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DNI Metals presentation march 2017
- 1. DNI METALS INC. Graphiteto fuel the Clean Energy Revolution Madagascar Graphite Property Lowest Cost Highest Margin Large Flake Near Term Production 1 Graphite Mine Graphite Sales
- 2. 2 This material hasbeen prepared as a matter of general information. It is not intended to be a complete description of any security or company mentioned and does not constitute an offer to buy or offer to sell, or the solicitation of an offer to buy or sell any security. All facts and statistics are from sources believed reliable, but are not guaranteed as to accuracy. Some of the information in this document may contain projections or other forward‐looking statements regarding future events or the future financial performance of the Company. We wish to caution you that these statements are only estimates and that actual events or results will likely differ materially. Axiom Capital Management has been engaged by the Company to assist the Company in capital raising. Axiom will receive a cash and equity fee upon success. For further detail, please see the complete set of closing documents. This presentation contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include, without limitation, statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of the Company. These risks and uncertainties could cause actual results and the Company’s plans and objectives to differ materially from those anticipated in such information. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. The Company assumes no obligation to update forward-looking information should circumstances or management’s estimates or opinions change. DNI metals Inc.
- 3. GRAPHITE PROJECT WISHLIST DNI Metals 1. Team YES-BUILT GRAPHITE MINES 2. High Grade YES-3-30% from trenching programs 3. Large Flake YES-62-67% large flake 4. Low Cap-Ex YES-SAPROLITE-NO GRINDING 5. Low-Cost YES-SAPROLITE-NO GRINDING 6. Friendly Mining YES-$9 BILLION SPENT IN Jurisdiction MADAGASCAR IN PAST 5 YEARS 7. Infrastructure YES-50KMS TO A PORT, PAVED ROAD 8. Permitted YES 9. Customers YES-BUILDING THROUGH WHOLESALE 3 Graphite Mine The Vohitsara Graphite project (Madagascar) met the criteria Purchased by DNI June 2015
- 4. No Primary Grinding Free Dig FloatingGraphite MADAGASCAR ADVANTAGE SAPROLITE – SOFT OR FRIABLE ROCK 4 HARD ROCK DISADVANTAGE Drilling EXPENSIVE Blasting EXPENSIVE Grinding EXPENSIVE Loading Floating Graphite Lower Capex and Opex No Blasting No Drilling Saprolitic Graphite Ore 10% of world’s production 53% of world’s reserves Note: China is the largest hard rock producer, low cost Saprolite deposits have a cost advantage over China. Graphite Mine
- 5. QUOTE : JOHN HYKAWYOF STORMCROW CAPITAL • How do you think junior graphite companies will be able to compete with Chinese pricing? • JH: The only way they’re going to be able to do it is two factors, really. It’s type of deposit and the old adage of location, location, location. So, producing in a very remote location, even with a deposit that’s really high-quality but in hard rock is probably a lost cause. What we’re going to be looking for are fairly high-grade deposits, hosted in friable rock or in sediments, in clays, so that the mining required is very inexpensive, the processing is available, and hopefully this deposit is also close to the coast or close to highways so it can be transported out relatively simply and relatively inexpensively. • Interview with Investing News Network, June 22, 2016. 5
