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

22 November 2011

Advanced Magnesium Limited

ASX Code: ANM

Executive Chairman’s Presentation – 2011 AGM

The attached material will be presented by the Executive Chairman to the Annual General Meeting of the company to

be held this morning at 10:00 AM.

John Talbot

Company Secretary

Advanced Magnesium Limited

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Chairman’s Address To Shareholders

Ladies and Gentlemen, the last 12 months have been one of significant activity and progress for Advanced Magnesium:

Slide One

The signal event of the period has been the acquisition of the Magontec Group of companies from Straits Resources Limited.

Magontec is a leading manufacturer and distributor of magnesium alloys to all the World’s major automotive and electronics companies.

Mr Franke will provide you with a more detailed outline of Magontec, acompany that he has lead for the last 17 years; however, I am particularly pleased to be able to welcome Guenter and his colleagues into our business as they bring a wealth of industry experience and nearly 60 years of history as the World’s premier magnesium alloy manufacturer.

Magontec is a company that has been preparing for the future with new investments in Romania and China to boost recycling capacity and has a business plan for investment in new alloy production and cost reduction initiatives.

AML has acquired the best possible platform for the commercialisation of ourmagnesium technology portfolio. As a combined group AML and Magontec are becoming a very competitive player in the global magnesium alloy manufacturing and recycling industry.

The acquisition has allowed AML to further rationalise its independent activities, with Magontec assuming control of all manufacturing, marketing, distribution and logistics activities.

In addition to the operational advantages of this business combination,Magontec brings a brand name recognised and respected by magnesium alloy consumer groups around the World.

As a result we will be asking shareholders at this meeting to vote on a resolution to change the name of the company from Advanced MagnesiumLimited to Magontec Limited. (New Code: MGL)

Slide Two

This slide shows the new structure of the group.

The Australian listed company holds a 53% stake in HNKWE Alloy Materials Company Limited and a 100% stake in the Magontec Group.

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It also has a partnership relationship with the CAST CRC Limited, an Australian industry and Government funded research and development company.

HNKWE is the joint venture that the group entered into in June 2009. It is a large scale, low cost producer of generic magnesium alloys from its factory in Chang Ge in Henan Province.

This business has been managed by one of our joint-venture partners, Mr Sun Qiu Jian, for a little over a year. During the 2011 financial year unit costs ofproduction fell significantly and the factory produced 9,300 metric tonnes of Mg alloy material. In recent weeks HNKWE has commission two new furnaces and now has total annual productive capacity of 35,000 metric tonnes per annum.

Magontec, the new subsidiary, manufactures new Mg alloys at it factory in Xi’an and recycles scrap Mg alloys in Suzhou in China and Bottrop inGermany. In a few days time it will commence recycling production at Arad inRomania.

Magontec is also a manufacturer of sacrificial anodes for the water heater industry. Anode production takes place in Germany and China and will shortly commence in Romania.

The relationship with CAST CRC Limited is a critical part of our corporate structure. CAST has been responsible for the development of the core Mgalloys that we expect to commercialise in the coming years.

The combination of competitive manufacturing capacity, a global distribution and recycling network and a world class R&D portfolio ensures that AML is the best positioned magnesium alloy manufacturer in the World today.

Slide Three

I wanted to make a few comments on the financial results for 2011 before moving on to look in more detail at the new group and the opportunities that lie ahead of us.

As you will see revenue increased significantly as production at the HNKWE factory in Chang Ge rose from 3,000 metric tonnes in FY2010 to 9,300 mt in FY2011.

You will see that we have been able to cut costs by further reducing expenditure on travel and R&D. This latter expense, R&D, has been thesubject of critical analysis in recent weeks as we combine the AML and Magontec patent portfolios. We have identified the commercial opportunities for each patent and rationalised the portfolio accordingly to better focus our expenditure and activities.

