Donner Metals and Xstrata Zinc : From the discovery of Bracemac-McLeod in 2007 to the production in 2013
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1 CAUTIONARY STATEMENT Certain statements of this presentation contain forward looking information and future oriented financial information. The reader is cautioned that assumptions used in the preparation of such information, although considered accurate at the time of preparation, may prove incorrect. The actual results may vary materially from the information provided herein. Consequently, there is no representation that actual results achieved will be the same as those forecast. A full Cautionary Statement is available at www.donnermetals.com
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2 Presentation
› Donner Metals › Bracemac-McLeod › Joint venture exploration › Strategy for the future
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3 Management and Directors
David Paterson (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 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) 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 years 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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4 Capital Structure
Shares Outstanding: 249,655,993 Toronto Venture Exchange: DON Fully Diluted: 274,711,948 Frankfurt Exchange: D4M 52 Week Hi-Lo: $0.145 - $0.27 Institutionally held: approx. 50% Market Capitalization: ~$40M Liquidity: ~$15M, no debt
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5 Bracemac-McLeod The next Matagami Mine Q2 2013 production of zinc and copper in Québec
TSX.V: DON A Donner Metals/Xstrata Zinc Joint Venture Mine Development › Partnership with Xstrata Zinc (65% Xstrata / 35% Donner) › Bracemac-McLeod Mine under construction - 90 kt Zn, 13 kt Cu / yr › Production first part of Q2 2013, cash cost US$0.42 lb Zn › Initial 4 year mine life, potential to expand to 7+
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7 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 2013 McLeod Deep Discovery 2014 2.47 MT (Inferred Resources) Open 2015 Inferred resources 2016 not included in mine plan
TSX.V: DON Resources and Reserves High-grade zinc, copper, silver and gold
Proven and Probable Resources
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 Resurces 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) Deep McLeod 2.5 9.2 1.2 40 1.1 600-1,200 McLeod West 0.16 2.2 2.6 24 0.20 400-600
TSX.V: DON 9 Production primarily from zinc, with copper, silver and gold
Production by metal Revenues by metal Revenues by metal (feasibility) (as of Nov 2012) (consensus Nov 28 2012)
gold gold gold silver silver silver 4% 3% 7% 3% 6% 3%
copper zinc copper zinc copper zinc 33% 60% 36% 54% 31% 60%
zinc 0.80/lb $ zinc 0.91/lb $ zinc 1.06/lb $ copper 2.50/lb $ copper 3.57/lb $ copper 3.35/lb $ silver 12 /oz $ silver 34.18/oz $ silver 31.52/oz $ gold 1,000 /oz $ gold 1,725/oz $ gold 1,661/oz $
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10 Surface Key Tuffite
McLeod Deep West proposed drilling McLeod
-500m McLeod Zone
-1000m
McLeod Deep 2.47 MT Inferred Resources
TSX.V: DON Established Infrastructure
TSX.V: DON Underground at Bracemac-McLeod: Bracemac Main Zone Ore
Copper
Zinc + Copper
TSX.V: DON Bracemac-McLeod
Reduced Risk Optimization › Existing infrastructure › Grinding circuit › Production without ramp-up › Developing in ore › Qualified workforce from › Backfilling Persévérance › Zinc Larox › Treatment by Xstrata › Precious metals › Permitted
TSX.V: DON 14 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
› Payments : $US 32.75M, revenue from sales of copper and precious metals › Line of credit up to $US 4M › 100 % of zinc production remains unhedged › Other joint venture areas excluded
TSX.V: DON Large Area of Mutual Interest: 4,737km2 Located in Mining-Friendly Jurisdiction
TSX.V: DON SANDSTORM AGREEMENT AREA 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 17 Exploration Targets Pipeline Matagami Mill 3,000 tonnes per day
Development & produc on Bracemac-McLeod 3.6 MT Reserve Feasibility study McLeod Deep 1.7 MT Defini on drilling West McLeod Meas. + Ind. Resource 2.6 MT PD1 OP Scoping study PD1 UG 2.6 MT Inf. Resource Inf. + Ind. Resource
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
18 Strategy for the future
› Generation of revenues from the mine › Exploration and potential acquisitions, with a focus on Quebec
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19 › Experienced exploration team
› Adaptable exploration plans
› Pipeline of high-quality drill targets
Bracemac-McLeod discovery - 2007
Intersecting the discovery hole - 2012 Miners at surface - 2012 TSX.V: DON 20 20 Montréal 1 Place Ville Marie, bureau 2001 Montréal, QC H3B 2C4 T : 514.286.1665 Vancouver 885 West Georgia Street, bureau 2150 Vancouver, BC V6C 3E8 T : 1-800-909-8311 www.donnermetals.com TSX.V: DON TSX.V: DON
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