Donner Metals Increases Private Placement Financing (ccnm)

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 27, 2012) -

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Donner Metals Ltd. (TSX VENTURE:DON)(FRANKFURT:D4M) ("Donner" or the "Company") is pleased to announce that, in response to strong investor demand, it has increased the size of the private placement financing announced on February 24, 2012. The Company has increased the amount of Flow-Through Shares (as defined below) that can be sold under the option granted to Haywood Securities Inc. ("Haywood") (the "Agent's Option"). The Agent's Option can now be exercised, in whole or in part by Haywood at any time up to the closing date, to sell up to an additional C$3,500,000 of common shares of the Company designated as flow-through shares for purposes of the Income Tax Act (Canada) (the "Flow-Through Shares") at a price of C$0.28 per Flow-Through Share (the "Flow-Through Price") and up to an additional $2,800,000 of units in the capital of the Company (the "Units") at a price of C$0.25 per Unit (the "Unit Price").

The Company entered into an agreement with Haywood under which Haywood agreed to act as agent for the private placement, on a best efforts agency basis, of up to C$2,000,000 of Units at the Unit Price, and for up to C$8,000,000 of Flow-Through Shares at the Flow-Through Price, for aggregate gross proceeds to the Company of C$10,000,000.

The net proceeds from the sale of the units will be used by Donner to fund its portion of the capital expenditures required to complete construction of the Bracemac-McLeod zinc mine, for exploration expenditures at its projects in Quebec, and for other general corporate and working capital purposes. The gross proceeds from the sale of the Flow-Through Shares will be used by Donner to fund exploration and development expenditures which qualify as 100% Canadian Exploration Expense at its projects in Quebec.

The closing of the financing is subject to the completion of formal documentation, receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange, and other customary conditions.

The Units and the Flow-Through Shares will be subject to a four-month hold period.