MAGONTEC LIMITED — AGM Information 2014

May 27, 2014

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The!Manager! Company!Announcements!Office! Australian!Securities!Exchange!Limited! 20!Bridge!Street! NSW!2000!

28!May!2014!!

Magontec!Limited!4!Executive!Chairman’s!Address!to!2014!Annual!General!Meeting!

Attached!(below)!is!the!content!of!the!Executive!Chairman’s!address!to!the!Company’s!2014! AGM!to!be!held!on!Thursday!29!May!2014.!!

Yours!Sincerely!

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John!Talbot! Company!Secretary!

Magontec!Limited,!L8,139!Macquarie!Street! Sydney!NSW!2000!AUSTRALIA!

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2014 AGM Executive Chairman’s address

Ladies & Gentlemen

Before we move to the formal business of the Annual General Meeting I would like to make a brief presentation.

I do not plan to go into any great detail on the financial results for the year ended 31 December 2013.

This was covered in an extensive summary in the Annual Report and updated again at the end of the first quarter in a report published on 24[th] April.

Today I will give an overview of the company and its activities, offer a snapshot of our European, Asian and Group financial progress in the four months to 31 April 2014, and discuss in some detail the Qinghai Project and its implications for growth and profitability in the years ahead.

Slide 2

Magontec is a company that has continued to evolve quickly. Over the last 12 months the company has restructured its balance sheet and many of its underlying operations. Today Magontec has a turnover of over A$130 million, net debt is now just 24% of net equity, down from over 100% at the same time last year, and earnings before interest and tax a more comfortable 3.4 times interest costs.

Following the Rights Issue and option exercise Magontec now has 1,115 million ordinary shares on issue and a market capitalisation of over A$33 million.

Finally, Magontec has a very strong and committed group of major investors. Our four substantial shareholders are all long-term investors and very optimistic for the Group’s prospects.

Slide 3

Around the world 2013 was a year of considerable progress at Magontec facilities. In Bottrop in Germany we continue to aggressively address

Magontec!Limited,!L8,139!Macquarie!Street! Sydney!NSW!2000!AUSTRALIA!

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processing costs. By the 3[rd] quarter of 2014 this plant will be one of the most efficient and competitive in Europe.

Xi’an is now a specialist alloy production unit with one alloy furnace and we have relocated our Chinese anode manufacturing operations to this site.

Over the coming months we will begin to install a greater level of automation in this anode manufacturing business with a view to improving competitiveness and profitability.

Our recycling plant in Suzhou has operated at close to full capacity through the last 18 months although magnesium usage in mobile phones and computers, the main source of scrap for this business, is continually under threat from aluminium.

Magontec’s major primary alloy manufacturing operation takes place in a factory in Shanxi Province that is rented.

This facility has been particularly challenging over the last 12 months although, through the strenuous efforts of our Chinese team, we expect to deliver an improved performance as the year progresses.

Magontec’s newest facility, at Santana in Romania, has performed particularly well. The alloy recycling plant is at full capacity and the magnesium anode operation, relocated from Germany last year, is now at full production and operating profitably.

Magontec now has global magnesium alloy manufacturing capacity of 61,000 mtpa, although actual production is closer to 40,000 mtpa.

Slide 4

This slide discusses some of the corporate and other actions that management have achieved in the period since the company acquired Varomet Holdings.

In 2011 Magontec acquired from Straits Mine Management the assets that comprise the business as it stands today and set about the task of executing a strategy to deliver a world leading magnesium alloy and anode manufacturing business.

Magontec!Limited,!L8,139!Macquarie!Street! Sydney!NSW!2000!AUSTRALIA!

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In the intervening 3 years a lot of progress has been made.

In 2012 Magontec signed a Cooperation Agreement with the Qinghai Salt Lake Industries Co Ltd and brought that company on board as a major shareholder and cornerstone investor in an $11m Rights Issue.

A new recycling plant commenced production in Romania and is now at full capacity and consistently profitable. In China Magontec’s primary magnesium alloy manufacturing operations were shifted from an older factory at Xian to a larger and more cost effective location in Shanxi Province.

