Ms. Alison Thompson reports

MAGMA ENERGY COMPLETES PURCHASE OF 98.5% OF ICELANDIC GEOTHERMAL COMPANY HS ORKA

Magma Energy Corp.'s wholly owned subsidiary, Magma Energy Sweden AB, has closed the final portion of a previously disclosed agreement to acquire further shares of Iceland geothermal company HS Orka hf. (All amounts are in U.S. dollars unless stated otherwise.) Magma Sweden now holds a 98.53-per-cent interest in HS Orka.

In today's transaction, Magma Sweden acquired 14.32 per cent of HS Orka's outstanding shares from Geysir Green Energy ehf by assuming a bond with the municipality of Reykjanesbaer with a principal value of 6.3 billion kronur repayable in 2016 with interest at 3.5 per cent per year. The principal amount is indexed based on movements in aluminum prices on the London Metal Exchange. The adjustment is equal to one-half of the relative difference between the actual price (capped at $3,250 per tonne) and a reference price of $1,500 per tonne.