DeMil International Inc. Awarded Exclusive US DOD Contract to Build a Contained Detonation Chamber.

HUNTSVILLE, Ala.--(BUSINESS WIRE)--Oct. 2, 1998--As part of the US Government's initiative to find effective and environmentally friendly ways to dispose of outdated and surplus munitions, DeMil International Inc. (OTC BB:DMIL) has been awarded an exclusive contract to build its Contained Detonation Chamber (CDC).

This is a product research and development award for the optimization of Contained Detonation of Energetic Materials Technology. DeMil International anticipates that this award will further demonstrate and optimize the application of its CDC system for use in the detonation of energetic materials under this contract award. This award is for three phases of a stationary contained detonation system. Additional CDC option units have been awarded, however, these option units have not been priced and will be subject to future price negotiations should they be exercised.

The initial contract award is for $1.8 million. It has been awarded by the Crane Division, Naval Surface Warfare Center, in support of the Army Defense Ammunition Center Joint Demilitarization Technology Program.

According to John Donovan, DeMil International's chairman, "This is the first part of a multi-phase program to help The Department of Defense to develop a new way to dispose of unwanted munitions wherever they exist in the United States.

"Traditionally, the government has had to destroy these munitions outdoors without the benefit of being able to control the noise pollution and residual materials and emissions which are harmful to the environment," Donovan added, "and now with new, more stringent EPA regulations, the practical, safe solution is a CDC system that captures harmful materials which otherwise would be released into the environment, controls noise, and is far more cost-effective than traditional disposal methods."

DeMil has the exclusive world-wide rights to the patented Donovan Contained Detonation Chamber. Patented in 1996, this contained detonation system is capable of safe, environmentally friendly, controlled detonations of all types of munitions. This system has been in daily industrial and commercial use for the last 10 years at Donovan Demolition Inc. (DDI).

DeMil International Inc. manufactures, services and supports contained detonation chamber systems which will be sold to U.S. and foreign governments and agencies responsible for destroying unwanted or dangerous munitions. This dynamic company focuses on the development and marketing of demilitarization equipment and anti-terrorism products to government agencies in the US and international markets.

The statements contained in this release which are not historical facts contain forward-looking information with respect to plans, projections or future performance of the company, the occurrence of which involves certain risks and uncertainties that could cause the company's actual results to differ materially from expected results. Such risks include the timing of implementation and the scope and success of the program described here.