MAGONTEC LIMITED — Investor Presentation 2015

Feb 1, 2015

==> picture [596 x 111] intentionally omitted <==

2 February 2015

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

Dear Sirs,

Presentation for investor meetings

Please find attached a presentation on the activities of Magontec Limited for the purposes of investor meetings.

Yours sincerely

==> picture [147 x 43] intentionally omitted <==

Nicholas Andrews Executive Chairman Magontec Limited

For more information please contact

Nicholas Andrews, on 0402 220 077 John Talbot (CFO) on 0405 317 594

Magontec Limited, Suite 1.03, 46 Macleay Street Potts Point NSW 2011 AUSTRALIA

==> picture [720 x 35] intentionally omitted <==

==> picture [720 x 143] intentionally omitted <==

Magontec Limited (MGL) February 2015

DISCLAIMER

This Presentation has been prepared by Magontec Limited (ABN 30 147 131 977) (Magontec or the Company). This Presentation contains summary information about Magontec and its activities current as at the date of this Presentation. The information in this Presentation is of a general background nature and does not purport to be complete or to comprise all the information that a shareholder or potential investor in Magontec may require in order to determine whether to deal in Magontec shares. It should be read in conjunction with Magontec’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), which are available at www.asx.com.au. This document is not a prospectus or a product disclosure statement under the Corporations Act (Cth) 2001 (Corporations Act) and has not been lodged with the Australian Securities and Investments Commission (ASIC).

Not investment or financial product advice

This Presentation is for information purposes only and is not financial product or investment advice or a recommendation to acquire Magontec shares and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek financial, legal and taxation advice appropriate to their jurisdiction. Magontec is not licensed to provide financial product advice in respect of Magontec shares. Cooling off rights do not apply to the acquisition of Magontec shares.

Financial data

All dollar values are in Australian dollars (A$) unless stated otherwise and financial data is presented within the financial year end of 30 June 2013 unless stated otherwise. Any pro forma historical financial information included in this Presentation does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the US Securities and Exchange Commission.

Past performance

Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

Future performance

This Presentation contains certain “forward-looking statements”. The words “expect”, “should”, “could”, “may”, “will, “predict”, “plan”, “scenario”, “forecasts”, “anticipates”, “outlook” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Such forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differ materially from these forward-looking statements, and there are risks associated with the Company and the industry (including those set out below) which may affect the accuracy of the forward-looking statements. The Company does not undertake any obligation to release publicly any revisions to any forward looking statement to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

Investment Risk and other risks

Investment in Magontec shares is subject to investment and other known and unknown risks, some of which are beyond the control of Magontec Limited, including risk factors associated with the industry in which Magontec operates and risks specific to Magontec, such as: construction, development and operational risk associated with the Golmud Plant, fluctuations in magnesium alloy prices and exchange rates, risks associated with operating in China, financing risks, market price and demand risk and other risks generally relating to security investments.

Not an offer

This document may not be released or distributed in the United States. This Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. Securities in the Company have not been, and will not be, registered under the U.S. Securities Act of 1933 or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States unless the securities are registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, registration.

To the maximum extent permitted by law, Magontec and its respective advisers and affiliates, directors, officers and employees:

• make no representation or warranty, express or implied, as to the accuracy, reliability or completeness of information in the Presentation; and

• exclude and disclaim all liability, for any expenses, losses, damages or costs incurred by you as a result of your participation in the proposed offering and the information in this Presentation being inaccurate or incomplete in any way for any reason, whether by negligence of otherwise.

==> picture [720 x 26] intentionally omitted <==

1

Content

==> picture [270 x 54] intentionally omitted <==

1. Company

==> picture [270 x 54] intentionally omitted <==

1. Qinghai Project

==> picture [272 x 54] intentionally omitted <==

1. Research & Development

==> picture [271 x 54] intentionally omitted <==

1. Industry Overview

==> picture [720 x 26] intentionally omitted <==

2

1. Company

Go beyond.

