REPORT ESTIMATES 320 MEGAWATT INFERRED RESOURCE AT PELLADO AND ADJOINING MAULE PROPERTY
Vancouver, B.C., Canada, January 20, 2010 - Magma Energy Corp. (TSX:MXY) announces that it has been awarded the 100,000 hectare Pellado property, 300 km south of Santiago, by the Government of Chile. Pellado adjoins the Maule property upon which Magma previously reported a 140 megawatt ("MW") Inferred Resource.
Slim hole drilling and a magnetotelluric geophysical program carried out by Magma in 2009 discovered a large heat anomaly (the "Mariposa Geothermal Resource") that straddles the Pellado and Maule properties. Magma's consultant, Sinclair Knight Mertz ("SKM"), estimates that Mariposa contains an Inferred Resource of 320 MW of electrical generation capacity, including the previously reported 140 MW Inferred Resource. In July 2009, Magma submitted a geothermal development plan for a 50 MW power project at the Maule property, approval of which is pending.
Magma is currently completing a 13 km access road that will enable additional drilling to commence in February, 2010. The US$15 million 2010 exploration program will include two wells on each of the Pellado and, when granted, Maule properties, plus related work.
Ross Beaty, Magma Energy's Chairman and CEO, commented, "Award of the Pellado property now allows Magma to aggressively explore and develop the Mariposa Geothermal Resource. This major geothermal discovery by our outstanding Chilean exploration team increases Magma's attributable geothermal resources to 784 MW, in addition to Magma's producing reserves of 86 MW. This is a great start to what I expect will be another successful year of large scale geothermal discovery and development for Magma."
About Magma Energy Corp:
Magma Energy Corp. is a geothermal power company which operates, develops, explores and acquires geothermal energy projects. We have an extensive portfolio of properties throughout the western United States, Iceland and Latin America, including one operating power plant in Nevada and an interest in two other operating power plants in Iceland.
About the resource estimate:
The resource estimate has been prepared in accordance with The Canadian Geothermal Code for Public Reporting (the "Code") 2010 Edition, published by the Canadian 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 "Qualified Person" under the Code, a member of the Society of Economic Geologists and is independent of Magma.
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, management's expectations regarding exploration and development activities at Magma's Laguna del Maule and Pellado properties 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.