Donner Metals Ltd.
TSX VENTURE : DON
FRANKFURT : D4M

Donner Metals Ltd.

October 27, 2008 17:04 ET

Donner Metals Ltd.: Scoping Study Initiated as Latest Step-Out Delineation Drilling Continues to Expand Bracemac-Mcleod at Matagami, Quebec

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 27, 2008) - Mr. Harvey Keats, Chief Executive Officer of Donner Metals Ltd. (TSX VENTURE:DON)(FRANKFURT:D4M), reports that delineation drilling continues to intersect high-grade massive sulphides at Bracemac-McLeod. New drilling has expanded the high-grade massive sulphides at both McLeod and Bracemac. Mineralization encountered between the Old McLeod zone and the New McLeod zone indicates they are a single connected deposit of sulphides that will now be called the "McLeod Zone". In addition to these results, a laterally continuous copper zone has been identified in the footwall to the massive sulphides that define the McLeod Zone. With this continued expansion of the zones, Bracemac-McLeod has entered the initial stages of a scoping study to be funded and conducted by Xstrata Canada Corporation - Xstrata Zinc Canada Division (Xstrata Zinc). This is an important milestone and leverages Xstrata Zinc's expertise gained from the successful development of their wholly owned and operating Perseverance mine and Matagami mill complex, the latter located six kilometers northwest of Bracemac-McLeod. Results for all new drill holes are provided in Appendix 1.



Drilling Highlights
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Core
DDH Length
(Depth) From To (metres) % Zn % Cu g/t Ag g/t Au
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McLeod Zone
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MC-08-57 655.50 666.00 10.50 12.18 1.99 47.07 0.41
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MC-08-63 440.86 442.11 1.25 8.19 8.69 100.59 0.82
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MC-08-66 701.30 707.35 8.05 7.95 2.34 66.47 0.29
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MC-08-68 653.00 656.52 3.52 22.40 1.28 36.41 0.77
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MC-08-69 571.85 572.6 0.75 Assays Pending(i): Massive
sulphides - 20% Sph, 2% Cpy
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and 577.00 582.10 5.10 Assays Pending(i): Semi-massive
sulphides - 15% Sph, 3-4% Cpy,
5-6% Po,
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MC-08-70 640.00 649.66 9.66 Assays Pending(i): Massive
sulphides - 33% Sph and 8% Cpy
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MC-08-71 670.45 677.50 7.05 Assays Pending(i): Massive
Sulphides - 35% Sph, 4-5% Cpy,
25% Py
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West McLeod
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MC-08-62 576.15 578.95 2.80 11.44 0.59 29.31 0.31
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McLeod Copper Zone
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MC-08-56 772.00 778.00 6.00 0.52 1.44 3.55 0.04
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MC-08-57 695.5 700.00 4.50 0.04 1.20 5.17 0.08
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MC-08-59 704.37 708.80 4.43 2.01 1.90 11.84 0.10
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Bracemac Key Tuffite Zone
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BRC-08-81 435.00 437.30 2.30 11.89 0.80 30.00 0.35
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Sph equals Sphalerite, (1% Sph approximately equal to 0.5% Zn), Cpy equals
Chalcopyrite, (1% Cpy approximately equal to 0.3% Cu), Py equals Pyrite, Po
equals pyrrhotite, (i) Mineral content estimates.


MCLEOD AREA

Since the Company's news release dated July 30, 2008, a total of 17 diamond drill holes were completed to investigate the extension of known sulphides. Massive sulphide intersections returned from drilling between the Old McLeod and New McLeod zones has confirmed that mineralization is continuous between the two zones and therefore these two zones will be combined under "McLeod Zone". High-grade, massive sulphide mineralization has also been extended up-dip and along the west side of the McLeod Zone, towards mineralization encountered in the West McLeod Zone. Strong alteration with high-grade massive sulphides encountered in recent drilling points to the down-dip potential of the West McLeod Zone.

An investigation of copper and zinc values related to both stringer and semi-massive sulphide mineralization in the footwall to sulphides at the Key Tuffite horizon in the McLeod Zone has identified a horizon of copper-zinc mineralization (Copper Zone) running 10 to 20 metres below and roughly parallel to the Key Tuffite horizon. Continuity is based on a reasonable degree of predictability in recent drilling and drill intercepts in 14 drill holes.

Delineation drilling is in progress with the boundaries of the McLeod Zone and the West McLeod Zone undefined and with good potential to expand in many directions. Detailed material including maps and sections are posted on www.donnermetals.com.