==> picture [720 x 26] intentionally omitted <==

3

Company

Corporate dashboard (Financial numbers as at 30 June 2014)

Corporate profile Listed in Australia MGL.AX Substantial shareholders Market capitalisation A$22 million (@2c) Shares on issue 1,115 million Qinghai Salt Lake Magnesium 30% Gross assets A$83 million Allan Gray Australia 19% Annual revenues A$133 million Straits Resources Limited 15% MGL Management 3% Principal activities Magnesium alloy manufacturing Magnesium alloy scrap recycling Magnesium & Titanium anode manufacturing (CCP) Financial ratios (30 June ‘14) Global presence China Xi’an, Suzhou, Jishan, Qinghai (under construction) Net Debt-to-Equity 44% Germany Bottrop NTA per share 2.8c Romania Santana Research & Development Mg alloy research Mg alloy patent portfolio - Australian Govt Grant Group statistics - Industry partners Employees 450 CCP research CCP patent portfolio Manufacturing locations 5 - Ti & Mg application technologies Shareholders 14,000 - Product customisation

==> picture [720 x 26] intentionally omitted <==

4

Company

What does Magontec do?

• ─ Buys pure magnesium (Mg) and Mg alloy scrap to produce Mg alloy ingots

==> picture [543 x 108] intentionally omitted <==

• ─ Manufactures magnesium and titanium anodes

(Cathodic Corrosion Protection – CCP)

==> picture [544 x 108] intentionally omitted <==

==> picture [720 x 26] intentionally omitted <==

Company

Who are Magontec’s customers?

• ─ Sells Mg alloy ingots to OEMs and Tier 1’s in the die cast industry

==> picture [217 x 169] intentionally omitted <==

----- Start of picture text -----

Powertool
Automotive
Electronics
Other
----- End of picture text -----

==> picture [143 x 96] intentionally omitted <==

==> picture [141 x 95] intentionally omitted <==

Gearbox housing

Steering wheel armature

==> picture [252 x 226] intentionally omitted <==

• ─ Sells Mg & Ti anodes to gas, electric and solar hot water tank makers

==> picture [126 x 104] intentionally omitted <==

==> picture [118 x 99] intentionally omitted <==

==> picture [720 x 26] intentionally omitted <==

6

Company

Common applications made from magnesium AM50/60, AZ91, AS31

Instrument panel structures (“IP Beam”)

==> picture [309 x 149] intentionally omitted <==

Steering wheel armatures

==> picture [201 x 141] intentionally omitted <==

Transmission housing

Centre console

==> picture [355 x 117] intentionally omitted <==

==> picture [720 x 26] intentionally omitted <==

7

Manufacturers use Mg because it is a lightweight metal

Company

New applications made from magnesium alloys

Window frame

==> picture [318 x 232] intentionally omitted <==

Tailgate

==> picture [253 x 240] intentionally omitted <==

==> picture [720 x 26] intentionally omitted <==

8

Company

Locations and capacities

==> picture [701 x 411] intentionally omitted <==

----- Start of picture text -----

Bottrop
Golmud 2016
Toronto Santana Ji Shan
HQ Xi’an
Production
Su Zhou
Sales Office
Technology Centre
Cast House Project
Alloy/Recycling Capacity
Anode Capacity
Bottrop Santana Xi‘an Suzhou Shanxi Sydney
1 CAST is a Technology Association
CAST [1 ]
15 kt 6 kt 1 kt 5 kt 1 kt 8 kt 30 kt
2 kt = thousands of tonnes
----- End of picture text -----

9

Company

Strategic position

 A global magnesium alloy company

Only Western magnesium alloy producer

• Own Chinese primary Mg alloy manufacturing base

• Own Mg alloy recycling facilities in Europe & Asia

• Global logistics and sales capabilities

• Comprehensive Mg alloy product portfolio

==> picture [145 x 142] intentionally omitted <==

• Active commitment to Research & Development

From commencement of Qinghai Project (2015/16)

• Exclusive Mg alloy production from electrolytic smelter

• World’s lowest CO² footprint Mg metal

• Long-term price offering for volume customers

==> picture [145 x 143] intentionally omitted <==

==> picture [720 x 26] intentionally omitted <==

10

Company

Strategic actions 2013 - 2016

Magnesium alloy manufacturing and recycling

Building a competitive advantage in a global growth industry

• Romania, China ++

• Recycling capacity in new die cast regions

• Reduce manufacturing costs

• Process change, automation

• Golmud, Qinghai Province

• New primary magnesium alloy capacity

==> picture [145 x 141] intentionally omitted <==

Magnesium and Titanium anodes

Raise barriers to entry for smaller competitors

• Reduce conversion & fabrication costs

• Romania, automation, process

• Scale economies through increased volume

• New markets & products

• ICAS, electronics

• Increase product sophistication

==> picture [145 x 141] intentionally omitted <==

==> picture [720 x 26] intentionally omitted <==

11

Go beyond.

