expanded drilling program to recommence

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Level 3,
18 Richardson Street
West Perth WA 6005
Tel: (61 8) 9324 1500
Fax: (61 8) 9324 1700
[email protected]
18 January 2007
Centralised Company Announcement Office
Australian Stock Exchange Limited
10th Floor, 20 Bond Street
SYDNEY NSW 2000
Dear Sir,
EXPANDED DRILLING PROGRAM TO RE-COMMENCE AT THUNDER BAY
NORTH IN CANADA.
Magma Metals Limited advises that its wholly owned Canadian subsidiary,
Magma Metals (Canada) Limited (“Magma”), is preparing to re-commence drilling
at its Thunder Bay North project in north-west Ontario, Canada (Figure 1),
following a break over the Christmas – New Year period. Drilling is expected to
re-commence early next week following the anticipated arrival of the drilling crew
on site over the weekend.
The Thunder Bay North drilling program is targeting a magnetic anomaly
approximately 1.5km long and up to 200m wide at Current Lake, 50km northeast
of the city of Thunder Bay and 50km southeast of the large Lac des Iles Pd-Pt
mine and concentrator. The first two drill holes (TBND001 & TBND002) have
established that the magnetic anomaly reflects an ultramafic intrusion which is
interpreted to be the source of Platinum-Palladium-Gold-Copper-Nickel (Pt-Pd-
Au-Cu-Ni) mineralised boulders found on the east and west shores of Current
Lake. These boulders assayed up to 9.4g/t Pt+Pd+Au, 1.15% Cu & 0.41% Ni.
Results from the first two drill-holes, located approximately 1km apart, were
strongly encouraging, including:
Drill Hole TBND001: 10.5m @ 2.80g/t Pt+Pd+Au, 0.45% Cu & 0.34% Ni from 72m
Drill Hole TBND002: 7.2m @ 0.51g/t Pt+Pd+Au from 79.8m
The distance between these drill-holes suggests the potential for a large
mineralised system. Following analysis of these results, it has been decided to
expand the first-pass drilling program with an additional six holes. The program
will now consist of 11 diamond drill holes for approximately 3,000m, including a
hole into the Beaver Lake magnetic anomaly and including the two holes
completed to date. The planned and completed drill-holes are shown on Figure 2.
The drilling will re-commence with drill-hole TBND003. It is planned to complete
the drilling program by the end of March with results to be released as
they become available.


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In addition to the expanded drilling program it is planned to conduct a surface Induced
Polarisation geophysical survey over the magnetic anomaly, designed to map zones of
disseminated sulphides and a helicopter-borne electro-magnetic (VTEM) survey
designed to detect massive sulphide bodies to depths of up to 400m. This geophysical
work is planned for the March Quarter and the results, combined with those from the
current drilling program, will provide guidance for the design of further drilling programs
at the project.
Magma is earning a 100% interest in the Thunder Bay North Project, subject to a 3% net
smelter royalty (NSR). Magma has the right to acquire 1% of the NSR. Magma has an
option to purchase a 100% interest in the Beaver Lake Project, which is also subject to
the Thunder Bay North royalty.
Yours sincerely
Keith Watkins
Managing Director
Magma Metals Limited