Magma Metals Limited
TSX : MMW
ASX : MMW

Magma Metals Limited

July 07, 2011 07:58 ET

Magma Metals Limited: Summer Drilling Program Extends Thunder Bay North Mineralization

PERTH, WESTERN AUSTRALIA--(Marketwire - July 7, 2011) - Magma Metals Limited (TSX:MMW)(ASX:MMW) ("Magma" or the "Company") is pleased to advise that initial results from its summer drilling program have significantly extended the mineralization at its Thunder Bay North platinum-palladium-copper-nickel (Pt-Pd-Cu-Ni) project in Ontario.

Highlights

  • Initial results from exploration drilling southeast of the mineral resource include:
BL11-390: 15.5m @ 4.88g/t Pt+Pd, 0.72% Cu & 0.37% Ni from 378m,
including: 8m @ 6.81g/t Pt+Pd, 0.97% Cu & 0.47% Ni from 380m.
BL11-393: 14m @ 4.72g/t Pt+Pd, 0.78% Cu & 0.43% Ni from 401.7m,
including: 6m @ 5.47g/t Pt+Pd, 0.96% Cu & 0.53% Ni from 409.7m.
  • Sulphides have been logged in drill core up to 400m east of the mineral resource.
  • The drilling program will be expanded to track the mineralization further to the east.

Summer Drilling Program

An approximately 14,000m drilling program is in progress to test potential resource extensions over a 600m strike length of the Current Lake Intrusive Complex, immediately to the south-east of the currently defined mineral resource (Figure 1). Nineteen holes have been completed so far in this area for 8,210m and assay results have been received for four of these (Figure 2).

Two holes returned significant intersections (see "Highlights" above, Tables 1 & 2, and Figure 2). In addition, disseminated sulphides (the main style of mineralization in the Thunder Bay North deposit) have been logged in drill core in a broad east-northeast trending zone up to 400m east of the defined mineral resource (Figure 2). Assay results are pending from these drill holes.

"These drilling results are very encouraging and confirm the potential for significant extensions to the mineral resource. The drilling program will be expanded beyond the planned 14,000m to track the sulphide mineralized trend further to the east" said Dr Keith Watkins, Magma's Managing Director.

To view "Figure 1. Summer drilling program in progress in the Current Lake Intrusive Complex", please visit the following link: http://media3.marketwire.com/docs/MMWfig1.jpg.

To view "Figure 2. Status of the summer drilling program and results to date", please visit the following link: http://media3.marketwire.com/docs/MMWfig2.jpg.

Table 1. Significant drilling results

Drill Hole From (m) To (m) Length (m) Pt (g/t) Pd (g/t) Pt+Pd (g/t) Cu (%) Ni (%) Cut-off
BL11-390 378.00 393.50 15.50 2.56 2.32 4.88 0.72 0.37 1.0
including 380.00 388.00 8.00 3.58 3.23 6.81 0.97 0.47 5.0
B11-393 401.70 415.70 14.00 2.43 2.29 4.72 0.78 0.43 1.0
including 409.70 415.70 6.00 2.80 2.67 5.47 0.96 0.53 5.0

Results are reported for intercepts >1.0 g/t Pt+Pd at the lower cut-off grades shown in the right hand column of the table above. Drill intercepts are down-hole thicknesses and may not represent true thicknesses.

Table 2. Drill hole collar and depth information

Drill Hole Easting (m) Northing (m) Azimuth (Deg) Dip (Deg) Depth (m)
BL11-390 358700 5402150 0 -90 426
BL11-393 358800 5402150 0 -90 441

Background

Magma has established mineral resources at the Thunder Bay North project, from 528 drill holes for 97,676m of diamond drilling up to end-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)
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)
Inferred Resource: 0.21 Mt @ 3.00g/t Pt-Eq (1.40g/t Pt, 1.29g/t Pd, 0.34% Cu & 0.23% Ni)

(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 these resources 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 exploration and also optimizing the scoping study outcomes to reduce the estimated capital and operating costs for the project.

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.

Drill-hole location and detailed assay data for drill-holes mentioned in this report but not provided herein have been provided in previous announcements. These are available on the Company's website at www.magmametals.com.au.

Assays were conducted at the ALS Laboratory Group facility in Vancouver, British Columbia, following sample preparation at the ALS facility in Thunder Bay, Ontario.

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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