Donner Metals Ltd.
TSX VENTURE : DON
FRANKFURT : D4M

Donner Metals Ltd.

September 08, 2014 08:00 ET

Donner Metals Ltd.: Closing Above Market of a $1.1 Million Financing and Acquisition of Option on Samson Property From Midland Exploration Near Balmoral's Nickel-Copper-PGE Discovery on Grasset

MONTREAL, QUEBEC--(Marketwired - Sept. 8, 2014) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES

Donner Metals Ltd. ("Donner" or the "Corporation") (TSX VENTURE:DON)(FRANKFURT:D4M), announces that it closed on September 5, 2014 a non-brokered private placement for aggregate gross proceeds of $1,090,650. The funds of the private placement have been raised through the issuance of 8,389,615 units of the Corporation at a price of $0.13 per unit. Each unit (a "Unit") consists of one common share in the capital of the Corporation and one common share purchase warrant (a "Warrant"). Each Warrant entitles the holder to acquire one common share at a price of $0.175 per common share until September 5, 2016. The securities of the Corporation to be issued pursuant to the private placement are subject to a four-month hold period expiring January 6, 2015.

The aggregate proceeds from the sale of the Units for the private placement will be used solely for the advancing the Samson nickel-copper-PGE property (under option from Midland Exploration Inc. "Midland", see below), the Valmond gold property (under option from Midland), the Preissac nickel-copper-PGE property (100% owned by the Corporation) and other exploration properties that are in discussions with potential partners in Québec. The private placement was conditionally accepted by the TSX Venture Exchange (the "Exchange").

In connection with the private placement, the Corporation has agreed to pay to certain finders a finder's fee of up to 8% in cash, representing an aggregate amount of up to $2,080, and an 8% finder's option representing an aggregate of 16,000 options. Each option is non-transferable and exercisable for one Unit at a price of $0.13 per Unit until September 5, 2015. Each underlying Warrant for each option will be non-transferable.

The Corporation further announces the participation of a significant subscriber in the private placement: Aurion II Equity Fund ("Aurion"). Aurion's subscription for 3,850,000 Units result in Aurion holding 3,850,000 common shares, or approximately 15.8% of the currently outstanding common shares. Aurion was also issued 3,850,000 Warrants, the full exercise of which would result in Aurion holding approximately 27.2% based on the Corporation's currently outstanding common shares. Aurion's Warrant certificate provides for a "warrant stopper" clause which restricts Aurion from acquiring more than 19.99% of the then outstanding shares, subject to certain exceptions and compliance with applicable securities laws. Aurion does not have any present intention to acquire additional ownership of, or control over, additional securities of Donner. It is the intention of Aurion to evaluate its investment in Donner on a continuing basis and such holdings may be increased or decreased in the future. The address of Aurion for the purposes of National Instrument 62-103 - Early Warning System and Related Take-Over Bid and Reporting Issues is 120, Adelaide Street West, Suite 2205 Toronto (Ontario) M5H 1T1. A copy of Aurion's Early Warning Report is available on SEDAR at www.sedar.com.

Samson Nickel-Copper-Platinum Group Elements ("Ni-Cu-PGE") property

The Corporation is pleased to announce the execution of an option agreement with Midland for the Samson property, currently wholly owned by Midland and which consists of 512 claims covering a surface area of about 284 km2 about 50 km west of the town of Matagami, in Abitibi, Quebec. The property has a strong gold and Ni-Cu-PGE potential and is located about 5 km south of the recent Ni-Cu-PGE and gold discoveries made by Balmoral Resources Ltd. ("Balmoral") on the Grasset project. Recently, Balmoral announced the discovery of a high-grade Ni-Cu-PGE zone, with values up to 1.79% Ni, 0.19% Cu, 0.42 g/t Pt, and 1.04 g/t Pd over 45.28 m, and 54.08 m grading 1.62% Ni, 0.18% Cu, 0.36 g/t Pt and 0.88 g/t Pd (see Balmoral's press releases dated May 20 and August 18, 2014).

