DNI Metals - First 12 of 28 Diamond Core Assays Received; Including 34m Grading 5.63% Graphitic Carbon

Toronto, Ontario--(Newsfile Corp. - December 7, 2017) - DNI Metals Inc. (DNI: CSE) (FSE: DG7N) (OTC Pink: DMNKF) ("DNI" or the "Company").

Highlights

• VHTDD007: 12.00m @ 9.28% GC; from 1.00m (incl. 4.50m @ 12.00% GC; from 1.00m)

• VHTDD009: 13.50m @ 8.21% GC; from 5.50m (incl. 3.00m @ 10.60%GC; from 7.00m);

• VHTDD011: 18.00m @ 5.01% GC; from 2.50m (incl. 3.00m @ 7.22% GC; from 2.50m);

• VHTDD012: 34.00m @ 5.63% GC; from surface (incl. 3.00m @ 11.65% GC, from 19.00m);

DNI is pleased to announce the following (refer Figure 1 following):

1. Receipt of the first and second batches of drilling assay results from its recent diamond core drilling programme its 100%-owned Vohitsara Graphite Project in Madagascar; incorporating two (2) mineralised holes from the Southwest Zone ("SW Zone") & the all of the first six (6) assayed holes from the Main Zone;

2. Drilling has confirmed that free-dig saprolitic weathered material has been developed to depths of 17m to 42m below surface; averaging 28m;

3. 28 holes for a total of 1,040 metres drilled have been completed for this programme; which finished during the first week of November 2017.

Dan Weir, CEO, commented: "We continue to be impressed and excited with the results being returned from our drilling within these two highly prospective targets at our Vohitsara project. Nine (9) of the first twelve holes — including every one of the holes from the Main Zone - returned solid intercepts. Worth noting is that, as stated previously, many of the Saprolitic graphite mines around the world produce from an average in-situ grade of 3-5% graphitic carbon ('GC'). Obtaining an intercepted width of 12 metres grading 9.28% GC, that includes 4.5m grading 12.00% GC, almost from surface, is well above the average tenor of mineralisation for this area. We are very excited about these results and very much look forward to receiving the remaining assays."

Table 1: Composite Results:

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.

A full listing of all 255 assay results is appended at the back of this document.

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.

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 were preformed using LECO instruments.

Drill Collars:

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 two permitted, saprolite-hosted graphite deposits in Madagascar; located 50kms from the country's main seaport. The deposits are 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 Pink
Issued: 98,273,355

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.

Figure 1: Summary Working Plan for the Vohitsara Project - showing locations of initial core holes

To view an enhanced version of this graphic, please visit:
http://orders.newsfilecorp.com/files/1803/31109_a1512659255738_68[1].jpg

APPENDIX 1 — ASSAY RESULTS — DRILLING: