MAGONTEC LIMITED — Director's Dealing 2010

Dec 20, 2010

==> picture [149 x 71] intentionally omitted <==

developing technologies for the future

AML Group Policy

BUYING AND SELLING AML GROUP SHARES

A Policy Directed to Staff and Consultants

December 2010

DOCUMENT VERSION AML Group Policy – Buying & Selling AML Group Shares V3-December 2010

DOCUMENT APPROVAL NO. DA1010

AML Group Policy

(Updated 17 December 2010)

==> picture [92 x 44] intentionally omitted <==

TABLE OF CONTENTS

1.	BACKGROUND............................................................................................................................3
2.	AIM ................................................................................................................................................3
	a)To effect proper business controls.................................................................................................3
	b) To protect the broader sharehodler interest
3.	**DEFINITIONS...............................................................................................................................3 **
	3.1. WHO IS COVERED BY THISPOLICY?...........................................................................................3
	3.2. WHAT IS ACLOSEASSOCIATE?.................................................................................................3
	3.3. WHAT ARESECURITIES_?_..........................................................................................................3
	3.4. WHAT IS AGROUPCOMPANY_?_.................................................................................................3
	3.5. WHAT ISDEALING INSECURITIES? ...........................................................................................4
	3.6. WHAT ISINSIDEINFORMATION? ...............................................................................................4
	3.7. WHAT IS THEPROHIBITED PERIOD? .........................................................................................4
4.	POLICY .........................................................................................................................................5
	4.1. GROUPCOMPANIES..................................................................................................................5
	4.2. NON-GROUPCOMPANIES.........................................................................................................5
5.	PROCEDURES..............................................................................................................................5
	5.1. WHAT MUST YOU DO IF YOU WISH TO DEAL OUTSIDE THEPROHIBITED PERIOD? ........................5
	5.2. WHAT MUST YOU DO IF YOU HAVE A SPECIAL NEED TO DEAL DURING THEPROHIBITED PERIOD,
	OF IF YOU BELIEVE YOU MAY HOLD INSIDE INFORMATION? ........................................................5
	5.3 EXCLUDEDTRANSACTIONS………………………………………………………………………5

DOCUMENT APPROVAL NO.	DOCUMENT	VERSION
DA1010	AML Group Policy – Buying & Selling AML Group Shares	V3- December 2010

DOCUMENT APPROVAL NO. DA1010

Page 2

AML Group Policy

(Updated 17 December 2010)

==> picture [92 x 44] intentionally omitted <==

1. BACKGROUND

Although employees (including Directors and consultants) are encouraged to become shareholders of our businesses, there are both legal and ethical considerations involved in respect of such transactions. The obvious legal consideration is the prohibition placed upon individuals trading in shares (ie buying or selling) where those individuals are in possession of “inside information”.

2. AIM

• (a) To effect proper business controls.

• (b) To protect the broader shareholder interests. (c) To meet legal requirements.

3. DEFINITIONS

3.1. Who is covered by this Policy?

All employees, specified consultants (those consultants working for the Company on a regular or periodic basis as a substitute for engagement of full time personnel) and Directors of AML (which includes associated companies) and their close associates, and all AML Group companies.

3.2. What is a Close Associate?

For the purposes of this policy, a close associate is:

• (i) any company in which you have a substantial shareholding;

• (ii) any private trust of which you are a beneficiary; and

• (iii) any person or company with whom you have an arrangement which would entitle you to control, or influence substantially, the exercise of any voting power of shares in any of the relevant companies.

3.3. What are Securities ?

For the purposes of this policy, securities are any listed or unlisted class of share, right or share option.

3.4. What is a Group Company ?

For the purposes of this policy, the AML Group companies incorporate Advanced Magnesium Limited and any other Company which becomes part of the Group as a result of a takeover offer or other form of acquisition by AML.

DOCUMENT APPROVAL NO. DOCUMENT VERSION DA1010 AML Group Policy – Buying & Selling AML Group Shares V3- December 2010

Page 3

AML Group Policy

(Updated 17 December 2010)

==> picture [92 x 44] intentionally omitted <==

3.5. What is Dealing in Securities?

For the purposes of this policy, dealing in securities is a transaction that includes:

• (i) the buying or selling of, or subscribing for, any securities; and

• (ii) the sale of shares which are a result of the exercise of the Employee Share Options.

Whether on your own account or on behalf of another person.

The participation by an employee, consultant of Director in a capital raising (eg rights issue or share purchase plan) offered by the company to all Australian and New Zealand domiciled shareholders is not considered to be dealing in securities under this Policy. The issue of any share option to staff under the Company’s Employee Share Option Plan is not considered to be dealing in securities under this Policy. However, the subsequent sale of shares from the exercising of these options does constitute such a transaction and must comply with this policy.

