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Donner Metals and Xstrata Zinc : Bracemac-McLeod Mine
Discovered in 2007 Production in 2013
Investor Presentation March 2013
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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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› Donner Metals › Bracemac-McLeod Mine › Joint venture exploration › Strategy for the future
Presentation
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Years of experience Juniors Majors Exploration Metallurgy Development Operation Finance Strategy Environment
David Patterson Chairman & Director
35 ü ü ü ü
Harvey Keats CEO & Director 35 ü ü ü ü ü ü ü ü Normand Champigny, CFO, President, Director
31 ü ü ü ü ü ü ü ü
Ron Tessier VP Engineering 40 ü ü ü ü ü ü Robin Adair VP Exploration 33 ü ü ü ü ü ü ü ü Kerry Sparkes Director 30 ü ü ü ü ü ü ü ü Ken Thorsen Director 35 ü ü ü ü ü ü ü ü Laurie Sadler Director 30 ü ü
Strong, Complementary Management Team
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Management and Directors David Patterson (Chairman, Director) • 20 years of experience with exploration stage mining
companies
Harvey Keats (CEO, Director) • 25 years with senior positions at Falconbridge Ltd. • Former VP Exploration of Diamond Fields Resources,
where he was responsible for the exploration program at Voisey’s Bay
Normand Champigny (President, CFO, Director) • 31 years of experience in Québec and other jurisdictions • Chair of the Board of Directors of Minalliance and an
Executive Committee Member of the PDAC.
Robin Adair (VP Exploration) • 25 year career with Falconbridge/Noranda, Exploration
Manager – North America for zinc/copper • He received his B.Sc. and M.Sc. in geology from the
University of Alberta
Ron Tessier (VP Engineering) • Over 40 years of experience in the mining industry,
including in the Matagami Camp • He managed the feasibility study at Perseverance Mine
and oversaw its $160M construction by Xstrata
Kerry Sparkes (Director) • 25 years of experience in exploration • Vice-President of Exploration for Rainy River Resources
Ken Thorsen (Director) • Over 35 years of experience in the exploration business
including President of Teck Exploration Ltd. • Spent 21 years General Manager of Advanced Projects
with Teck-Cominco
Laurie Sadler (Director) • Founder and managing partner of Sadler, Weismiller,
Spencer, Chartered Accountants (1984-2001) • He holds an MBA from the University of Western
Ontario
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Shares Outstanding: 255,280,993 Fully Diluted: 284,174,148 52 Week Hi-Lo: $0.125 - $0.27 Market Capitalization: ~$40M
Toronto Venture Exchange: DON Frankfurt Exchange: D4M Institutionally held: approx. 50%
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Capital Structure
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A Donner Metals/Xstrata Zinc Joint Venture
Bracemac-McLeod The next Matagami Mine May 2013 production of zinc and
copper in Québec
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Donner’s annualized production: 50 million lbs. of zinc, unhedged
Matagami zinc concentrate
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Proven and Probable Reserves
Mt % Zn % Cu g/t Ag g/t Au Depth (m)
Bracemac-McLeod 3.7 9.6 1.3 28 0.43 35-900
Measured and Indicated Resources
Mt % Zn % Cu g/t Ag g/t Au Depth (m) McLeod copper
zone 0.24 1.0 1.3 7.8 0.19 600-700
PD1 (West Camp) 1.7 4.6 1.1 20 <0.1 25-515
Inferred Resources
Mt % Zn % Cu g/t Ag g/t Au Depth (m)
McLeod Deep 2.5 9.2 1.2 40 1.1 600-1,200
West McLeod 0.16 2.2 2.6 24 0.20 400-600
Resources and Reserves High-grade zinc, copper, silver and gold
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Mine Development
› Partnership with Xstrata Zinc (65% Xstrata / 35% Donner) › Bracemac-McLeod Mine under construction - 90 kt Zn, 13 kt Cu/yr › Production begins in May 2013 - cost US$ 0.42/lb. Zn › Initial 4 year mine life, potential to expand to 7+
