NOV 2010
TSX : MXY
A GLOBAL GEOTHERMAL POWER COMPANY
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
These slides and the accompanying oral presentation contain certain “forward-...
MAGMA ENERGY - STRATEGY & VALUE CREATION
Geothermal power can be the lowest cost and cleanest form of electricity generati...
BALANCED PORTFOLIO: GLOBAL EXPLORATION & OPERATIONS
ICELAND:
2 power plants with 175 MW capacity
80 MW of expansions under...
Mission: To build a leading pure play geothermal power company
Strong team of explorers, builders and operators
Execution:...
0
100
200
300
400
500
600
700
Ram Power U.S. Geo NGP MAGMA Ormat
MW
Operating Development through 2013
DEVELOPERS
NORTH AM...
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
STP MXY CLL OPC
CDN$/BOE
EV/BOE RESERVES & RESOURCES
EV/BOE Reserves EV/BOE Resourc...
CREATING VALUE
OUR PROGRESS
Existing Iceland infrastructure allows for
rapid, low cost expansions
Now the 2nd largest Nort...
www.magmaenergycorp.com
TSX MXY
9
10
APPENDIX
MAGMA ENERGY - GLOBAL PROJECT PIPELINE
STAGE PROPERTY
AREA RESERVES RESOURCES
(HA) PROVED INDICATED INFERRED
Operations So...
HS ORKA ACQUISITION - OVERVIEW
Magma gains:
Large producing asset base creates
strong income statement & balance sheet
Sig...
HS ORKA EXPANSION HIGHLIGHTS
Potential to expand from 175 MW to 405 MW
PPA discussions with Nordural and Others on-going
C...
PRODUCTION - SODA LAKE, NEVADA
Ramping up to capacity of 23 MW
Current installed throughput is 84,000 GWh/yr
Phase 2 expan...
320 MW Inferred Resource discovered
by Magma in 2009
50 MW Phase 1 exploitation plan
approved in April 2010
$15M resource ...
WORLD CLASS MANAGEMENT TEAM
Dick Benoit: USA
Exploration Manager
Over 35 years experience in the geothermal industry both
...
INSTITUTIONAL QUALITY BOARD OF DIRECTORS
Ross Beaty - Chairman and CEO
David W. Cornhill - [Independent] Member Audit, Com...
NEWS-FLOW CATALYSTS
LOCATION GOAL TARGET DATE
Peru Exploration results On-Going
Mariposa, Chile Slim hole drilling results...
11%
51%5%
13%
20%
REGIONAL REPRESENTATION
OF SHAREHOLDERS
(JULY 2010)
U.S.A.
Canada
Europe
Other
Retail (Unknown Location)...
20
www.magmaenergycorp.com
TSX MXY
17-Nov-10
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Magma presentation-nov17

  1. 1. NOV 2010 TSX : MXY A GLOBAL GEOTHERMAL POWER COMPANY
  2. 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. 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 Better multiples We are a power company and an energy resource company 3 DISCOVERY RETURNS UTILITY RETURNS ACQUISITION EXPLORATION FEASIBILITY PERMITTING FINANCING CONSTRUCTION OPERATIONS TIME PROJECTVALUE$
  4. 4. BALANCED PORTFOLIO: GLOBAL EXPLORATION & OPERATIONS ICELAND: 2 power plants with 175 MW capacity 80 MW of expansions underway Additional 150 MW of defined expansion plans USA: 23 MW power plant with expansion potential Steady, predictable and long-life cash flow Excellent government support for geothermal projects 12 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. 5. 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 Growing financial strength $(10) $(5) $- $5 $10 $15 $20 $25 JAN - JUN /08 JULY/08 - DEC/09 JAN - DEC/10 MILLIONSUSD EBITDA 11 84 190 0 25 50 75 100 125 150 175 200 2008 2009 2010 INSTALLEDCAPACITY(MW) POWER GROWTH $- $10 $20 $30 $40 $50 $60 Jan - Jun /08 July/08 - Dec/09 Jan - Dec/10 MillionsUSD REVENUE MAGMA ENERGY - CORPORATE SUMMARY 5 199 555 99060 181 11 86 195 0 200 400 600 800 1000 1200 1400 2008 2009 2010 MW1 GEOTHERMAL RESERVES & RESOURCES GROWTH Inferred Indicated Reserves 1 Geothermal Reporting Code verified MW 2 2008 and 2009 actuals (2009 reflects Magma’s equity portion in HS Orka) 3 2010 is an estimate and reflects Magma's equity and newly consolidated portion in HS Orka 2 33 2 2 2
