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Message: Magma Metals Limited: Positive Scoping Study for Thunder Bay North Project

Perth, Western Australia – Magma Metals Limited (ASX & TSX: “MMW”) (“Magma” or the “Company”) is pleased to advise that AMEC Americas Limited (“AMEC”) has completed an independent Scoping Study (Preliminary Economic Assessment) for the Thunder Bay North platinum-palladium-copper-nickel project in Ontario, Canada.

In the Base Case, which uses analysts’ consensus forecasts of long term metal prices, the project generates an undiscounted pre-tax cash flow of C$164 million, with an IRR of 13%, NPV(8%) of C$41 million and NPV(5%) of C$77 million. In the Upside Case, which is based on current metal prices and exchange rates (at January 21, 2011), the project generates an undiscounted pre-tax cash flow of C$360 million, with an IRR of 27%, NPV(8%) of C$164 million and NPV(5%) of C$222 million.

“The results of the Scoping Study clearly indicate that we have the basis for a robust project. There is also considerable upside potential to enhance the economics of the project, particularly by increasing the Mineral Resource available for mining and/or reducing the capital and operating costs for mineral processing” said Dr Keith Watkins, Magma’s Executive Chairman.

The principal conclusions arising from the Scoping Study are summarized below.

http://www.connect4.com.au/fcas/casdeliver.cgi?img=01148523

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