In the 12 months to 31 December 2013 the process of strengthening the balance sheet has continued and our Board has also been strengthen through the addition of two experienced Non-Executive Directors, Robert Kaye SC and Andre Labuschagne

In Romania production of magnesium anodes has commenced and our European anode business is now consistently profitable after a period in which it struggled to compete.

This year-to-date we have completed a major capital raising undertaken to finance the new project in Qinghai, we have completed the restructuring of the balance sheet - bringing debt down to a more modest level - and, following the completion of the agreements between Magontec and QSLM, we have commenced the process of ordering equipment for installation in the magnesium alloy cast house that is currently under construction in Qinghai.

Together these actions provide a solid base for Magontec to grow over the coming years.

Slide 5

I now want to move to an overview of the last three quarters of trading activity and operational performance.

As you know our business is divided into two divisions, Asia (principally China but with sales into Japan, Taiwan and Thailand), and Europe (which also covers the Middle East and North America).

Magontec!Limited,!L8,139!Macquarie!Street! Sydney!NSW!2000!AUSTRALIA!

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As we have discussed in previous reports, movements in foreign exchange significantly impact our business. In this analysis we have excluded all unrealised foreign exchange effects and all inter company sales and included all one-off costs.

Our Asian business has struggled to make headway in a market where new supply and aggressive pricing continues to undercut our ability to compete in the export market.

China is our source of primary magnesium alloy and the home of our largest production units. To stay in this business Magontec needs a response to this challenge. The new project in Qinghai is that response and will address the critical pricing issues surrounding this business.

Our Chinese anode business also operates in a very price competitive market and requires constant efficiency improvements to maintain its market share. In a similar vein to the changes that we introduced in Europe, we will introduce process changes and automation to improve productivity and reduce costs in China.

In Europe sales performance shows the impact of declining volumes from our Chinese factories as competitors sell alloys at prices that would be unprofitable for Magontec.

The dip in performance in the 4[th] quarter of 2013 reflects the final costs of the transfer from Germany to Romania of the anodes business. However the European business is slowly gathering momentum following an 18-month period of restructuring.

Both magnesium alloys and anodes are operating profitably in Romania. The magnesium alloy furnace is running at full production and there is now sufficient demand to justify a second furnace at this location.

In Germany Magontec’s magnesium recycling business receives scrap from European die casters. While the volume of primary alloy from Magontec has declined, the total industry volumes into Europe have remained steady and our Bottrop facility remains one of the most competitive in northern Europe.

Slide 6

Magontec!Limited,!L8,139!Macquarie!Street! Sydney!NSW!2000!AUSTRALIA!

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Looking at overall performance we see the weakness in the 4[th] quarter last year being reversed through the first quarter in 2014.

As at the end of March 2014 the Group result, including Head Office costs, showed only a modest improvement over the same period last year, masking diverging fortunes on the ground in Asia and Europe.

These include recovering European recycling margins driven by improved efficiencies at plant level, the restoration of profitability in our magnesium anode business following the shift to Romania and continually improving economics in the Romanian recycling business as volumes grow.

Looking forward we see further gains in European recycling margins driven by capex planned for the August shutdown and growing specialist alloy sales into Europe and N America.

Other than relocation costs incurred in the 4[th] quarter of 2013, group profitability continues to suffer from aggressive pricing in export markets from China. Elsewhere extensive refurbishment costs at Magontec’s primary alloy production unit has also constrained profitability.

Prior to Magontec’s move to Qinghai it is the business of management to maintain market share without incurring losses while improving overall profitability. As much as we can we are also preparing for the significant increase in volume that will become available to Magontec in the future.

When Qinghai comes on stream our principal primary magnesium alloy business will have very different underlying economics.

This will flow through to current activities in magnesium, particularly in export markets and recycling, and open up new opportunities for us in other downstream activities in addition to magnesium anode manufacturing.

Slide 7

I now want to turn to the Qinghai Project and the agreements we have recently concluded with Qinghai Salt Lake Magnesium Co Ltd.

These agreements now represent a major asset of the company and are the basis of Magontec’s relationship with QSLM over the next 20 years.

