PERTH, WESTERN AUSTRALIA--(Marketwire - Aug. 29, 2011) - Magma Metals Limited (News - Market indicators)(ASX:MMW) ("Magma" or the "Company") is pleased to provide an update on the exploration program at its Thunder Bay North (TBN) platinum-palladium-copper-nickel (Pt-Pd-Cu-Ni) project in Ontario. 

Highlights

• Results from the 32-hole, 13,509m summer drilling program in the East Beaver Lake area have defined an approximately 450m-long extension to the mineralization immediately east of the current underground mineral resource.
  
  
• A drilling program to test a further 1km strike length to the east will commence shortly.
  
  
• Preliminary data from an airborne geophysical ZTEM survey over the main intrusive complexes at TBN have identified several anomalies similar to that over the defined mineral resource.
  

Summer Drilling Program

A 32-hole, 13,509m drilling program has been completed in the East Beaver Lake area to test potential resource extensions immediately to the east of the currently defined underground mineral resource (Figure 1). Assay results have been received for all but the last three drill holes (Tables 1 & 2 and Figure 2). 

The drilling program has defined an approximately 450m-long zone of mineralization contiguous with, and immediately east of, the current underground mineral resource. Much of the mineralization in the Beaver Lake area appears to be located above linear depressions in the base of the host intrusion. The new zone of mineralization is located above a pronounced linear depression which appears to be deepening to the east (Figure 2).

The wireframe for the newly defined zone is shown in Figure 2 (pink shapes) compared with the current underground mineral resources (green shapes) at a 0.95g/t Pt cut-off grade, which was used to define the underground mineral resources. The current underground mineral resources (green shapes) are:

Infill drilling will be required to better define the new zone of mineralization prior to estimation of mineral resources.

"The newly defined zone of mineralization represents a significant potential extension to the underground mineral resource at TBN. This zone is open to the east where drilling will now focus on identifying further extensions in the next 1km of strike to the east" said Dr Keith Watkins, Magma's Managing Director.

ZTEM Geophysical Survey

An airborne geophysical ZTEM survey was recently flown over most of the TBN claim block covering the Current Lake, Steepledge Lake and Lone Island Lake intrusive complexes. This geophysical technique is capable of detecting disseminated sulphide mineralization to depths of over 1km. Data from this survey are currently being processed and interpreted. However, preliminary data indicate a prominent anomaly over the known mineralization, and several other anomalies associated with the other intrusive complexes in the area. These targets will be further assessed during detailed interpretation and drilling programs will be designed to test prioritized targets.

To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/mmw829fig1.pdf

To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/mmw829fig2.pdf

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; these may include intervals of up to 2.0m below the cut-off grade. Drill intercepts are down-hole thicknesses and may not represent true thicknesses. 

Background

Magma has established mineral resources at the Thunder Bay North project, from 528 drill holes for 97,676m of diamond drilling completed prior to 31 May, 2010, comprising:

(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