Magma Metals Limited
TSX : MMW
ASX : MMW

Magma Metals Limited

September 29, 2011 07:30 ET

Magma Metals Limited: Major Step-Out Drilling Program Commences at Thunder Bay North

PERTH, WESTERN AUSTRALIA--(Marketwire - Sept. 29, 2011) - Magma Metals Limited (TSX:MMW)(ASX:MMW) ("Magma" or the "Company") is pleased to advise it has commenced a step-out drilling program designed to test for further extensions of the mineralization at its Thunder Bay North (TBN) platinum-palladium-copper-nickel (Pt-Pd-Cu-Ni) project in Ontario.

This drilling program will investigate the potential to extend the mineralization by at least one kilometre to the east-southeast of the newly defined zone of mineralization recently announced by the Company (refer to ASX announcement dated 30 August 2011). The Current Lake Intrusive Complex, which hosts the Pt-Pd-Cu-Ni mineralization, extends for at least two kilometres to the east-southeast of the easternmost substantive mineralization drilled so far and eventually it is planned to test this entire strike length (Figure 1).

The initial phase of step-out drilling in this area will be on sections spaced 200m apart with holes drilled 100m apart on each section. It is anticipated that this phase will comprise approximately 10,000m of diamond drilling, which should be completed by early December. Down-hole geophysical surveys will be conducted in each drill-hole. The drilling should provide important information on the geometry of the magma conduit in this area and its potential to host mineralization. There is no previous drilling in this area.

Follow-up drilling will focus on in-filling around mineralized drill intercepts and targeting down-hole geophysical anomalies. It is anticipated that this will entail at least as much drilling as the initial phase and will extend into the March quarter, 2012.

The initial phase of the drilling program has commenced with one drill rig and a second rig is scheduled to be added in early October.

Recent petrochemical work on rocks hosting the Pt-Pd-Cu-Ni mineralization suggests that magma entered the conduit via a feeder zone located somewhere to the east of the area of existing drilling. It then appears to have flowed from the southeast to the northwest within the conduit carrying entrained sulphides with it, which formed the known mineral deposit. The feeder zone to the conduit represents another important exploration target as this area may have favourable geology to host massive sulphide mineralization. This target concept is illustrated in Figure 2.

Dr Keith Watkins, Magma's Managing Director said, "This drilling will essentially track the magma conduit to the east into an area we believe could contain a feeder zone, which is the most likely location for sulphide-rich mineralization. That makes this an exciting phase of our exploration program in this complex."

To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/mmw0929fig1.pdf.

To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/mmw0929fig2.pdf.

Background

Magma has established mineral resources at the Thunder Bay North project, from drilling completed prior to 31 May, 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 positive 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.

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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