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Through the last quarter of FY2011 HNKWE operated profitably although shipment delays, requested by HNKWEs largest customer, have negatively impacted profitability in the first half of FY2012.

Over the last 12 months the Board continued to debate the structure that would best serve the purpose of commercialising AML’s portfolio of patentedmagnesium technology assets and formed the view that the company needed to find a faster path to market than that offered by the HNKWE joint venture.

Without a more robust marketing and distribution platform we felt AML wouldnot be able to penetrate the major automotive customers and develop programs that would properly test our alloys.

It also became clear that AML and HNKWE would take some time to develop the scale and expertise required to become financially self-sufficient.

For these reasons we sought to grow the business through acquisition. The merger of Magontec and AML fulfils these critical shortcomings andestablishes AML, proposed to be re-named Magontec – as the best possible platform for the exploitation of our technology assets and the fastest route to becoming a profitable company, able to fund or part fund the programs required to promote these technologies.

Slide Four

While the combined financials of the two companies for the 2011 financial year continue to show a deficit, there are a number of rationalisation opportunities between the two groups and other events that should help to bridge this gap.

Magontec has been a profitable company for many years however its existing manufacturing locations suffer from cost pressures that are being addressedthrough new investment. In 2011 Magontec embarked upon a strategy of growth and diversification, acquiring and constructing new manufacturing and recycling facilities in China and Europe to reduce its costs of production. The combination with HNKWE provides Magontec with access to another high volume and low cost manufacturing base in China.

Over the coming months we expect to announce a series of initiatives that will further entrench Magontec as a highly competitive, high volume magnesium alloy producer.

Ladies and gentlemen, manufacturing and recycling magnesium alloys in China and Europe in competition with Chinese companies is a tough business. We are in the process of structuring the company to become more competitive in this industry while at the same time we are developing channels to market for our patented, high technology alloys.

Slide Five

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Today Magontec has a global footprint that is unrivalled among magnesium alloy and anode manufacturers.

We have one recycling plant in China and two in Europe. Recycling is critical activity in the magnesium industry as die casters generate significant quantities of scrap. Our new recycling plant at Suzhou in China was purchased in March 2011 and is now operating profitably. Our Romanian plant will begin operations in a few days and is expected to become profitable within six months.

We also have two plants manufacturing new magnesium alloy at Xi’an in central China and at Chang Ge, our joint venture partner, in Henan Province.

Finally, and in my view most importantly, we have a global technologycapability with centres in Bottrop, Germany and Xi’an in China as well as in Melbourne, the home of our technology partner CAST. We are now able to channel our technologies directly into the major automotive companies all over the world.

Slide Six

Very briefly on this slide I wanted to show you a couple of charts that describe our productive capacity in both magnesium alloys and anodes.

New capacity installed at Chang Ge is expected to be filled by the Magontec sales and distribution network through the next 12 months. We have already begun the process of qualification and we are confident that the Magontec name and reputation, together with the skills and expertise that Magontec brings, will result in significant new orders from existing customers in Europe, North America and Asia. Chang Ge is our lowest cost operation in China and makes Magontec a more competitive force in its traditional markets.

I have not spent much time discussing Magontec’s anode business. I knowthat Guenter will spend more time on this, as it is very much his creation. Magontec has developed a major share of this global business niche, and that is before inroads have been made into US markets.

We believe there are significant growth opportunities in this market where Magontec has both a strong market share and some important technologies, which present barriers to entry for potential competitors.

Slide Seven

Again briefly, here is a snapshot of the new combined AML and Magontec businesses showing global market shares and sales by geographic location.

The sacrificial anode market is a small but higher margin segment in which we have a 20% share.

In Magnesium alloys we currently have around an 18% market share.

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And as the two pie charts on the right display, we have an excellent mix of customers by geographic location for our alloys business and a significant opportunity to grow a new market in North America for our anode business.

Slide Eight

The opportunity ahead of us is essentially twofold.