- 6. WHERE ARE THEWORLD GRAPHITE PROJECTS? Weathered Deposits SAPROLITE (hot, wet climates) -Madagascar -Brazil -Tanzania -Mozambique Hard Rock -Canada -USA -Sweden -Russia -China -Germany 6 Graphite Mine
- 7. DNI GRAPHITE DEPOSITMADAGASCAR • Permitted • 63 square kms • Main Zone 3 kms long • Highway access • SAPROLITE • Stratmin sold their property for $15 million PRE-drilling 8 Graphite Mine ONLY 50 kms to port
- 8. DNI GRAPHITE DEPOSITMADAGASCAR * Trenching and Geophysics program complete * Confirmation of Large/Jumbo flake, high quality Graphite Next Steps: 1. Resource / PEA - 6 to 8 months - Cost U$1.2 million 2. Production - late 2017 - Cost U$10-15 million 8 Graphite Mine
- 9. DECEMEBER 2016 DNI SIGNSAGREEMENT WITH COUGAR METALS • Cougar owns 8 drill rigs • Cougar will drill, complete a NI 43-101 resource report by June 30, 2017 and a NI 43-101 PEA by October 31st 2017, to earn 49% • Drill rig is on its way to Madagascar. • Drilling to start in March, 2017. 9
- 10. FLAKE SIZE MATTERS 10 Graphite Mine Larger flake means higher marginsFineand Med Flake $500-$950 per Mt Large and Jumbo Flake $1,400-$2,500 per Mt Note: Purity also effects the price
- 11. THE DNI ADVANTAGE AHIGH PURITY LARGE FLAKE (67.4%)* WORLD CLASS DEPOSIT DNI Madagascar - Graphite Prices At Mine Site – Carbon Content 90-98% FlakeSize Microns Mesh Flake Dist.% Assay TGC% Price(US$/t)1 TargetMarket SuperJumbo >500 30Mesh 25.3 97.9 2,500 Expandable Jumbo 300-500 50Mesh 29.5 96.7 2,000 Expandable Large 180-300 80Mesh 12.6 91.3 1,400 Expandable /Refractory Medium 150-180 100Mesh 9.9 93.9 950 Battery-grade spherical Small +105 140Mesh 5.8 94.9 700 Battery-grade spherical Fines -105 -140Mesh 16.9 90.0 500 Refractory Production Cost $300-500 Shipping $200 Total $500-700 Average Basket Price 1,617.80 Mine starting at 12,000 t/y Resource and PEA U$1.2 million Capex Mine U$12 million Note: These are all Projections. Pricing is from Industrial Minerals, other company PEA’s and Benchmark Minerals. The Flake Dist.% and TGC were results from trenching programs completed on the Madagascar Project. 11 Graphite Mine *Disclaimer: Testing was done at the Lab we are acquiring but prior to LOI, See DNI Press release dated Oct. 7, 2015 All testing was done to NI 43-101 standards.
- 12. MADAGASCAR IS AMINING FRIENDLY JURISDICTION President Barack Obama and First Lady Michelle Obama greet, His Excellency and Mrs. Hery Rajaonarimampianina President of the Republic of Madagascar Aug, 5, 2014 Over the past 5 years an estimated $9 Billion has been invested in Madagascar by major mining companies. Sherritt, Kores, Sumitomo and Rio Tinto 12 Graphite Mine
- 13. WHICH GRAPHITE PROJECTIS MOST ATTRACTIVE? Company Location Grade % 30 Mesh $2500 % 50 Mesh $2000 %80 Mesh $1400 %100 Mesh $950 %-100 Mesh $550 % large Flake Basket Sales Price U$/t Cash Cost/Mt Tonnes /year Distance To Port Permitted Capex Capital Cost U$/Mt Margin U$/Mt Mason Quebec, Can 17.2% n/a 22 14 17 47 36 $1056.00 U$376 51,900 200+km No U$123.8 million $2,385.36 $680.00 Focus Quebec, Can 15.1% n/a 12 28 37 23 40 $1,110.00 U$441 44,300 350+km No U$166 million $3,747.17 $669.00 N. Monde Quebec, Can 4.62% n/a 16.10 29.80 11.10 43 45.9 $1,081.00 C$660 50,000 130km No U$144 million $2,880.00 $421.00 Northern Ontario, Can 2% 22 38 