Magontec!Limited,!L8,139!Macquarie!Street! Sydney!NSW!2000!AUSTRALIA!

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They are the most important agreements in the history of this company and, subject to execution, will deliver an excellent return to shareholders in the years ahead.

The agreements comprise

• An operating agreement that defines the working relationship between the two parties,

• An off-take price agreement that defines the economic relationship between the two parties, and

• A lease agreement that provides Magontec with security of tenure at this site for 20 years.

As we have highlighted in previous commentaries, Magontec has an exclusive right to make and sell magnesium alloys from the Qinghai magnesium project.

The project has great longevity and represents the foundation on which the company will build its future prosperity.

In the event of any disagreements both parties would resort to Hong Kong law.

These agreements are the culmination of nearly two years of discussions. In that period we have

• Secured a major investment from QSLM in Magontec,

• Appointed the Vice President of QSLI as a Non-Executive Director to the Board of Magontec and

• Enjoyed a very welcoming and profession engagement with our Chinese counterparts in Golmud.

It is worth highlighting that while these Agreements are important for both parties, the investment by QSLM in Magontec is a relatively small outlay beside the US$3 billion that is being invested in the entire first stage magnesium project in Qinghai.

Slide 8

Magontec!Limited,!L8,139!Macquarie!Street! Sydney!NSW!2000!AUSTRALIA!

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These agreements provide Magontec with a very high level of certainty.

The Off-Take Price Agreement gives Magontec the ability to make financial projections that we will share with investors, as we get closer to production.

The Agreement defines a formula for the price of liquid pure magnesium delivered to the Magontec alloying furnaces.

This formula would allow Magontec to make a very attractive return on its investment in Qinghai under current market conditions.

QSLM has also agreed to an adjustment to logistics costs designed to accommodate the remote location of this facility.

Furthermore as Magontec will be receiving pure magnesium in liquid metal form from the QSLM smelter, there will be no inventory costs associated with building and holding magnesium raw material stockpiles.

Finally, the Agreement also allows Magontec to enter into negotiations with major customers to supply volume and long-term contracts with fixed underlying economics.

There are currently no long-term contracts offered by Chinese magnesium alloy suppliers.

These documents will

• Provide Magontec with a strong marketing proposition in all its target markets

• Allow us to grow our market share as Qinghai comes on stream, and

• Resolve the challenging issue of competitiveness that constrains our primary alloy manufacturing operation today.

Slide 9

I want to turn now to the actual magnesium project in Qinghai and provide you with some more details about this opportunity.

The magnesium resource that QSLM will access is contained in a series of artificial lakes build over the last 50 years as the parent company, Qinghai

Magontec!Limited,!L8,139!Macquarie!Street! Sydney!NSW!2000!AUSTRALIA!

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Salt Lake Industries Co Ltd, mined the local area for feedstock for its potassium manufacturing business.

Because it is an established industrial location it has existing logistics infrastructure that is being upgraded for the new projects.

Furthermore this is a project that has the strong support of the provincial and central governments, providing a high level of administrative support.

Contained within these lakes is sufficient Mg material to feed the Qinghai magnesium project under construction and the proposed additional capacity to take it to 450,000 mt per annum, for many decades.

Slide 10

The construction program at Golmud is well under way.

Responsibility for construction is in the hands of our partners at QSLM who are building the brine purification plant, the dehydration plant and the electrolytic cell house as well as the cast house and all associated infrastructure

Magontec will install its equipment in the cast house, adjacent to the equipment that QSLM will install to manufacture pure magnesium ingots.

Slide 11

This is a schematic of the cast house showing the location of all seven casting lines to be installed by the QSLM and Magontec, the warehouse and the maintenance building.

The three pure magnesium lines, operated by QSLM, are at the top, and the four magnesium alloy lines, operated by Magontec Qinghai, at the bottom

Slide 12

Let me briefly take you around the four Magontec casting lines.

These will be divided into two lines devoted to AZ alloys and two to AM and specialty alloys.

Magontec!Limited,!L8,139!Macquarie!Street! Sydney!NSW!2000!AUSTRALIA!

