Mr. Harvey Keats, Chief Executive Officer of Donner Metals Ltd. (“Donner”) (TSX VENTURE:DON)(FRANKFURT:D4M), reports positive changes recently made to the development plan for the Bracemac-McLeod Mine as advised to the Company by partner and project operator Xstrata Canada Corporation-Xstrata Zinc Canada Division (“Xstrata Zinc”). Following on Xstrata Zinc’s objective to continuously optimize the development plan at Bracemac-McLeod, the mine design is being revised to allow production at a rate of 3,000 tonnes per day during the first two years of operation, compared to an average of 2,250 tonnes per day in the feasibility study. The mill will also be modified by the addition of a ball mill to allow production at 3,000 tonnes per day in the first two years. It will also provide for continued production at that rate to handle any incremental tonnage identified in and around Bracemac-McLeod. The additional mining and milling rate will increase cash flows in each of the first two years of operation.
Construction at the Bracemac-McLeod mine has successfully transitioned from single-face development in the main access ramp to multi-face development. Even though advancement has yet to reach the targeted rate, the number of mining fronts is increasing and should reach 10 or 11 fronts in July. Total advancement now stands at 4,304 metres. Development continues and initial production is still scheduled to begin in the first quarter of 2013.
The fill raise has been completed and will be used shortly as temporary ventilation. The pilot hole for the vent raise is in progress, and the vent raise is scheduled to be in service by the end of 2012.
PURCHASE DEPOSIT
The Company has received US$5 million from Sandstorm Energy Ltd. (“Sandstorm”). This payment is the final upfront purchase deposit pursuant to the metal purchase agreement announced July 13, 2011. In addition, the Company has issued to Sandstorm 7,431,759 common shares at a deemed price of CDN$0.19 per share, in satisfaction of an obligation to issue US$1.4 million of Company common shares upon receipt of final upfront purchase deposit. These shares have a hold period expiring October 30, 2012.
PROJECT OVERVIEW
The Company is a fully vested partner with Xstrata Canada Corporation in the extensive Matagami base metal camp located in the Abitibi region of Québec. This joint venture partnership covers six joint venture areas governing 4,737 square kilometres of prime stratigraphy, which has yielded high-grade base metal production since 1963. Xstrata Zinc is the project operator for the Matagami Project, including the Bracemac-McLeod Mine. Additional information is available at www.donnermetals.com.
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