Donner Metals Ltd.
TSX VENTURE : DON
FRANKFURT : D4M

Donner Metals Ltd.

March 06, 2011 09:00 ET

Donner Metals Ltd.: Bracemac-McLeod Ramp Moves Past 660 Metres

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 6, 2011) - Mr. Harvey Keats, Chief Executive Officer of Donner Metals Ltd. (TSX VENTURE:DON)(FRANKFURT:D4M), reports that the Bracemac-McLeod ramp is currently at 660 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 are in progress. The existing 4.3 kilometres of haulage road from the portal to the Matagami Mill is also currently being refurbished to accommodate haulage of ore from Bracemac-McLeod. The development of the Bracemac-McLeod deposit is operated by Xstrata Canada Corporation – Xstrata Zinc Canada Division ("Xstrata Zinc") with 12 contractor companies on site currently employing approximately 30 people in addition to Xstrata Zinc personnel.

In addition, exploration drilling has been conducted in the Radiore area, located 11.8 kilometres north of the Bracemac-McLeod deposit, and in the New Hosco area located 18.4 kilometres northwest of the Bracemac-McLeod deposit. Three diamond drillholes were completed on the near-surface, southeastern extension of the historical Radiore Mine (historical production of 0.14 million tons 1.34% zinc, 1.57% copper). Drillhole DR-11-04 targeted a geophysical response 450 metres east of the deposit. It intersected 51.6m of stringer and disseminated pyrite and pyrrhotite. A stepout drillhole from the same set-up (drillhole DR-11-05) intersected 1.8 metres of massive pyrrhotite with traces of chalcopyrite. Drillhole DR-11-06 was drilled 65 metres to the west of this mineralization and it intersected 49.3 metres of stringer and disseminated pyrite and pyrrhotite. All holes intersected stratigraphy consistent with the Radiore deposit. Two stratigraphic drillholes were completed 1.3 kilometres southwest of the historical New Hosco Mine (historical production of 1.83 million tonnes grading 1.73% zinc and 1.73% copper). Both drillholes stayed in rocks considered to be the hanging wall to the deposit and they did not intersect mineralization.

On the PD1 deposit, Xstrata Zinc is seeking bids from independent engineering firms for the feasibility study described in the news release dated February 10, 2011. The technical report on the resource calculation has been posted on SEDAR.

Additional information is available at www.donnermetals.com.

PROJECT OVERVIEW

The Matagami Option and Joint Venture Agreement has an area of mutual interest of 4,753 square kilometres and presently includes 2,986 mineral claims covering 644 square kilometres. Donner has the option to earn an initial 50% participating joint venture interest from Xstrata Canada Corporation 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. Donner will complete its 50% earn-in option in five separate joint venture areas within the Matagami Project, including Bracemac-McLeod and PD1 deposits, on or before May 31, 2011. 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 and New Hosco), 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 "bump-up" 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. Pursuant to this bump-up right, the South Flank joint venture area, which includes the Bracemac-McLeod mine, will become a 65% Xstrata Zinc and 35% Donner joint venture. The remaining 4 joint venture areas that comprise the rest of the Matagami project will remain at 50% Xstrata and 50% Donner, subject to remaining bump-up rights. 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, 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 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 the future joint ventures. As operator, Xstrata Zinc is responsible for the execution of all development, production and exploration programs on the property. This includes resource evaluation, sampling, submittal of samples for assay, assay verification, metallurgical evaluation and QA/QC. Sample preparation and assaying are conducted by ALS Chemex-Chimitec, of Val D'Or, Québec (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.

Click here to view Table 1: Regional Exploration Drilling: http://media3.marketwire.com/docs/don36.pdf

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 "will", "is scheduled", and "expected". Such statements are applicable specifically to the possible future completion of the Matagami Option and both the development of and production from the Bracemac-McLeod Deposit as well as expected assays from exploration drilling. 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. With respect to future production, and the commencement thereof, from the Bracemac-McLeod deposit, the forward looking statement using the wording "is scheduled" is in the context of the feasibility study completed by Xstrata Canada Corporation - Xstrata Zinc Canada Division and Genivar Limited Partnership in 2010. "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.

Contact Information