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While this might be a little more detailed than you bargained for I thought I might take you on a quick tour of the Qinghai facility and briefly explain the layout of the cast house and the metal flow.

The liquid magnesium arrives at the Magontec cast house in a metal truck directly from the electrolyser and is poured into one of 5 alloying furnaces.

Additional alloying material is added from one of 7 pre-heating furnaces.

After chemical analysis to ensure that the material meets the alloy specifications the molten material is poured into a refining furnaces and impurities are removed as sludge.

When the liquid magnesium alloy is ready to be cast it is pumped into moulds, then cooled, polished and inspected before they are stacked, strapped, wrapped and sent to the warehouse for despatch.

On the side of the cast house are the process control room and the chemical analysis laboratory.

The whole process will be highly automated, it will use HFC134a as a cover gas, instead of SO2, and the cycle times from receipt of metal to wrapped ingot will be considerably shorter than our current Chinese operations or the operations of any of our Chinese competitors.

Slide 13

Here is a recent photo of the site at Golmud showing the dehydration unit on the far left, the electrolytic cell house, the transformer station that delivers power to the complex, the magnesium cast house and the warehouse

Slide 14

Up close you can more clearly see the cast house emerging from the space between the transformer station and the warehouse building.

Slice 15

I wanted to emphasise again the environmental credentials of our new investment because Qinghai is a model environmental project.

Magontec!Limited,!L8,139!Macquarie!Street! Sydney!NSW!2000!AUSTRALIA!

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It has the best hydropower resources in China sited close to the source of three major rivers and adjacent to an extensive and growing solar power array

The project will take 75% of its power from hydro and 10% from solar in the initial stages before further renewable energy sources are brought on stream at a later date.

Slide 16

This means that the carbon footprint from Qinghai will be around a quarter of the current average for all Chinese magnesium plants.

This chart shows the average CO2 emission per kilo of magnesium manufactured at Pidgeon plants across China.

Below is an estimate of emission levels from the new plant at Qinghai – about a quarter of the current Pidgeon process average.

This environmental edge will be a great boon to Magontec in its efforts to market magnesium to automotive companies and other die casters around the world, all of whom face the challenge of meeting new and increasingly stringent environmental standards.

Slide 17

So in conclusion

We have a major project that has the broad support of the Qinghai Provincial Government and the Chinese National Government, is under construction and expected to produce its first material in 2015.

Magontec will become the largest magnesium alloy manufacturing and recycling company in the world with exclusive access to the world’s largest magnesium project.

Magontec’s existing businesses are making good progress and are expected to deliver stronger returns as the full impact of the changes introduced over the last two years emerge in the second half of 2014.

Magontec!Limited,!L8,139!Macquarie!Street! Sydney!NSW!2000!AUSTRALIA!

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The company now has a stable and sustainable balance sheet with the financial resources to fund its commitments over the next two years and

The major shareholders, who hold over 70% of the share capital, are all fully committed to executing the opportunity in front of the company.

Ladies and gentlemen, thank you for your time.

Magontec!Limited,!L8,139!Macquarie!Street! Sydney!NSW!2000!AUSTRALIA!

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Magontec Limited (MGL)

Annual General Meeting 29[th] May 2014

Nicholas Andrews Executive Chairman & CEO

DISCLAIMER

This Presentation has been prepared by Magontec Limited (ABN 30 147 131 977) (Magontec or the Company). This Presentation contains summary information about Magontec and its activities current as at the date of this Presentation. The information in this Presentation is of a general background nature and does not purport to be complete or to comprise all the information that a shareholder or potential investor in Magontec may require in order to determine whether to deal in Magontec shares. It should be read in conjunction with Magontec’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), which are available at www.asx.com.au. This document is not a prospectus or a product disclosure statement under the Corporations Act (Cth) 2001 (Corporations Act) and has not been lodged with the Australian Securities and Investments Commission (ASIC).

