David Patterson Discusses Increased American Interest as Donner Approaches 2013 Production Target




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Matagami Project - Bracemac-McLeod Mine

Construction of the Bracemac-McLeod Mine began on April 1, 2010 and was followed by an official announcement on July 9, 2010 by Xstrata. The expedient decision to develop Bracemac-McLeod was made in order to meet a timeline that is expected to enable production from Bracemac-McLeod to replace production from Xstrata's wholly owned Perseverance mine without a gap in feed to the Matagami mill. Donner holds a 35% interest in the Bracemac-McLeod deposit.

In a base-case feasibility study published by Xstrata and Genivar in September of 2010 , the deposit showed a positive rate of return on a 4 year mine life using metal prices of $0.80/lb zinc, $2.50/lb copper, $12.00/oz silver and $1000/oz gold. On a 65% Xstrata/35% Donner joint venture basis, capital costs are estimated at $115.6 million in pre-production costs, followed by an additional $48.1 million after production has commenced. Total capital costs are estimated at $163.7 million (US dollars). Initial life of mine will be 4 years at an average production rate of 2,500 tonnes per day based on measured and indicated resources of 3.39 million tonnes grading 11.31% zinc, 1.47% copper, 34.27g/t silver and 0.50g/t gold. Production is scheduled to commence in early 2013. Development will consist of ramp access from the existing Bell Allard South open pit.

Potential to expand the mine beyond 2016 is possible on the basis of inferred mineral resources of 2.63 million tonnes at 8.9% zinc, 1.3% copper, 38.8g/t silver, 1.1g/t gold and excellent exploration potential immediately surrounding both mining reserves and mineral resources.

VIEW Bracemac-McLeod Feasibility Report on SEDAR