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

 

DNI ANNOUNCES POSITIVE LEACHING RESULTS FROM COVER ROCKS OVERLYING ITS BUCKTON INFERRED RESOURCE, ALBERTA

 

DNI METALS INC. (DNI:TSX-Ven)(DG7:FSE) is pleased to announce initial results from its bioleaching testwork on drill core samples from the overburden cover rocks overlying its Buckton inferred maiden resource (announced Oct24/2011 and Jan16/2012) at its polymetallic black shale projects, Athabasca Region, Alberta. The cover rocks consist of the LaBiche Shale Formation, also a black shale, with a thin veneer of till which has been glacially scoured from it.

 

The results being announced are from the first leaching tests ever completed to determine recovery of Specialty Metals, Rare Earth Elements and Base Metals from the overburden cover rocks. The results are from recently completed bench scale batch amenability bioleaching testwork launched in 2011, carried out by Alberta Innovates Technology Futures (AITF, formerly the Alberta Research Council), on a 200gm drill core sample representative of the overburden LaBiche Shale overlying the Buckton inferred resource. The sample was tested in duplicate to specifications formulated by DNI.

 

A summary of the best metal recoveries achieved during the above bioleaching tests, as reported by AITF, are as follows: Mo-57%, Ni-82%, U-78%, V-10%, Zn-76%, Cu-65%, Co-80%, Li-41%.

 

Recoveries for Specialty Metals and REE, as calculated by DNI, based on the difference of metal content between head sample feed material and final tail residues per analytical results from AITF's testwork, range as follows: La-13%-20%, Ce-21%-28%, Pr-28%-34%, Nd-35%-41%, Sm-49%-53%, Eu-55%-59%, Gd-61%-64%, Tb-60%-63%, Dy-61%-65%, Ho-58%-62%, Er-51%-55%, Tm-53%-57%, Yb-42%-47%, Lu-53%-57%, Y-56%-59%, Sc-28%-37%, Th-32%-34%.

 

The above results are from bioleaching of a homogenized composite drill core sample of the LaBiche Shale overlying the Buckton resource, representing a 3m long intercept in an archived historic drill hole which was collected by DNI during its 2009 verification sampling program (Hole 7BK04 from 79.6m to 82.6m). The interval is geochemically representative* of the LaBiche Shale which comprises the overburden cover above the Buckton resource.

 

All of the above results were achieved under test conditions which are yet to be optimized and, as such, are regarded by DNI as initial results which future work will endeavor to improve by further optimizing and refining test parameters. Final tails from one of the duplicate samples was further leached in HCl following bioleaching to monitor precipitation of a variety of compounds (eg: jarosites, sulfates, ferro-compounds) and to assess related metals re-precipitation from the leaching solution after the metals had been extracted from the shale. As noted in previous bioleaching tests conducted at AITF, the test results indicate that a significant fraction of some of the dissolved metals, once leached from the shale, are removed from the leaching solution through re-precipitation. Mitigation of these processes will be addressed during future testwork intended to optimize test parameters.

 

The Buckton inferred resource is a near-horizontal tabular zone hosted entirely within the Second White Speckled (black) Shale Formation, bounded within its upper and lower contacts. This Formation is exposed throughout the erosional edge of the Birch Mountains (eg:Buckton Zone) but is overlain westward by progressively thicker sequences of other shales and till. Given the uniformity of metals grades within the Speckled Shale, the Buckton resource has been laterally delimited based on depth criteria (ie: volume of "waste" material which would have to be excavated to access the mineralized zone by open pit) rather than based on continuity of metallic mineralization which extends well beyond the limits of the current resource.

 

As previously reported, overburden cover rocks overlying the Buckton inferred resource have to date been considered to be "waste" material for the purposes of estimating the Buckton resource. The results being announced suggest that the overburden material may represent potential value given that contained metals and REE are recoverable.

 

The results being announced about recoverability of Metals and REE from the overburden cover above the Buckton resource might serve to: (i) enable expansion of the Buckton inferred resource beyond its current limits to surrounding areas under thicker overburden cover, and (ii) provide an additional mineralized zone within the overburden cover rocks which were previously considered to be "waste" material. The foregoing represents a significant new milestone development from the Buckton Zone.

 

The Buckton maiden resource study for Mo-Ni-U-V-Zn-Cu-Co-Li (announced Oct24/2011) and the Buckton supplemental resource study for REE-Y-Sc-Th (announced Jan16/2012) estimated that the Buckton inferred resource is overlain by 762,678,000 short tons of overburden cover material consisting of LaBiche Formation shales with a thin veneer of overlying till glacially scoured therefrom.

