MAGONTEC LIMITED — Interim / Quarterly Report 2017

Jul 30, 2017

==> picture [592 x 110] intentionally omitted <==

Suite 1.03, Level 1 46A Macleay St Potts Point NSW 2011 Australia Ph: +61 2 8005 4109 Fax: +61 2 9252 8960

31 July 2017 Company Announcements Office Australian Securities Exchange Limited 20 Bridge Street, Sydney NSW 2000

Dear Sirs,

Appendix 4C – Quarter Ended 30 June 2017

Appendix 4C for the quarter ended 30 June 2017 is attached. The cash flow data on which the Appendix 4C are based is unaudited.

Given the Company’s report for the half year ended 30 June 2017 will be released on or prior to 31 August 2017, no supplementary accounting data and Executive Chairman’s report are included in this report.

The Company’s cash flow statement in the form consistent with the requirements of AASB107 will be disclosed in the Company’s half year report.

Appendix 4C is submitted in the format as required by Paragraph 4.7B of Chapter 4 of the ASX listing rules.

It is reiterated that all data presented in this report is unaudited.

Yours Sincerely,

==> picture [170 x 72] intentionally omitted <==

John Talbot Company Secretary

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

==> picture [131 x 32] intentionally omitted <==

Limited

QUARTERLY UNAUDITED CASHFLOW APPENDIX 4C

for the Period Ended 30 June 2017

Quarterly Report for 30 June 2017

Page 1

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Magontec Limited

ABN: 51 010 441 666 Registered & Principal Office: Suite 1.03, Level 1 46A Macleay St, Potts Point, NSW 2011 Australia

Tel: +61 2 8005 4109 Fax: +61 2 9252 8960 Website: www.magontec.com

Email: corporate@magontec.com

Non-Executive Directors As at 30 June 2017

Zhongjun Li Kangmin Xie Andre Labuschagne

Independent Directors

As at 30 June 2017

Robert Shaw Robert Kaye

Management Team

Issued Capital (as at 30 June 2017)

Ordinary Shares (ASX Code MGL)

1,140,073,483 fully paid Ordinary shares on issue

Options: Nil Performance Rights[(1)] :

Performance Period Granted 1 Jan 2015 to 31 Dec 2017 19 May 2017 1 Jan 2016 to 31 Dec 2018 19 May 2017 1 Jan 2017 to 31 Dec 2019 19 May 2017 Total Note:	Number 22,976,789 25,749,882 15,621,146
	64,347,817

(1) For terms of issue refer to the heading “Vesting of Performance Rights as Magontec Ordinary Shares” in paragraphs o to t of Resolution 5 of the 2017 AGM.

Substantial Shareholders

Shareholder	No. of shares(2)	Percent(3)
Qinghai Salt Lake Magnesium Industry Limited	330,535,784	28.99
Allan Gray Australia Pty Limited	187,230,248	16.42
Straits Mine Management Pty Limited	148,874,507	13.06

Notes:

• (2) As per last “Notice of change of interests of substantial holder” lodged with ASX by shareholder.

• (3) “No. of Shares” divided by fully paid Ordinary shares on issue as at the date of this report.

Share Registry Services

Nicholas Andrews Executive Chairman

John Talbot Company Secretary

Derryn Chin Chief Financial Officer

Boardroom Pty Limited Level 7, 207 Kent St Sydney NSW 2000

Postal Address:

GPO Box 3993 Sydney NSW 2001

Tel: 1300 737 760 or International: +61 2 9290 9600

Fax: 1300 653 459 Website: http://www.boardroomlimited.com.au

The current share price can be obtained from the ASX Website – www.asx.com.au

Quarterly Report for 30 June 2017

Page 2

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Appendix 4C

Quarterly report for entities subject to Listing Rule 4.7B

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16

Name of entity

Magontec Limited ABN Quarter ended (“current quarter”) 51 010 441 666 30 June 2017

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter (3 months) $A’000	Year to date (6 months) $A’000
1. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8	Cash flows from operating activities Receipts from customers Payments for (a) research and development (b) product manufacturing and operating costs (c) advertising and marketing (d) leased assets (e) staff costs (f) administration and corporate costs Dividends received (see note 3) Interest received Interest and other costs of finance paid Income taxes paid Government grants and tax incentives Other (provide details if material)	43,617 (144) (33,453) (15) - (1,724) (1,334) - 20 (317) (58) 83 -	71,409 (239) (65,781) (62) - (3,175) (2,555) - 29 (579) (123) 83 -
1.9	Net cash from / (used in) operating activities	6,675	(992)