Under the terms of this new agreement, Donner may earn 50% of Midland's interest over a period of four (4) years, by fulfilling the following conditions:

  • Cash payments totalling $275,000, including a $40,000 payment upon signing the agreement;
  • Exploration expenditures totalling $3,500,000, including a firm commitment of $350,000 during the first year. Midland will be project operator during the option period.

This property covers, over a strike length of more than 20 km, a series of strongly magnetic sills located just south of the regional Lower Detour Fault, also known for its gold potential. In addition, lithogeochemistry data from historical drill holes indicate the presence of ultramafic sills, thus confirming the potential for magmatic Ni-Cu-PGE mineralization. Data from an airborne MegaTEM electromagnetic survey indicate the presence of several conductors coinciding with magnetic sills, which have never been drill-tested and thus represent potential high-priority targets. Ground time-domain electromagnetic surveys ("TDEM") are planned in order to identify drilling targets.

Maps showing the location of the Samson property may be consulted using the following link: http://media3.marketwire.com/docs/966626MAP.pdf.

Payment of loan to Quebec Lenders

Recently, the Corporation received the refund of the 2012 mining duties from the Quebec Ministry of Energy and Natural Resources and it reimbursed $1,640,000 of the loan with the Quebec lenders. The outstanding balance of the loan is now $890,000.

Amendments to the stock option plan

In June 2014, the board of directors of the Corporation approved certain amendments to the stock option plan of the Corporation, which were conditionally approved by the Exchange subject to customary conditions. The following is a summary of the main changes to the stock option plan:

  • The maximum number of listed common shares reserved for issuance under the stock option plan upon exercise of stock options is equal to an aggregate of 1,543,000 common shares;
  • The exercise price of stock options may not be less than the price of the listed common shares on the Exchange on the close of the previous trading day, provided that certain conditions set forth in the stock option plan are met; and
  • The changes include certain housekeeping amendments to update the stock option plan to current standards.

About Donner Metals

Donner is an exploration company focused on the development of mineral exploration projects in Quebec and on executing a roll-up strategy that includes the acquisitions of operating mines. The Corporation is committed to a leading standard of practice with respect to health, safety, community relations and environmental management. This press release was prepared by Normand Champigny, eng., acting as Donner's Qualified Person under NI 43-101.

ON BEHALF OF THE BOARD OF DONNER METALS LTD.

Normand Champigny, President & Chief Executive Officer

This news release contains forward-looking information within the meaning of applicable Canadian securities laws. All information other than historical fact is forward-looking information. Forward-looking information relates to future events or future performance and is based on Donner's current internal expectations, estimates, projections, assumptions and beliefs. Forward-looking information is often, but not always, identified by the use of words such as "expect", "project", "proposed", "intend", "seek", "anticipate", "budget", "plan", "continue", "estimate", "forecast", "may", "will", "predict", "potential", "targeting", "could", "might", "should", "believe" and similar expressions. Although management considers the assumptions and estimates, reflected in forward-looking information, to be reasonable, based on information currently available, there can be no assurance that such information will prove to be correct. As a consequence, actual results may differ materially from those anticipated.

Undue reliance should not be placed on forward-looking information which is inherently uncertain, and subject to known and unknown risks and uncertainties (both general and specific) and other factors that contribute to the possibility that the future events or circumstances contemplated by the forward looking information will not occur or that may cause the actual results, level of activity, performance or achievements of the Corporation to be materially different from those expressed or implied by such forward-looking information. These risks include, but are not limited to risks associated with general economic conditions, the actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future metal prices, financial risks and substantial capital requirements. Further information regarding certain of these risks (as well as risks relating generally to the Corporation's business) may be found under the headings "Risks and Uncertainties" and "Forward-Looking Statements" in the latest Corporation's annual Management's Discussion & Analysis on www.sedar.com. Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive. The forward-looking statements contained in this news release are made as of the date hereof and Donner does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

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.

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