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DESERT QUEEN - NEVADA

Owned 100%
5,449 hectares (13,464 acres), NW Nevada
6 km from 12.5 MW Desert Peak plant
extensive geothermal exploration in 70's - 80's including 13 holes
Heat flow calculation potential - P₉₀ = 36.4 MW (Inferred Resource)
Magma 24 month plan: geophysics, deep drilling program
Temperature Gradient program starts March 2010

DESERT QUEEN

The Desert Queen Property is located adjacent to the Hot Springs Mountains in west-central Churchill County, Nevada. The site is approximately 38 km north of the town of Fallon and is contiguous with, or near to, the Desert Peak and Brady-Hazen Hot Springs geothermal facilities and our Soda Lake Operation, three of the nine producing geothermal fields in the state of Nevada. The total land currently under lease at the Desert Queen Property, including both the U.S. Bureau of Land Management ("BLM") and private leases, is 5,449 hectares (13,464 acres).

The property is approximately 8 km from the two major 345 kilovolt ("kV") lines, located on the northwest side of Interstate 80, that originate at the Valmy power plant. The substation at the Desert Peak geothermal facility, approximately 9.5 km to the southwest of the Desert Queen Property, connects to a 115 kV line that parallels Interstate 80 into the Reno area.

Geothermal exploration in the Brady's Hot Springs and Desert Peak area was conducted by the U.S. Geological Survey ("USGS"), the U.S. Bureau of Reclamation, and a number of private entities over a period of more than 20 years mainly because it was the site of the hottest surface temperature gauged in the state of Nevada. Beginning in 1973, Philips Petroleum Company conducted a three-year exploration program that focused primarily on the Desert Peak area, but extended into the Desert Queen site. Of the 53 temperature gradient holes that Phillips drilled, twelve were in the Desert Queen area. These holes were drilled to an average depth of 91.4 metres (300 feet). In addition, they drilled eight stratigraphic holes, one of which, was in the Desert Queen area. It was drilled to a total depth of 425 metres (1,395 feett) where a temperature of 101°C (214°F) was gauged.

In 2007, the Great Basin Center on Geothermal Energy at the University of Nevada, Reno conducted a shallow (two metre) temperature probe survey over the area of the Desert Queen Property. Results of that survey defined a north-northeast-trending shallow temperature anomaly approximately six kilometres long and two kilometres in width, defined by the 25°C isotherm. The maximum temperature reached 43°C against a background temperature of 23°C.

Magma is evaluating all data and available databases located at the University of Nevada, Reno and the Nevada Division of Minerals. The likely resource delineation program will include acquisition of 3D reflection seismic data over the prospect in order to define the fault and fracture system as well as in-fill electrical field surveys. This data will be modeled using 3D analysis and visualization techniques to select locations for drilling two intermediate depth (1,000 to 2,000 metre) slim holes from which flow tests will be conducted.