DNI concludes financing to resume drilling on its Alberta polymetallic black shale projects, Athabasca region, Alberta

DNI METALS INC. (DNI : TSX-Ven)(DG7 : Frankfurt)

TORONTO, May 29, 2012 /CNW/ - DNI Metals Inc. (DNI:TSX-Ven, DG7:FSE) is pleased to announce that it has concluded the financing announced on May 22, 2012, with a final non-brokered private placement of 300,000 flow-through shares with arm's length parties for gross proceeds of $135,000. The securities issued under the private placements are subject to a four-month hold period expiring on September 25, 2012. A commission was paid in connection with the placement, consisting of an aggregate of $9,450 and issuance of 21,000 warrants, each warrant entitling the holder to purchase an additional common share of the company at a price of 45 cents for a period of twelve months from closing. Shares underlying the broker warrants are subject to a four-month hold period expiring on September 25, 2012.

Proceeds of the financing, together with funds in treasury from prior financings, will be applied toward resuming drilling at DNI's polymetallic shale properties, Alberta, to complete two drill programs during early fall. The planned drilling consists of exploratory drilling over the Buckton South mineralized target with the objective of delineating an initial resource, and will also include other strategic holes over the Buckton initial inferred resource (announced October 24, 2011) to expand and upgrade the resource. The drilling program is fully funded and permitting has commenced in anticipation of mobilization in July.

Considerable other work is also in progress, including a resource study related to mineralized black shales overlying the Buckton resource, which had previously been regarded as waste cover rocks but which hold potential for hosting additional mineralized tonnages from which Base Metals, Specialty Metals and Rare Earth Elements (REEs) are recoverable by leaching (announced March 1, 2012).

Other work in progress includes bioleaching testwork testing additional samples from black shales above and beneath the Buckton inferred resource, and separate collaborative work being carried out at CANMET Mining and Minerals Science Laboratories entailing testwork toward the commercialization of a heap leaching process for DNI's polymetallic black shales, specifically focusing on formulating refining procedures for separation of the various Rare Earth Elements (REEs) from the leaching solution into saleable end-products, relying on process technologies from Chinese ionic clay adsorbed REE ores as a guide.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

DNI - TSX Venture
DG7 - Frankfurt
Issued: 69,546,689 post financing

SOURCE DNI Metals Inc.