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Tracking On Budget and On Schedule
-750m 2010
2011
2012 2013
2014 2015 2016
LEGEND
350
290
230
170
Ramp Entrance Bell Allard South Pit
McLeod Deep Discovery 2.47 MT (Inferred Resources)
West McLeod
Explora7on corridors
Bracemac Main Zone
Upper Bracemac Zone Bracemac KT Zone
Inferred resources not included in mine plan
McLeod Zone
Current Advancement
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New high-grade intersections Open
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McLeod Deep drilling
West McLeod
McLeod Zone Reserves
McLeod Deep 2.47 MT Inferred Resources *Conceptual mine design
Key Tuffite Surface
-500m
-1000m
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New high-grade intersections
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Reduced Risk Optimization › Existing infrastructure › Production without ramp-up › Qualified workforce from
Persévérance › Treatment by Xstrata › Permitted
› Grinding circuit › Developing in ore › Backfilling › Zinc Larox › Precious metals
Bracemac-McLeod Mine
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Revenues by metal (as of 14 Mar, 2013)
Production by metal (feasibility)
3% 7%
37% 53%
3% 4%
33% 60% copper copper zinc zinc
silver gold silver gold
Revenues by metal (consensus 14 Mar, 2013)
3% 6%
32% 59% copper zinc
silver gold
zinc 1.05/lb $ copper 3.45/lb $ silver 31.75/oz $ gold 1,664/oz $
zinc 0.88/lb $ copper 3.51/lb $ silver 28.77/oz $ gold 1,593/oz $
zinc 0.80/lb $ copper 2.50/lb $ silver 12 /oz $ gold 1,000 /oz $
Production primarily from zinc, with copper, silver and gold
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Financing with Sandstorm Metals & Energy
Metal Purchase Agreement
› 100 % of zinc production remains unhedged › Payments : $US 32.75M, revenue from sales of copper and precious metals › Line of credit up to $US 4M › Other joint venture areas excluded
Cu
Au equivalent 20.8 M lbs
>2.75 US$ / lb, 0.80 US$/ lb Donner <2.75 US$ / lb, 0.55 US$/ lb Donner <2.75 US$ / lb, 0.80 US$ / lb Donner
>2.75 US$ / lb, 1.05 US$ / lb Donner
>350 US$ / oz, 350 US$ / oz Donner <350 US$ / oz, market price Donner
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South Flank - Key Tuffite 3D Model
Looking at the surface of the Key Tuffite (paleo-sea floor) in its current position in the South Flank
Matagami Town site
Bracemac-McLeod
Orchan West High-grade (Undeveloped)
Bell Allard
Historical Producer
Exploration Potential Ramp access under construction
Mill
1 Km
2 Kms
Isle Dieu Matagami
Ramp Portal
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Exploration Targets Pipeline
Drill Targets
Delinea7on drilling
Advanced Explora7on
Discovery
Feasibility study Defini7on drilling Scoping study
Development & produc7on Bracemac-‐McLeod
Orchan West
PD1 OP
Bell Channel
Galinee 14
Matagami Mill 3,000 tonnes per day
McLeod Deep West McLeod
West McLeod
8.6% Zn, 0.14% Cu/ 2.2m
Daniel 1 2.2% Cu/ 4.0 m
South Flank
Perseverance North
New Hosco Central Camp
North Flank
0.34 MT 15.9% Zn, 1.8% Cu
Radiore 2.4% Cu/ 8.9m
3.6 MT Reserve
1.7 MT Meas. + Ind. Resource
Radiore East
PD1 UG
Bracemac-‐ McLeod extension
Cavalier 0.29 MT 1.4% Zn, 1.5% Cu
2.6 MT Inf. Resource
McLeod Up dip
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› Generation of revenues from the mine
› Exploration and potential acquisitions, with a focus on Québec
Strategy for the future
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› 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
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www.donnermetals.com
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
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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