at a generous premium. Alternatively, long-term shareholders will also benefit from this offer through the advantages gained by having a cornerstone shareholder committed to the strategic growth of the company. In this context, Pala's offer opens a window of opportunity for Neo and all of its shareholders."

Pala has asked Neo's board to waive the application of Neo's shareholder rights plan dated February 5, 2004 (the "Rights Plan") provision that 50% of the independent shares be tendered in order for the bid to proceed. By granting the waiver, Neo's board would remove an obstacle to shareholders' individual decision-making. This waiver would take into account all shareholders' interests: shareholders desiring immediate, full or partial, liquidity, and those shareholders that prefer not to sell and desire to remain invested in a company strengthened by the addition of a fully invested strategic partner with the resources and ability to help the company grow as needed.

The Offer

Pala intends to file its offer upon receipt of Neo's shareholder list, which has been requested from the board of directors. The offer expires at 5:00 p.m. Eastern Time, on the date that is 60 days after the take-over bid circular in respect of the offer is sent to shareholders. The offer will be subject to customary conditions and regulatory approvals. The full terms of the offer and its conditions will be included in a takeover bid circular that will be delivered to shareholders of Neo. Once filed, the circular will be available at www.sedar.com.

The offer will include the rights associated with the common shares under the Neo shareholder Rights Plan, but not other rights, options, preferred shares, warrants or debentures. Pala does not intend to purchase any more than 23 million of Neo's common shares. If more shares are deposited, the shares to be purchased from each depositing shareholder will be determined on a pro rata basis according to the number of securities deposited by each shareholder.

About Pala

Pala Investments Holdings Limited, based in Jersey, Channel Islands, is a US$1.0 billion multi-strategy investment company with a particular focus on mining and natural resource companies in both developed and emerging markets. Pala Investments' exclusive investment advisor, Pala Investments AG, is a Switzerland-based team with extensive experience within the mining and natural resource sectors. Pala Investments seeks to assist companies in which it has long-term shareholdings by providing strategic advice and innovative financing solutions.

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This press release contains summary information only about the offer by Pala. Complete information about the offer will be available by referring to the offer and takeover bid circular to be filed with Canadian securities regulators.

Certain statements in the press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. These statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from the expectations of Pala include, among other things, general business and economic conditions globally or in particular geographic regions in which Neo and its subsidiaries conduct business, the failure to meet certain conditions of the offer, the inability to attract and retain qualified employees, competition, regionally and internationally, changes in law, disruptions in business operations due to reorganization activities, and interest rate and foreign currency fluctuations. Such forward-looking statements should therefore be construed in light of such factors, and Pala is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Information concerning Neo contained in this press release and has been taken from, or is based upon, publicly available information and records on file with Canadian securities regulatory authorities and other public sources. Neo has not reviewed this press release and has not confirmed the accuracy and completeness of the information in respect of Neo contained herein. Although Pala has no knowledge that would indicate that any statements contained herein concerning Neo taken from or based on such documents and records are untrue or incomplete, neither Pala, nor any of its affiliates, nor any of their respective directors or officers, assumes any responsibility for the accuracy or completeness of such information or for any failure of Neo or its directors or officers to disclose events or facts which may have occurred or which may affect the significance or accuracy of any such information but which are unknown to it.

The offer is being made for the securities of a Canadian issuer and the offer is subject to Canadian disclosure requirements. Shareholders should be aware that such disclosure requirements are different from those of the United States.

SOURCE: Pala Investments Holdings Limited

Pala Investments AG Colin Murray +41-41-560-9070 or Edelman Public Relations for Pala Shane Dolgin 1-416-979-1120 or Shareholders: Kingsdale Shareholder Services 1-866-581-0512