DNI to acquire second Madagascar graphite property

Jul 28, 2017

2017-07-26 08:28 ET – News Release

Mr. Dan Weir reports

DNI METALS INC. SIGNS LETTER OF INTENT FOR A 2ND GRAPHITE PROPERTY IN MADAGASCAR

Since DNI Metals Inc. has had positive drilling and metallurgical results from its first mining claim, DNI has signed an LOI (letter of intent) on a second property contiguous to the first mining claim.

The new property, Madagascar claim No. PE8904 (the Marofody project), is a permit that allows for production, is good for 40 years and can be extended (see attached table).

With the addition of the new claim, DNI will have a contiguous mining tenement package comprising nearly 70 square kilometres (68.75 square km).

Madagascar is known for large flake and high-quality graphite; the vast majority of which is sourced from the central-eastern coastal area between Toamasina and Brickaville. The project lies in a well-defined graphitic belt, which has been producing for over 50 years

Both claims have historical mine workings on them.

Infrastructure can be the key to any project. It is a significant advantage that the claims are 50 km by paved highway from Madagascar’s main operating port at Toamasina.

Marofody contains historical mining operations from the period of French colonial occupation (circa 1935) and recent Vendor exploration as confirmed the existence of strike and depth extensions to the historically exploited graphite zones.

The purchase price for Marofody is $1.65-million (U.S.) cash. The cash component will be paid as follows:

$100,000 (U.S.), upon signing the LOI;
$550,000 (U.S.) shall be paid in 60 days;
$1-million (U.S.) shall be paid in 90 days.

DNI’s management team continues to assess graphite assets, around the world, with a focus on saprolitic deposits.

                                  MINING LICENSES IN MADAGASCAR

Licence type               Pre                                  PR                               PE (DNI licence)

Licence description        Artisanal mining licence             Exploration licence              Mining licence
Term of validity           Eight years                          Five years                       40 years
Renewal                    Four years -- multiple               Three years by two               20 years -- multiple
Eligibility                Malagasy nationals                   All local entities               All local entities
Maximum size (km 2)        100                                  1,000                            1,000             
Rights conferred           Exploration and mining               Exploration                      Exploration and mining
Sale of mineral products   Yes                                  No                               Yes                 
Restrictions               Maximum 20 workers/no mechanized 
                           mining operations (artisanal only)   No commercial mining allowed     Full commercial 
                                                                                                 mining allowed
Environmental              Simple preliminary study (PEE)       Simple preliminary study (PEE)   Full impact study (EIE)

About DNI Metals Inc.

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

It was the 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.

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

http://dnimetals.com/news/