Magma presentation feb-1_2011

• 1. A GLOBAL GEOTHERMAL POWER COMPANYFEB 2011TSX : MXY

2. CAUTION REGARDING FORWARD-LOOKING STATEMENTSThese slides and the accompanying oral presentation contain certain forward-looking information within the meaning of Canadiansecurities laws, which may include, but is not limited to, statements with respect to future events or future performance,managements expectations regarding our growth, results of operations, estimated future revenues, requirements for additionalcapital, production costs and revenue, future demand for and prices of electricity, business prospects, opportunities and estimates ofrecoverable geothermal energy resources or reserves or energy generation capacities (at either P90 or based on the GeothermalCode for Public Reporting). Such forward-looking information reflects managements current beliefs and is based on informationcurrently available to management.A number of known and unknown risks, uncertainties and other factors, may cause our actual results or performance to materiallydiffer from any future results or performance expressed or implied by the forward-looking information. Such factors include, amongothers, those discussed in the section of our prospectus entitled Risk Factors. These factors should be considered carefully. Theforward-looking information is also based upon what management believes to be reasonable assumptions, including, but not limitedto, assumptions about: the success and timely completion of planned exploration and expansion programs, including expansion andimprovements to operations in Iceland and to our Soda Lake Operation in Nevada; the growth rate in net electricity consumption;support and demand for non-hydroelectric renewables; government initiatives to support the development of renewable energygeneration; the accuracy of resource and reserve estimation methodology and probabilistic analysis used to estimate the quantity ofpotentially recoverable energy; geological, geophysical, geochemical and other conditions at our properties; the reliability of technicaldata, including extrapolated temperature gradient, geophysical and geochemical surveys and geothermometer calculations; capitalexpenditure estimates; availability of capital to fund exploration, development and expansion programs; the differences in financialresults reported under IFRS and Canadian GAAP; and general economic conditions. Forward-looking information and statementsare also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from theforward-looking information and statements will occur.There can be no assurance that the forward-looking information will prove to be accurate, as actual results and future events coulddiffer materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance onforward-looking information. Other than as required by applicable securities laws, we assume no obligation to update or revise suchforward-looking information to reflect new events or circumstances.2 3. MAGMA ENERGY - STRATEGY & VALUE CREATION Geothermal power can be the lowest cost and cleanest form of electricity generation Potentially a great cash generator without incentives Incentives (USA, Europe, Chile) greatly improve margins Magmas mission: to build a leading pure play geothermal power company Magmas strategy: DISCOVERYUTILITY broad asset portfolio and scale = RETURNSRETURNS PROJECT VALUE $ discovery returns and utility returns Reduces drilling risk and high front-end capital riskFEASIBILITY Improves margins with PERMITTINGlower cost ofcapital OPERATIONSFINANCING Better multiples ACQUISITIONEXPLORATIONCONSTRUCTION TIME We are a power company and an energy resource company3 4. BALANCED PORTFOLIO: GLOBAL EXPLORATION & OPERATIONSICELAND: 2 power plants with 175 MW capacity 80 MW of expansions underway Additional 150 MW of defined expansion plansUSA: 23 MW power plant with expansion potential Steady, predictable and long-life cash flow Excellent government support for geothermal projects 12 other exploration propertiesCHILE / PERU: Huge (320 MW) inferred resource discovered at low cost Positioned in emerging world-class geothermal markets Growing government support for geothermal projects4 5. MAGMA ENERGY - CORPORATE SUMMARY Mission: To build a leading pure play geothermal power company Strong team of explorers, builders and operators Execution: From 2008 startup, the worlds fastest growing geothermal power company POWERGROWTH GEOTHERMALRESERVES&RESOURCESGROWTH1750 2502000 InstalledCapacity(MW)15001981,650Inferred IndicatedReserves Production(GWh) 20016001250 1951000 15012001951811,023 181 750 100800 86 500601,19023 50 400 990 250 11555 0 1691019902008200920102011eMW 1 20082009 20102011e Growing financial strength REVENUE EBITDA$80 $25$70 $20 MillionsUSD$60MillionsUSD $15$50 $10$40$5$30$20$$10 $(5)$ $(10)JanJunJuly/08Jan 2,3Jan 3,4 JanJun July/08Jan 2,3 Jan 3,42222/08 Dec/09 Dec/10eDec/11e/08Dec/09 Dec/10e Dec/11e1Geothermal Reporting Code verified MW22008/09 actual and 2009/2010 reflects Magmas equity portion in HS Orka32010 is an estimate, 2011 is an estimate and reflects Magmas consolidated portion in HS Orka5 4 Assumed aluminum price of USD 2,300/tonne and 111 ISK/USD 6. Q1 OPERATING AND FINANCIAL HIGHLIGHTS Magma gained control of HS Orka during Q1, full consolidation of results occur in Q2 ACTUALExpressed in thousands of US dollars, except forMWh and per share amounts Year End2010-Q1June 30-2010NET PRODUCTION (MWh) 372,042 62,072TOTAL REVENUE 8,0445,056GROSS PROFIT1,1911,659EBITDA (1)5,910(3,261)EARNINGS (LOSS) PER SHARE .05(0.07)TOTAL ASSETS 656,006 198,703TOTAL LIABILITIES415,542 56,633CASH GENERATED BY OPERATING ACTIVITIES 12,47289(1) EBITDA is defined by the Company as earnings before interest and other financing costs, taxes, depreciation and amortization, as well as before deductions for non-cash chargesrelated to employee compensation, equity earnings/losses, loss on re-measurement of equity interest, NCI, gain on bargain purchase and changes to the balance sheet carryingvalue of long-term debt and derivatives. The Company discloses EBITDA as it is a measure used by analysts and by management to evaluate the Companys performance. AsEBITDA is a non-GAAP measure, it may not be comparable to EBITDA calculated by others. In addition, as EBITDA is not a substitute for net earnings, readers should consider netearnings in evaluating the Companys performance.6 7. NORTH AMERICAN PRIMARY GEOTHERMAL COMPANIES 700 DEVELOPERS 600 500 400MW 300 200 1000(1) Ram PowerU.S. Geo NGP MAGMAOrmatOperatingDevelopment through 2013(1)Geothermal Reporting Code verified MWSource: Jacob Securities Inc7 8. CREATING VALUE OUR PROGRESS Existing Iceland infrastructure allows forrapid, low cost expansions Now the 2nd largest North American basedprimary geothermal developer Major discovery in Chile NEXT STEPS Complete expansions at HS Orka, Iceland Fulfill potential at Soda Lake, NV anddevelop other US assets Develop Mariposa, Chile and explore other 700 643 6000Chile/Peru assets EXPECTEDORGANICGROWTH600INSTALLEDCAPACITY(MW)5000 VALUE PROPOSITION500 443 4000 Non-declining assets providing steady 400 GWhproduction and cash flow (forever)307 3000300 248 Strong inventory of development prospects 190 1982000200 Sufficient resources to increase existing10084 1000 company proved reserves six-fold11 Growing portfolio size reduces risk 0 0 Large team of geothermal experts - core 2008 2009 2010 2011 2012 2013 2014 2015+assetSoda Lake HS Orka Nevada Mariposa8 9. www.magmaenergycorp.com TSXMXY9 10. APPENDIX10 11. MAGMA ENERGY - GLOBAL PROJECT PIPELINE AREARESERVESRESOURCES STAGE PROPERTY (HA) PROVED INDICATED INFERRED Operations Soda Lake - Nevada12,881 20 41 HS Orka - Iceland231,067175140500 AdvancedMariposa - Chile 3 104,000320 McCoy - Nevada 4 4,621170 Early Stage Argentina [2]26,922 Chile [2] 158,000 Peru [7]7,900 USA [11] 34,977 370,368 195 MW 181 MW990 MW (1) Reporting Code Estimate GeothermEx (2) Reporting Code Estimate Mannvit Engineering (3) Reporting Codes Estimate SKM (4) Independent estimate P90 Geo Hills Associates Plant PropertyMcCoy11 12. MAGMA IS AN UNDERVALUED ENERGY COMPANY BOE RESERVES & RESOURCES EV/BOE RESERVES & RESOURCES 2,500$6.00 2,000$5.00$4.00MM BOE 1,500CDN $ / BOE$3.00 1,000$2.00500 $1.00- $- STPMXYCLL OPC STPMXY CLLOPC BOE Reserves BOE ResourcesEV/BOE Reserves EV/BOE ResourcesCO2 CREDITS (PENALTIES) FROM . . . . . @ $15/tonne TSXsymbols: RESERVES & RESOURCES $14 billion credit STP SouthernPacific MXY MagmaEnergy1,500over 30 years CLL ConnacherOil&Gas1,000MEGA TONNES OPC OPTICanada500- Assumptions:STPMXY CLLOPC 0.62bbl/MWh(th)(500) 0.1MW(e)/MW(th)(1,000) 30yearsofassumedprojectlife 430kgCO2 emittedperBOE (1,500)12 13. HS ORKA EXPANSION HIGHLIGHTSPotential to expand from 175 MW to 405 MWPPA discussions with Nordural and Others on-goingCapEx for full 230 MW expansion is ~$560 M; will be staged50 MW phase expansion commenced; significant equity already investedNext 30 MW phase requires no additional drilling~46% of HS Orkas revenue currently indexed to aluminum price Future PPAs with smelters and/or other power off-takers will impact HS Orkas on-going sensitivity to aluminum pricesCONCEPTUALPRODUCTION GROWTH13 14. PRODUCTION - SODA LAKE, NEVADARamping up to capacity of 23 MW Current throughput is 84,000 GWh/yrPhase 2 expansion - achieve reservoir capacity 61 MW14 15. ADVANCED DEVELOPMENT - MARIPOSA, CHILE320 MW Inferred Resource discovered by MP- 03 DRILL SITEMagma in 200950 MW Phase 1 exploitation plan approvedin April 2010$15M resource confirmation programunderway to drill additional slim holes>$100/MWh power rates and drillingincentives available