MAGONTEC 
By
10thJanuary 2014
Company Announcements Office Australian Stock Exchange Limited
20 Bridge Street
Sydney, NSW, 2000
Dear Sirs,
Following the expiry of the 2012 Rights Issue options on 3 January 2014 Magontec is pleased to report that a total of 328.3 million options were exercised raising $6.566 million.
Option holders other than Magontec's largest shareholder, Qinghai Salt Lake Magnesium Co Ltd (QSLM), exercised 93.45% of available options. QSLM are limited by shareholder and FIRB approval to a maximum shareholding in MGL of
30%. QSLM exercised 150 million of their option entitlement to take them to a
shareholding in MGL of 29.65%. (See table below).
On 3rdJanuary 2014, at the same time as the listed options were exercised, Straits Mine Management (SMM) converted its remaining Convertible Loan Notes (CLN) and was issued a further 21 million shares. On or before 17thof January, as announced to the ASX in November 2013, Magontec will repay the final debt installment of A$2.1 million to SMM.
The option exercise, CLN conversion and debt repayment restore Magontec to very low levels of debt, all of which is currently engaged as working capital for the company's magnesium alloy and anode manufacturing and sales operations.
Magontec now presents a very strong balance sheet in advance of its major investment in a new magnesium alloy cast house at the Qinghai electrolytic magnesium smelter (announced in June 2012). The company is close to resolving the final operating, pricing and leasing agreements for the cast house and expects to announce these in the next few weeks.
Based on the pro forma balance sheet in the Attachment, Magontec will show net debt (interest bearing debt less cash at hand) of $6.534 million and shareholders funds (less intangibles) of $33.357 million. Based on the pro forma balance sheet the company's net debt to equity ratio is expected to be 19.5% and Net Tangible Assets per share is expected to be 3.0 cents. (Pro-