Not investment or financial product advice

This Presentation is for information purposes only and is not financial product or investment advice or a recommendation to acquire Magontec shares and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek financial, legal and taxation advice appropriate to their jurisdiction. Magontec is not licensed to provide financial product advice in respect of Magontec shares. Cooling off rights do not apply to the acquisition of Magontec shares. Financial data

All dollar values are in Australian dollars (A$) unless stated otherwise and financial data is presented within the financial year end of 30 June 2013 unless stated otherwise. Any pro forma historical financial information included in this Presentation does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the US Securities and Exchange Commission.

Past performance

Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

Future performance

This Presentation contains certain “forward-looking statements”. The words “expect”, “should”, “could”, “may”, “will, “predict”, “plan”, “scenario”, “forecasts”, “anticipates”, “outlook” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Such forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differ materially from these forward-looking statements, and there are risks associated with the Company and the industry (including those set out below) which may affect the accuracy of the forward-looking statements. The Company does not undertake any obligation to release publicly any revisions to any forward looking statement to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

Investment Risk and other risks

Investment in Magontec shares is subject to investment and other known and unknown risks, some of which are beyond the control of Magontec Limited, including risk factors associated with the industry in which Magontec operates and risks specific to Magontec, such as: construction, development and operational risk associated with the Golmud Plant, fluctuations in magnesium alloy prices and exchange rates, risks associated with operating in China, financing risks, market price and demand risk and other risks generally relating to security investments.

Not an offer

This document may not be released or distributed in the United States. This Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. Securities in the Company have not been, and will not be, registered under the U.S. Securities Act of 1933 or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States unless the securities are registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, registration.

To the maximum extent permitted by law, Magontec and its respective advisers and affiliates, directors, officers and employees:

• make no representation or warranty, express or implied, as to the accuracy, reliability or completeness of information in the Presentation; and

• exclude and disclaim all liability, for any expenses, losses, damages or costs incurred by you as a result of your participation in the proposed offering and the information in this Presentation being inaccurate or incomplete in any way for any reason, whether by negligence of otherwise.

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1

Limited Magontec Corporate Overview (ASX Code: MGL)

Annual Revenue (2013)

	Asia	A$60 million
	Europe	A$70 million
	Global	A$130 million
	Investment metrics
	Net Debt-to-Equity	24%
	Interest Cover	3.4 times
	Valuation
	Issued capital	1115 m shares
	Market capitalisation (@ 3 c)	A$33.45 million
	Gross Assets	A$83 million
	NTA per share	3.0 cents
	Enterprise Value	$36.5 million
	Substantial shareholders
	Qinghai Salt Lake Magnesium Co Ltd	29.7%
	Allan Gray Australia	18.8%
	Straits Resources Limited	15.6%
	KWE(HK) Investment Development Co Ltd	5.0%

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2

Magontec Limited - locations and capacities

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Bottrop
Golmud
Toronto Santana Shanxi
HQ Xian
Production
Suzhou
Sales Office
Technology Centre
Cast House Project
Alloy/Recycling Capacity
Anode Capacity
Bottrop Santana Xi‘an Suzhou Shanxi Sydney
1 CAST is a Technology Association
CAST [1 ]
15 kt 3 kt 1 kt 5 kt 1 kt 8 kt 30 kt
2 kt = thousands of tonnes
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3

	Magontec Limited (ASX Code: MGL)
	Corporate Actions – 2011 to 2014
	Construction of primary Mg alloy cast house. Qinghai, PRC
	Operation, Price & Lease Agreements signed with QSLM
2014
	Balance sheet restructure completed, final debts repaid to Straits
	A$6.3m new equity (option exercise). QSLM becomes 29.7% shareholder
	Appointment of new Directors to strengthen Board
2013	Straits Resources converts debt to equity, becomes 15.5% shareholder
	Mg Anode production starts in Romania & at new location in Xi’an
	Primary Mg alloy production starts in Shanxi
	Mg recycling production starts in Romania
	QSLM becomes 27% shareholder
2012
	A$11m equity capital raising (Rights Issue)
	A$2m Placement to QSLM
	Cooperation Agreement signed with Qinghai Salt Lake Magnesium Co. Ltd (QSLM)
2011	Advanced Magnesium acquires Varomet Holdings Ltd from Straits Mine Management. Name change to Magontec Ltd
	60 years of experience in Magnesium, 12 years in China	4

