MAGONTEC LIMITED — AGM Information 2007

Sep 27, 2007

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28 September 2007

Company Announcements Office Australian Stock Exchange Limited Level 4, 20 Bridge Street SYDNEY NSW 2000

Dear Sirs,

RE: ANNOUNCEMENT

Pursuant to ASX Listing Rule 3.13.3, please find attached a presentation given to shareholders at the Annual General Meeting held today at Royal on the Park, Cnr Alice & Albert Streets, Brisbane commencing at 10.00 am (AEST).

Yours sincerely, P.K. Nair COMPANY SECRETARY

Advanced Magnesium Limited Level 9, 303 Coronation Drive, Milton · PO Box 1364, Milton BC, QLD 4064, Australia Phone: +61 (0) 7 3510 4400 · Fax: +61 (0) 7 3510 4525 Email: corporate@am-technologies.com.au · Web: www.am-technologies.com.au · ABN: 51 010 441 666

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Stuart Fitton Executive Chairman

Advanced Magnesium Limited AGM 2007 – Chairman’s Address

commercialising advanced materials solutions

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SUITE OF MG ALLOYS

Magnesium Alloys

• AM-lite[®] - A diecasting alloy suited for decorative components. Provides excellent as-cast surface finish, improved diecastability and recyclability, and offers significant cost savings compared with competitive materials.

• AM-HP2™and AM-SC1™ - high temperature creep resistant alloys for automotive powertrain components such as engine blocks and transmission housings. A new version of AM-HP2 with improved diecastability is about to undergo beta testing.

• AM-cast™ - improved zirconium master alloy for grain refining of sand castings and permanent mould castings.

Melt Handling Technologies

• AM-cover[®] - a cover gas system that reduces oxidation of molten magnesium during melting and casting. Compared with conventional SF6 cover gas mixtures, AM-cover reduces green-house gas emissions by more than 95% and significantly lowers metal losses.

• AM-converter™ - a device that improves the efficiency of the melting of ingots and returns, reduces metal losses, improves melt quality, and allows in-cell recycling of returns.

A strong suite of metal alloys and melt handling technologies meeting 21[st] Century needs

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SIGNIFICANT EVENTS

• AM-lite diecasting volume production process perfected

• Accredit two Chinese diecasters by end October

• AM-lite electroplating volume production close to being perfected

• Accredit two Chinese electroplaters by end November

• Trials to demonstrate reliability of AM-lite in thixomolding production process for high quality components.

• Continuing interest from multinational OEM’s seeking light weight, lower cost, excellent surface finish material solutions.

• Improved version of AM-HP[2] with greater diecastability about to commence beta testing.

• Trial by US EPA further proves that less than 98% greenhouse gas reductions when .

• using AM-cover instead of SF6

• Board and Management changes.

• Reinvigoration of Japan marketing strategy.

No Mg alloy sales contracts yet. However, some progress has been made.

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STRATEGY

• Establish AM-lite in the ‘decorative finished component’ market.

• • Accredit diecasters and electroplaters globally

• Trial AM-lite with existing OEM zinc customers of accredited diecasters and electroplaters.

• Market AM-lite as replacement for plastic, aluminium, AZ91 as well as zinc with other OEMs.

• Support Hyder joint venture in the marketing of AM-cover.

• Seek additional AM-converter sales, particularly in Europe.

• Beta test AM-HP2 plus in Europe and Japan.

• Work with partners in Japan on commercialising AM-cast.

Resources focused on commercialising AM-lite in the market while beginning to establish market presence for other magnesium products

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CASH POSITION

• Commenced the 2008 financial year with $6.57 million

• $170,000 of 2007 incurred cash expenses

• $340,000 provision for terminations

• Effective opening operating cash position for 2008, $6.06 million.

• Head office and administration overheads reduced to approximately $560,000. Unavoidable expenses such as share registry, insurance, patent costs and audit add a further $720,000.

• Production Process Unit $1.7 million.

• Marketing and Sales $1.6 million.

• Interest income, AM-converter sales and Europe office sub-let bring in revenue of approximately $315,000.

Sufficient cash to get through 2008 financial year and possibly to commercial viability

CASH POSITION $,000 Balance at June 30, 2007 6,565 Less: 2007 incurred expenses 170 Terminations 340 Starting balance for 2008 operating year 6,055 Production Process Business Unit - Includes CAST R&D 1,700 Marketing and Sales - Includes CEO costs 1,600 Administration - Includes unavoidable costs of $720,000 1,280 Balance after cash outgoings 1,475 Plus “certain” cash income 315 End 2008 financial year cash balance 1,790	CASH POSITION $,000 Balance at June 30, 2007 6,565 Less: 2007 incurred expenses 170 Terminations 340 Starting balance for 2008 operating year 6,055 Production Process Business Unit - Includes CAST R&D 1,700 Marketing and Sales - Includes CEO costs 1,600 Administration - Includes unavoidable costs of $720,000 1,280 Balance after cash outgoings 1,475 Plus “certain” cash income 315 End 2008 financial year cash balance 1,790

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CASH SPEND, 1[ST] QUARTER

	$’000
Operating Costs
Production Process Business Unit	323
Marketing and Sales	351
Administration	242
	916
Inflows – sundry sales income, interest and other revenue	118
Net operating cash outflow	798
Non Operating Costs
Plus 2007 incurred expenses & terminations	476
Net cash spend for 1st Quarter (up to 27 September)	$1,274

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SALES POTENTIAL

• No sales revenue included in cash budget.

• Long lead time to establish new metal in the global market.

• Reasonable to expect minimum 1000 tonnes of AM-lite sales in 2008 with potential to exceed 2000 tonnes.

• Revenue potential between US$500,000 and US$1 million in 2008 increasing significantly in 2009.

• Expect to achieve cash positive position early in 2009 financial year.

Little doubt there is a market for AML’s suite of Mg alloys. Question is can cash break-even be achieved within current cash reserves?