2. Qinghai Project

==> picture [720 x 26] intentionally omitted <==

12

Qinghai project

Qinghai Project – manufacturing and resource location

==> picture [664 x 305] intentionally omitted <==

----- Start of picture text -----

Golmud
Situated on a substantial
resource in western China
An established industrial
location for > 50 years
Electrified rail links to
domestic and export
markets
----- End of picture text -----

 Situated on a substantial resource in western China  An established industrial location for > 50 years

 Electrified rail links to domestic and export markets

 Sponsored by Provincial and National governments

Brine content > 20% MgCl2 / Mean Mg content of 58g/litre

4 bil tonnes of MgCl2 at Golmud of which 1 bil tonnes is pure Mg

==> picture [720 x 26] intentionally omitted <==

13

Qinghai project

Electrolytic magnesium smelter complex and cast house schematic

==> picture [720 x 394] intentionally omitted <==

==> picture [720 x 26] intentionally omitted <==

14

Qinghai project

Electrolytic magnesium smelter complex and cast house

• Mg complex constructed, owned and operated by QSLM

• Mg alloy cast house equipment installed, owned and operated by Magontec

• Cost US$4 + billion Cost US$12 million

==> picture [657 x 174] intentionally omitted <==

----- Start of picture text -----

100,000 metric tonnes pa capacity
Magnesium cast house
Pure Mg
44%
(QSLM)
Electrolytic
Brine
Dehydration cell-house
purification
Mg alloys
56%
(Magontec)
----- End of picture text -----

==> picture [720 x 115] intentionally omitted <==

==> picture [720 x 26] intentionally omitted <==

15

Qinghai project

Qinghai & Magontec have signed 3 Agreements

==> picture [139 x 174] intentionally omitted <==

----- Start of picture text -----

Magnesium Alloy Cast House
Operating Agreement
between
Qinghai Salt Lake Magnesium
and
Magontec Qinghai Ltd
28 May 2014
----- End of picture text -----

==> picture [337 x 175] intentionally omitted <==

----- Start of picture text -----

Build-to-suit-to-lease
Off-Take Price Agreement Agreement
between between
Qinghai Salt Lake Magnesium Qinghai Salt Lake Magnesium
and and
Magontec Qinghai Ltd Magontec Qinghai Ltd
28 May 2014 28 May 2014
----- End of picture text -----

• Defines working relationship

• Defines pricing benchmark & formula

• Foundation documents for future prosperity

• • 10 year + 10 year option duration

• Provides absolute exclusivity

• Arbitration in Hong Kong

==> picture [720 x 114] intentionally omitted <==

==> picture [720 x 26] intentionally omitted <==

16

The move to Qinghai will be a company transforming event

Qinghai project

Golmud Cast House – ready for Phase A installation

January 2015

==> picture [594 x 335] intentionally omitted <==

==> picture [720 x 26] intentionally omitted <==

17

Qinghai project

The Qinghai Project is an environmental model

==> picture [239 x 160] intentionally omitted <==

==> picture [252 x 158] intentionally omitted <==

• Best hydro power resources in China.

==> picture [5 x 41] intentionally omitted <==

Wind 0.10% Solar 9.10% Coal 15.50%

• Source of 3 major Chinese rivers (Yellow, Yangzte, and Canglan)

• Future growth in solar and hydro

==> picture [580 x 42] intentionally omitted <==

Hydro 75.30%

==> picture [720 x 26] intentionally omitted <==

18

Qinghai project

Comparison CO2 eq / kg Magontec Qinghai[2] vs Various Mg[1] + Al[1]

Qinghai Salt Lake Magnesium CO2 credentials :

20 kg

 36% below next best (RIMA in Brazil)  49% below world aluminium average

18 kg

14 kg Pidgeon - av. Magontec Yitong Electrolysis incl. credits incl. credits incl. credits

==> picture [40 x 14] intentionally omitted <==

----- Start of picture text -----

13 kg
----- End of picture text -----

10 kg

6 kg

Rima Process incl. credits

Magontec Aluminium Qinghai (World average)

