The Behavior Gap demonstrates the distance between what we should do and what we actually do; a term coined by author and financial planner Carl Richards in his book by the same name.

In the mining and exploration industry what we should do is look for companies with a great management team, a great project, and strong upside potential. One that fits the bill is Donner Metals, and they appear to be approaching the upswing from the Model of Classic Mining Company Share Price Cycle – Discovery to Production. Donner appears to be entering into what Casey Research has been often quoted as the Second Best Time To Buy Mining Stocks:

You’ll find Donner Metals (TSX.V: DON) poised on the brink of transitioning from development (6) to production (7). Donner’s zinc/copper project in Matagami, Québec has the benefit of joint venture partner Xstrata Zinc as the operator (35% Donner, 65% Xstrata). The new Bracemac-McLeod mine is on schedule and on budget to begin full production in Q1 2013.

Donner has just received $5M, the second installment of a total $25M metal purchase agreement from Sandstorm Energy (TSX.V: SND). The agreement with Sandstorm is for half of Donner’s share of the copper and precious metals (silver and gold) production at the new mine, with the option to buy back half of that amount from Sandstorm. Along with the $15M private placement done in March, this means that Donner is fully funded for it’s pre-production capital.

Donner’s July 5, 2012 development update noted higher production at Bracemac-McLeod Mine, with the addition of a ball mill to the existing facilities (which should increase cash flows in each of the first two years of operation) Shareholders should have been happy to hear this and hope for higher production, increased cash flows, and still on schedule for a Q1 2013 start of production.

Donner has successfully partnered with Xstrata to get this new mine into production at the Matagami Project, and continue working together in exploration of the property, a big chunk of land 6x the size of New York City. Xstrata’s own Perseverance Mine is currently filling the onsite mill, and as that mine winds down, the new Bracemac-McLeod Mine is positioned to take over in 2013.

When the dust finally settles in this horrific bear market in junior resource stocks, one of the small minority that more than just survived should be Donner