LATROBE MAGNESIUM LIMITED — AGM Information 2014

Nov 26, 2014

Latrobe um Magnes AGM Presentation November 2014

David Paterson Chairman

ASX: LMG

Presentation

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1. 2014 year highlights

2. Project Summary

3. LMG opportunity

4. LMG process

5. LMG Site

6. LMG Current Activities

7. Timelines and milestones

8. Financial overview

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1. Year 2014 highlights

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• Granting of Australian hydromet patent

• Strong results achieved in the cementitious material

• Securing a site within the Latrobe Valley

• Completed the RWE Power Concept Study

• Produced a large bulk sample, processed it through a full scale commercial Chinese plant and received above average magnesium recoveries

• Maintained an operating loss $661,915 (2014) - $650,292 (2013).

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2. Project Summary

• Magnesium is strong growth metal, with potential car panel production being a game changer (market increase up to10 times)

• 2015 complete bankable feasibility study & begin construction of plant

• Further significant cost savings to be investigated during bankable feasibility study

• 2016 become Australia’s only magnesium producer

• Progressing the RWE Power project (2*Latrobe size)

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3. LMG opportunity

Magnesium uses

• Steel desulphurization

• • Titanium sponge

• Alloy in aluminium can production

• • Motor car parts for strength &

• weight savings

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12 33 33

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100 === New uses – planes, trains & consumer products (laptops, mobile phones etc)

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3. LMG opportunity

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3. LMG opportunity

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Automotive Opportunity

CO2 per kms

EU 2012 figure 120 g EU 2020 target 95 g Emission reduction 25 g Weight reduction required 250 kg or 15% of medium size car

US auto study revealed that above weight reduction can be achieved by replacing 380kg of Steel & Al parts with 150kg of Mg parts. This would multiply current market 10x.

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3. LMG opportunity

Primary Magnesium metal production

• 2000

• 2012

• 2013

210,300 tons 693,000 tons 792,000 tons

• 2023 projected production 1,600,000 tons Annual growth 6-7%. Above excludes alloys and powders. China – 85% of world production.

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4. LMG process

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4. LMG Process: China Sample

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Slag powder & Slag

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Magnesium crown
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5. LMG Site

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Swop Line from Yallourn

Swop Line from Hazelwood

Natural Gas Pipeline

Proposed Slurry Pipeline

320 Tramway Site

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5. LMG Site

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320 Tramway Site Plan (11 hectare)

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5. LMG Site

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320 Tramway Site Building

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6. LMG Current Activities

• Finalising Latrobe Valley fly ash agreement.

• Completing a detailed assessment of the cementitious material from the China sample.

• Conducting further test work on iron removal.

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7. Timelines & milestones

Key Dates

• Nov 2014 results of the Chinese bulk sample.

• Jan 2015 receive results from the cementitious analyses.

• Mar –June 2015 conclude MOU with major customers & suppliers.

• June 2015 complete bankable feasibility study.

• July 2015 start installation of 5,000 tonnes plant.

• July 2016 start production of 5,000 tonnes plant.

• July 2017 expand the plant to 40,000 tonnes capacity.

• Dec 2017 start installation of RWE Power plant.

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8. Financial overview

5,000 40,000 Financial Parameters tonnes tonnes A$/tonne A$/tonne Magnesium revenue 4,218 4,218 Net Cash operating costs (3,840) (2,635) -------- -------Operating surplus 378 1,583 ==== ==== Capex A$45M A$285M NPV at 12% discount factor A$100M to A$125M China operating costs range US$2,200 to US$2,500/t

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8. Financial Overview

Cost improvements through further process optimisation –

• Further iron reduction in BFA reduces FeSi usage possible savings up to A$200 per tonne of Mg.

• Possible new magnetite product.

• Use of vertical retorts may save 20% in capital costs & A$360 per tonne of Mg in operating costs.

• Possible savings in freight & consumables of >A$100 per tonne of Mg.

Total Savings targeted of >A$660 per tonne of Mg

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Disclaimer

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• This presentation may contain forward looking statements that are subject to risk factors associated with the magnesium business.

• It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially including but not limited to: price fluctuations, actual demand, currency fluctuations, production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates.

• Investors should undertake their own analysis and obtain independent advice before investing in LMG shares.

• All reference to dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated.

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