Magma Metals Limited
TSX : MMW
ASX : MMW

Magma Metals Limited

December 17, 2009 10:47 ET

Magma Metals Announces Closing of C$11.655 Million Equity Financing and C$1.575 Million Private Placement

WEST PERTH, WESTERN AUSTRALIA--(Marketwire - Dec. 17, 2009) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Magma Metals Limited (TSX:MMW)(ASX:MMW) ("Magma Metals" or the "Company") announced today that it has completed its previously announced equity financing issuing 18,500,000 Ordinary Shares (the "Shares") at a price of C$0.63 per Share for gross proceeds of C$11,655,000 (the "Offering"). The Offering was conducted through a syndicate of underwriters led by CIBC, and including Cormark Securities Inc., GMP Securities L.P. and Dundee Securities Corporation. Additionally, Anglo American Investments (Australia) Limited ("Anglo") has subscribed for 2.5 million shares on a private placement basis at the same price as the Offering (the "Private Placement"). The gross proceeds from the Offering and the Private Placement are $13,230,000. The Shares of Magma Metals were sold under the Offering by way of a short form prospectus in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia and New Brunswick. All shares issued pursuant to the Offering and the Private Placement were made using Magma's 15% placement capacity under ASX listing rule 7.1.

Magma intends to use the net proceeds of the Offering to continue exploration and development activities at the Company's Thunder Bay North property and for general corporate purposes.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States or any other jurisdiction outside of Canada, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Shares offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act and applicable state securities laws.

Cautionary Note Regarding Forward-Looking Statements and Information
This news release contains "forward-looking information" within the meaning of applicable securities legislation.  Where statements by Magma express or imply an expectation or belief as to future events, such expectation or belief is expressed in good faith and believed to have a reasonable basis.  However, forward-looking information involves risks, uncertainties and other factors that may cause actual results to be materially different from those implied by such forward-looking information.  There can be no assurance that the Offering or the private placement will close or that they will close in the time frame indicated above.  Among other factors, conditions and regulatory approvals must be met or obtained.  Any use of proceeds from the offering and private placement may be altered if there are sound business reasons to do so.

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