Metals Ltd. has forfeited its interest in the Bracemac-McLeod
zinc-copper mine in the Matagami region of Quebec after failing
to pay its share of monthly expenditures under a development
and operating agreement.
The Vancouver, British
Columbia-based mining company entered a metal purchase
agreement in July 2011 with Sandstorm Metals & Energy Ltd.,
Sandstorm Metals & Energy (Canada) and Sandstorm Gold Ltd.
for the mine.
Donner Metals failed
to pay amounts owed under a development and operating agreement
with Baar, Switzerland-based Glencore Xstrata Plc, which owns
and operates the mine through a subsidiary.
Sandstorm Metals sent
a letter to Donner Metals Aug. 30 saying that as of Aug. 15 it
was in default of the metal purchase agreement.
Glencore Xstrata has
issued a 3-percent net smelter return royalty to Sandstorm
Metals on 100 percent of production from Bracemac-McLeod for
the interest in Bracemac-McLeod acquired by Sandstorm Metals
Glencore Xstrata also
will gain an option to acquire 40.36 million Donner shares for
$2 million and 26.5 million warrants at 10 cents per share. If
Glencore Xstrata exercises its option and the warrants in full,
it would own about 19.5 percent of Donners outstanding
shares on a partially diluted basis.
Sandstorm Metals and
Sandstorm Gold have given up their respective copper and gold
streams, and Sandstorm Metals will issue 1.33 million shares to
Donner still holds
interests in five Matagami joint ventures, where exploration
A version of this article was first published by AMM sister
publication Metal Bulletin.