34 6 n/a 94 $1,843.00 U$640 20,800 462km No U$84 million $4,038.46 $1,2013.00 Energizer Southern Madagascar 6.13% n/a 23.6 22.8 6.9 46.7 46.4 $1,113.60 U$709 53,000 226km No U$163.7 million $3088.67 $404.60 Syrah Mozambique 20% n/a 8.5 12 11.5 68 20.5 $821.25 U$286(1) 350,000 512km Yes U$144 million $411.42 $535.25 Magnis Tanzania 5.4% 9 32 25 10 24 66 $1,442.00 U$559 220,000 200km U$269 million $1,222.72 $883.00 Alabama Graphite 10% oxidized layer First 3 years Alabama, USA 2.5% n/a 17.8 36.9 10.4 34.9 54.7 $1,163.35 U$764 5,500 3 years 300+km no U$43.2 million Year 1-3 U$83.2 in Year 3 $7,854.54 $399.35 Graphex Mining Tanzania 10.85% 1.9 24 22.5 6 45.6 48.5 $1,150.30 U$490 69,000 220km No U$73.8 million $1069.56 $660.30 DNI Metals Projections Western Madagascar 7-10% 25.3 29.5 12.6 9.9 22.7 67.4 $1,617.80 U$300-350 12,000 50km Yes U$12 million $833.33 $1,267.80 Large Flake is 80 mesh and larger Note (1) excluding royalties and corporate taxes Note: DNI’s projections, based on internal expertise, trenching results, and data from adjacent mines – Resource Study Not Complete 13 Graphite Mine DNI: 1. Highest potential Margin 2. Lowest Capex 3. Permitted
- 14. DNI GRAPHITE DEPOSITPOTENTIAL HIGH AVERAGE SELLING PRICE – LOW OPERATING COST Syrah,820 Mason,1060 NouveauMonde,1090 Energizer,1110 DNI,1620 Northern,1840 BASKET PRICE U$ PER MT Syrah,286 DNI,350 Mason,376 NouveauMonde,507 Northern,640 Energizer,709 CASH COST U$ PER MT 14 Graphite Mine Note: DNI’s projections, based on internal expertise, trenching results, and data from adjacent mines – Resource Study Not Complete
- 15. DNI GRAPHITE DEPOSITPOTENTIAL LOWEST CAPEX – HIGHEST MARGINS DNI,12 Northern,84 Mason,124 Syrah,144 N.Monde,144 Energizer,164 CAPEX U$ MILLIONS Energizer,400 N.Monde,420 Syrah,540 Mason,680 Northern,1210 DNI,1270 MARGINS U$ PER MT 15 Graphite Mine Note: DNI’s projections, based on internal expertise, trenching results, and data from adjacent mines – Resource Study Not Complete
- 16. NATURAL FLAKE GRAPHITEIS TAKING SHARE FROM THE SYNTHETIC Graphite 2.7 mt/yr Natural Graphite 1.2 mt/yr Amorphous 700k mt/yr Flake & Vein 500k mt/yr Synthetic Graphite 1.5m mt/yr Powders 600k mt/yr Electrodes 900k mt/yr Made from Oil Mined from Mother Nature 16 Graphite Mine Battery manufacturers used to prefer synthetic graphite for its superior consistency and purity. Today, natural graphite can achieves higher purity rates (99.9% vs 99.0%).
- 17. NATURAL IS BETTER,CHEAPER AND MORE ENVIRONMENTALLY FRIENDLY THAN SYNTHETIC 17 Graphite Mine Natural graphite (made into spherical graphite) US $7,000 per mt Synthetic graphite US $10,000 per mt Natural graphite offers: * better electrical and thermal conductivity; * 67% less energy consumed in manufacture; * 30% lower cost for use in Lithium Ion Batteries;
- 18. LITHIUM ION BATTERIES 18 Graphite Mine USgeological survey Flake Graphite demand forecast 6.1% Cagr 2016-2025. Li ion batteries have 10-20x more Graphite than Lithium!
- 19. 1 9 Expandable graphite markets •Fuel cells • Gaskets • Foil • Construction materials - flame retardant - replaces carcinogenic compounds 19 Graphite Mine EXPANDABLE GRAPHITE Large Flake expands better than small flake commanding much higher margins. DNI is 67.4% large flake* *Disclaimer: Testing was done at the Lab we are acquiring but prior to LOI, See DNI Press release dated Oct. 7, 2015All testing was done to NI 43-101 standards.