3.6. What is Inside Information?

For the purpose of this policy, inside information is information which has not been released to the Australian Stock Exchange, and which may have an effect on the price of the securities in the relevant company.

3.7. What is the Prohibited Period?

The prohibited period is a block-out period in which dealing in securities should not occur by persons covered by this policy.

A prohibited period occurs during the following times:

• (i) two weeks prior to a Board Meeting;

• (ii) one month prior to the release of Half Year and Full Year Results to the Australian Stock Exchange;

• (iii) the period 3 weeks prior to the announcement of a capital raising by the company to the date of allotment of shares under such capital raising and

• (iv) one week prior to the release of Quarterly Reports to the Australian Stock Exchange.

VERSION V3- December 2010

DOCUMENT APPROVAL NO. DA1010

DOCUMENT AML Group Policy – Buying & Selling AML Group Shares

Page 4

AML Group Policy

(Updated 17 December 2010)

==> picture [92 x 44] intentionally omitted <==

4. POLICY

4.1. Group Companies

You and your close associates should not deal in securities of the AML Group during a prohibited period.

At no time may you deal in securities in the AML Group when you are in possession of inside information.

In addition, when in possession of inside information, it is not permissible to:

• (i) communicate the information to any other person; or

• (ii) encourage or induce any other person to deal in those securities.

4.2. Non-Group Companies

You and your associates should not deal in securities in a non-Group company which you are aware is the subject of an unannounced significant commercial transaction with an AML Group company.

5. PROCEDURES

5.1. What must you do if you wish to deal outside the Prohibited Period?

You can deal in securities in any AML Group Company outside the prohibited period unless you hold inside information. Once you have completed the transaction you must report the details by completing a “Notification of Change in Shareholdings in Group” form. The completed form is to be provided to the Company Secretary who maintains a register of those transactions on behalf of the Audit Committee. The “Notification of Change in Shareholdings in Group” form is attached in Appendix 2.

5.2. What must you do if you have a special need to deal during the Prohibited Period, of if you believe you may hold inside information?

The Company’s default position is that there is a blanket prohibition on trading within a prohibited period or you a restricted in trading because you hold privileged information.. Under extraordinary circumstances the Executive Chairman in his absolute discretion may provide a dispensation to permit a trade if

• the seller’s action is not in breach of any law; and

• the seller is not in possession of “inside information”.

In the first instance you should contact the Company Secretary prior to entering into the transaction. The Company Secretary will assemble relevant information for submission to the Executive Chairman. That information will include an assessment of -

Executive Chairman.	That information will include an assessment of -
DOCUMENT APPROVAL NO.	DOCUMENT	VERSION
DA1010	AML Group Policy – Buying & Selling AML Group Shares	V3- December 2010

Page 5

AML Group Policy

(Updated 17 December 2010)

==> picture [92 x 44] intentionally omitted <==

• the requirements of law;

• the requirements of rules specified by the Australian Securities Exchange;

• the way in which shareholders may interpret the proposed transaction;

• the possible impact upon the share price;

• the possible impact on the business and finance plans of the company; and

• the urgency of your circumstances and options available.

Should the transaction be permitted and subsequently executed you must report its details to the Company Secretary to record, together with the reason for the dealing, in the register.

5.3. Excluded Transactions

Transaction excluded from this policy are those of the nature as described in heading 9 of Australian Securities Exchange Guidance Note Number 27 issued 1 January 2011.

DOCUMENT APPROVAL NO.	DOCUMENT	VERSION
DA1010	AML Group Policy – Buying & Selling AML Group Shares	V3- December 2010

Page 6

AML Group Policy

(Updated 17 December 2010)

==> picture [92 x 44] intentionally omitted <==

Appendix 2

ADVANCED MAGNESIUM LIMITED

Notification of Change in Shareholdings in Group Securities

NB: This form should be completed at the time of any share transaction activity and forwarded to:

Company Secretary Advanced Magnesium Limited Level 9, 303 Coronation Drive Milton Qld 4064 Fax: (07) 3510 4525

I hereby notify the Company of a change in my shareholding (or that of a close associate) , in the Company or related corporation, as detailed below:

Name of Shareholder .................................................................. Relationship: Self / Spouse / Other (delete as applicable) Site Location: .................................................................. Contact Telephone Number: .................................................................. (business hours) Home address: .................................................................. .................................................................. Company: AML/Other[(1)] ............................................. (delete and insert as applicable) Type of Transaction: Buy / sell / exercise / subscribe for Share / Options (delete as applicable) Date of Transaction: .................................................................. Number of Securities: .................................................................. Name: ............................................. Signature: ....................................... Date: .............................................

• (1) AML or other company which becomes part of the AML Group as a result of a takeover offer or other form of acquisition by a Group company.

DOCUMENT APPROVAL NO.	DOCUMENT	VERSION
DA1010	AML Group Policy – Buying & Selling AML Group Shares	V3- December 2010

Page 7