DNI's Vohitsara Saprolitic Graphite Project Drilling Update

Toronto, Ontario--(Newsfile Corp. - August 31, 2017) - DNI Metals (CSE: DNI) (OTC Pink: DMNKF) ("DNI") is pleased to provide further drilling results from the Vohitsara Saprolitic Graphite Project, Madagascar.

The latest drill results comprise of a further sixteen holes (16) holes and one trench from the Main Zone and complement the results from the initial results of 3 holes. See DNI press release dated July 24, 2017.

To date, forty-five (45) air core drill holes and five (5) diamond core hill have been completed with an average depth of the Saprolite being approximately twenty-eight (28) meters.

Highlights from the most recent results include:

Table 1

To view an enhanced version of Table 1, please visit:
 http://orders.newsfilecorp.com/files/1803/28754_a1504190397060_39.jpg

Disclosure: Note that insufficient geological data currently exist to accurately determine true mineralisation widths as compared to intersection widths as listed in Table 1 above. Note also that the intersected mineralisation is hosted within weathered in-situ saprolitic material and is known to be broadly disseminated within this regolith horizon in the area currently being tested by drilling.

These recent results compliment the initial results from the Main Zone released on July 24, 2017 which included:

• VHT0025: 11.50m @ 7.23% Cg, from surface;
• VHT0016: 12.00m @ 4.14% Cg from 8.50m
  • and 4.50m @ 5.20% Cg, from 25.00m;
• VHT0019: 19.50m @ 6.12% Cg, from 10.00m -
  • Incl. 4.50m @ 10.59% Cg, from 19.00m.

All intercepts and drill collar locations are summarized on Figure 1 appended to this release. Drill Collars for the above results are listed in the table below:

Table 2

To view an enhanced version of Table 2, please visit:
http://orders.newsfilecorp.com/files/1803/28754_a1504190397389_98.jpg

Dan Weir, CEO, commented, "We continue to get encouraging results from the drilling. The additional of the diamond core drill will increase the speed of the drilling and support the air core results."

We note the following disclosure:

• DNI is building a pilot plant due to the drill results, the positive metallurgical tests, and the MOU for offtake. See our press releases dated August 15 and 17, 2017.
• The purpose of the graphite pilot plant is for testing its properties in Madagascar. Plant to be designed to produce up to 6,000 tonnes of graphite per year, depending on the head grade.

Figure 1: Summary of current exploration at Toamasina (Vohitsara) Project

To view an enhanced version of Figure 1, please visit:
http://orders.newsfilecorp.com/files/1803/28754_a1504190397592_99.jpg

All representative samples were prepared and collected by or under supervision of DNI's Country Manager, Steven Goertz. Mr. Goertz is a Geologist and is a Qualified Person under NI43-101 regulations. Mr. Goertz has approved this Press release.

QAQC: Standards every 20 samples - within acceptable limits / Duplicates averaging every 10 samples - results comparable to primary assays.  AGAST also have internal QAQC procedures - passed.

The samples were processed at AGAT Laboratories, in Ontario, Canada. Graphitic carbon assays were performed using a modified infrared assay method. This method is preferable to other industry-accepted assay methods; inclusive of varying forms of Loss on Ignition (LOI) testing. All analysis was preformed using LECO instruments.

About DNI Metals

Certain advisors and directors of DNI have significant operational experience at historical hard rock graphite mines in Canada (e.g. Ontario and Quebec) and Australia. Between them, they have built three (3) processing plants and designed two (2) others; all, which were shut down in the 1990,'s due to increased Chinese competition. Keith Minty, a director, previously worked at Cal Graphite near Kearny, Ontario.

It was our team's understanding of the high production and capital expenditure costs associated with so-called "hard rock" graphite mining that inspired DNI to search for saprolite-hosted graphite deposits.

Certain parts Madagascar and Brazil, produce graphite from weathered material called saprolite.

According to Dictionary.com, saprolite is described as:

"Soft, thoroughly decomposed and porous rock, often rich in clay, formed by the in place chemical weathering of igneous, metamorphic, or sedimentary rocks. Saprolite is especially common in humid and tropical climates. It is usually reddish brown or grayish white and contains those structures (such as cross-stratification) that were present in the original rock from which it formed."

DNI owns a commercially permitted, saprolite-hosted graphite deposit in Madagascar; located 50kms from the country's main seaport. The deposit is located less than two (2) kms from the paved national highway. DNI intends to develop the Vohitsara project, should the economic viability and technical feasibility be established. DNI has not yet established mineral resources or mineral reserves supported by a PEA or mining study (PFS or FS).

DNI has a graphite wholesale business, in which it buys and sells high quality graphite. This business has shown a steady increase in volume over the past year.

Steven Goertz (MAusIMM, MAIG), who is a qualified person, approved the technical disclosure in this news release.

DNI — Canadian Securities Exchange
DMNKF - OTC
Issued: 63,068,155

For further information, contact:
DNI Metals Inc. — Dan Weir, CEO 416-595-1195
DanWeir@dnimetals.com
Also visit www.dnimetals.com

We seek Safe Harbour. This announcement may include forward looking statements. While these statements represent DNI's best current judgment, they are subject to risks and uncertainties that could cause actual results to vary, including risk factors listed in DNI's Annual Information Form and its MD&A's, all of which are available from SEDAR and on its website.