An anonymous director reports

MAGMA ENERGY COMPLETES PURCHASE OF A FURTHER INTEREST IN ICELANDIC GEOTHERMAL ENERGY PRODUCER HS ORKA

Magma Energy Corp.'s wholly owned subsidiary, Magma Energy Sweden AB, has closed a portion of a previously announced agreement to acquire further shares of Iceland geothermal company HS Orka hf. Magma Sweden now holds an 84.21-per-cent interest in HS Orka. The acquisition was originally announced in Stockwatch May 17, 2010.

In today's transaction, Magma Sweden acquired 38.03 per cent of HS Orka's outstanding shares from Geysir Green Energy ehf in consideration for:

• Payment today of 3,871,195,513 Icelandic kroner (approximately $32.3-million (U.S.));

• Issuance today of 24,808,569 subscription receipts of Magma Energy;

• Payment on Nov. 30, 2010, of approximately 3,062,612,586 Icelandic kroner (approximately $25.6-million (U.S.)), subject to certain interest adjustments.

Each subscription receipt will convert into one common share of Magma Energy on Dec. 18, 2010, for payment of no additional consideration. Magma Energy has the right at its sole option to repurchase the subscription receipts, in whole or in part, at prices ranging from 135.90 kroner to 142.24 kroner per subscription receipt at certain times between Sept. 4 and Dec. 11, 2010. The maximum total cost to repurchase all of the subscription receipts will be approximately $29.5-million (U.S.).

Magma Sweden's previously announced agreement to acquire Geysir's remaining 14.32-per-cent interest in HS Orka has not yet closed and remains subject to certain outstanding closing conditions, which are expected to be met in the near term.