MAGMA Energy completes purchase of 98.5% of Icelandic Geothermal Company HS Orka

Monday, Sep 06, 2010

Magma Energy Corp. (TSX: MXY) announces that its wholly-owned subsidiary, Magma Energy Sweden A.B., today has closed the final portion of a previously announced agreement to acquire further shares of Iceland geothermal company HS Orka hf. Magma Sweden now holds a 98.53% interest in HS Orka.

In today's transaction, Magma Sweden acquired 14.32% of HS Orka's outstanding shares from Geysir Green Energy ehf by assuming a bond with the municipality of Reykjanesbaer with a principal value of ISK 6.3 billion repayable in 2016 with interest at 3.5% per annum. The principal amount is indexed based on movements in aluminum prices on the London Metal Exchange. The adjustment is equal to one half the relative difference between the actual price (capped at $3,250/tonne) and a reference price of $1,500/tonne.

Source: PR Newswire