Magma Energy Corp. - McCoy - Thu Jul 29, 2010

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MCCOY HOT SPRINGS - NEVADA

100% owned
7,815 hectares (19,312 acres), NW Nevada
Extensive geothermal exploration in 1972 - 82
- geology, geochemistry, geophysics
- 52 temperature gradient holes, 3 slim holes
Heat flow calculation potential - P₉₀ = 80 MW (Inferred Resource)
Magma 24 month plan: resistivity, seismic and drilling program

MCCOY HOT SPRINGS

The McCoy Property is located in Nevada 50 km northwest of the community of Austin, Nevada, and straddles the boundary between Churchill County on the west and Lander County on the east. It consists of a total of 7,815 hectares (19,312 acres) covering 27 more or less contiguous sections of land.

AMAX Exploration, Inc. ("AMAX") performed geophysical, geochemical, and geological surveys in the area of the McCoy Property in the late 1970's and early 1980's and formed a geothermal development unit consisting of 15,135 hectares (37,417 acres). AMAX let its interest expire during the weak energy market period in the mid-1980's. AMAX drilled fifty-two shallow temperature gradient holes ranging in depth from 30 metres to 100 metres; two intermediate depth exploration wells (66-8 to 765 metres, and 14-7 to 613 metres); and three intermediate depth thermal gradient wells (25-9 to 610 metres, 38-9 to 620 metres, and 28-18 to approximately 600 metres). Temperatures of fluids produced from 500 metre depths reached 102°C. Temperature gradients in the shallow holes varied from 28°C per kilometre to 522°C per kilometre. AMAX estimated the areal coverage within the 200°C isotherm to be more than 12,140 hectares (30,000 acres).

Magma is evaluating all data and available databases. The likely resource delineation program will include acquisition of 3D reflection seismic data over the McCoy Property in order to define the fault and fracture system followed by in-fill gravity, magnetics, and electrical field surveys. This data will be modeled using 3D analysis and visualization techniques to select locations for drilling two to four intermediate depth (1,000 to 2,000 metres) slim holes from which flow tests will be conducted. Because of the large number of shallow temperature gradient holes already available in the area, it is unlikely new shallow holes will be drilled.