  6. 6. 0 100 200 300 400 500 600 700 Ram Power U.S. Geo NGP MAGMA Ormat MW Operating Development through 2013 DEVELOPERS NORTH AMERICAN PRIMARY GEOTHERMAL COMPANIES (1) Geothermal Reporting Code verified MW Source: Jacob Securities Inc 6 (1)
  7. 7. $- $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 STP MXY CLL OPC CDN$/BOE EV/BOE RESERVES & RESOURCES EV/BOE Reserves EV/BOE Resources (1,500) (1,000) (500) - 500 1,000 1,500 STP MXY CLL OPC MEGATONNES CO2 CREDITS (PENALTIES) FROM RESERVES & RESOURCES - 500 1,000 1,500 2,000 2,500 STP MXY CLL OPC MMBOE BOE RESERVES & RESOURCES BOE Reserves BOE Resources MAGMA IS AN UNDERVALUED ENERGY COMPANY 7 . . . . . @ $15/tonne ≈ $14 billion credit over 30 years TSX symbols: STP Southern Pacific MXY Magma Energy CLL Connacher Oil & Gas OPC OPTI Canada Assumptions: 0.62 bbl/MWh(th) 0.1 MW(e) / MW(th) 30 years of assumed project life 430 kg CO2 emitted per BOE
  8. 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 Chile/Peru assets VALUE PROPOSITION Non-declining assets providing steady production and cash flow (forever) Strong inventory of development prospects Sufficient resources to increase existing company proved reserves six-fold Growing portfolio size reduces risk Large team of geothermal experts - core asset 8 248 11 84 190 307 443 643 198 InstalledCapacity(MW)
  9. 9. www.magmaenergycorp.com TSX MXY 9
  10. 10. 10 APPENDIX
  11. 11. MAGMA ENERGY - GLOBAL PROJECT PIPELINE STAGE PROPERTY AREA RESERVES RESOURCES (HA) PROVED INDICATED INFERRED Operations Soda Lake - Nevada 1 2,881 20 41 HS Orka - Iceland 2 31,067 175 140 500 Advanced Mariposa - Chile 3 104,000 320 McCoy - Nevada4 4,621 170 Early Stage Argentina [2] 38,311 Chile [2] 158,000 Peru [7] 7,900 USA [11] 34,977 381,757 195 MW 181 MW 990 MW Plant Property 11 (1) Reporting Code Estimate GeothermEx (2) Reporting Code Estimate Mannvit Engineering (3) Reporting Codes Estimate SKM (4) Independent estimate P90 Geo Hills Associates McCoy
  12. 12. HS ORKA ACQUISITION - OVERVIEW 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 Magma acquired 98.5% of HS Orka 3 separate deals (2009 - 2010) Cost for HS Orka: $133 million cash and share subscriptions $ 90 million vendor bonds1 $2.4 M/MW2 for 175 MW in production plus other opportunities 1 Bonds indexed to price of aluminum with an average coupon rate of 2.4% and 2016 maturity 2 Includes $171.2 million HS Orka non-recourse to Magma long term debt* * Basket of foreign currency with an average coupon rate of 2.8% and maturities ranging from 2016-2031 PROPERTY RESERVES RESOURCES COMMENT PROVED INDICATED INFERRED SVARTSENGI 75 MW No further expansions planned REYKJANES 100 MW 90 MW 45 MW of steam behind pipe for expansion phases; 50 MW turbine arrived May 2010; further production drilling underway ELDVÖRP 50 MW Steam behind pipe from 1 production well KRÝSUVÍK 500 MW 4 MW of steam behind pipe from 2 production wells that are candidates for stimulation; 9 slim wells; 19 temperature gradient wells TOTAL MW 175 140 500 Delivery of 50 MW turbine units - May 2010Delivery of 50 MW turbine units - May 2010
