Shareholder Update


February 3, 2009

Dear Shareholder,

I am writing to update you on our recent progress. In January 2009 we successfully closed equity financings for a total of Cdn $ 28,931,250 through the issuance of 23,145,000 shares at a price of Cdn$1.25 per share, giving us about 160 million shares outstanding (110 million of these are subject to a long-term prohibition on sale).

We are rapidly building a global business and I am very proud that we now have great shareholders from Canada, the USA, Bahamas, Switzerland, London, the Gulf region and Singapore. These include retail investors, major financial institutions, a large Alberta-based gas utility company, and the investment company of one of the world's most prominent individuals. In addition, all senior members of our management team are shareholders. I thank all of you for your support of our mission to build the world's pre-eminent geothermal energy company.

Since inception in March 2008, we have put together a world-class operating team, acquired 21 properties with over 500,000 acres of geothermal rights in five countries - at all stages from early exploration to advanced exploration to operation. Our more recent acquisitions have been the Glass Buttes project in Oregon, the Whitehorse property in Nevada, additional land near our Soda Lake operation in Nevada, and additional concession applications in Chile.

Our plans for 2009 are to double production from Soda Lake, to aggressively advance our exploration projects towards ultimate production of hundred of megawatts of clean, renewable geothermal energy, to seek new projects to further build Magma's land bank and project pipeline, and to complete an IPO as soon as market conditions allow, in order to provide liquidity for our shareholders and to enhance our financing and growth opportunities.

We have a new website too - - and I urge you all to have a look at it and, through it, keep current with our progress. We have had a great start to our business, with your support, and we expect to deliver great capital gains for all our shareholders as we continue our strong growth in the future.

Yours truly,

Ross Beaty
Chairman and CEO