Donner cuts more high-grade zinc at Matagami

Vancouver – Drilling by Matagami project partners Donner Metals (DON-V, DONFF-O) and Xstrata (XSRAF-O, XTA-L) has turned in further high-grade zinc intercepts from two different zones on the western Quebec property.

Three holes collared in the Bracemac area all cut significant mineralized intervals in the favourable Key Tuffite horizon. Hole BRC-07-52 intersected 13.55 metres (from 292 metres downhole depth) grading 16.9% zinc, 0.84% copper and 26.7 grams silver per tonne.

Bracemac drilling has extended the Key Tuffite zone about 75 metres to the east now traced across 150 metres east-west with a dip extent of about 70 metres.

McLeod area drilling also intersected significant sulphide mineralization including hole MC-05-18W6 that cored 32.2 metres (from 845 metres depth) of 9.62% zinc, 1.3% copper and 10 grams silver with a 12.4-metre section of 22.4% zinc. Testing the New McLeod zone, the hole was a wedge cut from a pilot hole designed to allow about 50-metre spaced pierce-points into the Key Tuffite horizon.

The Old McLeod zone, about 225 metres up dip from New McLeod, was also recently drilled returning up to 18.3% zinc, 1.1% copper and 48.8 grams silver over 9.1 metres (from 547 metres depth) in hole MC-07-26.

Volcanogenic massive sulphide (VMS) mineralization throughout the Matagami area is wide-spread and well documented. The mining camp hosts 18 known VMS deposits that include ten past producing operations. Discovered in 1957, the main Matagami Lake deposit contained 25.6 million tonnes averaging 8.2% zinc, 0.56% copper and 20.9 grams silver and was mined from 1963-1988.

Donner is earning a 50% interest on the 4,738-sq. km project area from Xstrata by incurring $20-23 million in exploration expenditures by May 31, 2011. At earn-in, five separate joint ventures will be formed on each of which Xstrata can earn back 15% interest by incurring up to $20 million on a feasibility study.

Swiss-based Xstrata owns the near-by 2,600-tonne-per-day Matagami mill part of its Falconbridge acquisition package and plans to place its Perseverance VMS deposit (5.1 million tonnes of 15.8% zinc, 1.2% copper and 29 grams silver) into production during 2008.

Shares of Donner perked up 16% on the October 22nd Matagami drill results, gaining 8 to close at 58 apiece on strong volume. The company posts a $23-million market capitalization based on its 39-million shares outstanding with the stock showing a 52-week trading range of 35-80.