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Magma Energy Corp. Closes C$100 Million Initial Public Offering Of Common Shares

07/07/2009


NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

VANCOUVER, B.C., CANADA, July 7, 2009 - Magma Energy Corp. (TSX: MXY) ("Magma") has closed its previously announced initial public offering of common shares (the "Offering"). Pursuant to the Offering, Magma today issued 66,667,000 common shares at a price of C$1.50 per common share, for aggregate gross proceeds of C$100,000,500. Magma has granted to the underwriters an over-allotment option, exercisable for a period of 30 days from the date of closing of the Offering, to purchase up to an additional 10,000,050 common shares also at a price of C$1.50 per common share to cover over-allotments, if any, and for market stabilization purposes. If the over-allotment option is exercised in full, total gross proceeds of the Offering will be C$115,000,575.

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

Ross J. Beaty, Chairman and Chief Executive Officer of Magma, said, "We are pleased by the extremely positive reception to our initial public offering. We are committed to building shareholder value through discovery, development, operation and acquisition of geothermal projects internationally. The success of our initial public offering will enhance our ability to become a leader in the global geothermal industry."

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), four advanced-stage exploration properties and 14 early-stage exploration properties in our portfolio of assets 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