{INTERVIEW} DNI METALS – Important Project Updates

Dan Weir the Executive Chairman of DNI Metals sits down with Maurice Jackson of Proven and Probable to discuss the merits of being a shareholder in what has the makings of being the world’s lowest cost graphite producer.  We will provide project updates and discuss the issuance of a Letter of Default to Cougar Metals.  Specifically, Mr. Weir will provide a historical context of Graphite in saprolite soil which is generously abundant throughout both the Vohitsara and Marafody Projects.  We will address carbon, carbon content, graphite purity, flake size, logistics, drilling, trenching, bulk sampling, 43-101’s, Resource Study, PEA’s, Feasibility Study, Pilot Plant, Laboratory, and Environmetal Survey’s on the Vohitsara Project and we will provide shareholders updates on the new acquired Marofody Project.  We will also discover what keeps Mr. Weir up at night that we don’t know about!

Sinc this interview the following has occurred: DNI Terminates Option Agreement with Cougar Metals

www.dnimetals.com

website: https://provenandprobable.com
youtube: https://www.youtube.com/c/provenandprobable.com
twitter: https://twitter.com/provenprobable

VIDEO:

 

AUDIO

TRANSCRIPT

Maurice Jackson:

Welcome to Proven and Probable where we focus on metals, mining, and more. I’m your host, Maurice Jackson. Our featured issue is establishing itself to become one of the world’s leading graphite producers. Now, speaking of DNI Metals trading on the CSE, symbol DNI and on the OTC, symbol DMNKF.

Joining us for a conversation is Dan Weir, the executive chairman of DNI Metals. Before we begin, allow me to convey to our listeners that DNI Metals is a sponsor of Proven and Probable and that we are proud shareholders of DNI Metals for the virtues we will convey in today’s message. Mr. Weir, welcome to the show, sir.

Dan Weir:

Hi, Maurice.

Maurice Jackson:

Dan, I always have to ask you this, but for first time listeners, what is graphite and where is it used?

Dan Weir:

Graphite is carbon. It’s really the base of graphite. Carbon can be found in either coal, graphite, or in diamonds. That’s the main ways we find it, but again, carbon based organisms. It’s found everywhere in the world. What is it used for? Everything we touch in our lives, pretty much everyday, has been in contact with graphite or uses graphite.

Let’s use a prime example. Elon Musk has this vision of the world that we are going to all drive electric cars. All the other car manufacturers in the world are jumping on board with that, but what makes an electric car work and the problems have been for the electric car to bring the prices down and everything else is storing of that electricity or a battery. A lithium-ion battery, the biggest component in a lithium-ion battery by weight is graphite other than the plastic case or the steel casing that holds the battery together.

One of the most important components in a lithium-ion battery is graphite. It’s very, very critical to that. It’s a huge growth area. Bloomberg stated that in 2015 that there was about 15,000 tons a year use for anodes and lithium-ion batteries. That’s graphite tonnage. They figured that in the next number of years that that’s going to grow to probably about 350,000 tons year. The demand is growing exponentially for graphite, specifically for uses in lithium-ion batteries. Another area that we see a huge growth for graphite is in what they call the expandable graphite area. Expandable graphite allows you to make foils or make graphite into plates. A fuel cell has plates in it. They’re made out of graphite.

Building materials, they’re starting to use graphite in building materials in the roof, on the walls for fire protection because it’s a good insulation, but it has a very, very high melting temperature. That’s why traditional uses of graphite were in refractories or in the steel making industry where all the crucibles, all the molds are lined with graphite because it can handle the high heat. Again, you’ve got your traditional markets and you now have growth markets. DNI realized in 2015 that in order to compete with China, because China produces 60% to 70% of the world’s graphite, you had to go somewhere where your cost could be low and you could find infrastructure as well as high quality graphite. That’s how we ended up in Madagascar and why we’re developing two projects, currently, in Madagascar.

Maurice Jackson:

Now, we know what graphite now is used for and what it is, but why should investors care?

Dan Weir:

Investor should care because of the growth demand. There’s lots of graphite in the world. Again, you’ve got to look at places that have been producing graphite for over 100 years. Brazil is a country that produces lots of graphite. Madagascar has been producing graphite for well over 100 years. You have to ask yourself why. Why can Brazil and Madagascar compete with China all the time? It’s because of this saprolitic or saprolitic is just a fancy word for weathered material. It’s very simple to go in and mine graphite in countries that have high temperatures and get a lot of rainfall. Certain area is Madagascar and certain area is Brazil, in particular, have this effect. You get this weathering of the rock. In our case, on average, it’s about 30 meters deep. Where simply, you go in with an excavator, you dig it up, and you can process it and produce it.

