OCT 2010TSX : MXY

A GLOBAL GEOTHERMAL POWER COMPANY

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

These slides and the accompanying oral presentation contain certain “forward-looking information” within the meaning of Canadiansecurities 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 additionalcapital, production costs and revenue, future demand for and prices of electricity, business prospects, opportunities and estimates ofrecoverable geothermal energy “resources” or “reserves” or energy generation capacities (at either P90 or based on the GeothermalCode for Public Reporting). Such forward-looking information reflects management’s current beliefs and is based on informationcurrently available to management.

A number of known and unknown risks, uncertainties and other factors, may cause our actual results or performance to materiallydiffer from any future results or performance expressed or implied by the forward-looking information. Such factors include, amongothers, those discussed in the section of our prospectus entitled “Risk Factors”. These factors should be considered carefully. Theforward-looking information is also based upon what management believes to be reasonable assumptions, including, but not limitedto, assumptions about: the success and timely completion of planned exploration and expansion programs, including expansion andimprovements 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 energygeneration; the accuracy of resource and reserve estimation methodology and probabilistic analysis used to estimate the quantity ofpotentially recoverable energy; geological, geophysical, geochemical and other conditions at our properties; the reliability of technicaldata, including extrapolated temperature gradient, geophysical and geochemical surveys and geothermometer calculations; capitalexpenditure estimates; availability of capital to fund exploration, development and expansion programs; the differences in financialresults reported under IFRS and Canadian GAAP; and general economic conditions. Forward-looking information and statementsare also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from theforward-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 coulddiffer materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance onforward-looking information. Other than as required by applicable securities laws, we assume no obligation to update or revise suchforward-looking information to reflect new events or circumstances.

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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

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DISCOVERYRETURNS

Capital Growth

DISCOVERYRETURNS

Capital Growth

UTILITYRETURNS

Income Growth

UTILITYRETURNS

Income Growth

AcquisitionExplorationAcquisitionExploration

FeasibilityPermittingFinancingConstruction

FeasibilityPermittingFinancingConstruction

OperationOperation

TIMETIME

PR

OJE

CT

VA

LU

E $

PR

OJE

CT

VA

LU

E $

DISCOVERYRETURNS

Capital Growth

UTILITYRETURNS

Income Growth

AcquisitionExploration

FeasibilityPermittingFinancingConstruction

Operation

TIME

PR

OJE

CT

VA

LU

E $

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

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$(10)

$(5)

$-

$5

$10

$15

$20

$25

JAN - JUN /08 JULY/08 -DEC/09

JAN - DEC/10

MIL

LIO

NS

USD

EBITDA

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

1184

186

0

25

50

75

100

125

150

175

200

2008 2009 2010 YTD

MW

PRODUCTION GROWTH

$-

$10

$20

$30

$40

$50

$60

Jan - Jun /08 July/08 -Dec/09

Jan - Dec/10

Mil

lio

ns

USD

REVENUE

MAGMA ENERGY - CORPORATE SUMMARY

5

199555

99060

171

86

193

0

200

400

600

800

1000

1200

1400

2008 2009 2010 YTD

MW

1

GEOTHERMAL RESERVES& RESOURCES GROWTH

Inferred Indicated Reserves

1Geothermal Reporting Code verified MW

22008 and 2009 actuals (2009 reflects Magma’s equity portion in HS Orka)

32010 is an estimate and reflects Magma's equity portion in HS Orka

2

33

2

2 2

0

100

200

300

400

500

600

700

Raser Ram Power U.S. Geo NGP Cal Energy MAGMA Ormat

MW

Operating Development through 2013

DEVELOPERS

NORTH AMERICAN PRIMARY GEOTHERMAL COMPANIES

Source: Jacob Securities Inc(1)

Geothermal Reporting Code verified MW

6

(1)

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

UTS STP MXY CLL OPC

CD

N $

/ B

OE

EV/BOE RESERVES & RESOURCES

EV/BOE Reserves

EV/BOE Resources

(1,500)

