MAGONTEC LIMITED — AGM Information 2010

Nov 29, 2010

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2010 Annual General Meeting

November 2010

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Disclaimer

This presentation has been prepared by Advanced Magnesium Limited (“AML”) based on information available to it. No representation or warranty express or implied is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained within this presentation. To the maximum extent permitted by law, neither AML or any member of the AML group of companies, their directors, employees or agents, nor any other person accepts any liability for any loss arising from the use of this presentation or its contents or otherwise arising from fault or negligence on the part of their directors, employees or agents.

General Securities Warning

This company background is not an offer or invitation for subscription or purchase of or a recommendation of securities. It does not take into account investment objectives, financial situation and particular needs of the investor. Before making an investment in AML, the investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult an investment advisor if necessary.

All Information including business forward plans in this presentation should not be considered as a recommendation in relation to holding purchasing or selling, securities or other instruments in AML. Due care and attention has been used in the preparing of historical financials and forward plan. However, actual results may vary from forecast and any variation may be materially positive or negative. Forward plans, by their very nature, are subject to uncertainty and contingencies many of which are outside of the control of AML. Past performance is not a reliable indication of future performance

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FY2010 Financial Summary

Review of Income Statement and Operations

	Summary	Consolidated
	30 June 2010	30 June	2009
	$	$
Sales revenue	7,404,870		174,176
Cost of sales	(7,557,761)		(29,342)
Gross Profit	(152,891)		144.834
Other income	15,005		44,236
Discount on acquisition of HNKWE	272,811		-
Expenses	(4,205,870)	(3,036,299)
Loss before income tax expense	(4,070,946)	(2,847,229)
Income tax (expense)/benefit	18,437		34,432
Loss from continuing operations	(4,052,509)	(2,812,229)

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Revenue and Expenses breakdown

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FY 2010 FY 2009 $ change
Loss before income tax expense $(4,052,509) $(2,812,229) $(1,240,280)
Add back
-
Discount on acquisition of HNKWE [1] $272,811
Deduct
HNKWE loss $(1,834, 105) -
- Includes deferred project fee [2 ] $(1,204,000) -
Adjusted Total Income $(2,493,215) $(2,812,229) $319,014
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1. Excess of book value of net assets acquired over purchase price.

2. 1[st] of five installment due June 2014. Compensation for investment prior to AML participation

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Cost reduction

Key Management Personnel	FY 2011 (f)	FY 2010 (a)	FY 2009 (a)
Salary	$785,498	$834,143	$831,196
Superannuation	$35,910	$44,065	$87,292
Shares	$0	$160,000	$165,000
Options	$11,220	$23,026	$0
Termination benefits	$0	$0	$140,389
TOTAL	$832,631	$1,061,234	$1,223,877
- of which AML	$636,117	$1,043,811	$1,223,877

Other cost reduction measures

Rental and lease costs FY 2011 expenditure budget Consultant expenses = A$1.5 m German office Travel

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Operational Review

	Progress milestones
October 2010	Specialty Alloy Module construction completed
September 2010	Qualification with European and N American die casters
August 2010	2nd Module construction completed and commences production
March 2010	European marketing agreement - Arrandene MFG
Feb – March 2010	1st Module reaches full production
Feb 2010	First sales to European customers
Dec - Jan 09/10	First contracts with Chinese customers
Oct - Nov 2009	Production capacity commissioning phase
July - Sept 2009	Construction of 1st Module (6,500 mt ann. capacity)
June - July 2009	Factory complex construction

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HNKWE at Chang Ge, Henan Province

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Alloy Production Capacity

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Generic alloy Proprietary alloy production production AZ91D AM-cast AM50A AM-HP2+ AM60B AM-EX1 AM-SC1 AM-lite

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target production capacity of 30,000 mt per annum

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Alloy sales and production capacity

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Technology update

	Technology projects
AM Coat	Current commercial production in Taicang. Opportunities in Guangdong and Chonqing
	Multiple trials of decorative finishes on AZ91/AM50/AM60 and AM lite parts
AM Cast	Marketing campaign commencing 1Q 2011
AM HP2plus	Die cast trials in Europe delayed. No current trials.
AM SC1	Trial supplies to major N American auto group, for delivery in December2010
AM EX1	Completed trials in Japan, reviewing commercial supply opportunities
AM lite	Current trials at European die cast companies
AM Converter	Major new installation opportunity in Europe
	Establishing Japanese manufacturing partner & reviewing Chinese options

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commercial production capacity for specialty alloys now installed

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AM Coat - Chemical Supply

• Supplying AML proprietary chemical technologies to electroplating partners

• A significant revenue opportunity

• Appoint new GM at AML China

AML coating technology

AML electroplating partners

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low cost and high yield e/p solutions

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Strategy & Objectives 2010 - 2012

Develop profit streams from generic Mg alloy and Mg electroplating activities to fund specialty Mg alloy marketing and promotion

• Build a competitive generic Mg alloy manufacturing business in China selling to local and global customers

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• Build a electroplating coatings business centred on AML’s Taicang chemical manufacturing facility

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• Build a market for AML’s specialty alloys with targeted customers around the World

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Progress report

Generic Mg Alloys Electroplating chemicals Specialty Alloys HNKWE AM Coat AMT Global and overall sales Manufacturing capacity Manufacturing capacity progressing well installed installed Growing customer base Domestic sales slower than Ongoing trials with and positive market forecast prospective customers reception

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Domestic sales slower than Ongoing trials with and positive market forecast prospective customers reception Manufacturing efficiency Positive financial Significant marketing improving contribution investment required

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Currently break-even Prospects for strong growth

Prospects for commercial sales in 2011

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Thank You

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