MAGONTEC LIMITED — Director's Dealing 2008

Sep 11, 2008

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Mr John Talbot Company Secretary Advanced Magnesium Limited Suite 5, Level 4 350 George Street SYDNEY NSW 2000 Email: john.talbot@am-technologies.com.au

Dear Mr Talbot

ASX Markets Supervision Pty Ltd ABN 26 087 780 489 Level 5 Riverside Centre 123 Eagle Street Brisbane QLD 4000 PO Box 7055 Riverside Centre Brisbane QLD 4001

Telephone 61 (07) 3835 4000 Facsimile 61 (07) 3832 4114 Internet http://www.asx.com.au

Advanced Magnesium Limited (the “Company” ) Appendix 3Z – Final Director’s Interest Notice

We refer to the following:

1. The Appendix 3Z lodged by the Company with ASX on 9 September 2008 at 09:58 EST for Mr G Ralph (the “Appendix 3Z”);

2. Listing rule 3.19A which requires an entity to tell ASX the following:

3. 3.19A.1 The notifiable interests of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) at the following times.

   • On the date that the entity is admitted to the official list.

   • On the date that a director is appointed.

   • The entity must complete Appendix 3X and give it to ASX no more than 5 business days after the entity’s admission or a director’s appointment.

4. 3.19A.2 A change to a notifiable interest of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust). The entity must complete Appendix 3Y and give it to ASX no more than 5 business days after the change occurs.

5. 3.19A.3 The notifiable interests of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) at the date that the director ceases to be a director. The entity must complete Appendix 3Z and give it to ASX no more than 5 business days after the director ceases to be a director.

6. Listing rule 3.19B which states as follows.

An entity must make such arrangements as are necessary with a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) to ensure that the director discloses to the entity all the information required by the entity to give ASX completed Appendices 3X, 3Y and 3Z within the time period allowed by listing rule 3.19.A. The entity must enforce the arrangements with the director.

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1. The Companies Update dated 27 June 2008, reminding listed entities of their obligation to notify ASX within 5 business days of the notifiable interests in securities held by each director and outlining the action that ASX would take in relation to breaches of listings rules 3.19A and 3.19B.

As the Appendix 3Z indicated that the director ceased to be a director on 25 August 2008, it appears the Appendix 3Z should have been lodged with ASX by 1 September 2008. As it was lodged on 9 September 2008, it appears that there may have been a breach by the Company of listing rules 3.19A and/or 3.19B.

Please note that ASX is required to record details of breaches of the listing rules by listed companies for its reporting requirements.

ASX reminds the Company of its contract with ASX to comply with the listing rules. In the circumstances ASX considers that it is appropriate that the Company make necessary arrangements to ensure there is not a reoccurrence of a breach of the listing rules.

Having regard to listing rules 3.19A and 3.19B and Guidance Note 22: “Director Disclosure of Interests and Transactions in Securities - Obligations of Listed Entities”, we ask that you answer each of the following questions:

1. Please explain why the Appendix 3Z was lodged late.

2. What arrangements does the Company have in place with its directors to ensure that it is able to meet its disclosure obligations under listing rule 3.19A?

3. 3 If the current arrangements are inadequate or not being enforced, what additional steps does the Company intend to take to ensure compliance with listing rule 3.19B?

Your response should be sent to me by e-mail at frances.finucan@asx.com.au or by facsimile on facsimile number 07 3832 4114. It should not be sent to the Company Announcements Office.

A response is requested as soon as possible and, in any event, not later than half an hour before the start of trading (ie before 9.30 a.m. A.E.S.T.) on Friday, 12 September 2008.

Under listing rule 18.7A, a copy of this query and your response will be released to the market, so your response should be in a form suitable for release and should separately address each of the questions asked. If you have any queries or concerns, please contact me immediately.

Yours sincerely,

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Frances Finucan Senior Adviser, Issuers (Brisbane)

ANM2008.09.09L-ff

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