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Magma Announces Closing Of Over-Allotment Option

07/20/2009


VANCOUVER, B.C., CANADA, July 20, 2009 -- Magma Energy Corp. ("Magma") announced today, in connection with the initial public offering (the "Offering") of Magma which closed on July 7, 2009, the closing of the exercise of the over-allotment option for 6,933,334 common shares from its treasury at a price of Cdn.$1.50 per share, for gross proceeds of Cdn.$10,400,001.00. Magma has now completed the distribution of its common shares under the Offering.

As of July 20, 2009 Magma has 236,892,002 issued and outstanding common shares.

A syndicate of underwriters, co-led by Raymond James Ltd. and Cormark Securities Inc., managed the Offering. The other members of the syndicate were Canaccord Capital Corporation, National Bank Financial Inc., Dundee Securities Corporation, Jacob & Company Securities Inc. and Wellington West Capital Markets Inc.

No securities regulatory authority has either approved or disapproved of the contents of this news release. The securities being offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the ''U.S. Securities Act''), or any state securities laws, and may not be offered or sold in the United States unless pursuant to an exemption therefrom. This press release is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of Magma Energy Corp. in any jurisdiction.

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:
Andrea Zaradic, Vice President, Corporate Development
Magma Energy Corp.
Phone: 604.646.1874
Email: azaradic@magmaenergycorp.com

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION

THIS NEWS RELEASE CONTAINS "FORWARD-LOOKING INFORMATION" WITHIN THE MEANING OF APPLICABLE CANADIAN SECURITIES LEGISLATION, SUCH AS STATEMENTS REGARDING THE EXPECTED TIMING AND TERMS OF MAGMA'S INITIAL PUBLIC OFFERING.

WHERE STATEMENTS BY MAGMA EXPRESS OR IMPLY AN EXPECTATION OR BELIEF AS TO FUTURE EVENTS OR RESULTS, SUCH EXPECTATION OR BELIEF IS EXPRESSED IN GOOD FAITH AND BELIEVED TO HAVE A REASONABLE BASIS. HOWEVER, FORWARD-LOOKING INFORMATION INVOLVES RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE MAGMA'S ACTUAL RESULTS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING INFORMATION. SUCH FACTORS INCLUDE THOSE FACTORS DESCRIBED IN MAGMA'S PROSPECTUS UNDER THE HEADING "RISK FACTORS". ACCORDINGLY, READERS SHOULD NOT PLACE UNDUE RELIANCE ON FORWARD-LOOKING INFORMATION. MAGMA DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION TO, UPDATE SUCH FORWARD-LOOKING INFORMATION, OTHER THAN AS REQUIRED BY APPLICABLE LAW. ADDITIONALLY, MAGMA EXPRESSLY DISCLSIMS ANY OBLIGATION TO COMMENT ON EXPECTATIONS OF, OR COMMENTS MADE BY, THIRD PARTIES IN RESPECT OF OUR INITIAL PUBLIC OFFERING.