The first of these is about becoming an efficient generic magnesium and anode manufacturer.

We are restructuring ourselves to become the mg alloy industry’s most geographically diverse and competitive producer.

This process is well underway and while there have been some costs associated with implementing this strategy, and the broader rationalisation process, the financial benefits should begin to emerge through the second half of this year.

We are going to remain focussed on Mg alloys and anodes and we will notinvest in pure magnesium capacity. The pure magnesium market is characterised by substantial over supply, high capital costs, challenging environmental issues and technology risk. This is a critical point of differentiation between Magontec and competitors who are pursuing a strategy of vertical integration.

We are focussed on securing our raw material supply chain and we are in active negotiation with suppliers of pure magnesium and other raw materials.As a large and growing magnesium alloy manufacturer we expect terms from our suppliers to improve over time.

The second opportunity lies in our technology portfolio and the emerging legislative environment governing vehicle emissions around the world.

The Magontec business provides us with the ideal platform to exploit this opportunity.

Slide Nine

This chart from the United Nations shows that in each jurisdiction the legislative framework for emissions control is different.

However all Governments are seeking lower average CO2 emissions over the next 10 years.

Slide Ten

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Mandated reductions in the order of 70% in the USA and 55% in Europe are backed up with significant financial penalties for companies that fail to meet these targets.

Put simply automotive manufacturers cannot ignore this trend if they wish tobe in business at the end of this decade.

Magnesium alloys, over which AML and Magontec have comprehensive patents, represent part of the solution for automotive companies. Particularly as high temperature applications, such as the engine block and transmission housing, offer the highest weight loss opportunities.

Our high technology alloy portfolio has been augmented by the combination with Magontec. In addition to AM HP2+ we also have a patent over casting technology for another high temperature alloy, AE44.

Slide Eleven

So let me summarise for you

Over the last 12 months we have consolidated a strong position in our industry through the acquisition of Magontec and we are now a leading mg alloy and anode manufacturer

Our comprehensive mg alloy technology portfolio is focussed on meeting market demands within the automotive industry, as emissions legislation becomes a new reality for our customers.

We have a significant and well-funded R&D capacity through our own business and through CAST so that we can continue to innovate and work closely with automotive company technology divisions.

While a strong economy will assist Magontec achieve its goals, demand for magnesium is not reliant on economic growth, change is coming to automotive materials selection through legislation.

Magnesium alloys are part of the emerging environmental sector. Our sector is focussed on one of the Worlds largest industries, the automotive industry, and other rapidly growing industries such as electronics and the fast train industry.

Advanced Magnesium Limited, soon to be Magontec Limited, is the world’s best-positioned listed company from which to take advantage of this trend.

Thank you for your attention and attendance. I will now hand over to Mr Guenter Franke to talk a little more about the business that he has run for the last 17 years.

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2011 - Year in Review

!  Acquisition of the Magontec Group of companies

!  Expansion and increased efficiency

!  HNKWE joint-venture capacity increased to 35,000 mta and conversion costs reduction

!  Construction of ‘greenfield’ re-cycling facility in Romania now close to completion

!  Rationalisation of AML activities:

!  EU and US offices closed, Chinese office to be closed later this year.

!  Marketing, distribution and logistics for generic and high technology alloys within Magontec

!  Name change from Advanced Magnesium to Magontec Limited

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Group Structure

Advanced Magnesium Limited

(Magontec Limited) (Australia)

Magontec Group HNKWE Alloy Materials

100% 53%

Chang Ge(China)

Xi’An(China)

Suzhou (China)

Santana (Romania)

Bottrop (Germany)

