Wednesday, November 16, 2011 8:25:29 AMTo view this email as a web page, go here.Vanguard Shareholder SolutionsKnightDonner Metals: Entwining Its Fortunes with Xstrata The company has a top drawer majority partner in Xstrata in development of the Matagami polymetallic mining camp of Quebec Early 2013 should see production commence from the already advanced Bracemac- Macleod deposit The presence of the Perseverance mill complex nearby is a massive capex saving for the JV partners The capex commitment from Donner (TSXV DON) towards the new mine is now less than $15mn The new mine should be a cash bonanza almost from the first day of production, and development of the PD1 mine should follow swiftly on its heels Zinc has come in for another period of self-doubt, which only goes to exacerbate any potential future zinc crisis by deferring investment now As a junior partner of Xstrata, we believe Donner will be an exciting cash generating play but it needs to get some properties that are exclusively its own to create its own personality for investorsRare as Hen's TeethZinc mining plays are rarer than one might imagine. Very few independents have made it to production in recent times, and those that have tend to have been devoured rather quickly by majors. This is a sign to us that rather than the sector being blighted it is one in which the cognoscenti (mining majors, refiners/smelters and trading houses) are positioning themselves while the general investing public and institutions remain rather blithely unaware of the space's attractions.In our hunt for "fresh meat" in the zinc and lead space, a lot of effort is expended for the discovery of precious few candidates. In itself, this is a sign that there is a much more severe supply shortage coming down the pike in these two metals than in copper, where there is no dearth of junior and mid-tier names. One of the names we have come across in recent times and adopted as our champion is Donner Metals, a Toronto Venture Exchange-listed development and exploration company focused on base and precious metal projects in Abitibi region of central Québec. Its flagship project is a partnership with Xstrata's Canadian subsidiary in the Matagami Mining Camp encompassing both the current development of a new mine and on-going exploration activities. The project is supported by Xstrata's existing mine infrastructure, a highly experienced workforce and an operating 2,950-tonne per day mill. As well, the area is serviced by highway, power, airport, railroad and town site infrastructure.The Matagami Project(s)The Matagami Mining Camp is a mining district which hosts 18 known VMS deposits, including ten past producing mines of varying sizes. One of these was the sizable Matagami Lake deposit (25.64 million tonnes of 8.2% Zn, 0.56% Cu, 20.91 g/t Ag and 0.41g/t Au) discovered in 1957 and mined from 1963 to 1988. The first discovery at Matagami was made in 1957, and continued exploration has yielded timely new discoveries. The Perseverance deposit, wholly owned by Xstrata, is currently producing. Mineral concentrates produced in Matagami are processed and refined at Xstrata's facilities in Rouyn-Noranda and Montreal.The Matagami Project is an almost district-sized complex and has an area of mutual interest for the JV partners of 4,737 square kilometres that is governed by the Matagami Joint Venture Agreement signed in 2006 between Donner Metals Ltd and Falconbridge Limited, now Xstrata Canada Corporation.The area of mutual interest is divided into five separate joint ventures areas that cover claims in which Donner holds an interest with Xstrata. Under the joint venture agreement, Xstrata Canada Corporation - Xstrata Zinc Canada Division is the project operator for the Matagami Project and its relative joint ventures.This almost district-sized complex consist of five properties in the sway of Donner, of which one is fully backed in by Donner, while the other four have potential for Xstrata to increase its stake through further work. The state of ownership of these concessions currently is: South Flank JV (Xstrata 65% - Donner 35%) - No further Back-in North Flank JV (Xstrata 50% - Donner 50%) - Xstrata Back-in option (15%) Central Area JV (Xstrata 50% - Donner 50%) - Xstrata Back-in option (15%) West Camp JV (Xstrata 50% - Donner 50%) - Xstrata Back-in option (15%) - Xstrata has elected to back-in East JV (Xstrata 50% - Donner 50%) - Xstrata Back-in option (15%)The objective for Donner and Xstrata is to explore for, and discover zinc-copper-silver-gold deposits in the Matagami Camp in order to supply the Matagami Mill over the long term. Production from Xstrata's Perseverance mine will be replaced by production from the Xstrata/Donner Bracemac-McLeod mine. New discoveries will leverage the general infrastructure and existing processing facilities within a known and well-established cost structure for developing deposits.Full Report----------------------------------------------------------------For further information, please contact:Andrea Magee, Investor RelationsDonner Metals Ltd.Tel: 604.683.0564Vanguard Shareholder SolutionsTel: 604.608.0824Toll free: 1.866.898.0826www.donnermetals.com donner@bed-rock.comVanguard Solutions