Donner Metals (TSX - C, DON, $0.18), a Vancouver junior mining, moved its headquarters in Quebec to get closer to its investors and make an acquisition. The opportunity is good to throw a glance on this small free debt company which provides revenues of production as early as 2013, with a mine of zinc and copper, scheduled to start in the first quarter. Now led by the Quebec Normand Champigny, Donner Metals is partner of 35% with XStrata Zinc for six years to revive the Matagami camp, in the Abitibi region, North of the 49th parallel. The British-Swiss giant XStrata already has the Perseverance zinc mine, which employs 220 people, but it will be exhausted in six months. Donner Metals team, in partnership with XStrata, has discovered and developed a new mine, named Bracemac-McLeod, located two kilometres from the treatment plant. The new mine zinc and copper enter into production immediately after the end of Perseverance. This will be one of the first new mines North of the 49th parallel

Its expected life of four years, but the partners are stepping up efforts to bring it to eight years.

"What is unusual is that the project is implemented on time and on budget," said Normand Champigny, during a visit of the future mine held on September 19. On this occasion, Les Affaires was found that the removal of certain facilities, which will be reused in the new site was well underway, as well as the construction of a new ventilation system and a ramp to the underground economic times and greener.

3000 tonnes per day

While the feasibility study published in 2010 by Donner treatment provided 2250 tons of ore per day, it is now 3000 tons of ore that will mill Perseverance deal, thanks to a new mill. The mine should produce in four years 606 million pounds of zinc, 83 million pounds of copper, 1.5 million ounces of silver and 13,000 ounces of gold. The timing is right: it is expected that global zinc production begin to decline in 2013, says Champigny.

In addition, the exploration continues with a budget of $ 5 million per year in the camp of 4000 km2, Donner and Xstrata have a total of six joint ventures and where we come to unveil new copper-rich mineralization.

Eliminated a significant financial risk

In March 2012, Donner has completed a financing of $ 15.2 million. To date, she has received funding from Desjardins, the Fonds de solidarité FTQ, Sodemex, the Société de développement de la Baie-James and SIDEX. In addition, it has sold 50% of its share of future copper production to Sandstorm Metals Society of Vancouver for $ 22.5 million. This company buys at a discount and at a fixed price of mining production, it sells thereafter.

Acquisition for

These are funds that helped Donner Metals to pay its contribution of 35% of expenditure for the development of the mine and keep a cash balance of $ 6 million.

In a note published on September 21, Stefan Ioannou, an analyst with Haywood Securities, said that "the most important risk affecting the company, namely the funding is eliminated." The analyst anticipates a loss of $ 2 million in 2012, but expects earnings of $ 6 million in 2013. It reiterates its recommendation outperformance for the title and its target of $ 0.35.

In 2013, Donner expects to reap revenues of $ 15 million, said Champigny. "We are one of the few small mining receive income from production."

In the meantime, however, Donner must be located close to $ 12 million in funding in 2013. A short-term bank loan is considered.

At its annual meeting on 17 October (the day after the fall of this edition of The Business), Donner must have the green light to begin the process leading to the relocation of its headquarters in Montreal by the end of 2012. It plans to recruit staff as well as administrators Quebec.

Moreover, Give intends to purchase half of the production it sold last year Sandstorm, which would cost $ 17.5 million.

Officer of Donner does not intend to stop there. It envisages acquisition of a Quebec producer of base metals. Mr. Champigny sees acquisition opportunities because prices are low now projects.

$ 159 million in capital expenditures to build the mine Bracemac-McLeod, whose $ 110 million have been paid prior to production.

The title of Donner Metals fell 5% from a year

Source: Bloomberg

4737 km2

Mining exploration area covered by the partnership between Xstrata and Donner Metals. This corresponds to 11 times the area of ​​the city of Montrea