MAGONTEC LIMITED — Capital/Financing Update 2013

Jan 15, 2013

==> picture [521 x 111] intentionally omitted <==

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

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

Dear Sirs,

16 January 2013

Magontec Limited (Company) – Conversion of Options Issued In Terms of Renounceable Rights Prospectus Dated 23 November 2012

The attached Appendix 3B records the detail of securities to be listed following conversion of options issued as per the above Prospectus.

Yours Sincerely

==> picture [147 x 63] intentionally omitted <==

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
	113,092 fully paid ordinary shares
	The shares have been issued as a consequence of shareholders’ exercising their right to convert options issued in terms of the Company’s Prospectus dated 23 November 2012 and released to the ASX on the same date.

• 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 Yes all 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 5 Issue price or consideration $0.02 per share 6 Purpose of the issue An integral part of the Company’s fund (If issued as consideration for the raising in terms of the aforesaid prospectus acquisition of assets, clearly identify those assets)

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

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 3

Appendix 3B New issue announcement

6d Number of+securities issued with security holder approval under rule 7.1A 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
	15 January 2013
	Number	+Class
	648,718,937 440,903,478	Fully paid ordinary shares Options exercisable at 2 cents each at any time on or before before 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)	Number	+Class
	1,300,000	Options having an exercise price of $0.10 expiring on 16 August 2013
	No policy exists

Part 2 - Bonus issue or pro rata issue

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	NA
	NA NA NA NA
	NA
	NA
	NA
	NA

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 5

Appendix 3B New issue announcement

20	Names of any underwriters	NA
21	Amount of any underwriting fee or	NA
	commission
22	Names of any brokers to the issue	NA
23	Fee or commission payable to the	NA
	broker to the issue
24	Amount of any handling fee payable	NA
	to brokers who lodge acceptances
	or renunciations on behalf of
	+security holders
25	If the issue is contingent on	NA
	+security holders’ approval, the date
	of the meeting
26	Date entitlement and acceptance	NA
	form and prospectus or Product
	Disclosure Statement will be sent
	to persons entitled
27	If the entity has issued options, and	NA
	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	NA
	applicable)
29	Date rights trading will end (if	NA
	applicable)
30	How do+security holders sell their	NA
	entitlements in full through a
	broker?
31	How do+security holders sell part	NA
	of their entitlements through a
	broker and accept for the balance?

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 6

Appendix 3B New issue announcement

32 How do[+] security holders dispose of their entitlements (except by sale through a broker)? 33 +Despatch date

NA NA

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 7

Appendix 3B New issue announcement

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

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
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
37		A copy of any trust deed for the additional+securities

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 8

Appendix 3B New issue announcement

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 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 no-one 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.

==> picture [167 x 55] intentionally omitted <==

Date: 16 January 2013

John Talbot Company Secretary

== == == == ==

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 10