Vancouver, B.C., Canada, October 15, 2009 -- Magma Energy Corp. (TSX:MXY) announces that it has agreed, subject to regulatory approval, to a private placement of 11,652,639 shares at a price of $1.85 per share to raise gross proceeds of $21.56 million and net proceeds of $20.78 million (US$20 million). A 5% finders fee will be paid on a portion of this placement. The shares will be restricted from trading for four months following issuance. Magma's CEO Ross Beaty has agreed to purchase 25% of such placement. Closing of the private placement is expected to occur on or about October 22, 2009.
Proceeds of this financing will be used to finance Magma's purchase of an initial 8.62% interest in the Icelandic geothermal company HS Orka, as announced on July 23, 2009. Closing of this initial purchase is expected to occur before the end of October once the closing conditions of the initial purchase have been met. The acquisition of Magma's further interest in HS Orka remains subject to similar conditions and is expected to be completed in November.
About Magma Energy Corp.
Magma Energy Corp. 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.
For further information please contact:
Alison Thompson, Vice President, Corporate Relations
Magma Energy Corp.
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, regulatory approval and closing of the private placement, prospects for closing our acquisition of an interest in HS Orka including required consents and third party negotiations, our plans to expand our operations and HS Orka's plans to expand their geothermal power production, management's expectations regarding our growth, business prospects and opportunities and geothermal 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 can be identified by terms such as plans, planned, anticipated, expects and is based upon what management believes to be reasonable assumptions, including, but not limited to, assumptions about: conditions to closing the private placement including regulatory approval; conditions to closing our acquisition of an interest in HS Orka being met and consents being received, 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 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.