VANCOUVER, B.C., CANADA, July 22, 2009 -- Magma Energy Corp. (TSX: MXY) ("Magma") announces the successful completion of its first slim hole that tested the geothermal reservoir at its Maule property, 300 km south of Santiago in Chile. Temperatures exceeded 200 degrees Celsius at a depth of 650 meters below surface. Drilling of the US$1.6 million slim hole followed a US$400,000 magnetotelluric geophysical program carried out in March 2009 which outlined a large anomaly in the vicinity of surface fumaroles sampled by Magma earlier in the year. Gas and steam condensate samples from these fumaroles were analyzed and indicate that deep reservoir temperatures may exceed 290 degrees Celsius.
These encouraging results have enabled Magma's consultants Sinclair Knight Mertz ("SKM") to estimate an Inferred Resource of 7000 petajoules ("PJ") of thermal energy in place, relative to 40°C, that is estimated to be capable of producing 140 megawatts ("MW") of electrical generation for 30 years. The resource estimate has been prepared in accordance with the Code for Geothermal Resources and Reserves Reporting (the "Code") 1st Edition: 2008, published by the Australian Geothermal Energy Association. The report was prepared by Philip James White who is responsible for its content. Dr. White, a Senior Geologist with SKM, is a "Competent Person" under the Code, a member of the Society of Economic Geologists and is independent of Magma.
The slim hole results and the resource estimate are being used as the basis for Magma's submission of a geothermal development plan to the Chilean Government for a 50 MW power project at its Maule property. Approval by the Chilean Government will enable additional drilling and infrastructure development to begin later in 2009.
Ross Beaty, Magma's Chairman and CEO, said, "These great results bode well for a large geothermal power development at Maule. The initial reservoir estimate of 140 MW is likely to be substantially increased with further planned exploration activities. We look forward to continuing positive results at Maule in the near future, subject to approval of Magma's development plan by the Chilean Government."
About Magma Energy Corp.
Magma is a geothermal power company which is actively engaged in operating, developing, exploring and acquiring geothermal energy projects. We currently have one operating power generation plant (the Soda Lake Operation in Nevada), and an extensive portfolio of exploration properties throughout the western United States, Chile, Argentina and Peru.
Contact: Andrea Zaradic
Vice President -- Corporate Development
Cautionary Note regarding Forward-Looking Statements and Information
This news release contains certain "forward-looking information" within the meaning of Canadian securities laws, which may include, but is not limited to, statements with respect to future events or future performance, management's expectations regarding exploration and development activities at Magma's Maule property and estimates of geothermal reservoir size and temperature, geothermal resources, recoverable geothermal energy or energy generation capacities. Such forward-looking information reflects management's current beliefs and is based on information currently available to management.
A number of known and unknown risks, uncertainties and other factors, may cause our actual results or performance to materially differ from any future results or performance expressed or implied by the forward-looking information. The forward-looking information is based upon what management believes to be reasonable assumptions, including, but not limited to, assumptions about: the success and timely completion of planned exploration and expansion programs, the growth rate in net electricity consumption; support and demand for non-hydroelectric renewables; government initiatives to support the development of renewable energy generation; the accuracy of reserve estimation methodology and analysis used to estimate the quantity of potentially recoverable thermal energy; geological, geophysical, geochemical and other conditions at our properties; the reliability of technical data, including extrapolated temperature gradient, geophysical and geochemical surveys and geothermometer calculations; capital expenditure estimates; availability of capital to fund exploration, development and expansion programs; and general economic conditions. Forward-looking information and statements are also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from the forward-looking information and statements will occur.
There can be no assurance that the forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance on forward-looking information. Other than as required by applicable securities laws, we assume no obligation to update or revise such forward-looking information to reflect new events or circumstances.