Disposal

Release date: 29 August 2006

Embargoed until: 07:00

    CLS HOLDINGS PLC ("CLS") ANNOUNCES THE DISPOSAL OF THE MAJORITY OF ITS     
                    INVESTMENT IN KERONITE PLC ("KERONITE")                    

CLS announces that its Equity Investment division has sold the majority of its
investment in Keronite for £3.6 million, which will produce a book profit of
approximately £3.0 million for CLS. CLS will retain a holding of 6.5 per cent
of the shares in the company, on a fully diluted basis.

Keronite is a technology company with an environmentally-friendly process for
the surface treatment of light alloys.

This transaction has facilitated a cash injection into Keronite by a group of
new and existing investors, which is expected to accelerate the company's
commercial development to the benefit of its shareholders. CLS has been an
investor in Keronite since July 2000.

Executive Chairman for CLS, Sten Mortstedt, commented:

"We are pleased that Keronite has secured significant funding to continue its
development, whilst at the same time enabling CLS to partially exit this
investment and retain further upside potential."

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For further information, please contact:

Sten Mortstedt, Executive Chairman

Per Sjöberg, Chief Executive Officer

CLS Holdings plc

Tel. [phone]

www.clsholdings.com