Donner Metals and Xstrata Zinc : Bracemac-McLeod Mine Discovered in 2007 Production in 2013
Investor Presentation May 2013 TSX.V: DON TSX.V: DON
CAUTIONARY STATEMENT This presentation includes certain “forward-looking statements”. These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management’s expectations. Forward-looking statements include estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by terms such as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”, or their conditional or future forms. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, results of exploration, project development, reclamation and capital costs of the Company’s mineral properties, and the Company’s financial condition and prospects, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the activities of the Company; and other matters discussed in this news release. This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company’s forward-looking statements. The Company does not undertake to update any forward- looking statement that may be made from time to time by the Company or on its behalf, except if required to do so by applicable securities laws.
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2 › Donner Metals Presentation › Bracemac-McLeod Mine › Joint venture exploration › Strategy for the future
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Strong, Complementary Management Team
Years of Juniors Majors Exploration Metallurgy Development Operation Finance Strategy Environment experience
David Patterson Chairman & 35 ü ü ü ü Director Harvey Keats 35 CEO & Director ü ü ü ü ü ü ü ü Normand Champigny, CFO, 31 ü ü ü ü ü ü ü ü President, Director Ron Tessier 40 VP Engineering ü ü ü ü ü ü Robin Adair 33 VP Exploration ü ü ü ü ü ü ü ü Kerry Sparkes 30 Director ü ü ü ü ü ü ü ü Ken Thorsen 35 Director ü ü ü ü ü ü ü ü Laurie Sadler 30 Director ü ü
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4 Management and Directors
David Patterson (Chairman, Director) Ron Tessier (VP Engineering) • 20 years of experience with exploration stage mining • Over 40 years of experience in the mining industry, companies including in the Matagami Camp • He holds an MBA from Simon Fraser University • He managed the feasibility study at Perseverance Mine and oversaw its $160M construction by Xstrata Harvey Keats (CEO, Director) 25 years with senior positions at Falconbridge Ltd. • Kerry Sparkes (Director) • Former VP Exploration of Diamond Fields Resources, • 25 years of experience in exploration where he was responsible for the exploration program • Vice-President of Exploration for Rainy River Resources at Voisey’s Bay
Normand Champigny (President, CFO, Director) Ken Thorsen (Director) • 31 years of experience in Québec and other jurisdictions • Over 35 years of experience in the exploration business • Chair of the Board of Directors of Minalliance and an including President of Teck Exploration Ltd. Executive Committee Member of the PDAC. • Spent 21 years General Manager of Advanced Projects with Teck-Cominco
Robin Adair (VP Exploration) Laurie Sadler (Director) • 25 year career with Falconbridge/Noranda, Exploration • Founder and managing partner of Sadler, Weismiller, Manager – North America for zinc/copper Spencer, Chartered Accountants (1984-2001) • He received his B.Sc. and M.Sc. in geology from the • He holds an MBA from the University of Western University of Alberta Ontario
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5 Capital Structure Shares Outstanding: 255,280,993 Toronto Venture Exchange: DON Fully Diluted: 284,174,148 Frankfurt Exchange: D4M 52 Week Hi-Lo: $0.11 - $0.21 Institutionally held: approx. 40% Market Capitalization: ~$30M
TSX.V: DON Bracemac-McLeod The next Matagami Mine May 15, 2013 Production of zinc and copper commenced May 15, 2013 in Québec
TSX.V: DON A Donner Metals/Glencore Xstrata Joint Venture Large Area of Mutual Interest: 4,737km2 Located in Mining-Friendly Jurisdiction
TSX.V: DON Copper
Underground at Zinc + Bracemac-McLeod: Copper Bracemac Main Zone Ore
TSX.V: DON Donner’s annualized production: 50 million lbs. of zinc, unhedged TSX.V: DON Matagami zinc concentrate 10 Resources and Reserves High-grade zinc, copper, silver and gold
Proven and Probable Reserves
Mt % Zn % Cu g/t Ag g/t Au Depth (m)
Bracemac-McLeod 3.7 9.6 1.3 28 0.43 35-900 Measured and Indicated Resources Mt % Zn % Cu g/t Ag g/t Au Depth (m) McLeod copper 0.24 1.0 1.3 7.8 0.19 600-700 zone PD1 (West Camp) 1.7 4.6 1.1 20 <0.1 25-515 Inferred Resources Mt % Zn % Cu g/t Ag g/t Au Depth (m) McLeod Deep 2.5 9.2 1.2 40 1.1 600-1,200 West McLeod 0.16 2.2 2.6 24 0.20 400-600
