Mannvit Engineering’s Geothermal Resources Assessment is Key in Energy Agreement

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Mannvit Engineering Provides Technical Assessment of Geothermal Reserves in Support of Magma Energy's 32% Acquisition of Iceland Geothermal Company HS Orka.

On December 14, 2009, Magma Energy Corporation announced closure of an agreement to acquire 32% of Iceland geothermal company HS Orka. As part of the technical due diligence, Mannvit Engineering prepared an independent report on the geothermal plants and properties of HS Orka in support of Magma’s technical due diligence assessment which was concurrent with its objective of acquiring an ownership stake in HS Orka.

Classification and assessment of HS Orka’s geothermal resources and reserves was an important part of the technical due diligence and an authoritative and objective assessment was required. The resource classifications and assessments of HS Orka’s geothermal resources required review and interpretation of substantial geothermal data produced over more than 30 years of continuous geothermal exploration and production. Extensive numerical simulation effort was an important part of the resource assessment work. Based on its extensive experience in geothermal project development, Mannvit Engineering was requested to prepare this technical report on the geothermal power plants and properties of HS Orka.

The report was prepared in accordance with the Code for Geothermal Resources and Reserves Reporting (the “Code”), 1st Edition: 2008, published by the Australian Geothermal Energy Association. In the report, four of HS Orka’s geothermal properties were determined to have a Proven Reserves totaling 175 MW, Indicated Resources totaling 140 MW and an Inferred Resources of 500 MW. The report was prepared by Mannvit’s geothermal specialists, Arnar Hjartarson and Dr. Johann Gardar Einarsson, who are responsible for its content and are “Competent Persons” according to the Code. For the technical report, Mannvit Engineering received important support and assistance from Vatnaskil Consulting Engineers.

Glacier Partners, a New York and Reykjavik based corporate finance advisory firm, specializing in geothermal energy, provided financial analysis in the report on HS Orka’s geothermal resources.

About Mannvit Engineering:
Mannvit Engineering of Iceland provides a broad range of engineering and technical research services. Since the early seventies, Mannvit has been active in the area of renewable energy and has been involved in the development of most power plants in Iceland, both hydroelectric and geothermal. Services for these projects range from research and prepatory work to complete design and construction management. For more information, please visit http://www.mannvit.com.

CONTACT:
Business Contact: Runólfur Maack
CEO, Overseas Operations
Mannvit Engineering
Reykjavik, Iceland
Tel: +354 422 3000
email: runolfur (at) mannvit (dot) is
web: http://www.mannvit.com

About Glacier Partners:
Glacier Partners is a specialized advisory firm focused on bringing value to Geothermal Energy and Seafood industry clients. The firm maintains strategic alliances with major Nordic consulting group Capacent, through their Capacent Glacier joint-venture in Iceland, and with energy focused investment bank Pritchard Capital Partners in the U.S.

CONTACT:
In New York:
Ignacio Kleiman: +1-212-716-0111, ikleiman (at) glacierpartnerscorp (dot) com
Charles J. Arrigo: +1-212-716-0120, carrigo (at) glacierpartnerscorp (dot) com

In Reykjavik:
Magnus Bjarnason: +354-895-4515, magnus.bjarnason (at) capacentglacier (dot) is
Timothy Spanos: +354-895-4477, tspanos (at) glacierpartnerscorp (dot) com
web: http://www.glacierpartnerscorp.com

About Magma Energy Corp.:
Magma Energy Corp. is a 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 an interest in two other operating power plants in Iceland.

About HS Orka:
HS Orka is a privately owned energy company in Iceland with installed geothermal power capacity of 175 megawatts (MW) and 150 MW of thermal energy for district heating. The expansion plans of HS Orka will provide power to a new aluminum smelter that is currently under construction.

SOURCE Mannvit Engineering

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Runólfur Maack
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