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Magma Energy’s Maule property in Chile with 140 MW potential

Alexander Richter Alexander Richter 24 Jul 2009

Magma Energy Corp. (TSX:MXY) has successfully completed its first slim hole that tested the geothermal reservoir at its Maule property, 300 km south of Santiago in Chile. Temperatures exceeded 200 degrees Celsius at a depth of 650 meters below surface.

Announced by the company, Magma Energy Corp. (TSX:MXY) has successfully completed its first slim hole that tested the geothermal reservoir at its Maule property, 300 km south of Santiago in Chile. Temperatures exceeded 200 degrees Celsius at a depth of 650 meters below surface. Drilling of the US$1.6 million slim hole followed a US$400,000 magneto-telluric geophysical program carried out in March 2009 which outlined a large anomaly in the vicinity of surface fumaroles sampled by Magma earlier in the year. Gas and steam condensate samples from these fumaroles were analyzed and indicate that deep reservoir temperatures may exceed 290 degrees Celsius.

These encouraging results have enabled Magma’s consultants Sinclair Knight Mertz (“SKM”) to estimate an Inferred Resource of 7000 petajoules (“PJ”) of thermal energy in place, relative to 40 degreesC, that is estimated to be capable of producing 140 megawatts (“MW”) of electrical generation for 30 years. The resource estimate has been prepared in accordance with the Code for Geothermal Resources and Reserves Reporting (the “Code”) 1st Edition: 2008, published by the Australian 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 “Competent Person” under the Code, a member of the Society of Economic Geologists and is independent of Magma.

The slim hole results and the resource estimate are being used as the basis for Magma’s submission of a geothermal development plan to the Chilean Government for a 50 MW power project at its Maule property. Approval by the Chilean Government will enable additional drilling and infrastructure development to begin later in 2009.

Ross Beaty, Magma’s Chairman and CEO, said, “These great results bode well for a large geothermal power development at Maule. The initial reservoir estimate of 140 MW is likely to be substantially increased with further planned exploration activities. We look forward to continuing positive results at Maule in the near future, subject to approval of Magma’s development plan by the Chilean Government.”

Source: Company announcement via MarketWire