TSX.V: DON Mine Development
› Partnership with Xstrata Zinc (65% Xstrata / 35% Donner) › Bracemac-McLeod Mine under construction - 90 kt Zn, 13 kt Cu/yr › Production began May 15, 2013 - cost US$ 0.42/lb. Zn › Initial 4 year mine life, potential to expand to 7+
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12 Tracking On Budget and On Schedule
Ramp Entrance Bell Allard South Pit
Upper Bracemac Zone Bracemac KT Zone
170 Bracemac Main Zone 230
290 Current Advancement 350
West McLeod
McLeod -750m Zone LEGEND 2010 Explora on corridors 2011 2012 Inferred resources 2013 not included in mine plan McLeod Deep Discovery 2014 2.47 MT (Inferred Resources) Open 2015 New high-grade intersections 2016
TSX.V: DON Established Infrastructure
TSX.V: DON Surface Key Tuffite
McLeod Deep West drilling McLeod
-500m McLeod Zone Reserves
-1000m
McLeod Deep 2.47 MT New high-grade intersections Inferred Resources *Conceptual mine design
TSX.V: DON Bracemac-McLeod Mine
Reduced Risk Optimization › Existing infrastructure › Grinding circuit › Production without ramp-up › Developing in ore › Qualified workforce from › Backfilling Persévérance › Zinc Larox › Treatment by Glencore Xstrata › Precious metals › Permitted
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16 Production primarily from zinc, with copper, silver and gold
Production by metal Revenues by metal Revenues by metal (feasibility) (as of 14 Mar, 2013) (consensus 14 Mar, 2013)
gold gold gold silver silver silver 4% 3% 7% 3% 6% 3%
copper zinc copper zinc copper zinc 33% 60% 37% 53% 32% 59%
zinc 0.80/lb $ zinc 0.88/lb $ zinc 1.05/lb $ copper 2.50/lb $ copper 3.51/lb $ copper 3.45/lb $ silver 12 /oz $ silver 28.77/oz $ silver 31.75/oz $ gold 1,000 /oz $ gold 1,593/oz $ gold 1,664/oz $
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17 Financing with Sandstorm Metals & Energy
Metal Purchase Agreement Cu >2.75 US$ / lb, 0.80 US$/ lb Donner >2.75 US$ / lb, 1.05 US$ / lb Donner <2.75 US$ / lb, 0.55 US$/ lb Donner <2.75 US$ / lb, 0.80 US$ / lb Donner 20.8 M lbs Au equivalent >350 US$ / oz, 350 US$ / oz Donner <350 US$ / oz, market price Donner
› 100 % of zinc production remains unhedged › Payments : $US 32.75M, revenue from sales of copper and precious metals › Line of credit up to $US 4M › Other joint venture areas excluded
TSX.V: DON South Flank - Key Tuffite 3D Model
Matagami Town site Matagami Isle Dieu Mill Orchan West Ramp High-grade Portal (Undeveloped) Bell Allard 2 Kms
Historical Producer
Exploration Potential 1 Km Bracemac-McLeod Ramp access under construction
TSX.V: DON Looking at the surface of the Key Tuffite (paleo-sea floor) in its current position in the South Flank 19 Exploration Targets Pipeline Matagami Mill 3,000 tonnes per day
Development & produc on Bracemac-McLeod 3.6 MT Reserve Feasibility study McLeod Deep Defini on drilling West McLeod 1.7 MT 2.6 MT PD1 OP Scoping study Meas. + Ind. Resource Inf. Resource PD1 UG
West McLeod Delinea on drilling McLeod Up dip Bracemac- Orchan West Advanced 0.34 MT 15.9% Zn, 1.8% Cu McLeod extension Explora on Daniel 1 Bell Channel 2.2% Cu/ 4.0 m 8.6% Zn, 0.14% Cu/ 2.2m Radiore Discovery
Cavalier 2.4% Cu/ 8.9m 0.29 MT 1.4% Zn, 1.5% Cu Galinee 14 North South Perseverance Radiore New Hosco Central Drill Targets TSX.V: Flank DON Flank North East Camp
20 › Generation of revenues from the mine Strategy for › Exploration and potential the future acquisitions, with a focus on Québec
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› Experienced exploration team
› Adaptable exploration plans
› Pipeline of high-quality drill targets
Bracemac-McLeod discovery - 2007
Miners at surface - 2012
Intersecting the discovery hole - 2012 TSX.V: DON
22 Montréal 1 Place Ville Marie, bureau 2001 Montréal, QC H3B 2C4 T : 1-514-286-1665 Vancouver 1055 West Georgia Street, Suite 2480 Vancouver, BC V6E 0B6 T : 1-800-909-8311 www.donnermetals.com TSX.V: DON TSX.V: DON
Appendix: Zinc Outlook
“The predicted rally in prices comes as Xstrata Plc (XTA) closes its Brunswick mine in Canada this month, an operation which yielded 2.9 million tons of ore last year. About 841,000 tons of mine output will be lost by 2014 as Xstrata also shuts the Perseverance mine in Canada and Vedanta Resources Plc (VED) closes Lisheen in Ireland.”
Source: Kenneth Hoffman, analyst, Bloomberg Industries, March 2013
Source: www.Xstrata.com
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