Magma Metals Limited
TSX : MMW
ASX : MMW

Magma Metals Limited

October 26, 2011 07:30 ET

Magma Enters Joint Venture on Greenwich Lake Property

PERTH, WESTERN AUSTRALIA--(Marketwire - Oct. 26, 2011) - Magma Metals Limited (TSX:MMW)(ASX:MMW) ("Magma" or the "Company") is pleased to advise that it has entered into a farm-in joint venture agreement with Mega Uranium Ltd (TSX:MGA) ("Mega") on Mega's Greenwich Lake property, which is adjacent to Magma's Thunder Bay North (TBN) platinum-palladium-copper-nickel (Pt-Pd-Cu-Ni) project in Ontario.

The Greenwich Lake property comprises 16 claims covering an area of approximately 22.5 km2 adjacent and to the northeast of the Thunder Bay North project (Figure 1). The property contains a number of magnetic anomalies, which could reflect mafic-ultramafic intrusions of the same type that host the mineral resource in the Current Lake Intrusive Complex, approximately 3 km to the southwest.

The principal terms of the agreement with Mega are:

  • Magma will spend $3 million on the project within 5 years to earn a 60% interest;
  • Following the farm-in stage, the parties will form a 60/40 joint venture; and,
  • Magma must spend $250,000 in the first year, at least half of which must be on drilling, after which it has the right to withdraw from the agreement.

Dr Keith Watkins, Magma's Managing Director, said "This is an important property which may contain components of the mafic-ultramafic complex we are exploring within the adjacent Thunder Bay North block. We are looking forward to testing these targets with drilling scheduled for this coming winter."

Background

Magma has established mineral resources at the Thunder Bay North project, from drilling completed up to May 31, 2010, comprising:

Open Pit
Indicated Resource: 8.46 Mt @ 2.13g/t Pt-Eq (1.04g/t Pt, 0.98g/t Pd, 0.25% Cu & 0.18% Ni)
containing 580,000 ounces Pt-equivalent metal
Underground
Indicated Resource: 1.03 Mt @ 3.48g/t Pt-Eq (1.63g/t Pt, 1.51g/t Pd, 0.39% Cu & 0.24% Ni)
containing 115,000 ounces Pt-equivalent metal
Inferred Resource: 0.21 Mt @ 3.00g/t Pt-Eq (1.40g/t Pt, 1.29g/t Pd, 0.34% Cu & 0.23% Ni)
containing 20,000 ounces Pt-equivalent metal

(For further information on these resources, including the calculation of platinum equivalents (Pt-Eq), refer to the Company's announcement dated February 7, 2011.)

An independent Preliminary Economic Assessment (Scoping Study) based on a potential open pit mine was completed earlier this year (refer to the Company's announcement dated February 7, 2011).

The strategy going forward is to enhance the project's economics by:

  • Growing the resource base through step-out drilling;
  • Including the underground resources in a proposed mine plan; and,
  • Simplifying the mineral processing flow sheet.

In addition the Company is actively exploring the Canadian sector of the Midcontinent Rift for additional Pt-Pd-Cu-Ni deposits.

To view "Figure 1. Magma's projects in the Thunder Bay region, including the Greenwich Lake JV", please visit the following link: http://media3.marketwire.com/docs/mmw_1026_fig_1.pdf

Technical Information

Additional information on Magma and its projects, including descriptions of its quality control and assurance procedures, is available on its website at www.magmametals.com.au and in technical reports filed under the Company's profile on the SEDAR website at www.sedar.com.

For information on Mineral Resources, please refer to the Company's announcement dated February 7, 2011, available on the Company's website at www.magmametals.com.au.

Competent & Qualified Person Statement

The information in this report that relates to Exploration Results or Mineral Resources is based on information compiled, reviewed or prepared by Dr Keith Watkins, the Managing Director of Magma Metals Limited, who is a Fellow of the Australian Institute of Geoscientists and a Member of the Australasian Institute of Mining and Metallurgy, and is a "qualified person" as such term is defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects. Dr Watkins has sufficient experience, which is relevant to the style of mineralization and type of deposit under consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (the JORC Code). Dr Watkins consents to the inclusion in the report of the matters based on this information in the form and context in which they appear.

Cautionary Statement

Certain information contained in this report constitutes "forward-looking information" under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", "is expected", "estimates", "intends", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Although management believes that the expectations expressed in such forward-looking information disclosed herein are based on reasonable assumptions, these statements are not guarantees of future performance. A number of factors could cause actual results, performance or achievements to differ materially from those in the forward-looking information. Such factors include future metal prices, exploration and evaluation results, future availability of capital and general economic, market or business conditions, government regulation of mining operations, failure of equipment or processes to operate as anticipated, risks inherent in mineral exploration and development including unusual or unexpected geological formations. Descriptions of these risks can be found in the Company's various statutory reports, including its Annual Information Form available on its website at www.magmametals.com.au and on the SEDAR website at www.sedar.com.

ABN 72 114 581 047

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