DNI extends its Alberta SBH Property over fracsand targets

DNI Metals Inc. (DNI : TSX-Ven)(DG7 : Frankfurt)

TORONTO, July 11, 2014 /CNW/ - DNI Metals Inc. (DNI:TSX-Ven)(DG7:FSE) announces that it has recently concluded acquisition of additional metallic and industrial mineral permits over 61,440 hectares adjoining its Alberta SBH Property to secure strategic locations over exposures of the Pelican sandstone Formation which is known elsewhere in Alberta to contain sections of sand suitable for use as a natural sand proppant (fracsand) by the oil/gas industry.

Compelled by growing demand in fracsand to supply fast growing tight oil/gas plays in western Canada, and the scarcity of local deposits, DNI has decided to test the Pelican Formation sandstone on its Property for suitability as fracsand. DNI's field program to sample and test this Formation on the Property will start shortly.

The Pelican Formation sandstone contains poorly cemented, hard, clean white coarse sand with relatively smooth round grains. Fracsand is currently being produced from the stratigraphic equivalent of this Formation in the Peace River region, in west-central Alberta. In addition, high silica (98%+) coarse and smooth grained sand sections have been reported by others from exposures of the Formation from locations adjacent to the Property which are being evaluated as a source for fracsand. Similar outcrop exposures on DNI's Property have not yet been sampled and their suitability as fracsand has not been determined.

DNI's subsurface geological and stratigraphic database, based on nearly 600 oil/gas wells drilled over its Property by others, confirms that the Pelican Formation sandstone extends under the entire Property with thicknesses typically ranging 30m-60m. Downhole geophysical logs from a random selection of the wells confirm the presence of porous clean sand sections within the Formation.

The Pelican Formation is under thin overburden cover throughout most of the eastern parts of the Property, and it is intermittently exposed in valley walls along the 100km trace marking erosional edge of the Birch Mountains on the Property. This Formation is eroded away to the east of the Property. The Pelican Formation is poorly consolidated and would lend itself well to free-dig extraction.

Four large areas have been identified on the Property offering ~1km-2km long outcrop exposures of the Pelican Formation some of which are accessible by road. These areas provide primary targets for sampling.

DNI has been exploring metal enriched zones in polymetallic black shales at its SBH Property since 2007 and has successfully delineated two mineral resources at the Property, one of which (the Buckton Deposit) has advanced through a Preliminary Economic Assessment for the production of base metals, Uranium and REE (announced in December 2013). The Pelican sandstone Formation at the Property lies beneath the flat-lying metal enriched black shales, and offers new targets with potential to add further value to the Property. DNI's planned exploration program to test this Formation will be an adjunct to its ongoing work to continue advancing its polymetallic shale resources toward pilot demonstration.

The Alberta SBH Property previously consisted of 2,720 sq km held under 36 permits, and provided coverage over six mineralized areas. Through ongoing rationalization of its land position, DNI allowed a large portion of its prior land position, being non-strategic areas over remote lower priority permits, to lapse in March 2014. These permits contained three early stage blind targets, namely; the McIvor West and North Lily Anomalies, and the Eaglenest Target Area. These targets are challenged by remote field access, lack of outcrop exposures and seasonal field activity constraints. DNI has not previously carried out any work on these areas other than compilation of historic work, and has instead prioritized the eastern parts of the Property where the shales are accessible and exposed.

DNI recently acquired additional permits adjoining the northeast and southeast parts of the SBH Property to secure localities over new targets which have potential for hosting large volumes of sand which might be suited for use as fracsand in the oil/gas industry. The SBH Property currently comprises 1,812 sq km held under 25 permits, and contains three drill-tested polymetallic mineralized zones or resources, namely; the Buckton Deposit, the Buckton South mineral resource and the Asphalt Zone. The foregoing comprise DNI's black shale hosted strategic polymetallic assets.

DNI's Qualified Person in respect of its Alberta polymetallic black shale projects, and this announcement, is Mr. Shahé F.Sabag P.Geo., President and CEO of DNI.

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: 74,857,022

SOURCE DNI Metals Inc.