VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 26, 2011) - Mr. Harvey Keats, Chief Executive Officer of Donner Metals Ltd. (News - Market indicators)(FRANKFURT:D4M), reports that the Company has exercised its Option with Xstrata Canada Corporation ("Xstrata") on the extensive Matagami base metal camp located in the Abitibi region of central Québec. As such, the Company is a fully vested partner with Xstrata in five joint venture areas covering 4,737 square kilometres of prime stratigraphy which has yielded high-grade base metal production since 1961. The joint venture areas currently contain 2,986 mineral claims covering 644 square kilometres. Each joint venture area is defined by an area of interest which expires in two years. Following this term, the joint ventures will apply only to the surviving mineral claims and other mineral interests. The specific joint venture areas (singular, "JVA") and their relative interests are:
- South Flank JVA: Donner 35% - Xstrata 65% (includes the Bracemac-McLeod Mine - under development)
- North Flank JVA: Donner 50% - Xstrata 50%
- Central Camp JVA: Donner 50% - Xstrata 50%
- West Camp JVA: Donner 50% - Xstrata 50% (includes the PD1 deposit: under feasibility study)
- East JVA: Donner 50% - Xstrata 50%
Xstrata holds a separate right to increase its interest to 65% in each of the North Flank, Central Camp, West Camp and East JVA's by completing a bankable feasibility study. Both parties will be responsible for their share of costs on the basis of the relative joint venture interests.
Bracemac-McLeod Development Update (South Flank JVA): Construction of the ramp is progressing normally with advancement rates consistently above plan. The current length of the ramp is 928 metres enroute to the Bracemac-McLeod deposit where initial production from the mine is scheduled to start in January, 2013. In addition to ramp advancement, the installation of mine ventilation facilities and the construction of support infrastructure at the ramp portal continue. The mine will produce an average of 2,500 tonnes per day for four years on the basis of proven and probable mining reserves of 3.7 million tonnes grading 9.6% zinc, 1.3% copper, 28.3 g/t silver and 0.4 g/t gold. Potential to expand the mine life is possible on the basis of inferred mineral resources of 2.63 million tonnes at 8.9% zinc, 1.3% copper, 38.8 g/t silver, 1.1 g/t gold and excellent exploration potential immediately surrounding both mining reserves and mineral resources.
PD1 Deposit Feasibility Study Update (West Camp JVA): Contracts have been awarded for the PD1 feasibility study which is scheduled for completion in late 2011. This study is entirely funded by Xstrata in fulfillment of its right to increase its interest in the West Camp JVA to 65%. The study will focus on the open pit potential of the deposit between 25 and 100 metres vertical depth. The objective of the study is to determine the viability of providing incremental feed to the 2,950 tonne per day Matagami mill as supplementary production to that from the Bracemac-McLeod deposit between 2014 and 2016.
Exploration: Exploration by Xstrata and Donner will continue with an estimated budget of $4 million towards exploration activities planned for the remainder of 2011 on the joint venture lands. The programs will mostly consist of drilling, geophysics, geology and geochemistry. The initial focus of the programs will be on the Radiore, New Hosco and Galinee prospects as well as on a number of other targets in the North and South Flank areas.
The objective of the partners in the Matagami camp is to identify and maintain consistent production of ore to the refurbished 2,950 tonne per day Matagami Mill over the long term. The mill is presently processing ore from Xstrata's wholly owned Perseverance mine.
Additional information is available at www.donnermetals.com.
PROJECT OVERVIEW
The Matagami Project covers the Matagami mining camp, a world-class mining district, with 18 known Volcanogenic Massive Sulphides (VMS) deposits including 10 past producers of varying sizes, including the giant Matagami Lake Deposit (25.64 million tonnes of 8.2% zinc, 0.56% copper, 20.91 g/t silver and 0.41 g/t gold). Current and historical production from the Matagami camp stands at approximately 46.5 million tonnes with an average grade of 9.1% zinc, 0.9% copper, 28.3 g/t silver and 0.5 g/t gold (source: Xstrata Zinc). The Matagami area is well-serviced by established infrastructure including the town of Matagami, power, a permitted tailings facility, railway, airport and well-developed road and highway networks. Xstrata Zinc is currently producing from its low-cost and wholly-owned Perseverance Deposit which feeds its refurbished 2950 tonnes per day Matagami mill complex. Any future development under the Donner-Xstrata joint ventures will support the established infrastructure and facilities. Zinc concentrates produced at Matagami are refined at the Noranda Income Fund zinc refinery in Valleyfield, Québec. Copper concentrates are smelted at Xstrata's Horne Smelter in Rouyn-Noranda and refined at Xstrata's Canadian Copper Refinery in Montréal, Québec.
The Company's strategy is to discover and develop base metal deposits in the Matagami Camp in order to leverage the general infrastructure and existing ore processing facilities within a stable and well-established cost structure environment. To date, Xstrata and Donner have discovered new mineralization at Bracemac-McLeod, Daniel1, Bell Channel, McLeod Deep and down-dip from Radiore. Within the extensive project area there are numerous exploration targets with excellent potential for additional discoveries.
SUPPLEMENTARY INFORMATION
Xstrata Zinc is the project operator for the Matagami Project and its relative joint ventures. As operator, Xstrata Zinc is responsible for the execution of all development, production and exploration programs on the property. This includes construction, engineering, processing, treatment, refining, resource evaluation, sampling, submittal of samples for assay, assay verification, metallurgical evaluation and QA/QC.
Robin Adair (VP of Exploration) is the Qualified Person for Donner Metals Ltd. and is responsible for the technical information reported in this news release.
ON BEHALF OF THE BOARD OF DONNER METALS LTD.
Harvey Keats, Chief Executive Officer
Cautionary Statement:
This news release contains "forward-looking statements" regarding predictions on schedules for the Bracemac-McLeod mine which are described in the feasibility study completed by Xstrata Canada Corporation - Xstrata Zinc Canada Division and Genivar Limited Partnership in September 2010. Such predictions may be affected by variables typically associated with mining projects. In addition, Donner will be required to meet its financial obligations under the joint ventures, including its share of the significant capital expenditures involved in the development of Bracemac-McLeod deposit. Donner's ability to meet its financial obligations under the joint ventures can be negatively affected by financial markets and Donner's ability to raise financing, among others. Failure to meet its financial obligations may result in dilution of its interest under the terms of the Option and Joint Venture Agreement which governs the joint ventures.
"Forward-looking statements" involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. This press release refers to information about Xstrata's Perseverance mine and mine property on which the Company has no right to explore or mine. This press release also refers to information about historical production from land covered by the Matagami joint ventures. Investors are cautioned that mineral deposits on other properties and/or historical production on lands under joint venture are not necessarily indicative of characteristics of new mineral deposits discovered on the Matagami Project or future discovery potential. Further discussion of "forward looking statements" and "future oriented financial information" and the risks inherent to mineral exploration and development, in relation to Donner's activities, can be found on the Company's website at www.donnermetals.com. The reader is cautioned not to place any undue reliance on any forward-looking statement, reference to other properties or historical production from the Matagami Project area.
Neither the TSX Venture Exchange nor its Regulation Services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. 
