MAGONTEC LIMITED — Capital/Financing Update 2012

Nov 22, 2012

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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

The Manager Company Announcements ASX Limited 20 Bridge Street Sydney 2000

23 November 2012

Dear Sirs

Magontec Limited (Company) – Partially Underwritten Renounceable Rights Issue

The Appendix 3B released to the market at 9:38am today was completed using an out-dated format.

The Appendix 3B attached is in the current format of that document.

No substantive data has been altered but it highlights data included in the Prospectus.

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John Talbot Company Secretary

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12

Name of entity

Magontec Limited

ABN

510 1044 1666

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if+convertible securities, the conversion price and dates for conversion)	•Fully paid ordinary shares (Shares) •Listed options to acquire fully paid ordinary shares (Options)
	Up to 236,115,374 Shares Up to 472,230,748 Options
	Shares and Options will be issued on the terms set out in the renounceable Rights Issue prospectus dated 23 November 2012 and lodged with ASX and ASIC on the same date (Prospectus). •Shares – terms of the Shares are summarised in section 4.1 of the Prospectus •Options are exercisable at 2 cents each on or before 3 January 2014 – terms of Options are summarised in section 4.2 of the Prospectus

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 2

Appendix 3B New issue announcement

4 Do the[+] securities rank equally in • Shares – Yes all respects from the date of • Options – No. The Options are a new allotment with an existing[+] class of class of options. Options are exercisable quoted[+] securities? in accordance with the terms summarised in section 4.2 of the Prospectus and upon If the additional securities do not conversion of the Options, the shares will rank equally, please state: • the date from which they do rank equally with existing shares. • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration Shares - $0.05 per share Options – Nil 6 Purpose of the issue Pro-rata renounceable Rights Issue to raise (If issued as consideration for the up to approximately 11,805,769 (before acquisition of assets, clearly costs) to be applied as described in section identify those assets) 2.1 of the Prospectus. 6a Is the entity an[+] eligible entity that No has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the[+] securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder NA resolution under rule 7.1A was passed 6c Number of +securities issued NA without security holder approval under rule 7.1 6d Number of[+] securities issued with NA security holder approval under rule 7.1A

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 3

Appendix 3B New issue announcement

6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of securities issued under an exception in rule 7.2 6g If securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the issue date and both values. Include the source of the VWAP calculation. 6h If securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 Dates of entering+securities into uncertificated holdings or despatch of certificates 8 Number and +class of all +securities quoted on ASX (including the securities in section 2 if applicable)	NA	NA
	NA
	NA
	NA
	NA
	Anticipated to be 3 January 2013 on the basis of the indicative timetable set out in the Prospectus.
	Number	+Class
	661,123,048 472,230,748	Fully paid ordinary shares Options having an exercise price of $0.02 expiring on 3 January2014

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 4

Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (including the securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests) art 2 - Bonus issue or 11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has+security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	Number	+Class
	1,300,000	Options having an exercise price of $0.10 expiring on 16 August 2013
	No policy exists
	pro rata issue
	No
	Renounceable
	5 new fully paid ordinary shares and 10 free attaching listed options for every 9 existing fully paid ordinary shares held as at the Record Date
	Fully paid ordinary shares Listed options exercisable at $0.02 on or before 3 January2014
	3 December 2012
	No
	Fractional Entitlements will be rounded up to the nearest whole number. Refer section 1.3 of the Prospectus.
	All countries other than Australia, New Zealand, Switzerland and the People’s Republic of China. Refer to sections 1.9 – 1.11 of the Prospectus.
	21 December 2012

Part 2 - Bonus issue or pro rata issue

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 5

Appendix 3B New issue announcement

20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of +security holders 25 If the issue is contingent on +security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do+security holders sell their entitlements in full through a broker?	Patersons Securities Limited (Patersons)
	Underwriting fee of 1% of the amount underwritten, being a fee of approximately $88,378. Refer to section 6.2 of the Prospectus.
	Patersons Securities Limited
	$60,000.
	N/A
	NA
	7 December 2012
	23 November 2012
	27 November 2012
	14 December 2012
	By contacting their broker verbally or completing the section marked “Instructions to Stockbroker” on the Entitlement and Acceptance Form and lodging the Form with their broker. Refer to section 3.4 of the Prospectus.

• See chapter 19 for defined terms.

01/08/2012

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Appendix 3B New issue announcement

31 How do+security holders sell part of their entitlements through a broker and accept for the balance? new 32 How do+security holders dispose of their entitlements (except by sale through a broker)? 33 +Despatch date	By completing the Entitlement and Acceptance Form in accordance with the instructions set out in the Form. Indicate the number of new shares and new options the Shareholder wishes to accept (being less than their entitlement as specified on the Entitlement and Acceptance Form) and complete the section marked “Instructions to Stockbroker” on the Form in respect of that part of the entitlement the Shareholder wishes to sell. Return the completed Entitlement and Acceptance Form together with payment for the total amount payable in respect of the shares and new options accepted by 5.00pm (EDST) on 21 December 2012. Refer to section 3.5 of the Prospectus.
	Complete a renunciation form (obtainable through your stockbroker or the Company’s share registrar). Refer to section 3.6 of the Prospectus.
	3 January 2013

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of securities (tick one) (a) √ Securities described in Part 1

(b) All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 7

Appendix 3B New issue announcement

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• To be advised in final Appendix 3B submitted upon closure of rights programme

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

To be advised in final Appendix 3B submitted upon closure of rights programme

• 37 A copy of any trust deed for the additional[+] securities – Not applicable

Entities that have ticked box 34(b)

38 Number of securities for which NA +quotation is sought 39 Class of +securities for which NA quotation is sought

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 8

Appendix 3B New issue announcement

• 40 Do the[+] securities rank equally in all NA respects from the date of allotment with an existing[+] class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• 41 Reason for request for quotation NA now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security)

Number +Class 42 Number and[+] class of all[+] securities NA NA quoted on ASX (including the securities in clause 38)

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 9

Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that noone has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the[+] securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Date: 23 November 2012

John Talbot Company Secretary

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• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 10