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MAGMA ENERGY CORP. AND PLUTONIC POWER CORPORATION ANNOUNCE MERGER TO CREATE ALTERRA POWER CORP.

VANCOUVER, March 7 /PRNewswire-FirstCall/ - Magma Energy Corp (TSX:MXY) and Plutonic Power Corporation (TSX:PCC) today announced that they have entered into an arrangement agreement (the "Arrangement Agreement") to merge and create Alterra Power Corp. ("Alterra"), a leading renewable power producer, with a post-deal market capitalization of approximately $575 million.

Under the terms of the Arrangement Agreement, each Plutonic shareholder will receive 2.38 shares of Magma for each Plutonic share held, and Magma will change its name to Alterra. The exchange ratio represents a premium to Plutonic shareholders of 32% over Plutonic's 20 day weighted average share price on the Toronto Stock Exchange. At the conclusion of the merger there will be 470 million shares of Alterra issued and outstanding and 487 million shares on a fully diluted basis.



Merged Entity Highlights

    -  Solid base of producing assets in three key renewable energy sectors:
       Geothermal, hydro and wind. Six operating plants in three locations:
       two geothermal plants in Iceland and one in Nevada; two hydro plants
       in British Columbia; one wind farm in British Columbia; and an option
       on one solar project in Ontario.

    -  Increased production capacity: 2011 production capacity of 198
       megawatts generating 1,340 gigawatt hours/year from Magma's geothermal
       assets and 168 megawatts generating 460 gigawatt hours/year from
       Plutonic's hydro and wind assets.

    -  Significant immediate increase in cash flow generation to both
       companies.

    -  Strong growth platform in geothermal, wind and hydro sectors:
       Near-term growth in Iceland and Nevada geothermal production;
       near-term growth prospects in British Columbia hydro and wind assets
       and Ontario solar assets; significant large long-term growth prospects
       in Chile, Peru, Nevada and Iceland geothermal assets and British
       Columbia hydro assets.

    -  Shared commitment to social responsibility: Both Magma and Plutonic
       recognize a commitment to social responsibility and sustainable
       development of renewable energy projects. The shared values and
       experience in this area will be a competitive advantage in creating
       long term value for shareholders and the communities in which Alterra
       operates.

    -  Complementary management teams: Magma's and Plutonic's highly regarded
       management teams blend renewable energy exploration, development,
       financing and operations skill sets.

    -  Significant administration synergies: Estimated at $2.2 million per
       year.

    -  Financial support: Magma to provide short term financial support to
       Plutonic by subscribing for a $10 million convertible debenture.




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