ARLINGTON, VA (ASX: MST) is pleased to announce that Metal Storm Inc. has delivered a four barrel weapons pod, fire control system and spares to the Naval Surface Warfare Center, Dahlgren Division (NSWCDD). These items comprise the first limited production systems to be delivered to the U.S. Military.

Commenting on the announcement, Peter D. Faulkner, Metal Storm Inc. Senior Vice President for U.S. Operations and General Manager, said, "Our product strategy has been to offer a standard set of modular components that can be easily configured to meet our customer specific needs for operational employment. The system that we configured for the Navy was based on the Metal Storm GLL4042 launcher and fire control components which are integrated through standard interfaces. This approach has allowed us to deliver a tailored system within twelve weeks from the receipt of an order."

Metal Storm Limited CEO Dr. Lee Finniear noted, "I am pleased to see the company reach this important stage on our path to commercialization. The employment of Metal Storm's stacked round technology for a U.S. Military weapon system is a huge step for us and illustrates our commitment to the global marketplace. Research and Development will continue to be an important part of our business but it is our product focus that will ultimately generate the bulk of future revenue for Metal Storm. In this context, the delivery of limited production systems to the U.S. Navy is indeed an important milestone for the company."

Notes:

Metal Storm's Australian Stock Exchange trading code: MST

Metal Storm's NASDAQ Small Cap ticker symbol: MTSX

About Metal Storm

Metal Storm Limited is a multi-national defence technology company engaged in the development of electronically initiated ballistics systems using its unique "stacked projectile" technology. The company is headquartered in Brisbane, Australia and incorporated in Australia. Metal Storm Limited technology and products are represented in the USA by Metal Storm Inc., which has offices in Arlington Virginia.

Metal Storm is working with government agencies and departments, as well as industry, to develop a variety of systems utilising the Metal Storm non-mechanical, electronically fired stacked ammunition system.

Metal Storm's weapon technology uses computer-controlled electronic ignition and a system of stacked projectiles, to achieve a completely non-mechanical gun that is very lightweight and compact, providing a very high firepower to weight ratio. The Metal Storm weapons system utilizes multiple barrels mounted together on one platform which allows varying munitions types to be deployed in a single, low cost, lightweight weapon system. Firing the weapons by electronic ignition requires no moving parts, allowing reliable long term unattended weapon operation.

Safe Harbour

Certain statements made herein that use the words "estimate," "project," "intend," "expect," "believe" and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties which could cause the actual results, performance or achievements of the company to be materially different from those which may be expressed or implied by such statements, including, among others, risks or uncertainties associated with the development of the company's technology, the ability of the company to meet its financial requirements, the ability of the company to protect its proprietary technology, potential limitations on the company's technology, the market for the company's products, government regulation in Australia and the US, changes in tax and other laws, changes in competition and the loss of key personnel. For additional information regarding these and other risks and uncertainties associated with the company's business, reference is made to the company's reports filed from time to time with the Securities and Exchange Commission, including the company's Form 20-F.

Company Contact: Australia Dr. Lee Finniear Chief Executive Officer Ph: +61 7 3123 4700 USA Peter Faulkner SVP US Operations Ph: +1 703 248 8218