2. CAUTION REGARDING FORWARD-LOOKING STATEMENTS
These slides and the accompanying oral presentation contain certain “forward-looking information” within the meaning of Canadian
securities laws, which may include, but is not limited to, statements with respect to future events or future performance,
management’s expectations regarding our growth, results of operations, estimated future revenues, requirements for additional
capital, production costs and revenue, future demand for and prices of electricity, business prospects, opportunities and estimates of
recoverable geothermal energy “resources” or “reserves” or energy generation capacities (at either P90 or based on the Geothermal
Code for Public Reporting). Such forward-looking information reflects management’s current beliefs and is based on information
currently available to management.
A number of known and unknown risks, uncertainties and other factors, may cause our actual results or performance to materially
differ from any future results or performance expressed or implied by the forward-looking information. Such factors include, among
others, those discussed in the section of our prospectus entitled “Risk Factors”. These factors should be considered carefully. The
forward-looking information is also based upon what management believes to be reasonable assumptions, including, but not limited
to, assumptions about: the success and timely completion of planned exploration and expansion programs, including expansion and
improvements 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 energy
generation; the accuracy of resource and reserve estimation methodology and probabilistic analysis used to estimate the quantity of
potentially recoverable energy; geological, geophysical, geochemical and other conditions at our properties; the reliability of technical
data, including extrapolated temperature gradient, geophysical and geochemical surveys and geothermometer calculations; capital
expenditure estimates; availability of capital to fund exploration, development and expansion programs; the differences in financial
results reported under IFRS and Canadian GAAP; and general economic conditions. Forward-looking information and statements
are also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from the
forward-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 could
differ materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance on
forward-looking information. Other than as required by applicable securities laws, we assume no obligation to update or revise such
forward-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
Magma’s mission: to build a leading pure play geothermal power company
Magma’s strategy: broad asset portfolio and scale = “discovery returns” and “utility returns”
Reduces drilling risk and high front-end capital risk
Improves margins with lower cost of capital DISCOVERY UTILITY
RETURNS RETURNS
Better multiples
PROJECT VALUE $
Capital Growth Income Growth
We are a power company and an energy Feasibility
Permitting Operation
resource company Acquisition Financing
Exploration Construction
TIME
3
4. BALANCED PORTFOLIO: GLOBAL EXPLORATION & OPERATIONS
ICELAND:
98.5% in 2 power plants producing 175 MW
80 MW of expansions underway
Additional 150 MW of defined expansion plans
USA:
Producing 13.5 MW with 47.5 MW expansion potential
Steady, predictable and long-life cash flow
Excellent government support for geothermal projects
13 other exploration properties
CHILE / PERU:
Huge (320 MW) inferred resource discovered at low cost
Positioned in emerging world-class geothermal markets
Growing government support for geothermal projects
4
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 world’s fastest growing geothermal power company
200 1400
175 PRODUCTION GROWTH GEOTHERMAL RESERVES
