DNI Metals: Madagascar Mining Permit - Graphite Saprolite Advantage

Toronto, Ontario--(Newsfile Corp. - March 16, 2017) - DNI Metals Inc. (CSE: DNI) (FSE: DG7N)  (OTC Pink: DMNKF)  ("DNI" or the "Company").

DNI Metals Inc. "DNI" has a commercial Mining Permit ("Permis de Exploitation" or "PE") over its Vohitsara graphite project in Madagascar. Originally an artisanal mining permit ('PRE') at the time of the transaction, the Mining permit was granted by the Madagascar Minister for Mines through the national mining cadastre office ("Bureau du Cadastre Minier de Madagascar" or "BCMM").

The BCMM is the government agency responsible for administrative oversight of all mining tenements in Madagascar.

The obtaining of a commercial PE marked a significant milestone for DNI in Madagascar, as it allows DNI to move to commercial production at its option, subject to completion / fulfillment of the requisite environmental impact and social responsibility ("EIE" & "CSR") studies and obligations.

Neither of these requirements are onerous and DNI will be moving to fulfill these requirements concurrent with its upcoming fast-track exploration and development programme for the Vohitsara Project.

DNI's Mining ('PE') Permit has a term of 40 years and is renewable. The following table sets out the license types in Madagascar.

Dan Weir, CEO, commented, "We were attracted to Madagascar because it is known for its Large Flake, High Quality Graphite and because Madagascar has a modern and transparent Mining Code. Additionally, the area in which our Project is located contains excellent infrastructure and port facilities and the mineralisation itself is hosted within soft 'free-dig' material called saprolite, which greatly facilitates commercial extraction and processing.

Having a commercial mining permit at this stage gives DNI a significant advantage to advance its graphite production plans in Madagascar."

Permit TypePREPRPE (DNI Permit)
Permit DescriptionArtisanal Mining PermitExploration PermitMining Permit
Term of Validity8 Years5 Years40 Years
Renewal4 years — multiple3 Years x 220 Years - Multiple
EligibilityMalagasy NationalsAll Local EntitiesAll Local Entities
Maximum Size (km2)1001,0001,000
Rights ConferredExploration & MiningExplorationExploration & Mining
Sale of Mineral ProductsYesNoYes
RestrictionsMaximum 20 Workers / No Mechanised Mining Operations (Artisanal Only)No Commercial Mining AllowedFull Commercial Mining Allowed
EnvironmentalSimple Preliminary Study (P.E.E.)Simple Preliminary Study (P.E.E.)Full Impact Study (E.I.E)


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.

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 has the intention of developing the Vohitsara project, should the economic viability and technical feasibility be established. DNI has not 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.

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

DNI — Canadian Securities Exchange
DG7N — Frankfurt
Issued: 40,558,775

For further information, contact:
DNI Metals Inc. — Dan Weir, CEO 416-595-1195
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.