Again, the other bonus about our project is, we’re 50 kilometers to a port, on a paved highway. We believe that we’ve got a very exciting project. There’s a lot of development work to continue to move it forward but we’re moving very quickly to do that.

Maurice Jackson:

DNI Metals is always working laboriously to increase shareholder value. You just issued two press releases this week. Let’s discuss the first entitled, “Graphite Project Updates.” What can you share with us about the drilling that would get us all excited?

Dan Weir:

DNI completed a drilling program at the end of October. We had brought in a rig to do a 1,000 meter drill program, a diamond core drill program. What’s very important about using a diamond core rig, specifically, to look at graphite, graphite is like diamonds. If you have a diamond mind, you’re going to have small diamonds and you’re going to have large diamonds. The small diamonds, you’re going to use in the industrial space for drill bits, saw blades. The very large diamonds, which are very rare, you’re going to use for jewelry and worth a lot of money. Graphite is identical to that. You’ve got fine material and then you’ve got these very large flakes. The larger the flake, the more valuable it is. Now, there are other aspects to that. Just like a diamond, a diamond can depend upon the clarity and the color of it.

When you’re looking at graphite, it is the carbon content or the purity of it that also is important. We’re lucky in Madagascar that the graphite there, a large percentage of it, is large flake, which makes it more valuable than a lot of other deposits in the world. We are very lucky. Low cost because of the saprolite and because we have a large percentage of the large flake. Now, back to my drilling. We used a diamond core rig to go in and bring up the samples. Because what we wanted to do is, we wanted to keep intact those flakes, okay, so that we could do a proper economic assessment of our property because again, if we maintained the flakes, then you can extract the larger flake and figure out what percentage it is. You’ll use that in an economic assessment. Again, the more larger the flakes, the more valuable your property.

Other people will drill these type of deposits just using an RC rig or an air-core rig. The RC, one of the problems with it is, is when you’re drilling with an RC rig, it destroys the flakes. You can’t get a proper flake size distribution. We’re very excited that we completed the drill program. We’ll have drill results out shortly on the back of some of our numbers on that. We’re also very excited that we believe that we’ve completed enough of the drilling now to complete a resource study. We believe in the first part of 2018 that we will have the resource study out. By the way, it’ll be to 43-101 Standards.

Maurice Jackson:

All right. Can you give us an update on the trenching as well?

Dan Weir:

The trenching, we completed the trenching last week. All the samples have been taken from the trenches. We did a total of five trenches. Some of them were up to 160 or 170 meters long. The great thing about the trenching is, we trenched, we drilled within a pattern of about 900 meters in length. We trenched outside of that 900 meters and we found a beautiful graphite in those trenches. What we’ve done by doing a bunch of the trenching is, we’ve extended the length of the zone or the mineralization of the graphite. We know that it’s both open north and south from where we are. We’re very, very excited about that. The trenching, also, is a great tool. The last trench we dug, it was four to five meters deep. It was all dug by hand. It was great.

All the locals, it’s great to be able to hire locals and give them jobs. A lot of these people are extremely, extremely poor. They love the fact that we’re there and giving them jobs. We could’ve brought excavator in there and dug it all up. We could’ve got it done faster and cheaper by doing it with an excavator, but it was really great to be able to work with the locals. They are amazing people. We love working with them. Giving them a job was fantastic.

Maurice Jackson:

I can attest to that. I’ve been there two times with you, Dan. Thank you for conveying that. Question for you here as well, how much bulk sampling have we collected?

Dan Weir:

Graphite is very unique. People try and use the same methodology when you’re exploring for graphite as a gold deposit. A gold deposit, you go and you drill it off, you do a resource report and you’ll have X amount of ounces. You can then take those ounces that you have and extrapolate on that and say, “Okay, if we have 1 million ounces and it’s worth $50 to $100 per ton in the ground, then our deposit is worth X.” The problem you have with graphite is, is that you can have these big massive resources and they’re not worth anything. I repeat that, they’re not worth anything unless you can actually sell the stuff. There were so many deposits around the world, graphite deposits that are stranded right now. Mostly because they’re too high class to compete with China or Brazil or Madagascar, but secondly, they don’t have offtake. They’re not making sales on this.

What you have got to do is, you’ve got to take samples. In this case, we collected 90 tons of material, 45 tons with two big zones on our property. With one, we called, The Main Zone and then we’ve got a Southwest Zone. We took 45 tons from each one of those zones. We then took and separated out 20 tons from each zone and put them in containers. Remember, graphite material around the world is all shipped 20 tons at a time in a 20-foot container. We put them in these super sacks and we ship them to India. I was in India in October. What we have found is, there’s a huge demand for graphite, right now, in India. Actually, in a lot of places in the world, there’s a huge demand for graphite, but specifically in India, the demand is increasing. We shipped 40 tons over to India. They’re going to process it and give us all the results from that. It will also allow us to have some fairly large samples as well. We’ve left the other 50 tons in Madagascar.