1200 193
150 186 & RESOURCES GROWTH 171
1000
125
800
MW
100
MW 1
75 600 86
60
50 84 400
990
25 11 200
555
0 199
2008 2009 2010 YTD 0
2008 2009 2010 YTD
Inferred Indicated Reserves
Growing financial strength
$25
$60 EBITDA
$20
$50
REVENUE
MILLIONS USD
$15
$40
Millions USD
$10
$30 $5
$20 $-
$10 $(5)
$- $(10)
2 3 2 3
Jan - Jun /08 July/08 -
2
Jan - Dec/10 JAN - JUN /08 JULY/08 - 2 JAN - DEC/10
Dec/09 DEC/09
1
Geothermal Reporting Code verified MW
2
2008 and 2009 actuals (2009 reflects Magma’s equity portion in HS Orka)
3
5 2010 is an estimate and reflects Magma's equity portion in HS Orka
6. NORTH AMERICAN PRIMARY GEOTHERMAL COMPANIES
700
DEVELOPERS
600
500
400
MW
300
200
100
0
Raser Ram Power U.S. Geo NGP Cal Energy MAGMA (1) Ormat
Operating Development through 2013
Source: Jacob Securities Inc
(1)
Geothermal Reporting Code verified MW
6
7. MAGMA IS AN UNDERVALUED ENERGY COMPANY
BOE RESERVES & RESOURCES EV/BOE RESERVES & RESOURCES
2,500 $6.00
BOE Resources EV/BOE Reserves
BOE Reserves $5.00 EV/BOE Resources
2,000
$4.00
CDN $ / BOE
MM BOE
1,500
$3.00
1,000
$2.00
500 $1.00
- $-
UTS STP MXY CLL OPC UTS STP MXY CLL OPC
. . . . . @ $15/tonne
CO2 CREDITS (PENALTIES) FROM
RESERVES & RESOURCES ≈ $14 billion credit
over 30 years
1,500
1,000
MEGA T ONNES
500
TSX symbols: -
UTS UTS Energy UTS STP MXY CLL OPC
STP Southern Pacific (500)
MXY Magma Energy (1,000)
CLL Connacher Oil & Gas
OPC OPTI Canada (1,500)
7
8. CREATING VALUE
OUR PROGRESS
Existing Iceland infrastructure allows for
rapid, low cost expansions
Now the 2nd largest North American based
primary geothermal developer
Major discovery in Chile
NEXT STEPS
Complete expansions at HS Orka, Iceland
Fulfill potential at Soda Lake, NV and
develop other US assets
Develop Mariposa, Chile and explore other 636
Chile/Peru assets
VALUE PROPOSITION 438
Non-declining assets providing steady
302
production and cash flow (forever) 245
196
Strong inventory of development prospects
Sufficient resources to increase existing 84
company proved reserves six-fold 11
Growing portfolio size reduces risk
Large team of geothermal experts - core
asset
8
11. MAGMA ENERGY - GLOBAL PROJECT PIPELINE
AREA RESERVES RESOURCES
STAGE PROPERTY (HA) PROVED INDICATED INFERRED
Operations Soda Lake - Nevada1 2,881 20 41
HS Orka - Iceland
2
31,067 173 130 500
Advanced Mariposa - Chile
3
104,000 320
McCoy - Nevada4 4,621 170
Early Stage Argentina [2] 39,057
Peru [7] 7,900
USA [11] 34,977
(1) Reporting Code Estimate GeothermEx
(2) Reporting Code Estimate Mannvit Engineering 224,503 193 MW 171 MW 990 MW
(3)
Reporting Codes Estimate SKM
(4)
Independent estimate P90 Geo Hills Associates
Plant
Property
McCoy
11
12. HS ORKA ACQUISITION - OVERVIEW
Magma acquired 98.5% of HS Orka PROPERTY RESERVES RESOURCES COMMENT
3 separate deals (2009 - 2010) PROVED INDICATED INFERRED
Cost for HS Orka: SVARTSENGI 75 MW No further expansions planned
45 MW of steam behind pipe for expansion
$133 million cash and share REYKJANES 100 MW 80 MW phases; 50 MW turbine arrived May2010;
subscriptions further production drilling underway
$ 90 million vendor bonds1 ELDVÖRP 50 MW Steam behind pipe from 1 production well
$2.4 M/MW2 for 175 MW in production 4 MW of steam behind pipe from 2
plus other opportunities KRÝSUVÍK 500 MW
production wells that are candidates for
1
Bonds indexed to price of aluminum with an average stimulation; 9 slim wells; 19 temperature
coupon rate of 2.4% and 2016 maturity gradient wells
2
Includes $171.2 million HS Orka non-recourse to TOTAL MW 175 130 500
Magma long term debt*
* Basket of foreign currency with an average coupon
rate of 2.8% and maturities ranging from 2016-2031
Delivery of 50 MW turbine units - May 2010
Magma gains:
Large producing asset base creates
strong income statement & balance sheet
Significant expansion potential
