Magma Metals Limited: Major Ground Position Staked Around the Griffins Find Gold Project

PERTH, WESTERN AUSTRALIA--(Marketwire - July 18, 2011) - Magma Metals Limited (TSX:MMW - News; ASX:MMW - News;"Magma" or the "Company") is pleased to provide an update on the Griffins Find gold project, located 320km southeast of Perth in Western Australia.

Highlights

--  Magma has lodged exploration licence applications over the gneiss belt
    to the north and south of the Griffins Find gold project covering a
    strike length of 180km and an area of approximately 7,000km2. 

--  Results from the final six holes in the recent drilling program
    included: 

    --  8m @ 2.52g/t gold & 3m @ 2.81g/t gold from the Griffins West
        prospect; 
    --  52m @ 0.58g/t gold including 6m @ 2.05g/t gold from the Griffins Pit
        prospect; and, 
    --  2m @ 3.29g/t gold & 1m @ 24.9g/t gold from the Ridge prospect. 

Lake Grace Gold Project

Magma has applied for exploration licences covering an area of approximately 7,000km2, to be called the Lake Grace gold project, to the north and south of the Griffins Find gold project (Figure 1). This area covers a strike length of approximately 180km of the gneiss belt which hosts the Griffins Find gold deposits and is comparable in size to Ausgold Limited's Boddington South gold project, which is adjacent to the west (Figure 1). Ausgold recently announced a major seven rig drilling program on this project to delineate gold resources.

A number of large greenstone units prospective for gold mineralization have been identified in the Lake Grace project area from analysis of historical exploration records, interpretation of aeromagnetic data and Magma's own field reconnaissance. In addition a number of gold occurrences and anomalies are known in this belt, which is mainly under soil cover in a wheat farming district and has had little systematic modern exploration coverage. Regional exploration work is planned to investigate the gold potential of the project particularly within the identified greenstone units.

Dr Keith Watkins, Magma's Managing Director said, "This is an exciting and very prospective region where there is significant potential to generate value as demonstrated by Ausgold, our neighbour to the west. Although it is important to note that this initiative will not detract from our ongoing program at the Thunder Bay North platinum-palladium project in Canada, which continues to be the Company's primary focus."

To view Figures 1-3, please visit the following link: http://media3.marketwire.com/docs/mmw_Fig1-3.pdf.

Griffins Find Drilling

Results have been received from the last six holes in the recently completed 8,557m reverse circulation and diamond drilling program conducted to test various prospects at the Griffins Find gold project. Results from these holes are listed in Tables 1 and 2 and shown in Figure 2, along with previously announced drilling results.

The drilling results from the Ridge and Griffins West prospects define mineralization within broadly east to east-northeast trending structures; the mineralization remains open at depth and along strike at both prospects.

Geological interpretation of the diamond drill-hole under the historical Griffins Find open pit (MGFDD11 in Table 1 and Figure 3) indicates the mineralization is likely to be closed off at depth vertically beneath the open pit, although there is potential for further mineralization extending down-plunge to the south. There is a significant body of mineralization beneath the open pit, which extends to approximately 50m below the pit floor (Figure 3).

Drilling is being planned for the summer field season to further evaluate these prospects and other targets in the project.

Table 1. Significant drilling results.

----------------------------------------------------------------------------
                                                                     Cut-off
Prospect       Hole Number   From (m)  To (m) Interval (m) Au (g/t) (g/t Au)
----------------------------------------------------------------------------
Griffins West  MGFDD9              64      72            8     2.52      1.0
----------------------------------------------------------------------------
               including           66      68            2     4.03      3.0
----------------------------------------------------------------------------
                                   77      78            1     1.64      1.0
----------------------------------------------------------------------------
               MGFDD10             83      86            3     2.81      0.5
----------------------------------------------------------------------------
               including           83      84            1     7.41      3.0
----------------------------------------------------------------------------
Griffins Pit   MGFDD11             91     143           52     0.58      0.1
----------------------------------------------------------------------------
               including           92      96            4     1.29      0.5
----------------------------------------------------------------------------
               and                116     122            6     2.05      1.0
----------------------------------------------------------------------------
               including          119     121            2     3.47      3.0
----------------------------------------------------------------------------
               and                137     143            6     1.01      0.5
----------------------------------------------------------------------------
Ridge          MGFDD12            111     113            2     3.29      1.0
----------------------------------------------------------------------------
               MGFDD13             39      40            1     1.33      1.0
----------------------------------------------------------------------------
                                   82      84            2     1.36      0.5
----------------------------------------------------------------------------
                                  115     120            5     0.75      0.5
----------------------------------------------------------------------------
                                  128     130            2     2.07      0.5
----------------------------------------------------------------------------
               MGFDD14            133     144            1     1.26      1.0
----------------------------------------------------------------------------
                                  179     184            5     1.14      0.5
----------------------------------------------------------------------------
               including          179     180            1     3.25      3.0
----------------------------------------------------------------------------
                                  196     197            1     24.9      3.0
----------------------------------------------------------------------------
                                  207     208            1     4.31      3.0
----------------------------------------------------------------------------
                                  210     211            1     1.74      1.0
----------------------------------------------------------------------------
                                  224     226            2     1.47      1.0
----------------------------------------------------------------------------

Results are reported for intersections greater than 1 g/t Au x metres at the lower cut-off grades shown in the right hand column; these may include internal intervals of up to 2m below the cut-off grade.

Table 2. Drill hole collar and depth information

------------------------------------------------------------------------
                 Easting    Northing     Azimuth         Dip       Depth
Hole Number          (m)         (m)   (Degrees)   (Degrees)         (m)
------------------------------------------------------------------------
MGFDD9            622520     6339920         180         -60       105.0
------------------------------------------------------------------------
MGFDD10           622560     6339920         180         -60       102.0
------------------------------------------------------------------------
MGFDD11           623253     6340248         240         -55       200.5
------------------------------------------------------------------------
MGFDD12           624666     6338680         150         -60       150.0
------------------------------------------------------------------------
MGFDD13           624627     6338668         150         -60       252.4
------------------------------------------------------------------------
MGFDD14           624700     6338700         150         -60       249.4
------------------------------------------------------------------------

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.

Drill-hole location and detailed assay data for all 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. It should be noted that drill intercepts referred to in this report are down-hole thicknesses and may not represent true thicknesses.

Sample preparation and assays for samples were conducted at the ALS Laboratory Group facility in Perth, Western Australia.