Right now, it’ll be sitting at a location near the port. That if, we need to do any other further testing, it’ll be very simple and easy just to ship it out. That’s why we collected the 90 tons.

Maurice Jackson:

All exciting news here. When I was in Madagascar with you in August, I recall that DNI was having the environmental survey conducted. What is the status on that?

Dan Weir:

Yeah. It’s very exciting. We completed and filed, very importantly with the government, the environmental study or the EIS. That was filed for the first property last week. Our new property, the Marofody property, it’s going to be filed this week or early next week. It’s a report that’s about 500 pages long. When you were there, Maurice, there was biologists out on site that were going through the property, checking on wildlife, making sure that there weren’t any endangered species that we were going to bother. Some people have claimed that we’re in the middle of a rainforest. That is totally incorrect. We’re in and around all sorts of small farmers that slash and burn the landscape, plant, fruit trees, and other things and then pick the fruit and live off of that fruit. They also have rice patties and stuff as well, but that’s how they live. There is no jungle that we’re destroying or anything else when we come in to do the mining. All of that has been filed. We should hear back from the government here very soon on that. That’s all we need, really, to go start mining, Maurice, which is very exciting.

Maurice Jackson:

Very exciting, very encouraging, and congratulations. You referenced Marofody here. Just give us a quick project update there please.

Dan Weir:

Towards the end of October, we closed on a second property called, The Marofody Property. It is adjacent to our first property. The first property’s name is Vohitsara. We now have contiguous land package of over 100 square kilometers. We know that the second property had a historical mining on it in 1939. There’s a nice pit there. The people that we bought it from had drilled three holes. There were some really nice intercepts in those holes. It was done to non-43-101 compliance. We can’t use those in a resource study or anything else, but it gave us some great indication and showed to us that there’s huge potential on the second property. In fact, we think that the second property could contain more graphite than the first one.

Again, I’m just speculating, but I’m telling you here that what we have seen on the second property and walked around on it, it looks absolutely phenomenal. The graphite is very similar to our first property with these big, large, massive flakes. We’re very, very excited about that second property as well, but I really will emphasize. The first property probably has enough graphite on it to that my grandchildren will probably see production from it on the first property. The second property is almost like a slam dunk for us. Now, we become having this big, massive land package, no immediate neighbors and having what I am trying to do is build a great graphite producing company or mining company and moving this company forward.

Maurice Jackson:             I just want to touch back on Marofody here. The historical mine there, was that alluvial?

Dan Weir:                           Yes. Traditionally, what happened in Madagascar is, you had French families that operated mines. There was four operations. What they would do is, they would go out and when they saw outcroppings of graphite, they would take and dig down somewhere down to about 5 to 10 meters in the outcropping, take the material back to their centralized processing plant, then move on to another area. The first property that we have, Vohitsara, we found that there was about five small pits throughout the property. The second property, I know of two and I’m likely as we continue exploring on it, it will find other small pits on it as well.

Maurice Jackson:             All right. In reference to Marofody here, are there any reversionary interest? Meaning, 100% owned by DNI Metals.

Dan Weir:

Both of our properties are 100% owned by DNI. Nobody else has any interest in either one of our properties.

Maurice Jackson:

Switching gears. Dan, can you comment on this letter of default to Cougar Metals issued this week?

Dan Weir:

What I’m going to say, Maurice, is that you should reference our press release on December the 1st. That would give all of the details of the notice of default to Cougar. I must emphasize that Cougar has until Friday to rectify some of the defaults that they have. Until then, I really don’t want to discuss anything further with that. Again, please reference our press release that we put out on December the 1st.

Maurice Jackson:

All right. Now, Dan, what keeps you up at night that I forgot to ask?

Dan Weir:

A couple things. I started at DNI in January of 2015. We knew that graphite prices were going to start to move higher. We knew that the demand for electric cars and the demand for cell phones and computers and everything else was going to explode. We knew that graphite as a component in a lithium-ion battery was very, very important. We knew that that was all going to happen. We were very excited about getting into the graphite space. I continued to be excited. Things are coming true that we always knew was going to happen. Graphite demand is exploding. Electric cars are exploding.