World class geothermal team
Iceland’s largest private energy
company
12
13. HS ORKA EXPANSION HIGHLIGHTS
Potential to expand from 175 MW to 405 MW
PPA discussions with Nordural and Others on-going
CapEx for full 230 MW expansion is ~$560 M; will be staged
50 MW phase expansion commenced; significant equity already invested
Next 30 MW phase requires no additional drilling
~46% of HS Orka’s revenue currently indexed to aluminum price
Future PPA’s with smelters and/or other power off-takers will impact HS Orka’s on-going sensitivity
to aluminum prices
CONCEPTUAL PRODUCTION
GROWTH
13
14. PRODUCTION - SODA LAKE, NEVADA
Ramping up to capacity of 23 MW
Currently operating at 60% capacity
Phase 1 expansion to 23 MW - currently underway
Target blended PPA rate of $85/MWh to reflect expanded capacity
and market conditions
Average cost of acquisition and expansion ~ $1.5 Million/MW
Projected EBITDA ~ $6.5 Million
Phase 2 expansion - achieve reservoir capacity 61 MW
Additional 14 MW expected by 2013
14
15. ADVANCED DEVELOPMENT - MARIPOSA, CHILE
320 MW Inferred Resource discovered MP- 03 DRILL SITE
by Magma in 2009
50 MW Phase 1 exploitation plan
approved in April 2010
$15M resource confirmation program
underway to drill additional slim holes
>$100/MWh power rates and drilling
incentives available
<25 km from 2 transmission lines under
development MP- 02 MP- 01 MP- 03
15
16. WORLD CLASS MANAGEMENT TEAM
Ross Beaty: Chairman & CEO
Geologist and resource company entrepreneur with 38 years experience in the international minerals industry.
Founder and chair of Magma Energy Corp and Pan American Silver Corp. (TSX: PAA, NASDAQ: PAAS) and
several other resource companies that were successfully built and divested.
MAGMA ENERGY CORP MAGMA ENERGY GLOBAL OPERATIONS
Lyle Braaten: Secretary & General Counsel Dick Benoit: USA
Lawyer. Extensive experience negotiating commercial Exploration Manager
agreements and implementing large infrastructure Over 35 years experience in the geothermal industry both
projects nationally and internationally
Annette Cusworth: Chief Financial Officer Mark Kumataka: USA
Chief Engineer
Certified General Accountant with over 20 years
Professional Engineer with over 30 years experience in
experience in the public and private sectors
geothermal resource management in U.S. & Latin America
Dr. Catherine Hickson: VP Exploration & Chief Geologist Ásgeir Margeirsson: ICELAND
World renowned volcanologist with over 25 years President & CEO
experience in Canadian and international geosciences An extensive career in geothermal power development both
within Iceland and internationally
Alison Thompson: VP Corporate Relations
Monte Morrison: USA
Masters of Chemical Engineering and Queen’s MBA; Country Manager & VP Operations
Extensive experience in the energy industry; Chair of Professional Engineer with 25 years experience managing the
CanGEA operations and maintenance of geothermal power plants
Andrea Zaradic: VP Operations & Development John Selters: CHILE & ARGENTINA
Mechanical Engineer with 20 years experience in Country Manager
engineering design, construction, commissioning and Mining engineer with over 40 years experience in Latin
operations with large international mining projects America
16
17. INSTITUTIONAL QUALITY BOARD OF DIRECTORS
Ross Beaty - Chairman and CEO
David W. Cornhill - [Independent] Member Audit, Compensation and Governance Committees
Mr. Cornhill is the founder, Chairman and Chief Executive Officer of AltaGas Income Trust, one of Canada’s largest
energy infrastructure groups, focused on gas and power infrastructure and renewable energy (wind and hydro).
With more than 25 years of experience in the energy industry, Mr. Cornhill also sits on several private and public
boards including AltaGas Utility Group and Ivey Business School.
