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Press release from CNW Group

Magma's Iceland Subsidiary HS Orka Signs New Energy Agreement with Silica Company

Thursday, February 17, 2011

Magma's Iceland Subsidiary HS Orka Signs New Energy Agreement with Silica Company10:10 EST Thursday, February 17, 2011VANCOUVER, Feb. 17 /CNW/ - Magma Energy Corp. (TSX: MXY) announces that its 98.53% owned Icelandic energy subsidiary, HS Orka hf, has today signed a power purchase agreement committing the sale of 30 megawatts of geothermal power to Iceland Silica Corporation ehf., "ISC", for the period May 1, 2013 to December 31, 2015. Iceland Silica is developing a new silica metal production plant at Helguvik, Iceland, about 20 km from HS Orka's power plants. HS Orka's 30 megawatts of supply will come from electricity currently being supplied to an Icelandic aluminum smelter under a soon expiring power contract that ties the electricity price to the world aluminum price. The new contract with ISC has no linkage to the aluminum price and will be at a higher base price than the contract it is replacing. HS Orka's supply of power to ISC's new plant will also provide a broader industrial base for Iceland and improve the employment and economic development situation in the vicinity of HS Orka's geothermal power operations.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 two in Iceland.For further information: Anders Kruus, Vice President, Corporate Relations, Magma Energy Corp., Phone: 604.646.1882, Email: akruus@magmaenergycorp.com