DNI's Initial Sampling Confirms Good Quality Sands at Two Fracsand Targets on its Alberta SBH Property

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

TORONTO, Aug. 7, 2014 /CNW/ - DNI Metals Inc. (DNI:TSX-Ven)(DG7:FSE) announces that initial reconnaissance sampling recently completed over two of the fracsand targets on its Alberta SBH Property (see press July 11, 2014) has confirmed sections within the Pelican sandstone Formation containing coarse clean sand of good roundness and sphericity with potential to meet fracsand specifications. The presence of high quality sands within this Formation had previously only been interpreted from downhole geophysical information from a random selection of oil/gas wells in the area.

The Pelican sandstone Formation is known to contain poorly cemented, hard, clean white coarse sand with smooth round grains, and has been shown to be suitable for use as fracsand elsewhere in Alberta and at locations adjacent to the Property. The two areas sampled represent only a small part of a broader sand bearing corridor across the Property over this Formation which is intermittently exposed in valley walls along the 100km trace marking the erosional edge of the Birch Mountains on the Property. The Formation is under progressively thicker overburden to the west and eroded away to the east of the Property. Five additional large fracsand project areas have been designated over the Property comprising a portfolio of seven contiguous properties with collective potential as a new fracsand district in northeast Alberta adjacent to oil sands operations in the Fort McMurray area.

Twenty-two 1kg-5kg trenching and grab samples were collected from large exposures of the Pelican sandstone Formation at the Tar River and Asphalt Creek valleys located at the southern parts of the Property which are nearest road access. The two areas sampled comprise 200m-300m long scarp exposures of the Formation surrounded by other similar outcrops on-strike 1km-2km away whose sampling was deferred. A single scarp was sampled at Tar whereas two scarps, 1km apart, were sampled at Asphalt. The Pelican Formation continues beyond the areas sampled under talus rubble, and extends under the entire 1,812 square kilometre SBH Property with a thickness typically ranging 30m-60m as demonstrated by DNI's subsurface stratigraphic database based on  nearly 600 oil/gas wells drilled by others over the SBH Property. The downhole geophysical information also shows presence of 20m-30m thick sections of porous clean sand in the Formation. The current sampling confirmed presence of these sections at the locations sampled.

The current sampling confirmed sections in the lower Pelican Formation of high quality coarse clean sand of moderate to high roundness and sphericity at both the Tar River and Asphalt Creek exposures. Samples of this section measuring 20m+ thick at the Tar River reveal clean sands with smooth surfaces ranging in sphericity from moderately oblong to perfect spheres. Photographs of typical samples of the lower Pelican sections are posted on DNI's website (http://www.dnimetals.com/fracsand-pics.htm). The website also includes a new section describing DNI's new fracsand projects.

Subsamples from the material collected were sieved by DNI under field conditions to enable review of the various size fractions. Initial results, currently regarded as a guideline only, show yields upward to 66%, 96% and 80% for the 20/40 mesh, 16/70 mesh and 16/140 mesh grain size fractions (US mesh). Detailed review of the samples is in progress to select samples for analysis and for more rigorous fracsand testing to quantify krumbein shape factors, crush profile and conductivity, among others.

The Tar River and Asphalt Creek fracsand project areas are sufficiently large enough that they each hold realistic potential for hosting sand deposits of reasonable dimensions suitable as a long term source of fracsand. They have, accordingly, been designated distinct fracsand properties located approximately 20km apart. The sampling program examined only a small fraction of the Pelican sandstone Formation at the SBH Property, and sampling of several other similar large areas identified on the Property were deferred to be completed in the course of a broader field sampling program with a view to advancing toward drilling and resource definition as soon as possible. These include the Buckton Creek, the Gos Creek, the Mid Creek, the Pierre River and the Joslyn Creek fracsand project areas. The projects collectively represent a portfolio of seven fracsand properties which are located some 10km-20km apart along a 100km long corridor across the Property where the Pelican sandstone Formation is intermittently exposed in valley walls.

DNI has not yet explored permits recently acquired 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. Additional project areas might be identified on these through field reconnaissance.

Based on encouraging results from the current sampling, DNI has decided to expand its fracsand field program to sample the Tar River and Asphalt Creek fracsand properties in greater detail, in addition to reconnaissance sampling of the other fracsand project areas on the SBH Property before winter. DNI is seeking financing or third party collaboration to complete these programs.

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.