Robert Pirooz - [Independent] Chair Corporate Governance Committee, Member Compensation Committee
Mr. Pirooz studied commerce at Dalhousie University and received a Juris Doctor degree from the University of
British Columbia in 1989. From May 1990 to February 1998, Mr. Pirooz practiced law primarily in the areas of
corporate, commercial and securities law. Mr. Pirooz' extensive legal and business background spans over 20
years and includes the role of General Counsel for the BCR Group of companies and Pan American Silver Corp, a
role in which he currently serves, and as principal in the Lumina group of resource companies. Currently a director
of 5 public companies, Mr. Pirooz has worked with Ross Beaty since early 1998.
Donald Shumka - [Independent] Chair Audit Committee, Member Governance Committee
Mr. Shumka is Managing Director of Walden Management Ltd., a financial consulting firm. Mr. Shumka received
his Bachelor of Arts degree from the University of British Columbia and a Master of Business Administration from
Harvard University. From 1966 -1979 he worked in a variety of positions in the forest industry, from 1979 -1989 he
was Vice President and Chief Financial Officer of West Fraser Timber Co. Ltd. and from 1989 - 2004 he headed
the Forest Products Group for two Canadian investment banks. Mr. Shumka is active in the not for profit sector and
is currently the Chair of the British Columbia Arts Council.
Paul Sweeney - [Independent] Chair Compensation Committee, Member Audit Committee
Mr. Sweeney has over 30 years experience in financial management of mining and renewable energy companies.
He is currently Executive Vice-President, Business Development, of Plutonic Power Corporation, a run-of-river
hydro developer. He has served as CFO of a number of successful mineral resource companies including Canico
Resources and Sutton Resources and is a Director of several resource companies including Pan American Silver
Corp. where he chairs the audit committee.
17
18. NEWS-FLOW CATALYSTS
LOCATION GOAL TARGET DATE
Desert Queen, Nevada Temperature gradient drilling results
Reykjanes, Iceland 80 MW expansion program begins
Soda Lake, Nevada Phase 2 expansion commenced
HS Orka, Iceland Acquire controlling interest
Mariposa, Chile Slim hole drilling results On-Going
Peru Exploration results On-Going
McCoy, Nevada Slim hole drilling results Q-4
Soda Lake, Nevada New PPA with NV energy Q-4
Soda Lake, Nevada Phase 1 expansion complete; 23 MW online Q-4
Reykjanes, Iceland PPA negotiations with Nordural and others Q-2 / 2011
18
19. OWNERSHIP, CAPITAL STRUCTURE & COVERAGE
MAGMA ENERGY SHAREHOLDERS CAPITAL STRUCTURE:
(JULY 2010) ISSUED & OUTSTANDING(1) 288.9 M
32% 35% Sitka Foundation OPTIONS 3.4 M
Board & Management W ARRANTS 0
Strategic Partner (AltaGas) LONG TERM DEBT(2)(3) US $ 49.3 M
Estimated Retail CASH(3) US $ 25.3 M
8%
20% 5%
Estimated Institutional SHAREHOLDERS’ EQUITY(3) US $ 142.9 M
(1) 100 M shares held beneficially for the Sitka Foundation
(www.sitkafoundation.org) no resale until 2013
(2) Bond has a face value of US $70.2 M
(3) As of June 30/2010
ANALYST COVERAGE CONTACT
REGIONAL REPRESENTATION Cormark Securities MacMurray Whale
11%
20% OF SHAREHOLDERS Jacob Securities John McIlveen
(JULY 2010) Mackie Research Capital Matthew Gowing
National Bank Financial Jeremy Mersereau
U.S.A.
13% Pritchard Capital Partners Veny Aleksandrov
Canada
Raymond James Securities Steven Li
5% 51% Europe Salman Partners Mike Plaster
Other Stifel Nicolaus Dilip Warrier
Retail (Unknown Location) Wellington West Capital Mngt Sean Peasgood
INDEX COVERAGE
Ardour Global Alternative Energy Index
S&P/TSX Clean Technology Index
19
