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PERTH, WESTERN AUSTRALIA--(Marketwire - April 13, 2011) -




THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR ANY JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL




Magma Metals Limited (TSX:MMW)(ASX:MMW) ("Magma" or the "Company") is pleased to announce the completion of an A$20 million placement of approximately 71.4 million new fully paid ordinary shares at a price of A$0.28 per share ("Issue Price") (the "Placement").


The Placement was well supported by existing and new institutional and sophisticated investors.


RBC Capital Markets is acting as Lead Manager and Sole Bookrunner to the Placement with Argonaut Limited acting as Co-Manager to the Placement.


The Placement will be completed in two tranches. Under tranche one, Magma will issue approximately 27.7 million shares ("Tranche One Placement Shares") at the Issue Price to raise approximately A$7.8 million with quotation of the Tranche One Placement Shares on the ASX expected to be on 20 April 2011. Under tranche two, Magma will issue approximately 43.7 million shares ("Tranche Two Placement Shares") at the Issue Price to raise approximately A$12.2 million. The issue of the Tranche Two Placement Shares is subject to approval by Magma shareholders, which will be sought at a General Meeting expected to take place on or around 17 May 2011 with quotation of the Tranche Two Placement Shares on the ASX anticipated to be on or around 24 May 2011. The shares issued under the Placement will rank equally in all respects with Magma's existing ordinary shares.


The Placement is also subject to receipt of approval from the Toronto Stock Exchange.



Magma intends to use the net proceeds from the Placement for:





Exploration activities at the Thunder Bay North platinum - palladium project in Ontario, including drilling programs and associated geophysical surveys;
Exploration activities at the Griffin's Find gold project in Western Australia; and
Corporate purposes and general working capital.



Commenting on the Placement, Dr Keith Watkins, Executive Chairman of Magma said:


"The recent exploration results at Thunder Bay North highlight the excellent potential for additional mineralization at the project. The funds raised under the Placement will allow us to undertake significant drilling programs and push towards achieving Magma's goal of delineating a much larger mineral resource at the project. In addition, the funds will also allow us to conduct further studies to optimize the outcomes of the recently released scoping study on Thunder Bay North."


This is the announcement that was referred to in the Company's request for a trading halt on the ASX made earlier today.



Company Information



Additional information on Magma and its projects is available on its website at http://www.sedar.com/">www.sedar.com.