STOCK EXCHANGE ANNOUNCEMENT

Extraordinary General Meeting

Tuesday 19 March 2002

Chairmans Address

Before putting the resolutions to this Extraordinary General Meeting I would like to update shareholders on our project progress.

Bankable Feasibility Study

Finalisation of the BFS is progressing very well and your management team is totally focused on completing this by the beginning of April.

The review of capital costs and other engineering matters by the independent engineers for the banks is scheduled to commence on April 8.

Engineering process flow sheets and similar matters have been fixed for some weeks. The engineering team comprising Thiess, Kvaerner E & C and our own engineers are currently compiling and finalising the capital costs and capacity numbers.

These numbers will form the basis for the engineering, procurement and construction (EPC) contract.

Contract negotiations for the EPC are currently underway and are expected to be finalised during April.

Final operating cost levels have been signed off internally and are within previous estimates.

Energy Supply

Final energy supply negotiations on a binding 15-year arrangement are currently taking place and we expect to have them completed within the next few weeks.

Government

Discussions with the federal and state governments on multi-user infrastructure are continuing and we remain hopeful of a satisfactory outcome in the near future.

At the state level we are mindful of and very appreciative of the support shown to our project by the South Australian Government.

Community

We are flattered and delighted by the extensive community support for our Port Pirie project.

We have encouraged the establishment of a community consultative panel comprising some 25 Port Pirie residents from all walks of life.

The panel will provide the Port Pirie community an appropriate forum to consult with us on the full range of local issues. Everyone at SAMAG is looking forward to working with the panel once the project gets underway, assisting our introduction to Port Pirie and helping us becoming a productive and integral part of the Port Pirie community.

Board

As I have outlined previously we are conscious of the need to have a board and management with necessary skill set to bring the SAMAG project to fruition and create a business that will have initial annual revenues in excess of A$400 million. We are well under way with that task and are hopeful that further appointments can be announced in the next month.

Magnesium markets

While world primary magnesium shipments fell during calendar 2001 primarily due to lower demand for aluminium alloying, the longer-term outlook remains very positive.

Apart from the report on the magnesium market prepared for us by cru international as part of our BFS there have been other published papers that highlight the dramatic volume growth that can be expected from automotive die casters using magnesium alloys resulting in a very favourable pricing outlook.

Of particular interest is a presentation given to the Institute of Mining and Metallurgy in London by Dr horst Friedrich of Volkswagen Ag.

Dr Friedrich indicates that VW already have engineered components which amount to 25kg magnesium alloy per vehicle.

Taking this figure and applying it to current world automobile production of around 50 million vehicles per year, this would equate to 1.25million tonnes of magnesium alloys for automotive die casting alone. This conclusion is supported by a presentation by Clive Burstow of Metal Bulleting Research to the IMM and more recently in a paper to the TMS conference by Randall JA Urbance. Clearly we and our competitors aim to be at the forefront of suppling and meeting this future demand.

Also the extent of development activity in high temperature alloys and component design bodes well for future magnesium demand.

Project Financing

With the completion of the BFS imminent we are developing the finance and insurance programs to ensure that we achieve in principal banking commitments by around mid year.

Options Underwriting

We announced earlier this week that Bell Potter Corporate Finance Ltd had agreed to underwrite the exercise of the option expiring on 31 March 2002. This will raise $8.3 million and will be primarily used for the ongoing development of SAMAG.

We are please that Thiess Pty Ltd participated as a major sub-underwriter. Thiess are preparing the engineering package and detailed capital cost estimates as part of the BFS.

We are also delighted with the considerable support received from Australian and international institutional investors.

Thyssen Krupp Metallurgie

As shareholders are aware we have a metal sales agreement with Thyssen Krupp Metallurgie for all of our proposed output. We have been working closely with them in relation to marketing issues and the involvement of the broader TK group in our project. We are very appreciative of the support and enthusiasm shown by TKMet.

Summary

In summary SAMAG is planning to become the lowest total cost magnesium producer. This is based on the sustainable competitive advantage provided by the world-wide exclusive license for the Dow magnesium technology.

This technology is proven and thus our project has very low process risks.

More importantly continuous improvements to the Dow process technology over a period of many years has seen this technology keep pace with the times complying fully with all environmental standards.

We are on track for the completion of the bankable feasibility study in the next few weeks. IN principal commitments from the banks should be obtained around mid-year.

As we meet these milestones, we expect that there will be growing recognition in equity markets of our achievements. Certainly current shareholders can be increasingly confident of the upside to be realized as we move forward.

With regard to the shareholder purchase scheme that is the subject of resolution 2 at this meeting, I advise that your directors propose to announce the pricing in the second week of April.

Thank you

I will now turn to the formal business of the meeting.

For further information

In accordance with Australian Stock Exchange listing requirements, the geological information in this report has been based on information provided by geologists who are corporate members of the Australian Institute of Mining and Metallurgy or Australian Institute of Geoscientists and who have had in excess of 5 years experience in their field of activity.