1 Source IMA LCA study 2013 2 Source Hatch/Qinghai project

19

Qinghai project

Qinghai timetable – current estimate

Installation and commissioning timetable

Jan	Magontec Phase A equipment acquired and on-site (Line 1 – 14k mt)
Feb/Mch Apr/May	Phase A equipment installation Dehydration units & electrolysis cell house completion	2015
May to Nov	Commissioning phase for dehydration and electrolysis
Sep/Oct	Magontec Phase B equipment arrives on site (lines 3 & 4 – 27k mt)
Dec/Jan	First commercial production dehydration & electrolytic cell	2016
Feb/Mch	Magontec Phase C equipment arrives on site (Line 2 – 15k mt)

==> picture [720 x 26] intentionally omitted <==

20

Qinghai project

Qinghai summary

A profound impact on Magontec:

• Competitive in every global magnesium alloy market

• Triple magnesium alloy production volume

• Transform profitability of PRC activities

• Improve profitability in downstream activities

==> picture [720 x 26] intentionally omitted <==

21

3. Research & Development

==> picture [720 x 114] intentionally omitted <==

----- Start of picture text -----

Go beyond.
----- End of picture text -----

==> picture [720 x 26] intentionally omitted <==

22

Research & Development

A strong focus on the future and on quality

• R&D teams in Germany, China and Australia

• Production & process experts in each business

• R&D partnerships with universities, research institutes & customers

==> picture [120 x 120] intentionally omitted <==

• 3-year product development program with Australian Research Council, 2 European manufacturers and 5 Universities in Australia and Germany

• Developing Mg alloy technologies for future applications

• Developing new corrosion protection technologies using Mg and Ti anodes

==> picture [122 x 118] intentionally omitted <==

• Working with customers to optimise outcomes

==> picture [720 x 26] intentionally omitted <==

23

Research & Development

==> picture [234 x 174] intentionally omitted <==

Magontec high-temperature alloys

AE44 alloy family



• Enhances castability, mechanical properties and high temperature resistance

• Potential to become foundation for future Mg alloy developments

Engine Covers

• AE44 alloy applications increasingly used by Porsche, Audi, BMW and GM

==> picture [183 x 133] intentionally omitted <==

Engine Torque Support

Tunnel bracket

==> picture [204 x 153] intentionally omitted <==

Engine Cradle

==> picture [720 x 26] intentionally omitted <==

24

3. Industry Overview

==> picture [720 x 143] intentionally omitted <==

----- Start of picture text -----

Go beyond.
----- End of picture text -----

==> picture [720 x 26] intentionally omitted <==

25

Industry overview

Chinese pure Magnesium Vs pure Aluminium ingot prices

==> picture [688 x 320] intentionally omitted <==

----- Start of picture text -----

¥20,000
Magnesium v Aluminium (1 January 2010 - 20 January 2015)
¥19,000
Al Ingot 99.7% China RMB
¥18,000 Mg 99.9% China RMB
Mg price adjusted for density (80%)
¥17,000
¥16,000
¥15,000
¥14,000
¥13,000
¥12,000
¥11,000
¥10,000
----- End of picture text -----

==> picture [720 x 26] intentionally omitted <==

26

Industry overview

Pure magnesium supply

• Global supply was 861Kt in 2013, of which China produced

• Other, 7% 681Kt

• China Israel, 3% 

• 79% Global supply rose 18.4% yearUSA, 7% on-year in 2013

• Russia 4%  Chinese capacity declined 6% to 1.9 MTPY, of which 67% (1.3 MTPY) is active and 17%

• 2013 unlikely to re-start  Planned capacity at Qinghai (100Kt pa electrolytic), Xinjiang, IM, Ningxia and Shaanxi (>100Kt pa Pidgeon)

• ~420,000 producing at or below break-even as at March

• All data from CM Group 2012 and 2013 presentations to IMA Conference 2014

All data from CM Group 2012 and 2013 presentations to IMA Conference

==> picture [720 x 26] intentionally omitted <==

27

Industry overview

Chinese magnesium consumption

==> picture [346 x 343] intentionally omitted <==

----- Start of picture text -----

Aluminium Alloying Iron & Steel Metal Reduction
Die Casting - Auto Die Casting - Other Other
350
21.1
300
21.7
250
61
5.9
200
15.8
71.2
45
150
44.9
48.2
100
36
50
87
61.6
0
2012 2013
‘000 tonnes per annum
----- End of picture text -----