Quarterly Report for 30 June 2017

Page 3

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter (3 months) $A’000	Year to date (6 months) $A’000
2. Cash flows from investing activities
2.1 Payments to acquire:
(a) property, plant and equipment	(645)	(2,255)
(b) businesses (see item 10)	-	-
(c) investments	-	-
(d) intellectual property	(1)	(2)
(e) other non-current assets	-	-
2.2 Proceeds from disposal of:
(a) property, plant and equipment	-	17
(b) businesses (see item 10)	-	-
(c) investments	-	-
(d) intellectual property	-	-
(e) other non-current assets	-	-
2.3 Cash flows from loans to other entities	-	-
2.4 Dividends received (see note 3)	-	-
2.5 Other (provide details if material)	168	(2)
2.6 Net cash from / (used in) investing activities	(479)	(2,241)
3. Cash flows from financing activities
3.1 Proceeds from issues of shares	-	-
3.2 Proceeds from issue of convertible notes	-	-
3.3 Proceeds from exercise of share options	-	-
3.4 Transaction costs related to issues of shares, convertible notes or options	-	-
3.5 Proceeds from borrowings	5,245	20,433
3.6 Repayment of borrowings	(10,215)	(16,966)
3.7 Transaction costs related to loans and borrowings	-	-
3.8 Dividends paid	-	-
3.9 Other (provide details if material)	-	-
3.10 Net cash from / (used in) financing activities	(4,970)	3,467

Quarterly Report for 30 June 2017

Page 4

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter (3 months) $A’000	Year to date (6 months) $A’000
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of quarter/year to date	3,379	4,593
4.2 Net cash from / (used in) operating activities (item 1.9 above)	6,675	(992)
4.3 Net cash from / (used in) investing activities (item 2.6 above)	(479)	(2,241)
4.4 Net cash from / (used in) financing activities (item 3.10 above)	(4,970)	3,467
4.5 Effect of movement in exchange rates on cash held	(187)	(408)
4.6 Cash and cash equivalents at end of quarter	4,419	4,419

5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	4,419 - - -	3,379 - - -
	4,419	3,379

6.	Payments to directors of the entity and their associates	Current quarter
		$A'000
6.1	Aggregate amount of payments to these parties included in item 1.2	35
6.2	Aggregate amount of cash flow from loans to these parties included
	in item 2.3	-
6.3	Include below any explanation necessary to understand the transactions included in
	items 6.1 and 6.2
Not	applicable

Quarterly Report for 30 June 2017

Page 5

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

7.	Payments to related entities of the entity and their	Current quarter
	associates	$A'000
7.1	Aggregate amount of payments to these parties included in item 1.2	-
7.2	Aggregate amount of cash flow from loans to these parties included
	in item 2.3	-
7.3	Include below any explanation necessary to understand the transactions included in
	items 7.1 and 7.2

Not applicable

8. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 8.1 Loan facilities 27,195 19,595 8.2 Credit standby arrangements 8.3 Other (please specify) 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
	27,195	19,595

Borrowings facilities as at 30 June 2017
	**Maturity **	Interest rate	Limit	Drawn	Security
Lender	%	%	$A 000	$A 000	status
Commerzbank Germany	30-Sep-17	2.15%	12,316	8,481	Secured
Commerzbank Germany	31-Dec-18	2.50%	426	372	Secured
ING Romania	Open	3.15%	4,306	3,640	Secured
Bank of Communications China	03-May-18	4.70%	3,843	3,843	Secured
Commerzbank Bank China	NA	5.78%	4,803	1,935	Secured
Total borrowings on balance sheet			25,693	18,270
Postbank(factoring)			1,502	1,326
Total facilities as at 31 Mar 17			27,195	19,595

The facilities with Commerzbank Germany that were due to expire on 30 June 2017 have been extended to 30 September 2017. The company is currently discussing an expansion of its limit, and will update the market as appropriate.

Quarterly Report for 30 June 2017

Page 6

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

9. Estimated cash outflows for next quarter	9. Estimated cash outflows for next quarter	$A’000	$A’000
9.1 Research and development 9.2 Product manufacturing and operating costs 9.3 Advertising and marketing 9.4 Leased assets 9.5 Staff costs 9.6 Administration and corporate costs 9.7 Other (provide details if material) 9.8 Total estimated cash outflows		(131) (30,014) (25) - (1,482) (1,196) -
		(32,848)
10. Acquisitions and disposals of business entities (items 2.1(b) and 2.2(b) above)	Acquisitions		Disposals
10.1 Name of entity	Not applicable		Not applicable
10.2 Place of incorporation or registration	Not applicable		Not applicable
10.3 Consideration for acquisition or disposal	Not applicable		Not applicable
10.4 Total net assets	Not applicable		Not applicable
10.5 Nature of business	Not applicable		Not applicable

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Sign here: Date: 31 July 2017 (Executive Chairman)

Print name: Mr Nicholas Andrews

Quarterly Report for 30 June 2017

Page 7