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Magma Energy Corp. Announces Prospectus Offering

07/12/2010


(All amounts in CDN dollars. Not for distribution to UNITED STATES news wire services or dissemination in the United States.)

Vancouver, B.C., Canada, July 12, 2010 - Magma Energy Corp. ("Magma" or the "Company") (TSX: MXY) is pleased to announce that it has filed a preliminary short-form prospectus in connection with a proposed marketed offering ("Offering") of approximately $40 million of common shares ("Shares") at a price of $1.12 per share. In addition, Magma has also granted the underwriters an option, exercisable in whole or in part, up to 30 days following the closing of the Offering to increase the Offering by up to an additional 15% of the number of Shares sold pursuant to the Offering to cover over-allotments and for market stabilization purposes. The Offering will be managed by a syndicate of underwriters led by Raymond James Ltd.

The net proceeds from the Offering are intended to be used for Magma's acquisition of 52.35% of the outstanding shares of HS Orka hf from Geysir Green Energy, as well as for working capital and general corporate purposes. Closing of the Offering is expected to occur on or about July 27, 2010.

The Offering is being made in all provinces of Canada, excluding Quebec, and is subject to the approval of applicable securities regulatory authorities. The Shares offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.


About Magma Energy Corp.

Magma Energy Corp. is a global 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 a significant interest in two in Iceland.


For further information please contact:
Alison Thompson, Vice President, Corporate Relations
Magma Energy Corp.
Phone: 604.646.1882
Email: athompson@magmaenergycorp.com

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 the closing of the prospectus offering. 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 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.

The Shares offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.