(1,000)

(500)

-

500

1,000

1,500

UTS STP MXY CLL OPC

ME

GA

TO

NN

ES

CO2 CREDITS (PENALTIES) FROM RESERVES & RESOURCES

-

500

1,000

1,500

2,000

2,500

UTS STP MXY CLL OPC

MM

BO

E

BOE RESERVES & RESOURCES

BOE Resources

BOE Reserves

MAGMA IS AN UNDERVALUED ENERGY COMPANY

7

. . . . . @ $15/tonne

≈ $14 billion credit over 30 years

TSX symbols: UTS UTS Energy

STP Southern Pacific

MXY Magma Energy

CLL Connacher Oil & Gas

OPC OPTI Canada

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

245

11

84

196

302

438

636

www.magmaenergycorp.com

TSX MXY

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APPENDIX

MAGMA ENERGY - GLOBAL PROJECT PIPELINE

STAGE PROPERTYAREA RESERVES RESOURCES

(HA) PROVED INDICATED INFERRED

Operations Soda Lake - Nevada1 2,881 20 41

HS Orka - Iceland2

31,067 173 130 500

Advanced Mariposa - Chile3 104,000 320

McCoy - Nevada4 4,621 170

Early Stage Argentina [2] 39,057

Peru [7] 7,900

USA [11] 34,977

224,503 193 MW 171 MW 990 MW

PlantProperty

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(1) Reporting Code Estimate GeothermEx(2) Reporting Code Estimate Mannvit Engineering (3)

Reporting Codes Estimate SKM(4)

Independent estimate P90 Geo Hills Associates

McCoy

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

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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 opportunities1

Bonds indexed to price of aluminum with an average coupon rate of 2.4% and 2016 maturity

2Includes $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 80 MW45 MW of steam behind pipe for expansion

phases; 50 MW turbine arrived May2010;

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 175 130 500

Delivery of 50 MW turbine units - May 2010Delivery of 50 MW turbine units - May 2010

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

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CONCEPTUAL PRODUCTION GROWTH

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

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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

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MP- 03

WORLD CLASS MANAGEMENT TEAM

Dick Benoit: USAExploration Manager

Over 35 years experience in the geothermal industry both nationally and internationally

Mark Kumataka: USAChief Engineer

Professional Engineer with over 30 years experience in geothermal resource management in U.S. & Latin America

Ásgeir Margeirsson: ICELANDPresident & CEO

An extensive career in geothermal power development both within Iceland and internationally

Monte Morrison: USACountry Manager & VP Operations

Professional Engineer with 25 years experience managing the operations and maintenance of geothermal power plants

John Selters: CHILE & ARGENTINACountry 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

Certified General 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 & CEOGeologist 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) andseveral other resource companies that were successfully built and divested.

MAGMA ENERGY GLOBAL OPERATIONSMAGMA ENERGY CORP

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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.

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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

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35%

8%5%20%

32%

MAGMA ENERGY SHAREHOLDERS(JULY 2010)

Sitka Foundation

Board & Management

Strategic Partner (AltaGas)

Estimated Retail

Estimated Institutional

11%

51%5%

13%

20%

REGIONAL REPRESENTATION

OF SHAREHOLDERS

(JULY 2010)

U.S.A.

Canada

Europe

Other

Retail (Unknown Location)

OWNERSHIP, CAPITAL STRUCTURE & COVERAGE

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CAPITAL STRUCTURE:

ISSUED & OUTSTANDING(1) 288.9 M

OPTIONS 3.4 M

WARRANTS 0

LONG TERM DEBT(2)(3) US $ 49.3 M

CASH(3) US $ 25.3 M

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

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 Mngt Sean Peasgood

INDEX COVERAGE

Ardour Global Alternative Energy Index

S&P/TSX Clean Technology Index

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7-Oct-10