Magma Metals Limited
TSX : MMW
ASX : MMW

Magma Metals Limited

November 24, 2010 09:25 ET

Thunder Bay North-Exploration Update

Drilling Results Extend High-Sulphide Zones

PERTH, WESTERN AUSTRALIA--(Marketwire - Nov. 24, 2010) - Magma Metals Limited (TSX:MMW)(ASX:MMW) ("Magma" or the "Company") is pleased to announce that drilling at the West Beaver Lake High-Sulphide Target at its Thunder Bay North platinum-palladium-copper-nickel (Pt-Pd-Cu-Ni) project in Ontario has extended the size of the high-sulphide zones in this area.

West Beaver Lake Zone High-Sulphide Target

Magma recently completed a close-spaced, 22-hole, 5,412m diamond drill program in the West Beaver Lake area of the Current Lake Intrusive Complex (CLIC) to follow-up four intersections of high-grade massive sulphides (in drill holes BL10-282, 303, 304, and 336) recorded during drilling earlier this year (Figure 1). The earlier holes were drilled to test down-hole electro-magnetic (DHEM) anomalies, interpreted to represent bodies of massive sulphides, semi-massive (net-textured) sulphides, or heavily disseminated sulphides (collectively termed "high-sulphide zones"). The objective of the follow-up drilling was to map the shapes and extents of the high-sulphide zones, to evaluate their continuity and determine the controls of mineralization.

There are two mineralized zones in this area, the Beaver Lake Zone, which is associated with the floor of the CLIC, and the Cloud Zone, which generally occurs just below the roof of the CLIC (Figure 2). The largest of the Beaver Lake Zone massive sulphide bodies is approximately 40m by 20m in plan dimensions and between 0.5m and 1.7m thick (Figure 2). The Beaver Lake Zone massive sulphides occupy topographic depressions on the floor of the CLIC in this area. Each of the four massive sulphide bodies is surrounded by large haloes of disseminated to locally semi-massive (net-textured) sulphides.

The recently completed drilling was carried out on 25m and 12.5m spaced sections in the area of the four previous massive sulphide intersections (Figures 1 and 2). Assay results have been received for 14 of the 22 holes. Significant intersections in these holes are listed in Table 1; drill hole collar and depth information is listed in Table 2. Three massive sulphide intersections were recorded in this program (in drill holes BL10-345, 346, and 348) and assay results for eight semi-massive to disseminated sulphide intersections are also listed in Table 1.

"The drilling program has demonstrated the continuity of high-sulphide mineralization in this area" said Keith Watkins, Magma's Executive Chairman. "Delineation of these higher grade zones within the Mineral Resource is important as they have the potential to significantly enhance the value of the project".

To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/mmw1124fig1.pdf

To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/mmw1124fig2.pdf 

East Bridge Zone High-Sulphide Target

Magma plans to commence drilling in a second high-sulphide target area in the eastern part of the Bridge Zone, about 200m southwest of the West Beaver Lake High-Sulphide Target (Figure 1) in the next few weeks. This drilling will target the area around three previous massive sulphide intersections, including a 2.6m intercept in hole BL10-197, which is the thickest and highest grade massive sulphide intersected to date at the project: 2.6m @ 52.77g/t Pt, 41.54g/t Pd, 3.87g/t Au, 61.0g/t Ag, 11.60% Cu & 3.29% Ni from 187.4m (see Magma announcement dated February 15, 2010).

Other Exploration Targets

One drill hole has also been completed at the gravity target identified in the South East Anomaly (see Magma announcement dated September 3, 2010). The deep drill hole to test the gravity target was terminated at 1,965m down-hole depth as it had deviated and lifted away from the target. Although the hole intersected several relatively thin intrusive units thought to be associated with the CLIC, these are unlikely to be the source of the gravity anomaly.

A Falcon airborne gravity survey was completed over the project following the discovery of the initial gravity anomaly. This has shown that the gravity anomaly extends approximately 12km east-west and is up to 1km wide and appears to be bound by two major east-west trending structures that transect the project area (Figure 3). The anomaly may represent a dense body which underlies the system of mineralized conduits in the Thunder Bay North project, which could potentially be a magma chamber that fed the overlying conduit system. Geophysical modelling work is in progress to understand the significance of this anomaly. Further drilling may follow this work.

A winter drilling program of approximately 11,000m has been designed to test a number of other targets, which lie beneath lakes, swamps and watercourses. The drilling will commence mid-January 2011 when the ground is frozen, making these areas more readily accessible.