 

In addition, the above studies also concluded that mineralized tonnages ranging 400-679 million short tons with similar grades** as the Buckton inferred resource can be blocked at a US$7.5 per tonne cut-off, representing extensions of the Buckton resource which are beneath less than 100m-150m of the surface and which are overlain by 1.4-3.0 billion short tons of overburden material. These tonnages are not resources and have currently not been classified as resources. Weighted average compositions of LaBiche Shale intercepts from all available drill holes were announced on Dec2/2011 and Dec16/2011.

 

In the absence of a resource study for the overburden material, and a separate study to revise the Buckton inferred resource, the above tonnages estimated by a quantitative resource model can only be considered to be mineralized material which is a target for further work whose ultimate quantity and grade are conceptual in nature as there has been insufficient exploration to define a mineral resource and it is uncertain whether further exploration will result in discovery of a mineral resource.

 

DNI's intentions are to shortly launch a resource study to estimate quantity and grade of mineralization within the overburden material overlying the Buckton resource and its projected extensions. Subject to conclusions of this study, a collateral separate resource study will also follow to re-asses the Buckton maiden resource to revise it based on conclusions of the resource study relating to the overburden material.

 

Plans are also underway to test a suite of composite drill core samples from overburden intercepts of drill holes completed by DNI during its 2010-2011 winter drilling program. This work, scheduled to commence during the summer, is slated for completion by the end of the year. Plans are also underway for an expanded leaching testwork program details of which will be announced once it has commenced.

 

The Qualified Person in connection with this press release is S.F.Sabag P.Geo, DNI's president and CEO, who has reviewed analytical results and is responsible for preparation of this press release. See DNI press Sept8/2011 and Alberta Mineral Assessment Report MIN20100017 for details of procedures related to the bioleaching testwork. Bioleaching was carried out using inoculum previously harvested and cultured by AITF from DNI's black shale zones. Analytical work carried out by Actlabs, Ancaster, Ontario, by ICP-MS. The Buckton maiden resource study and the Buckton supplemental resource study are both available from www.sedar.com and www.dnimetals.com. lb/t = pounds per short ton.

 

*Head grades for the drill core sample of the LaBiche Shale bioleached by AITF are as follows expressed in ppm(lb/t): MoO3-25(0.05), Ni-123(0.25), U3O8-4(0.01), V2O5-431(0.86), Zn-145(0.29), Cu-35(0.07), Co-15(0.03), Li2CO3-352(0.70), La2O3-40(0.08), Ce2O3-76(0.15), Pr2O3-9(0.02), Nd2O3-35(0.07), Sm2O3-7(0.01), Eu2O3-1(0.003), Gd2O3-6(0.01), Tb2O3-1(0.002), Dy2O3-5(0.01), Ho2O3-1(0.002), Er2O3-3(0.01), Tm2O3-0.5(0.001), Yb2O3-3(0.01), Lu2O3-0.5-(0.001), Y2O3-33(0.07), Sc2O3-28-(0.06), ThO2-12(0.02).

 

**Range of recoverable grades (lbs per short ton) reported in the Buckton maiden resource study and the Buckton supplemental resource study for mineralized tonnages ranging 400-679 million short tons, representing extensions of the Buckton resource which are beneath less than 100m-150m of the surface, which can be blocked by the resource model at a US$7.5 per tonne cut-off:  MoO3: 0.11-0.11, Ni: 0.26-0.26, U3O8: 0.07-0.06, V2O5: 1.02-1, Zn: 0.54-0.54, Cu: 0.09-0.09, Co: 0.04-0.04, Li22O3: 0.3-0.3, La2O3: 0.09-0.08, Ce2O3: 0.14-0.14, Pr2O3: 0.02-0.02, Nd2O3: 0.07-0.07, Sm2O3: 0.02-0.02, Eu2O3: 0.004-0.004, Gd2O3: 0.02-0.02, Tb2O3: 0.003-0.003, Dy2O3: 0.02-0.02, Ho2O3: 0.003-0.002, Er2O3: 0.01-0.01, Tm2O3: 0.001-0.001, Yb2O3: 0.01-0.01, Lu2O3: 0.001-0.001, Y2O3: 0.11-0.11, Sc2O3: 0.02-0.02, ThO2: 0.02-0.02. Data for  Mo-Ni-U-V-Zn-Cu-Co-Li based on material under less than 125m of cover.

 

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: 66,625,020

 

For further information, contact:
DNI Metals Inc. - Shahe Sabag, President & CEO (416-595-1195) or Denis Clement, Chairman (416-364-1909) email ir@dnimetals.com. Also visit www.dnimetals.com.

 

We seek Safe Harbour. This announcement includes 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&As, all of which are available from SEDAR and on its website.