• *CM Group 2012 and 2013 presentations to IMA Conference

OICA

“  Automotive” and “Other” die cast Mg consumption rose 36% in 2013*

 Total Mg consumption up 41% year-on-year*

 Chinese annual auto registrations + 22m in 2013, 13.9% year-on-year and CAGR of 18.2% since 2005 (Global CAGR 3.28%)[# ]

 Chinese annual auto production +14.8% in 2013 v global growth of 3.7%

 Automotive manufacturing in China is now dominated by international marques who make >75% of Chinese production[#]

==> picture [720 x 26] intentionally omitted <==

28

Industry overview

Automotive and Other Mg Die Cast Sector Growth Forecast to 2023

==> picture [682 x 366] intentionally omitted <==

----- Start of picture text -----


Mg is expected to
2,400 Forecast see growth in
demand from all
Global supply
major consumer
Rest of World
industries
China
Japan
1,600

EU Automotive die cast
demand is expected
NA
to grow most
strongly
800

Automotive die cast
demand forecast to
grow to more than
500k mtpa
0
1998 2003 2008 2013 2018 2023
Source: CM Group
'000 tonnes of Magnesium
----- End of picture text -----

 Automotive die cast demand is expected to grow most strongly

Source: CM Group

==> picture [720 x 26] intentionally omitted <==

29

Industry overview

Vehicle emission legislation – global comparisons

NEDC gCO2/km Year US California 2002 261 261 2003 259 2004 262 2005 253 2006 249 2007 243 2008 240 239 2009 213 2010 212 2011 228 221 2012 205 205 2013 198 198 2014 191 191 2015 181 181 2016 172 172 2017 162 2018 152 2019 143 2020 134 2021 126 2022 119 2023 112 2024 105 2025 99

Canada EU Australia Japan China S. Korea 244 166 252 157 213 239 164 156 232 239 162 247 154 218 237 161 245 153 214 227 160 230 149 188 213 158 226 147 207 154 222 141 185 198 146 222 130 154 125 167 150 95 117 Actual Enacted Proposed Under study  100 kg of weight reduction reduces ~10g of CO2 emission per kilometre  CO2regulations are driving automotive companies to look for lighter materials  The EU is the most aggressive but all jurisdictions have increasingly stringent emission regulations

Under the EU ‘Cars Regulation’, fleet average for all new cars is 130g of CO2/km by 2015 - phased in from 2012 - and 95g/km by 2020. The regulation is currently undergoing amendment in order to implement the 2020 target. Updated 30 July 2012

==> picture [720 x 26] intentionally omitted <==

30

Summary

• The Qinghai project will be transformative for Magontec and for the magnesium

• industry

• Magontec has a strong position in Qinghai underpinned by three comprehensive

• agreements

• QSLM is an equity partner in Magontec – not a disinterested counterparty

• The magnesium industry is enjoying a secular growth trend as automotive companies

• seek alternative materials that address CO2 emission requirements

• Magontec has an underlying business that is improving – it is not burning cash waiting

• for Qinghai to come on stream

• Magontec is not just a Mg alloy manufacturer and recycler – it has a growing portfolio

• of value-adding products in corrosion protection

==> picture [720 x 26] intentionally omitted <==

31

Thank you for your time

MAGONTEC Group MAGONTEC MAGONTEC GmbH MAGONTEC Xian Co., Ltd Head Office, Sydney Industriestraße 61 No. 40, Feng Cheng 3 Road, Suite 1.03 46a Macleay St 46240 Bottrop Xian Economic and Technological Potts Point Sydney NSW 2011 Germany Development Zone AUSTRALIA Xian, China, Post code: 710021 Tel +61 2 8005 4109 Tel +49 (0) 20 41 / 99 07-0 Tel. +86 29 / 86 52 68 78 Fax +61 2 9252 8960 Fax +49 (0) 20 41 / 99 07 99 Fax +86 29 / 86 52 37 22 corporate@magontec.com europe@magontec.com china@magontec.com www.magontec.com www.magontec.com www.magontec.com

==> picture [720 x 26] intentionally omitted <==

32