100%

100% 98%100%

CAST CRC Ltd

Technology group

100%

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FY2011 Financial Results

Advanced Magnesium Limited

30 June 2011 30 June 2010

A$m A$m % Chg

Sales Revenue 22.586 7.405 205%

Cost of Sales -21.367 -7.558 183%

Gross Profit 1.219 -0.153 na

Other Income 0.248 0.276 -10%

Marketing, Travel, Accom -0.263 -0.301 -13%

R&D, Licensing, Patents -0.313 -0.405 -23%

Operating costs -1.867 -1.583 18%

Corporate, Admin, Other -0.529 -0.712 -26%

EBITDA -1.505 -2.878 -48%

Deprec & Amort -0.173 -0.123 41%

Interest Expense -0.121 0.012 -1098%

Pre-tax profit (adj) -1.800 -2.989 -40%For

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FY2011 Financial Results

Pro – forma AML/Magontec Combined Group Magontec AML Combined

30 June 2011 30 June 2011 30 June 2011

A$m A$m A$

Sales Revenue 91.773 22.586 114.359

Cost of Sales -82.608 -21.367 -103.975

Gross Profit 9.165 1.219 10.384

Other Income 0.523 0.248 0.771

Marketing, Travel, Accom -0.595 -0.263 -0.858

R&D, Licensing, Patents 0.000 -0.313 -0.313

Operating costs -3.737 -1.867 -5.604

Corporate, Admin, Other -1.477 -0.529 -2.006

EBITDA 3.879 -1.505 2.374

Deprec & Amort -1.621 -0.173 -1.794

Interest Expense -1.225 -0.121 -1.347

Pre-tax profit (adj) 1.033 -1.800 -0.766For

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Global Footprint A platform for AML’s technology portfolio

!  Global magnesium alloy and anode manufacturer

!  Leading magnesium technology portfolio

corporate head office

manufacturing and recycling

marketing & distribution

technology centre

Detroit

Bottrop

Santana

Xi’an

Chang Ge

Suzhou

Sydney

Melbourne

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Production Capacity

* Santana commences Dec 2011 ** Chang Ge 53% to Magontec # Ti anodes not shown in volume

!  Total installed Mg alloy productive capacity of 80,000 mt

!  Total installed Mg and Ti anode productive capacity of 3,000 mt

Magnesium alloys Magnesium and titanium# anodes

-

500

1,000

Xi'an Santana* Bottrop

!"#$%&'()**"+'

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Chang

Ge**

Xi'an Bottrop Suzhou Santana*

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Business Overview

Global market share (AML and Magontec combined)

!  18% of die cast magnesium alloys

!  20% of water-heater anodes.

Anodes

Mg Alloys

Asia

Americas

Europe Europe

& ME Asia

Sales by product (mt) Mg alloy sales (mt) Anode sales (mt)

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Operational Outlook

!  New manufacturing locations, lower costs and increase customer coverage

!  Geographically diverse manufacturer and recycler of Magnesium alloys and

anodes

!  Rationalise and optimise AML and Magontec existing infrastructure

!  Focus on Magnesium alloys and anodes,

!  No divergence into Pure Magnesium

!  Supply chain security

!  Introduce AML high technology alloys to automotive customers leveraging

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Source: UN Dept of Economic and Social Affairs

Emissions control legislation

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Opportunity for AML/Magontec

!  European CO2 emissions to decline by > 55% within 10 years

!  Penalties for auto manufacturers

!  Light-weighting is an effective emission reduction strategy

!  High temperature parts offer the highest weight loss opportunities

!  AML/Magontec portfolio of magnesium alloy technology patents include

!  AE44 casting patent

!  AM HP2+ creep resistant alloy

!  The Magontec acquisition offers the AML technology portfolio direct access to market For

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Summary

!  Leading global Magnesium alloy and anode manufacturing, marketing and

distribution company

!  A comprehensive technology portfolio focused on commercial opportunities

!  Significant and well funded R&D capacity through CAST CRC Limited

!  Increasing competitiveness

!  The leading volume manufacturer of Mg alloys

!  Forecast strong growth in magnesium alloy demand from automotive, rail and

aerospace

!  Market share growth opportunities in magnesium, titanium and other anodes For

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