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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 10, 2011) - Mr. Harvey Keats,
Chief Executive Officer of Donner Metals Ltd. (TSX
VENTURE:DON)(FRANKFURT:D4M), reports that the Company has received
notice from partner Xstrata Canada Corporation - Xstrata Zinc Canada
Division ('Xstrata Zinc') that it will conduct a feasibility study on
the PD1 Deposit commencing immediately. The study will focus on the
open pit potential of the deposit between 25 and 100 metres vertical depth, as incremental feed to the Matagami mill that could supplement production from
the Bracemac-McLeod deposit between 2013 and
2016. The remainder of the deposit will be assessed in a scoping study
that will investigate the viability of further exploitation of the
deposit by underground development. These studies have been initiated
on the basis of the measured and indicated resources reported by the
Company in its press release dated January 14, 2011.
A table showing current mineral reserves and resources on the joint
Donner - Xstrata Zinc Matagami Project can be
viewed at the following link: http://media3.marketwire.com/docs/DON0210.pdf.
Donner will complete its option to earn a 50% interest in five separate
joint venture areas within the Matagami
Project, including Bracemac-McLeod and PD1
deposits, on or before May 31, 2011. Pursuant to Xstrata Zinc's bump-up
rights under the Option and Joint Venture agreement, funding and
completion of the feasibility study on the PD1 deposit by Xstrata Zinc
will result in a 65% Xstrata Zinc and 35% Donner joint venture in the
West Camp joint venture area, including the PD1 deposit. Xstrata Zinc
will also be responsible for funding the scoping study on the potential
underground development of PD1 and any future feasibility costs that
may result from this scoping study. Xstrata Zinc has previously
completed requirements to increase its interest the South Flank joint
venture area, which includes the Bracemac-McLeod
mine, and this will also result in a 65%
Xstrata Zinc and 35% Donner joint venture in this area. The remaining
three joint venture areas that comprise the rest of the Matagami project will remain at 50% Xstrata and 50%
Donner. See agreement summary below.
Additional geological information, including maps and sections, is
available at www.donnermetals.com.
PROJECT OVERVIEW
The PD1 deposit is covered by the terms of the Matagami
Option and Joint Venture Agreement which has an area of mutual interest
of 4,753 square kilometres. The Matagami project presently includes 2,986 mineral
claims covering 644 square kilometres
including 9 contiguous mineral claims covering the PD1 deposit that are
subject to cash and royalty payments to Phelps Dodge Corporation of
Canada.
Donner has the option to earn a 50% participating joint venture
interest in the Matagami Project by incurring
a total of $25 million of expenditures on exploration and related work
on or before May 31, 2011. To date, Donner has provided $24.9 million
towards exploration and has the balance of the funds at hand required to exercise the option. Following earn-in, five
separate joint venture ("JV") areas will be formed with
initial interests of 50% Xstrata Zinc and 50% Donner. The JV areas are:
South Flank JV area (includes Bracemac-McLeod,
McLeod Deep, Orchan West), North Flank JV
area (includes Radiore), Central Camp JV
area; West Camp JV area (includes the PD1 deposit - Phelps Dodge
Corporation of Canada holds a 15% net carried interest and cash
payments in the 9 claims covering the PD1 deposit under a 1976
agreement) and the East JV area - see web site for map locations.
Following earn-in, Xstrata Zinc has a right in each of the five JV
areas to earn back a 15% interest by completing a bankable feasibility
study or incurring a maximum of CDN $20 million towards a bankable
feasibility study. Completion of the requirements under this right will
result in joint venture interests of 65% Xstrata Zinc and 35% the Company.
The area of mutual interest remains in effect for two years following
earn-in.
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,
20.91g/t silver and 0.41g/t gold) discovered in 1957 and mined from
1963 to 1988. The area is host to historical production of 8,600
million pounds of zinc and 853 million pounds of copper. 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 2,600 tonnes per day Matagami mill complex. Any future development under
the Donner-Xstrata agreement will support the established
infrastructure and facilities. Zinc concentrates produced at Matagami are refined at the Noranda
Income Fund zinc refinery in Valleyfield, Quebec. Copper concentrates
are smelted at Xstrata's Horne smelter in Rouyn-Noranda
and refined at Xstrata's Canadian Copper Refinery in Montreal, Quebec.
The Company's strategy is to explore for and discover zinc-copper
deposits in the Matagami Camp and to leverage
the general infrastructure and existing processing facilities within a
known and well-established cost structure for developing VMS deposits. Donner's exploration objective is to investigate
multiple stratigraphic horizons with
potential for VMS mineralization including the prolific Key Tuffite horizon throughout the Matagami
Camp. To date, Donner has 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 is responsible for both fieldwork and resource evaluation
including, but not limited to, sampling, submittal of samples for
assay, assay verification, metallurgical evaluation and QA/QC. Sample
preparation and assaying of samples that form the basis of the resource
calculation were carried out and certified by ALS Chemex-Chimitec,
of Val D'Or, Quebec (zinc, copper and silver by atomic absorption, and
gold by standard fire assay procedures).
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:
Certain phrases in this news release are "forward-looking
statements". Forward-looking statements are identified by wording
such as "to be", "will", "scheduled",
"expected" and "could". Such statements are
applicable specifically to the possible future completion of the Matagami Option, development and production from
the Bracemac-McLeod Deposit, evaluation of
inferred resources or potential future decisions and deliverables
related to the PD1 Deposit. With respect to Donner earning an interest
in the Matagami Project, Donner's
ability to meet the requirements of the Option and Joint Venture
Agreement can be negatively affected by financial markets and Donner's ability to raise financing, among others.
"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 Project. Investors
are cautioned that mineral deposits on other properties and/or
historical production on lands under option 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.
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