Magma Energy Files Final Prospectus for Offering

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

(All amounts in Canadian dollars.)

VANCOUVER, July 21 /CNW/ - Magma Energy Corp. (TSX: MXY) announced today that in connection with its previously announced offering, it has filed a final prospectus with the securities regulatory authorities in each of the provinces of Canada, other than Quebec with respect to the issuance of 35,714,286 common shares of Magma at a price of $1.12 per share, for gross proceeds of $40,000,000. Closing is scheduled to take place on or about July 27, 2010.

In addition, Magma has granted to the underwriters an option to purchase up to an additional 5,257,142 common shares on the same terms as set out above to cover over-allotments, if any.

Raymond James Ltd. is the lead underwriter for the offering. The other members of the syndicate are National Bank Financial Inc., Cormark Securities Inc., Dundee Securities Corporation, Jacob Securities Inc., Mackie Research Capital Corporation, Salman Partners Inc., Wellington West Capital Markets Inc. and Canaccord Genuity Corp.

About Magma Energy Corp.

Magma Energy Corp. is a global geothermal power company which operates, develops, explores and acquires geothermal energy projects. We have an extensive portfolio of properties throughout the western United States, Iceland and Latin America, including one operating power plant in Nevada and a significant interest in two in Iceland.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION

This news release contains certain "forward-looking information" within the meaning of Canadian securities laws, which may include, but is not limited to, statements with respect to future events or the closing of the prospectus offering. Such forward-looking information reflects management's current beliefs and is based on information currently available to management.

A number of known and unknown risks, uncertainties and other factors, may cause our actual results or performance to materially differ from any future results or performance expressed or implied by the forward-looking information. The forward-looking information is based upon what management believes to be reasonable assumptions, including, but not limited to, assumptions about general economic conditions. Forward-looking information and statements are also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from the forward-looking information and statements will occur.

There can be no assurance that the forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance on forward-looking information. Other than as required by applicable securities laws, we assume no obligation to update or revise such forward-looking information to reflect new events or circumstances.

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

For further information: Alison Thompson, Vice President, Corporate Relations, Magma Energy Corp., Phone: [phone], Email: [email protected]