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Donner Metals Ltd. (TSX VENTURE:DON)(FRANKFURT:D4M) ("Donner" or
the "Company") is pleased to announce that, in response to strong
investor demand, it has increased the size of the private placement financing
announced on February 24, 2012. The Company has increased the amount of
Flow-Through Shares (as defined below) that can be sold under the option
granted to Haywood Securities Inc. ("Haywood") (the "Agent's
Option"). The Agent's Option can now be exercised, in whole or in part
by Haywood at any time up to the closing date, to sell up to an additional
C$3,500,000 of common shares of the Company designated as flow-through shares
for purposes of the Income Tax Act (Canada) (the "Flow-Through
Shares") at a price of C$0.28 per Flow-Through Share (the "Flow-Through
Price") and up to an additional $2,800,000 of units in the capital of
the Company (the "Units") at a price of C$0.25 per Unit (the
"Unit Price").
The Company entered into an agreement with Haywood under which Haywood agreed
to act as agent for the private placement, on a best efforts agency basis, of
up to C$2,000,000 of Units at the Unit Price, and for up to C$8,000,000 of
Flow-Through Shares at the Flow-Through Price, for aggregate gross proceeds
to the Company of C$10,000,000.
The net proceeds from the sale of the units will be used by Donner to fund
its portion of the capital expenditures required to complete construction of
the Bracemac-McLeod zinc mine, for exploration
expenditures at its projects in Quebec, and for other general corporate and
working capital purposes. The gross proceeds from the sale of the
Flow-Through Shares will be used by Donner to fund exploration and
development expenditures which qualify as 100% Canadian Exploration Expense
at its projects in Quebec.
The closing of the financing is subject to the completion of formal
documentation, receipt of all necessary regulatory approvals, including the
approval of the TSX Venture Exchange, and other customary conditions.
The Units and the Flow-Through Shares will be subject to a four-month hold
period.
This press release does not constitute an offer to sell, nor is it a
solicitation of an offer to buy, securities.
These securities have not been and will not be registered under the United
States Securities Act of 1933, as amended, or the securities laws of any
state, and may not be offered or sold in the United States or to, or for the
account or benefit of, U.S. persons unless an exemption from the registration
requirements of the United States Securities Act of 1933, as amended, and all
applicable state securities laws is available. This press release does not
constitute an offer to sell or the solicitation of an offer to buy these
securities in the United States or to, or for the account or benefit of, U.S.
persons.
Donner Metals Ltd.
Donner Metals Ltd. is a Canadian development and exploration company focused
on base and precious metal projects in Quebec. Donner's flagship project is a
partnership with Xstrata Canada Corporation in the Matagami
Mining Camp covering both the current development of a new mine and on-going
exploration activities. The project is located in the Abitibi region of
central Quebec and it is supported by Xstrata's existing mine infrastructure,
a highly experienced workforce and an operating 2,950 tonne
per day mill. As well, the area is serviced by highway, power, airport, railway and town site infrastructure.
ON BEHALF OF THE BOARD OF DONNER METALS LTD.
David Patterson, Chairman
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