McLeod Zone:

Diamond drill hole MC-08-57 intersected 10.5 metres of high-grade massive sulphides and extended the zone 80 metres down-dip from MC-07-26. This intersection is also 55 metres up-dip from MC-08-66 and provides evidence the New McLeod Zone and Old McLeod Zone are a connected plate of massive sulphides. Drill hole MC-08-66 intersected 8.05 metres of high-grade massive and semi-massive sulphides 60 metres up-dip from MC-08-43. The combined McLeod Zone was further extended 55 metres west of MC-08-57 by MC-08-70 that intersected 7.7 metres of massive sulphides and 1.7 metres of semi-massive sulphides (assays pending). Also on the west side of the zone, drill hole MC-08-69 intersected semi-massive sulphides (assays pending) over 5.1 metres, 40 metres up-dip from MC-04-04, indicating a new extension of sulphides in this area and allows for the incorporation of the intercept returned in MC-08-53 within the McLeod Zone.

MC-08-68 intersected 3.52 metres of high-grade massive sulphides and extended the eastern side of the McLeod Zone 50 metres down-dip and to the west of MC-07-28. MC-08-71 further intersected 7.05 metres of massive and semi-massive sulphides (assays pending) 50 metres down-dip and to the west of MC-08-68, providing further strong evidence the former Old McLeod and New McLeod zones are connected.

Drill hole MC-08-63 intersected 1.25 metres of copper-rich massive sulphides 37 metres above the Key Tuffite within a sequence of extensive Pipe/chlorite alteration, 50 metres up-dip from MC-08-55. This hole extends the McLeod Zone with potential for additional sulphides in the up-dip direction towards MC-08-45.

Drill hole MC-08-54 encountered semi-massive sulphides over 4 metres at the Key Tuffite followed by 40 metres of Pipe alteration and stringer mineralization on the east extension of the zone, 50 metres east of MC-08-40. Diamond drill holes MC-08-56 and MC-08-59 were drilled to investigate the extension of sulphide mineralization on the east side of the McLeod Zone. Both holes intersected weak mineralization at the Key Tuffite underlain by stringer mineralization and alteration in the footwall to the Key Tuffite (Copper Zone). Drill hole MC-08-61 intersected weakly mineralized Key Tuffite followed by heavy stringer mineralization (Copper Zone) 50 metres down-dip and to the east of MC-08-57 and 40 metres up-dip from MC-08-51.

West McLeod Zone:

Drill hole MC-08-60 intersected weakly mineralized Key Tuffite, 60 metres east and up-dip from MC-07-30. MC-08-62 intersected high-grade massive and semi-massive sulphides over 2.8 meters at the Key Tuffite followed by strong footwall alteration 60 metres down-dip from MC-08-46. A further 70 metres down-dip, diamond drill hole MC-08-65 intersected 60 metres of intense alteration/Pipe alteration immediately below mineralized Key Tuffite suggesting a well developed system in this area that warrants further investigation.

Step-out Drilling - McLeod Area:

Diamond drill hole MC-08-64 intersected pyrrhotite-pyrite-rich, semi-massive sulphides underlain by 18 metres of stringer mineralization and by 30 metres of strong chlorite/Pipe alteration. This hole was drilled 86 metres up-dip and to the east of MC-08-53. Drill hole MC-08-67 was designed to test the Key Tuffite near surface, at a vertical depth of 100 metres. In this hole, the critical sequence was faulted off with the Key Tuffite interval missing.

Copper Zone:

This zone is currently defined stringer mineralization in 17 diamond drill holes, comprising historical drill results and intersections returned from the current drill program at McLeod. A total of 14 drill holes contain intersections of interest and contain elevated copper grades. The zone is being tested as part of the on-going delineation program on the McLeod area. Of drilling reported herein, drill holes MC-08-56, MC-08-57, MC-08-59 and MC-08-61 intersected mineralization in the copper zone where mineralization was anticipated. Assay for drill holes MC-08-66, MC-08-68, MC-08-70 and MC-08-71 are pending for stringer mineralization encountered within the copper zone. Drill intercepts that define this zone are at a spacing of approximately 50 metres. Delineation of the Copper Zone will continue as part of the drill program on the McLeod Zone.

