MAGONTEC LIMITED — Capital/Financing Update 2011

Jan 20, 2011

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Office 10 Level 8 139 Macquarie St Sydney NSW 2000 Australia Ph: 61 2 8231 7085 Fax: 61 2 9252 8960

21 January 2011

Company Announcements Office Australian Stock Exchange Limited 20 Bridge Street Sydney, NSW, 2000

Dear Sirs,

RMB10,000,000 Working Capital Facility For Henan Keweier Alloy Material Co., Ltd

Henan Keweier Alloy Material Co., Ltd (HNKWE) - AML’s 53% owned alloy manufacturing subsidiary in Henan province in China – has secured a RMB10,000,000 working capital facility from a local bank. The facility has been accessed this week. Negotiations are also underway for further working capital funding.

The provision of working capital finance from banks will ease the demands on AML to fund working capital and enable partial repayment of the loan made by AML to HNKWE.

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John Talbot Company Secretary Advanced Magnesium Limited