PERTH, WESTERN AUSTRALIA--(Marketwire - July 7, 2011) - Magma Metals Limited (TSX:MMW - News; ASX:MMW - News;"Magma" or the "Company") is pleased to advise that initial results from its summer drilling program have significantly extended the mineralization at its Thunder Bay North platinum-palladium-copper-nickel (Pt-Pd-Cu-Ni) project in Ontario.

Highlights

--  Initial results from exploration drilling southeast of the mineral
    resource include: 

      BL11-390: 15.5m @ 4.88g/t Pt+Pd, 0.72% Cu & 0.37% Ni from 378m,       
      including: 8m @ 6.81g/t Pt+Pd, 0.97% Cu & 0.47% Ni from 380m.         
                                                                            
      BL11-393: 14m @ 4.72g/t Pt+Pd, 0.78% Cu & 0.43% Ni from 401.7m,       
      including: 6m @ 5.47g/t Pt+Pd, 0.96% Cu & 0.53% Ni from 409.7m.       

--  Sulphides have been logged in drill core up to 400m east of the mineral
    resource. 

--  The drilling program will be expanded to track the mineralization
    further to the east. 

Summer Drilling Program

An approximately 14,000m drilling program is in progress to test potential resource extensions over a 600m strike length of the Current Lake Intrusive Complex, immediately to the south-east of the currently defined mineral resource (Figure 1). Nineteen holes have been completed so far in this area for 8,210m and assay results have been received for four of these (Figure 2).

Two holes returned significant intersections (see "Highlights" above, Tables 1 & 2, and Figure 2). In addition, disseminated sulphides (the main style of mineralization in the Thunder Bay North deposit) have been logged in drill core in a broad east-northeast trending zone up to 400m east of the defined mineral resource (Figure 2). Assay results are pending from these drill holes.

"These drilling results are very encouraging and confirm the potential for significant extensions to the mineral resource. The drilling program will be expanded beyond the planned 14,000m to track the sulphide mineralized trend further to the east" said Dr Keith Watkins, Magma's Managing Director.

To view "Figure 1. Summer drilling program in progress in the Current Lake Intrusive Complex", please visit the following link: http://media3.marketwire.com/docs/MMWfig1.jpg.

To view "Figure 2. Status of the summer drilling program and results to date", please visit the following link:http://media3.marketwire.com/docs/MMWfig2.jpg.

Table 1. Significant drilling results

----------------------------------------------------------------------------
                From         Length    Pt    Pd  Pt+Pd                      
Drill Hole       (m)  To (m)    (m) (g/t) (g/t)  (g/t) Cu (%) Ni (%) Cut-off
----------------------------------------------------------------------------
BL11-390      378.00  393.50  15.50  2.56  2.32   4.88   0.72   0.37     1.0
----------------------------------------------------------------------------
  including   380.00  388.00   8.00  3.58  3.23   6.81   0.97   0.47     5.0
----------------------------------------------------------------------------
B11-393       401.70  415.70  14.00  2.43  2.29   4.72   0.78   0.43     1.0
----------------------------------------------------------------------------
  including   409.70  415.70   6.00  2.80  2.67   5.47   0.96   0.53     5.0
----------------------------------------------------------------------------

Results are reported for intercepts greater than 1.0 g/t Pt+Pd at the lower cut-off grades shown in the right hand column of the table above. Drill intercepts are down-hole thicknesses and may not represent true thicknesses.

Table 2. Drill hole collar and depth information

----------------------------------------------------------------------------
Drill Hole    Easting (m)   Northing (m)  Azimuth (Deg)  Dip (Deg) Depth (m)
----------------------------------------------------------------------------
BL11-390           358700        5402150              0        -90       426
----------------------------------------------------------------------------
BL11-393           358800        5402150              0        -90       441
----------------------------------------------------------------------------

Background

Magma has established mineral resources at the Thunder Bay North project, from 528 drill holes for 97,676m of diamond drilling up to end-May, 2010, comprising:

Open Pit                                                                    
Indicated Resource: 8.46 Mt @ 2.13g/t Pt-Eq (1.04g/t Pt, 0.98g/t Pd, 0.25%  
Cu & 0.18% Ni)                                                              
                                                                            
Underground                                                                 
Indicated Resource: 1.03 Mt @ 3.48g/t Pt-Eq (1.63g/t Pt, 1.51g/t Pd, 0.39%  
Cu & 0.24% Ni)                                                              
Inferred Resource: 0.21 Mt @ 3.00g/t Pt-Eq (1.40g/t Pt, 1.29g/t Pd, 0.34% Cu
& 0.23% Ni)                                                                 

(For further information on these resources, including the calculation of platinum equivalents (Pt-Eq), refer to the Company's announcement dated February 7, 2011.)

An independent positive Preliminary Economic Assessment (Scoping Study) based on these resources was completed earlier this year (refer to the Company's announcement dated February 7, 2011).

The strategy going forward is to enhance the project's economics by growing the resource base through exploration and also optimizing the scoping study outcomes to reduce the estimated capital and operating costs for the project.

Technical Information

Additional information on Magma and its projects, including descriptions of its quality control and assurance procedures, is available on its website at www.magmametals.com.au and in technical reports filed under the Company's profile on the SEDAR website at www.sedar.com.

For information on Mineral Resources, please refer to the Company's announcement dated February 7, 2011, available on the Company's website at www.magmametals.com.au.

Drill-hole location and detailed assay data for drill-holes mentioned in this report but not provided herein have been provided in previous announcements. These are available on the Company's website at www.magmametals.com.au.