BRACEMAC AREA

Drilling continued at Bracemac with the completion of 7 drill holes (Appendix 1). Mineralization was extended in the upper portion of the Bracemac Key Tuffite zone and on the east side of the Bracemac zone. Delineation drilling is on-going with potential to expand the extent of sulphide mineralization in the Key Tuffite Zone down-dip and around the margins of known sulphide intercepts. Detailed material including maps and sections are posted on www.donnermetals.com.

Key Tuffite Zone:

Drill hole BRC-08-76 was drilled 50 metres down-dip and 15 metres to the west of BRC-08-74 and BRC-08-76W1 was drilled 20 meters due east of BRC-08-76. Diamond drill hole BRC-08-83 was drilled a further 100 metres down-dip and slightly east of BRC-08-76W1. All three holes intersected Pipe alteration. BRC-08-85 was drilled 50 metres down-dip and to the east of BRC-08-74 and did not encounter mineralization.

BRC-08-84 was drilled on the eastern side of the upper portion of the Key Tuffite Zone, 55 metres down-dip from BRC-07-56 and intersected stringer mineralization in the immediate footwall to a weakly mineralized Key Tuffite. BRC-08-81 was drilled on the upper west side of the Key Tuffite Zone, 35 metres west of BRC-07-49 and intersected high-grade massive sulphides, extending the zone to the west. Delineation drilling is in progress.

Bracemac Zone:

Diamond Drill Hole BRC-08-76 intersected a narrow interval of semi-massive sulphides in the Bracemac Zone, 55 metres east of BRC-06-27.

SCOPING STUDY

The discovery and continued expansion of sulphide zones at Bracemac-McLeod, located 6 kilometres southeast of the Matagami mill, has resulted in the rapid advancement of the Donner/Xstrata Project at Matagami. Under Xstrata, Bracemac-McLeod has entered the initial steps of a scoping study that will be conducted by the Xstrata team that successfully developed Perseverance. The initial step of this study will provide the basis for a NI43-101 compliant resource estimate following completion of the delineation drill program presently underway.

SUMMARY

Complete assay results can be found in the attached Appendix 1. Four drills are active on the Matagami Project at Bracemac-McLeod. A total of 86,095 metres of diamond drilling in 173 drill holes has been reported on since the project began in late 2006. Additional geological information, including maps and sections, is available at www.donnermetals.com.

PROJECT OVERVIEW

The Matagami Project has an area of mutual interest of 4,750 square kilometres and presently includes 3,340 mineral claims covering 801 square kilometres. A pipeline of strong drill/exploration targets remain to be investigated in addition to the efforts at Bracemac-McLeod. Donner and Xstrata Canada Corporation - Xstrata Zinc Canada Division (Xstrata Zinc) are using a combination of 3D data integration, innovative advanced technologies, new concepts and diamond drilling to explore for new deposits in this prolific mining camp.

The Matagami Mining Camp is a world-class mining district, with 18 known VMS deposits, including 10 past producers of varying sizes, including the giant Matagami Lake Deposit (25.64 million tonnes of 8.2% Zn, 0.56% Cu, 20.91 g/t Ag and 0.41 g/t Au) discovered in 1957 and mined from 1963 to 1988. The area is host to historical production of 8600 million pounds of Zn and 853 million pounds of Cu and has established infrastructure including the town of Matagami, a railway, a paved road, and a 2,600 t/day mill owned by Xstrata Zinc.

Donner has the option to earn a 50% participating joint venture interest in the Matagami Project by incurring a total of $20 to $25 million of expenditures on exploration and related work on or before May 31, 2011. Upon earn-in by Donner, five separate joint ventures will be formed, covering the property and the area of interest. In each of the five joint venture areas, Xstrata Zinc has the option to earn back a 15% interest in each area by incurring up to $20 million on a feasibility study.

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 and at Bell Channel. Within the extensive project area there are numerous exploration targets with good potential for additional discoveries.

Supplementary Information

The field work on the Matagami Project is being carried out by project operator Xstrata Zinc Canada Division who is responsible for the sampling, submittal of samples for assay, assay verification and QA/QC. Assaying of samples reported in this news release was 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). Sample preparation was done by ALS Chemex of Val D'Or, Quebec. Robin Adair, VP of Exploration for the Company, is the Qualified Person responsible for the technical information in this news release.

ON BEHALF OF THE BOARD OF DONNER METALS LTD.

Harvey Keats, Chief Executive Officer

To view, Appendix 1 - New Results, please click on the following link: http://media3.marketwire.com/docs/don1027.pdf

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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