Vancouver, B.C., Canada, May 5, 2010 - Magma Energy Corp. (TSX:MXY) announces that it has been issued an exploitation permit enabling development of a 50 MW geothermal operation on the 4,000 hectare Laguna de Maule (Maule) property, 300 km south of Santiago, by the Government of Chile. Maule adjoins the 100,000 hectare Pellado property and together these properties encompass the Mariposa Geothermal Reservoir upon which Magma previously reported a 320 MW Inferred Resource.
Magma is currently drilling the second of five slim holes wells into the Mariposa Reservoir. The first well drilled in 2009 discovered temperatures greater than 200°C at a depth of approximately 650 meters. The 2010 slim hole program, plus related work, commenced in March and is expected to conclude by December at a cost of US$15 million. The target depth of each of the four slim holes is 1,500 meters. Drilling results will provide sufficient information for Magma to complete more detailed evaluation of the planned Phase 1 50 MW geothermal power plant. Mariposa is within 25 km of two planned hydro power plants and associated transmission lines.
Dr. Catherine Hickson, Magma's Vice President Exploration and Chief Geologist, said, "This geothermal exploitation permit will enable us to proceed directly to construction of our operating plant once we complete our drilling program and studies on detailed capital and operating costs and environmental impacts. I look forward to seeing continuing positive results at Maule in the months ahead."
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 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.