MONTREAL, QUEBEC--(Marketwire - Mar 14, 2013) - Donner Metals Ltd. (TSX VENTURE:DON)(D4M.F) ("Donner" or the "Company") announces the closing of a loan for a total amount of $6,000,000 with Québec institutions (the "Lenders"). The proceeds from the loan will be used for working capital in connection with the operations of the Bracemac-McLeod Mine.
The amount of the loan extended by the Lenders consists of the following:
- $5,000,000 by Ressources Québec Inc.
- $500,000 by the Société de développement de la Baie-James
- $300,000 by Capital croissance PME
- $200,000 by the Fonds régional de solidarité FTQ Nord-du-Québec
The loan is for a term of three (3) years and bears interest at a rate of 14% per annum, computed daily on the balance of the loan at the end of each day until it is fully repaid. Interest is payable monthly. The principal of the loan is repayable to the Lenders in 30 equal monthly instalments starting as of the 7th month following the closing date.
As collateral for the repayment of the loan, Donner has granted a hypothec to Ressources Québec Inc. in the amount of six million dollars on the universality of its property, except for property that is already covered by a conventional hypothec granted to Xstrata Canada Corporation - Xstrata Zinc Canada Division and except for some of its assets that may not be hypothecated or given as collateral in accordance with the terms of agreements entered into by Donner.
In connection with the loan, Donner has issued 5,625,000 common shares at a deemed price of $0.16 per share to the Lenders in proportion to the respective amounts extended by each, equivalent to 15% of the total amount of the loan. In accordance with applicable securities legislation and the policies of the TSX Venture Exchange, all the foregoing shares have a hold period expiring on July 14, 2013. As a result of the issuance of such shares, 255,280,993 common shares of Donner are issued and outstanding. Haywood Securities Inc. acted as an advisor to Donner on the transaction.
"We are proud to support Donner Metals in its operations. Investissement Québec, through its subsidiary Ressources Québec, is contributing, thanks to this financing, to the development of natural resources," said Jacques Daoust, President and Chief Executive Officer of Investissement Québec.
"We are pleased with the support from the Québec institutions, which will provide us with advantageous additional financial flexibility to meet our commitments regarding the start-up of operations at the Bracemac McLeod Mine site," stated Normand Champigny, President and Chief Financial Officer of Donner.
About Ressources Québec Inc.
As a subsidiary of Investissement Québec, Ressources Québec Inc. is the gateway for companies seeking to invest in the mining and hydrocarbon industries. The company specializes in mines and hydrocarbons. It offers a full range of financial products, including investments in share capital, debentures and various types of loans.
About the SDBJ
Created on July 14, 1971 by the Loi sur le développement et l''organisation municipale de la région de la Baie James, the SDBJ''s mission is to foster and promote, with a view to lasting development, the economic progress, improvement and exploitation of the natural resources, other than hydroelectric resources, of the James Bay territory. For more information, visit http://www.sdbj.gouv.qc.ca.
About Capital Croissance PME
Capital croissance PME was created in 2010 by Desjardins Group and the Caisse de dépôt et placement du Québec in order to support the expansion and growth of Québec SMBs. This $200-million fund is aimed at meeting the financing needs of small and medium-sized Québec companies, primarily in the form of subordinated loans of less than $3 million. Desjardins Venture Capital, a subsidiary of Desjardins Group, is the exclusive manager of this fund and an equal partner alongside the Caisse and Capital régional et coopératif Desjardins.
About the Fonds régionaux de solidarité FTQ
An integral part of the large Fonds de solidarité FTQ network since their inception in 1996, the regional funds are active participants in the economic development of each of Québec''s regions. At December 31, 2012, the portfolio of the Fonds régionaux had 346 partner companies accounting for investments of approximately $234.4 million in projects totalling $1 billion, bringing the number of jobs created, maintained or protected to over 14,062.
About Donner Metals
Donner Metals is an exploration and development company focused on the zinc-copper Matagami Project, a joint venture project with Xstrata Canada Corporation - Xstrata Zinc Canada Division. Development of the Bracemac-McLeod Mine is currently well underway, with commercial production scheduled to begin in early Q2 2013.
ON BEHALF OF THE BOARD OF DONNER METALS LTD
Normand Champigny, President and Chief Financial Officer
This News Release 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.
Source: Donner Metals Ltd.
To read the French version of this press release, click on the following link: http://media3.marketwire.com/docs/don314f.pdf