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THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR ANY JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE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 (News - Market indicators)(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.

• 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 www.magmametals.com.au and under the Company's profile on the SEDAR website at www.sedar.com.

Cautionary Statement

Certain information contained in this report constitutes "forward-looking information" under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" , "is expected", "estimates", "intends", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Although management believes that the expectations expressed in such forward-looking information disclosed herein are based on reasonable assumptions, these statements are not guarantees of future performance. A number of factors could cause actual results, performance or achievements to differ materially from those in the forward-looking information. Such factors include future metal prices, exploration and evaluation results, future availability of capital and general economic, market or business conditions, government regulation of mining operations, failure of equipment or processes to operate as anticipated, risks inherent in mineral exploration and development including unusual or unexpected geological formations. Descriptions of these risks can be found in the Company's various statutory reports, including its Annual Information Form available on its website at www.magmametals.com.au and on the SEDAR website at www.sedar.com.