Okay here is a generic version of what I know, and I do not know how closely this will be to the way Malta does it.
Firstly, to say that I had a UK PPL, I went to Portugal and changed my state of licence issue to Portugal, I then got all my ratings and licenses issued under their authority before returning to the UK and changing state back again.
It is an EASA requirement by law that the state of licence issue MUST hold the applicants medical records. When I went to Portugal they said that the UK medical was good enough for them and they didn't care about my medical records. This is wrong as far as I can see but I wasn't going to argue with them about it, so perhaps in Malta they want you to do a Maltese class 1 to constitute holding medical records, or maybe they want you to do it and then will want your existing records sent from the UK if you intend to hold a Maltese licence.
If you want to retain your UK licence, you can do all the training in Malta, but the school is partly correct saying you need a UK examiner. You either need one OR you need a Maltese examiner who has been briefed by the UK. The UK will then accept a test completed by him. I think there may be a small fee for this, which I imagine you would have to bear the brunt of but you would have to ask someone else (possibly the UK CAA) for more information.
lastly, the minimum time you can complete an IR in is 50 hours for a Single engine IR. The split between sim and aircraft will depend on what the FTO has been approved for and the type of sim etc. I personally did 20 hours sim and 30 hours aircraft for the SE/IR and then did 5 hours of aircraft for the ME/IR.