Matagami Project
Matagami Project – General Information
The Matagami Project has an area of mutual interest of 4,750 square kilometres that is governed by the Matagami Lake Option and Joint Venture Agreement signed in 2006 between Donner Metals Ltd. and Falconbridge Limited, now Xstrata Canada Corporation - Xstrata Zinc Canada Division ('Xstrata Zinc'). The project is located in central Québec and the area of mutual interest covers the entire Matagami Mining Camp which is centered on the town of Matagami. Under this agreement, Donner can earn a 50% joint venture interest in all claims held under the joint venture, excluding the Perseverance Mine, and subject to certain back-in rights by Xstrata Zinc.
The Matagami Mining Camp is a world-class mining district which hosts 18 known Volcanogenic Massive Sulphide (“VMS”) deposits. This includes 10 past producers of varying sizes, including the giant Matagami Lake deposit (25.64 million tonnes of 8.2% Zn, 0.56% Cu, 20.91 g/t Ag and 0.41 g/t Au) discovered in 1957 and mined from 1963 to 1988. The first discovery at Matagami was made in 1957 using an early airborne EM system and within the next two and a half years, six more major deposits were identified. Continued exploration within the Camp has yielded new discoveries. Between 1985 and 1992, four new deposits were discovered and in 2000 the currently producing Perseverance deposit, wholly owned by Xstrata Zinc, was discovered. Following the signing of the Donner/Xstrata Zinc Agreement, the Bracemac-McLeod deposit was discovered in 2007 and has progressed rapidly to a feasibility study which is scheduled for completion in June 2010.
One of the project’s key strength is its Exploration and Development team, in which both Xstrata Zinc and Donner participate. This group has a reputation for excellence in the mining business, with extensive experience finding, evaluating, developing and producing Matagami Deposits. To support this, the exploration team has developed a pipeline of drill-ready targets which will support exploration activities well into the future. The Matagami Camp is host to historical and current production in excess of 8,600 million pounds of zinc and 853 million pounds of copper. Current production in the Camp is from Xstrata Zinc’s wholly-owned Perseverance mine which feeds its refurbished 2,600 tonne per day Matagami mill complex.
The Company’s strategy is to explore for and discover zinc-copper deposits in the Matagami Camp to replace production from Perseverance which has an expected mine life to 2013. New discoveries will leverage the general infrastructure and existing processing facilities within a known and well-established cost structure for developing VMS deposits. The objective of the Donner/Xstrata Zinc partnership is to replace production from Perseverance and to identify a 15-year resource base to support the 2,600 tonne per day mill complex.
