Donner Metals Ltd.
TSX VENTURE : DON
FRANKFURT : D4M

Donner Metals Ltd.

August 08, 2013 13:10 ET

Donner Metals Announces Second Closing of Private Placement

MONTREAL, QUEBEC--(Marketwired - Aug. 8, 2013) - David Patterson, Chairman of Donner Metals Ltd. (TSX VENTURE:DON)(FRANKFURT:D4M) ("Donner" or the "Company") is pleased to announce that the Company has closed a second tranche of its previously-announced brokered private placement for gross proceeds of C$232,240 to the Company (the "Offering"). The Offering was completed on a best-effort agency basis through Secutor Capital Management Corp. and Marquest Capital Markets ("Marquest" and collectively, "the Agents"). The Company has now raised a total of C$3,039,250 in connection with this private placement.

Pursuant to the Offering, the Company issued a total of 3,200,000 units (the "Units") at a price of C$0.05 per Unit, for gross proceeds of C$160,000 to the Company, and 1,204,000 "flow-through" units (the "FT Units") at a price of C$0.06 per FT Unit, for gross proceeds of C$72,240 to the Company in the second closing. Each Unit consists of one common share in the capital of the Company (a "Common Share") and one common share purchase warrant (a "Warrant"). Each FT Unit consists of one Common Share designated as a "flow-through share" for purposes of the Income Tax Act (Canada) and one Warrant. Each Warrant entitles the holder thereof to acquire one Common Share at a price of C$0.10 until August 7, 2018. Should the closing price of the Company's Common Shares on the TSX Venture Exchange be equal to, or above C$0.15, on 20 consecutive trading days, the term of the Warrants will be reduced to 30 days from the 20th day.

Pursuant to the terms of an agency agreement among the Company and the Agents, the Company paid a commission of C$16,256.80 and also granted to the Agents an aggregate of 396,360 compensation options in the second closing. Each such option entitles the Agents to acquire one Common Share at a price of C$0.05 until August 7, 2016.

Marquest acquired 3,000,000 Units in this second closing and now owns directly (i) 22,384,384 Common Shares representing approximately 7.08% of the Company's issued and outstanding Common Shares and (ii) common share purchase warrants or compensation options of the Company exercisable into 26,467,084 Common Shares. Should the warrants and compensation options be fully exercised, its holdings would represent approximately 14.26% of the Company's issued and outstanding Common Shares on a partially diluted basis assuming the exercise of the warrants and compensation options only.

The securities of the Company are held by Marquest for investment purposes. Marquest expects to review from time to time its investment in the Company and may, depending on the market and other conditions: (i) acquire securities or related financial instruments of the Company in the open market, in privately negotiated transactions or otherwise, and/or (ii) dispose of all or a portion of the securities or related financial instruments of the Company over which it now or hereafter exercises, or may be deemed to exercise, control or direction, or owns.

The Company's Chairman David Patterson said, "We are pleased to have Marquest as a significant shareholder. This shows a strong commitment to supporting and financing projects in Québec."

The securities of the Company issued in connection with the second closing are subject to a four-month hold period expiring on December 8, 2013.

The net proceeds from the Units will be used by Donner to fund its share of the capital and operating expenditures at the Bracemac-McLeod Mine. The gross proceeds from the sale of the FT Units will be used by Donner to fund exploration and development expenditures which qualify as 100% Canadian Exploration Expense at its projects in Québec.

The securities of the Company will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

This press release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

ON BEHALF OF THE BOARD OF DONNER METALS LTD.

"David Patterson", Chairman

Neither the TSX Venture Exchange nor it's 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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