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

TORONTO, Dec. 2, 2011 /CNW/ - DNI Metals Inc. (DNI:TSX-Ven)(DG7:FSE) with reference to prior press releases ofOctober 24 and September 8, 2011, and the NI-43-101 compliant resource study on record of October 18, 2011, for a portion of the Buckton Mineralized Zone, DNI is pleased to report recent assay results for rare earth elements from its Buckton inferred resource and overlying overburden cover rocks at its Alberta polymetallic black shale projects, Athabasca Region, Alberta.

The Buckton inferred resource (announced October 24, 2011) represents 250,092,000 short tons (226,880,000 metric tonnes) of mineralized Second White Speckled black Shale, beneath less than 75m of overburden cover, which is mineralized with recoverable Molybdenum (Mo), Nickel (Ni), Uranium (U), Vanadium (V), Zinc (Zn), Copper (Cu), Cobalt (Co) and Lithium (Li). Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no guarantee that all or any part of the Buckton inferred resource will be converted into a mineral reserve.

The Buckton inferred resource also contains recoverable rare earth elements and specialty metals of value (e.g. Li, Sc, Th) which are incidentally extracted from the shale during DNI's leaching testwork as co-products to the traditional metals, and might represent additional previously unrecognized value hosted in the resource. These elements and metals were omitted from the resource study and will be addressed in a separate addendum report which is nearly completed. In addition, DNI's analytical work also reported rare earth elements and specialty metals from the overburden cover rocks above the Buckton resource. This is significant and suggests that material previously considered as "waste" might have potential to represent additional previously unrecognized value which might enhance economics of the underlying resource.

To begin assessing the potential of rare earths and specialty metals in the Buckton Mineralized Zone and related resource, all samples from all available drill core intercepts across the Buckton inferred resource and the overlying overburden cover rocks were recently re-analyzed for rare earth elements. The new data will replace prior partial databases collated from analytical programs of the past three years with a single database of higher analytical resolution specifically focusing on rare earth elements. Results being announced are from re-analysis of all drill core samples from DNI's 2010-2011 winter drilling program across the Buckton inferred resource as well as the overlying overburden cover rocks, in addition to results from samples of drill intercepts across the resource from archived historic drill core. The foregoing holes collectively form the basis of the Buckton resource study. Only partial third-party analytical data are available from historic drilling across the overburden cover overlying the Buckton resource.

Grades for specialty metals and rare earth elements for all drill intercepts across the Buckton resource are summarized below (see DNI press July15, 2011, for other metals). The results are for drill core samples collected from DNI's 2010-2011 winter drilling program, together with results from DNI's verification sampling of historic drilling and surface samples BK456 and BK003 tested during bioleaching studies.

Considering the uniformity of grades among all drill holes across the Buckton Mineralized Zone, the results tabulated above serve to characterize grades which can be reasonably expected from this Zone, which is a conceptual target for further exploration with potential for hosting 1.4-1.5 billion short tons of polymetallic mineralization extending over 26 square kilometers and is open in three directions. If amortized over the Buckton Mineralized Zone, the apparently modest grades tabulated are significant and represent an immense in-situ metallic budget of recoverable specialty metals and rare earth elements.

Calculated recoveries of specialty metals and REE's from leaching tests of samples from the Second White Speckled black shale hosting the Buckton inferred resource were announced September 8, 2011, and are reiterated below.

The Buckton resource study also concluded that the Buckton inferred resource is overlain by 762,678,000 short tons (691,890,000 metric tonnes) of overburden cover material consisting of LaBiche Formation shales and overlying till. The overburden material is barren of base metals and uranium, and is, accordingly, considered to be "waste" by the resource study for the purposes of estimating the initial Buckton base metals and uranium inferred resource. The overburden material, however, contains specialty metals (e.g. Li, Sc, Th) and rare earth elements which have not yet been fully evaluated even though their grades are comparable to grades from the Buckton Mineralized Zone (see pressSeptember 8, 2011).

Grades for specialty metals and rare earth elements for all drill intercepts across the overburden cover material ("O/B Cover") overlying the Buckton resource are summarized below. The results are for drill core samples collected from DNI's 2010-2011 winter drilling program, together with historic third-party results from historic drilling.

In addition to the above, the overburden cover material also contains recoverable Lithium over the lengths of drill intercepts reported as follows (Li reported as ppm, equivalent Li₂CO₃ in lb/st in brackets): 11BK01-79ppm (0.84lb/st), 11BK02-73ppm (0.78lb/st), 11BK03-61ppm (0.66lb/st), 11BK04-87ppm (0.93lb/st), 11BK05-69ppm (0.73lb/st). No analytical data are currently available for Li from historic holes 7BK01-05.

Considering the uniformity of grades among all drill holes across the Buckton Mineralized Zone, the tabulated results above serve to characterize grades which can be reasonably expected from overburden cover rocks overlying this Zone. If amortized over the volume of overburden above the Zone, the apparently modest grades tabulated are significant and represent an immense in-situ metallic budget of specialty metals and rare earth elements. DNI has not yet completed the necessary testwork to determine recoverability of these metals from the overburden cover rocks overlying the resource.

Despite the general availability of commodity price quotes for specialty metals and rare earth elements, given lack of transparency in their respective markets, assessment of the economic impacts that these metals might have as co-products on future development of DNI's polymetallic shales cannot be determined at this time. The grades and incidental recoverability of these metals are, however, material to any potential production scenario envisaged by DNI for continuing exploration and development of the six mineral systems identified at the Property as a long term source of a variety of metals. DNI has broadened scope of its testwork to actively focus on specialty metals and rare earth element recoveries alongside the base metals of interest which have so far been DNI's primary focus.

DNI recently initiated a study to estimate the quantity and potential value of rare earth elements and specialty metals contained within the Buckton inferred resource. This study is nearly completed and its conclusions will be announced shortly as an addendum to the Buckton resource study.

The Buckton inferred resource extends over only a 5.7 square kilometre portion of the 26 square kilometre Buckton Mineralized Zone which is one of six mineralized systems, or zones, identified by DNI on its 2,720 square kilometer Property. The Buckton Mineralized Zone is the most advanced at the Property and has sufficient drilling over a portion of it to support the Buckton initial inferred resource.

This announcement is being made in the interest of continuing disclosure of results on hand.

DNI continues to focus its efforts on its polymetallic black shale Properties in Alberta, and on its carried interest in the diamond discovery on its Attawapiskat Property, Ontario.

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.

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
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Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no guarantee that all or any part of the mineral resource reported herein will be converted into a mineral reserve. An 'Inferred Mineral Resource' is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The Buckton resource study NI-43-101 compliant technical report is available from www.sedar.com and from 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 MDS&A's, all of which are available from SEDAR and on its website.