Financial & Corporate Update – Asia & Europe/NA

Asia

Europe/NA

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EBITDA(2) Operating Cash Surrogate Sales Revenue(1)
¥1,800,000 ¥120
¥1,600,000
¥100
¥1,400,000
¥1,200,000
¥80
¥1,000,000
¥800,000 ¥60
¥600,000
¥40
¥400,000
¥200,000
¥20
¥-
¥-200,000 ¥-
3 months to 30 Sept 3 months to 30 Dec 2013 3 months to 31 March
2013 2014
EBITDA(2) Operating Cash Surrogate Sales Revenue(1)
€ 600,000 € 17.0
€ 16.5
€ 500,000
€ 16.0
€ 400,000
€ 15.5
€ 300,000 € 15.0
€ 14.5
€ 200,000
€ 14.0
€ 100,000
€ 13.5
€ - € 13.0
3 months to 30 Sept 3 months to 30 Dec 3 months to 31 March
2013 2013 2014
EBITDA/Cash
Revenue (¥ mil)
EBIITDA/Cash
Revenue (€ mil)
----- End of picture text -----

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1 Excludes all inter-company sales 2 Excluding unrealised foreign exchange gains

• Operating cash is ebitda + tax + interest expense

5

Financial & Corporate Update – MGL Group

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$800,000 EBITDA(2) Operating Cash Surrogate Sales Revenue(1) $40
$600,000 $35
$400,000 $30
$200,000 $25
$0 $20
-$200,000 $15
1 Excludes all inter-company sales
-$400,000 2 Excluding unrealised foreign exchange gains $10
Includes HO costs
-$600,000 $5
-$800,000 $0
3 months to 30 Sept 2013 3 months to 30 Dec 2013 3 months to 31 March 2014
EBITDA/Cash
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Positive impact

Negative impact

• Recovery in European recycling margins

• Anode shift to lower cost region

• Alloy customer shift to Eastern Europe

• Cost of EU anode relocation in 4Q 2014

• China alloy export margin collapse

• Operating capacity at MAY (primary Mg alloy)

• Capex to reduce operating costs in EU

Preparing for Qinghai

• Specialist metals sales

• Build capacity

• Increase efficiency

• Build market share

6

Qinghai Agreements

Three Agreements signed between Magontec and Qinghai Salt Lake Group

• Magnesium Alloy Cast House – Operating Agreement

• Off-Take Price Agreement

• Lease Agreement

• Exclusivity

• 10 year + 10 year option duration

• Arbitration in Hong Kong

• Foundation documents for future prosperity

• Culmination of negotiation, investment and appointments over the last 2 years since the signing of the Cooperation Agreement with QSLM

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7

Qinghai Agreements

The three new Agreements provide a high level of certainty

The Off-Take Price Agreement

• A formula fixed for three years defining the cost at which Magontec will buy liquid pure magnesium

• A transport cost adjustment that accommodates the relatively remote location of Qinghai

• No pure Mg inventory costs – receive material in liquid form on day of manufacture

• Subject to agreement, volume and long term contracts with fixed underlying economics

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8

Qinghai Project – manufacturing and resource location

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• Golmud

• � Situated on a substantial resource in western China Brine content > 20% MgCl2 / Mean Mg content of 58g/litre

• An established industrial location for > 50 years

• 4 bil tonnes of MgCl2 at Golmud of which 1 bil tonnes is pure Mg

• Electrified rail links to domestic and export markets

• Sponsored by Provincial and National governments

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9

Electrolytic magnesium smelter and cast house Golmud, Qinghai Province

Construction program at Golmud

• QSLM constructs electrolytic Mg manufacturing complex - initial capacity of 100,000 mtpa

• QSLM constructs magnesium cast house, maintenance workshop and warehouse buildings

• QSLM constructs associated infrastructure (including transport links, utilities supply etc.)