To view Figure 3, please visit the following link: http://media3.marketwire.com/docs/mmw1124fig3.pdf

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
Beaver Lake Zone
BL10-345 181.25 181.75 0.50* 3.72 4.69 8.41 1.80 0.74 5.0
BL10-346 197.50 203.00 5.50 4.50 4.63 9.13 1.24 0.58 1.0
including 200.50 202.50 2.00 10.41 10.93 21.34 2.90 1.39 10.0
including 202.00 202.50 0.50* 18.90 20.90 39.80 6.26 2.94 30.0
BL10-348 198.00 201.80 3.80 8.54 7.88 16.42 1.95 0.95 1.0
including 199.90 201.80 1.90 15.67 14.54 30.21 3.56 1.79 10.0
including 200.80 201.30 0.50* 27.10 21.60 48.70 5.81 1.91 30.0
BL10-351 176.00 184.70 8.70 1.40 1.40 2.80 0.40 0.21 1.0
including 183.00 184.70 1.70 3.18 3.26 6.44 0.95 0.44 5.0
BL10-352 179.00 181.30 2.30 2.73 2.55 5.28 0.64 0.18 1.0
including 180.70 181.30 0.60 6.15 5.49 11.64 1.26 0.21 10.0
BL10-357 169.25 172.25 3.00 2.18 2.19 4.37 0.60 0.33 1.0
including 171.25 172.25 1.00 4.46 4.54 9.00 1.23 0.68 5.0
BL10-358 166.15 168.60 2.45 1.16 1.16 2.32 0.30 0.15 1.0
including 166.15 167.15 1.00 1.75 1.77 3.50 0.46 0.21 3.0
Cloud Zone
BL10-349 146.26 164.00 17.74 1.29 1.26 2.55 0.30 0.16 1.0
including 158.00 162.00 4.00 2.36 2.26 4.62 0.55 0.24 3.0
BL10-354 151.80 157.80 6.00 1.05 1.03 2.08 0.28 0.17 1.0
including 153.80 154.80 1.00 2.14 2.13 4.27 0.55 0.27 4.0
BL10-355 142.80 167.80 25.00 1.69 1.59 3.28 0.42 0.15 0.5
including 159.80 167.80 8.00 4.48 4.18 8.66 1.07 0.27 1.0
including 163.80 167.80 4.00 7.76 7.19 14.95 1.82 0.39 10.0
BL10-357 148.40 153.40 5.00 1.29 1.26 2.55 0.39 0.20 1.0
including 149.40 151.40 2.00 1.86 1.81 3.67 0.58 0.26 3.0
Results are reported for intercepts greater than 1.0 g/t Pt+Pd at the lower cut-off grades shown in the right hand column of the table above; these may include intervals of up to 1.0m below the cut-off grade. Drill intercepts are down hole thicknesses and may not represent true thicknesses. BL10-346 has been reported previously (Magma Quarterly Report dated October 21, 2010) and is included here for completeness.
* Massive sulphide intersection.

Table 2. Drill Hole Collar and Depth Information

Drill Hole Easting (m) Northing (m) Azimuth (Deg) Dip (Deg) Depth (m)
BL10-345 358112.5 5402520.0 0 -90 237
BL10-346 358087.5 5402527.0 180 -85 516
BL10-348 358087.5 5402520.0 0 -90 240
BL10-349 358087.5 5402500.0 0 -90 228
BL10-351 358062.5 5402510.0 0 -90 231
BL10-352 358062.5 5402500.0 0 -90 231
BL10-354 358037.5 5402490.0 0 -90 219
BL10-355 358037.5 5402500.0 0 -90 225
BL10-357 358050.0 5402500.0 0 -90 231
BL10-358 358050.0 5402510.0 0 -90 228

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 (sedar.com).

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 and Dr William Stone, the Executive Chairman and Vice President Exploration of Magma Metals Limited, respectively, who are both Members of the Australasian Institute of Mining and Metallurgy, and each of whom is a "qualified person" as such term is defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects. Dr Watkins and Dr Stone have sufficient experience, which is relevant to the style of mineralization and type of deposit under consideration and to the activities undertaken to qualify as Competent Persons 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 and Dr Stone consent to the inclusion in the report of the matters based on this information in the form and context in which they appear.

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 their facility in Thunder Bay, Ontario.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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 (sedar.com).

ABN 72 114 581 047

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