Here in the Toronto area, you try and go and buy an electric car or a hybrid car, right now, pretty much every dealership, it doesn’t matter whether it’s GM, Ford, Tesla. It’s very difficult to even buy one of these cars right now because they’re in such high demand. All the car companies are scrambling right now to build and design and engineer electric cars. That’s all the way from Porsche, all the way to every other car company that’s out there. Everybody is scrambling to get electric cars because of the demand. It’s great that we can do that. We know that it’s very important to get into production as fast as possible. That is why we are going out and moving forward with building a pilot plant. It will be a small scale commercial plant that we’ll put in operation. We said in our press release and I gave an update to the market on December 4th, and please, I want everybody to refer to that too. It really gives a full update of our plans and what we’re doing and how we’re doing it and moving that forward.

The pilot plant will be containerized, built here in Ontario, Canada and shipped over to Madagascar. Our goal is to have that going in the first half of 2018. From there, as we keep working with our offtake partners and potential offtake partners, the goals is to build, then a full commercial plant somewhere towards the end of 2018, early 2019. We know it’s extremely important to be a first mover. We know that because of the low capex and our low operating cost, that we have a very strategic advantage over everybody else. Now, I will emphasize that we have not completed preliminary economic assessment or feasibility studies. We will be working on those in conjunction with all of this. When I say low cost and low capex, that’s just on the premise that we’re working in the saprolitic type deposits. It’s why we went to Madagascar in the first place because we know that there are lower cost, but again, we … I’ve got my legal head on here right now, until we actually put out those numbers, I have to be very careful in what I say out here, okay?

Maurice Jackson:

Those numbers, we are expecting them again in the first quarter. Is that correct?

Dan Weir:

That will be for the resource study. The PEA will follow after a resource study. Now, as part of that, in 2015, towards the end of 2015, when it was almost impossible to raise money in the mining industry, the other thing we realized was that there’s going to be a huge demand out here for lab work. What we’re seeing at the lab that we’re using and other mining … when I say lab, I mean a testing facility for mining samples and graphite, in general. Whether it’s gold, graphite, it doesn’t matter. They’re all running at full tilt. At the end of 2015, we tried to buy a lab here in Mississauga. The market didn’t understand what we were trying to do. I’m very disappointed that we couldn’t put the money together.

Now, it was pretty much impossible to raise money in 2015. It was understandable, but man, it would’ve been great to have owned that lab right now because it would be cranking out lots of money. What we’ve done since then, and this has just happened over the last month, we’ve rented some space. We’re setting up our own small lab where we can do some of the float test and other simple tests on graphite because we know how important that is to be able to provide samples, to provide the proper flake size distribution within your deposit and being able to, again, provide proper samples to your clients. That’s why we’re moving forward with that but I’m still really disappointed that we couldn’t buy that big full on lab. Many of my investors keep telling me, I need to stop talking about that and focus on the graphite, so that’s what we will do.

We are focused 100% on our two, and I’m going to emphasize this again, Maurice, 100% owned graphite deposits in Madagascar. We are moving them forward and we’ll continue to do that and we’ll keep working hard for our shareholders as we do all of that.

Maurice Jackson:

Well, we look forward to a very promising 2018. Dan, if investors want to get more information about DNI Metals, please share the contact information.

Dan Weir:

Yes. You can always get a hold of me. My cell phone number is 416-720-0754. That’s 416-720-0754. You can email me at danweir@dnimetals.com. That’s danweir@dnimetals.com or as you’re going to say, Maurice, come on say it.

Maurice Jackson:

What’s the website?

Dan Weir:

The website is www.dnimetals.com.

Maurice Jackson:

All right. Last but not the least, please visit our website, www.provenandprobable.com where we interview the most respected names in the natural resource space. You may reach us and contact@provenandprobable.com. Dan Weir of DNI Metals, thank you for joining us today on Proven and Probable.

Dan Weir:

Thank you, Maurice.

Maurice Jackson:

All the best, sir.

Speaker 3:

Thank you for joining us today on Proven and Probable. Remember to like and subscribe for more conversations with the most respected names in the natural resource space. Check out our website at www.provenandprobable.com. The information presented on Proven and Probable is provided for educational and informational purposes only, without any express or implied warranty of any kind including warranties of accuracy, completeness, or fitness for any particular purpose. The information is not intended to be and does not constitute financial, investment, or trading advice or any other advice. You should not make any financial, investment, or trading decision based on any of the information presented without, first, undertaking independent due diligence and consultation with a professional broker or competent financial adviser.

Proven & Probable

Maurice Jackson

All Rights Reserved.

The Information presented in Proven and Probable is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The Information contained in or provided from or through this forum is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information on this forum and provided from or through this forum is general in nature and is not specific to you the User or anyone else. YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED ON THIS FORUM WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A PROFESSIONAL BROKER OR COMPETENT FINANCIAL ADVISOR. You understand that you are using any and all Information available on or through this forum AT YOUR OWN RISK.”

Be the first to comment on "{INTERVIEW} DNI METALS – Important Project Updates"

Leave a comment

Your email address will not be published.


*