• Magontec installs and operates cast house equipment with 56,000 mtpa of Mg alloy production capacity

• QSLM installs cast house equipment with 44,000 mtpa of pure Mg production capacity

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10

Qinghai Cast House - shared by QSLM and Magontec Qinghai

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Warehouse
Pure
! QSLM
Magnesium
Cast House
Electrolyte
Magnesium
Recovery ! Magontec
Alloy Cast
Qinghai
House
Liquid Magnesium from Electrolysis
Maintenance
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11

Magontec’s Magnesium Alloy Cast House

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� � �
Highly automated HFC 134a cover gas Rapid cycle times
Storage/
Casting (4) Cooling Polishing Inspection Stacking Strapping Wrapping Despatch
Preheating Furnaces (7)
Alloying Furnace (5)
Refining Furnace (2) AZ alloys
Metal Wagon AM, AE & specialty alloys
12
Process control Chemical analysis
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Golmud Cast House site – May 2014

Dehydration unit

Electrolytic cell house

Warehouse Transformer Magnesium Cast House

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13

Golmud Cast House site – May 2014

Warehouse Electrolytic Cell House Magnesium Cast House

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14

The Qinghai Project is an environmental model

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wind mill 0.10%
�
Best hydro power resources in China.
�
Solar 9.10% Source of 3 major Chinese rivers (Yellow, Yangzte, and Canglan)
�
Thermal (coal) 15.50% Extensive and growing solar power array
Hydro 75.30%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
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Comparative other Chinese and Qinghai GHG/CO2 emissions

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30"
25" Average 25.8kg CO2 eq/kg Mg
20"
15"
10"
5"
0"
Dolomite(Mi( Ferrosilicone( Fluorite( Calcina2on( Brique5ng( Reduc2on( Refining( Total(
Producer(gas( 0.3( 9.4( 0.1( 9.5( 0.6( 5.6( 1.1( 26.6(
Coke(Oven(Gas( 0.3( 9.4( 0.1( 7.9( 0.6( 3.5( 0.5( 22.3(
Semi(Coke(Oven(Gas( 0.3( 9.4( 0.1( 10.8( 0.6( 5.8( 0.7( 27.7(
Natural(Gas( 0.3( 9.4( 0.1( 9.5( 0.6( 4.3( 0.8( 25.0(
Simone Ehrenberger. German Aerospace Centre, Institute of Vehicle Concepts. IMA LCA Study. May 2012
10
6.5 kg CO2 eq/kg Mg
0
Refining &
Brine Purification Evaporation Drying Reduction TOTAL
Casting
Series1 0.2 1.94 3.73 0.10 0.50 6.47
kg"CO2/kg"Mg"
Pidgeon Process
#
tCO2/tMg
GHG Emissions
Qinghai Electrolytic
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*Simone Ehrenberger. German Aerospace Centre, Institute of Vehicle Concepts. IMA LCA Study. May 2012

Hatch – Qinghai Integrated Magnesium Project Overview. July 2012

Page 16

Summary

• ─ Construction phase is well underway

• ─ Magontec will remain among the largest magnesium alloy manufacturers and recyclers in the World

▪ Exclusive access to the World’s largest electrolytic Mg supply

• ─ Existing businesses are beginning to generate stronger returns, particularly where we have invested in new plant and equipment.

• ─ The balance sheet is stable and sustainable

• ─ The major shareholders of Magontec are fully committed

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Thank you for your time

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MAGONTEC Group
MAGONTEC MAGONTEC GmbH MAGONTEC Xian Co., Ltd
Head Office, Sydney Industriestraße 61 No. 40, Feng Cheng 3 Road,
Lv 8, 139 Macquarie Street 46240 Bottrop Xian Economic and Technological
Sydney NSW 2000 Germany Development Zone
AUSTRALIA Xian, China, Post code: 710021
Tel +61 2 8231 7085 Tel +49 (0) 20 41 / 99 07-0 Tel. +86 29 / 86 52 68 78
Fax +61 2 9252 8960 Fax +49 (0) 20 41 / 99 07 99 Fax +86 29 / 86 52 37 22
corporate@magontec.com europe@magontec.com china@magontec.com
www.magontec.com www.magontec.com www.magontec.com
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