  13. 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 13 CONCEPTUAL PRODUCTION GROWTH
  14. 14. PRODUCTION - SODA LAKE, NEVADA Ramping up to capacity of 23 MW Current installed throughput is 84,000 GWh/yr Phase 2 expansion - achieve reservoir capacity 61 MW 14
  15. 15. 320 MW Inferred Resource discovered 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 ADVANCED DEVELOPMENT - MARIPOSA, CHILE MP- 03 DRILL SITE MP- 01MP- 02 15 MP- 03
  16. 16. WORLD CLASS MANAGEMENT TEAM Dick Benoit: USA Exploration Manager Over 35 years experience in the geothermal industry both nationally and internationally Mark Kumataka: USA Chief Engineer Professional Engineer with over 30 years experience in geothermal resource management in U.S. & Latin America Ásgeir Margeirsson: ICELAND President & CEO An extensive career in geothermal power development both within Iceland and internationally Monte Morrison: USA Country Manager & VP Operations Professional Engineer with 25 years experience managing the operations and maintenance of geothermal power plants John Selters: CHILE & ARGENTINA Country Manager Mining engineer with over 40 years experience in Latin America Lyle Braaten: Secretary & General Counsel Lawyer. Extensive experience negotiating commercial agreements and implementing large infrastructure projects Annette Cusworth: Chief Financial Officer Chartered Accountant with over 20 years experience in the public and private sectors Dr. Catherine Hickson: VP Exploration & Chief Geologist World renowned volcanologist with over 25 years experience in Canadian and international geosciences Alison Thompson: VP Corporate Relations Masters of Chemical Engineering and Queen’s MBA; Extensive experience in the energy industry; Chair of CanGEA Andrea Zaradic: VP Operations & Development Mechanical Engineer with 20 years experience in engineering design, construction, commissioning and operations with large international mining projects 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 GLOBAL OPERATIONSMAGMA ENERGY CORP 16
  17. 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. 18. NEWS-FLOW CATALYSTS LOCATION GOAL TARGET DATE Peru Exploration results On-Going Mariposa, Chile Slim hole drilling results Q-4 Soda Lake, Nevada Phase 1 expansion complete Q-4 McCoy, Nevada Slim hole drilling results Q-1 / 2011 Soda Lake, Nevada New PPA with NV energy Q-1 / 2011 Reykjanes, Iceland PPA negotiations with Nordural and others Q-2 / 2011 18
  19. 19. 11% 51%5% 13% 20% REGIONAL REPRESENTATION OF SHAREHOLDERS (JULY 2010) U.S.A. Canada Europe Other Retail (Unknown Location) OWNERSHIP, CAPITAL STRUCTURE & COVERAGE 19 CAPITAL STRUCTURE: AS OF SEPT 31/2010 ISSUED & OUTSTANDING 288.9 M OPTIONS 3.3 M LONG TERM DEBT US $275.0 M CASH US $ 46.2 M SHAREHOLDERS’ EQUITY US $240.5 M ANALYST COVERAGE CONTACT Cormark Securities MacMurray Whale Jacob Securities John McIlveen Mackie Research Capital Matthew Gowing National Bank Financial Jeremy Mersereau Pritchard Capital Partners Veny Aleksandrov Raymond James Securities Steven Li Salman Partners Mike Plaster Stifel Nicolaus Dilip Warrier Wellington West Capital Mgmt Sean Peasgood INDEX COVERAGE Ardour Global Alternative Energy Index S&P/TSX Clean Technology Index 43% 6%20% 31% MAGMA ENERGY SHAREHOLDERS (July 2010) Board and Management Strategic Partner (AltaGas) Estimated Retail Estimated Institutional
  20. 20. 20 www.magmaenergycorp.com TSX MXY 17-Nov-10

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