Donner Metals Bracemac-McLeod Interest
View this email in your browser
Bracemac-McLeod Interest
August 13, 2013, Montreal, Quebec: Donner Metals Ltd. (“Donner” or the “Company”) reports that, on August 12, 2013, it failed to make a cash call in the amount of $4.3 million under the Development and Operating Agreement (the “Development Agreement”) dated as of July 12, 2011 by and between Glencore Xstrata plc, formerly Xstrata Canada Corporation – Xstrata Zinc Canada Division (“Glencore”) and Donner.

Should Donner fail to remedy this situation within thirty days, it shall be in default under the Development Agreement (unless it remedies such failure within a twenty-day curative period following the receipt of a notice to that effect from Glencore).

Failure by Donner to meet its obligations under the Development Agreement will result in Glencore having the right to recoup any shortfall from Donner's portion of the proceeds of mine production. Should Donner's portion of the proceeds of mine production be insufficient to do so, Glencore may elect to buy the Company's interest at fair market value or to forgive the amount owing and convert the Company's interest in the Bracemac-McLeod mine to a 2% NSR royalty, of which a 1% NSR royalty can be purchased by Glencore for $1 million.

Donner continues to actively pursue various strategic alternatives encompassing potential financings in order to carry on with the development of its properties and to meet its various obligations, including the Company’s obligation to fund its share of ongoing monthly capital and operating cash calls for the Bracemac-McLeod mine under the Development Agreement.

Donner cautions that there can be no assurance that funding will be available for the Company or, if available, that it will be available on terms which are acceptable to the Company. The availability of external financing depends on many factors outside of Donner’s control, including capital market conditions and the overall performance of the economy.

Forward-Looking Information 

This news release contains forward-looking information within the meaning of applicable Canadian securities laws. All information other than historical fact is forward-looking information. Forward-looking information relates to future events or future performance and is based on Donner’s current internal expectations, estimates, projections, assumptions and beliefs. Forward-looking information is often, but not always, identified by the use of words such as "expect", "project", "proposed", "intend", "seek", "anticipate", "budget", "plan", "continue", "estimate", "forecast", "may", "will", "predict", "potential", "targeting", "could", "might", "should", "believe" and similar expressions.

Although management considers the assumptions and estimates, reflected in forward-looking information, to be reasonable, based on information currently available, there can be no assurance that such information will prove to be correct. As a consequence, actual results may differ materially from those anticipated.

In particular, this news release contains forward-looking information relating to, but not limited to, the Development Agreement and to possible financing transactions which may arise.

Undue reliance should not be placed on forward-looking information which is inherently uncertain, and subject to known and unknown risks and uncertainties (both general and specific) and other factors that contribute to the possibility that the future events or circumstances contemplated by the forward looking information will not occur or that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. These risks include, but are not limited to risks associated with general economic conditions, the actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future metal prices, the Metal Purchase Agreement and the Development Agreement, financial risks, substantial capital requirements, including future cash calls under the Development Agreement, and the Company's announcement of its review of strategic alternatives, including uncertainty arising from the announcement, and uncertainty regarding whether any transaction will occur. Further information regarding certain of these risks (as well as risks relating generally to the Company’s business) may be found under the heading "Financial risk factors" in the Company's Management's Discussion & Analysis. Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive. The forward-looking statements contained in this news release are made as of the date hereof and Donner does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Copyright © 2013 Sphinx Resources, All rights reserved.

unsubscribe    update subscription preferences