- 20. DNI – GRAPHITE WHOLESALE •Building customers. • DNI has confirmed orders for a minimum sales of 2,340 tonnes of graphite in 2017. • Goal to is to increase sales to 4,000 tonnes in 2017 and 10,000 tonnes in 2018. • DNI is buying the graphite from the 4th largest graphite producer in the world. They operate the largest graphite mine in the world, located in Brazil. • Like Madagascar, the Brazilian production comes from low-cost Saprolite. 20 Graphite Mine Graphite Sales
- 21. DNI – CSEDG7N – Frankfurt DMNKF – OTC Pink 40.7 million shares 25% owned by Mgmt., Board, and Advisors 10,600,000 warrants @ C$0.10 Expire July-Dec. 2017 375,000 options @ C$0.09 Expire July 2016-Feb. 2020 1,750,000 options @ C$0.06 Expire June 2021 Closing Price March 2, 2017 C$ .08 Market Cap. March 2, 2017 C$ 3.2 million 21 DNI Metals Inc. Mine Graphite Sales
- 22. BIOGRAPHIES –MANAGEMENT &ADVISORS 22 John Carter Special Advisor Process Engineer Has over 35 years experience in the metals and mining industries. Mr. Carter specializes in the engineering design and manufacturing of mineral processing equipment for mining operations and operators such as Timcal Inc., currently the largest natural graphite mining company in North America. Recently Mr. Carter served as Vice President of Engineering at Saint Jean Carbon, and VP Operations at Canada Carbon both junior mining companies. John has built over 200 mineral processing plants around the world, including 3 graphite processing plants. John Gillett Administrator Geology Has been involved in DNI’s Alberta Projects since 2008, and previously during the 1990’s. From 2003 to 2008 Mr. Gillett worked on DNI’s Utah, Nevada, and Arizona Projects. The Kiewit Gold Project 0.5% royalty is one of the Utah Projects Peter Eriksson Country Manager – Brazil Logistics Expert Mr. Eriksson is the Managing Director of SR Brazil., in Belo Horizonte, Brazil. He has lived in Brazil since 1993, and is fluent in Portuguese and English. Prior to moving to Brazil from Canada, Mr. Eriksson was the VP Business Development at Longview Capital. He has over 18 years in the natural resource industry. He managed a very successful Brazilian Import/Export Business. Steven Goertz Country Manager – Madagascar Geologist Mr. Goertz is the Principal of Hendry Consulting, a consultancy group servicing the resources and business sectors and is based in Madagascar’s Capital City, Antananarivo. A (Canadian / Australian) geologist and investor with over 30 years’ experience in various countries, Mr. Goertz has been based full-time in Madagascar since early 2007. During this period, he has developed an extensive local contact network of professional and administrative personnel within Madagascar’s government and business communities. Daniel J. Weir Chairman CEO, President Dan has worked for over 20 years at some of the top financial firms in Canada. He worked as an Institutional Equity Trader, and as a broker he managed over $500 million. Before joining DNI in November 2014, he was the Head of Institutional Sales at a boutique firm focused on financing Mining companies. Having raised millions of dollars, both publicly and privately, Mr. Weir has expertise at evaluating and financing mining deals. Dan has managed large high tech electrical and energy management projects, having owned his own electrical management firm. Dan graduated from the University of Toronto.
- 23. BIOGRAPHIES- BOARD OFDIRECTORS 23 Raymond E. Mitchell Director CPA, CA Ray Joined the Company in June, 2007, and has over 30 years of experience as a chartered accountant and senior executive. Mr. Mitchell has previously served as Senior Vice President and Chief Financial Officer for the Canadian Depository for Securities (CDS). During his 24 year career with CDS, he undertook a variety of senior roles, including Executive Oversight of the development of SEDAR. Prior to CDS, Mr. Mitchell was responsible for a variety of financial functions for a large Canadian trust company. He currently serves as CFO of Latin American Minerals (LAT-V). Daniel J. Weir Chairman CEO, President Dan has worked for over 20 years at some of the top financial firms in Canada. He worked as an Institutional Equity Trader, and as a broker he managed over $500 million. Before joining DNI in November 2014, he was the Head of Institutional Sales at a boutique firm focused on financing Mining companies. Having raised millions of dollars, both publicly and privately, Mr. Weir has expertise at evaluating and financing mining deals. Dan has managed large high tech electrical and energy management projects, having owned his own electrical management firm. Dan graduated from the University of Toronto. Dr. Ravi Gopal Director PHD, Engineer Ravi holds a Bachelor’s degree in Electronics and Controls and a Ph.D. in Physics and Instrumentation. He is a seasoned technology executive with a strong combination of technology and business development skills. Ravi has spent the past 25 years in clean energy technologies such as hydrogen, fuel cells and Lithium Ion batteries. Prior to founding PACEAS, a company driven by a vision to help accelerate the shift towards a sustainable environment and clean energy technologies, Ravi was the Vice President of Applications Development at Hydrogenics Corporation (NASDAQ: HYGS, TSX: HYG). Hydrogenics is a fuel cell manufacturer, based in Canada, Paul Hart Director MBA, CPA, CA Paul is a seasoned finance and operations executive with experience in the C-Suite, most recently as Chief Financial Officer and Corporate Secretary for Electrovaya Inc., a Lithium Ion Battery manufacturer based in Mississauga, Ontario, Canada. In addition to his experience in clean-technology, he has held senior financial roles with public companies (TSX, NASDAQ) in the software, internet and financial services industries where he has been responsible for strategic planning, corporate governance, finance and operations, mergers and acquisitions and capital markets in North America and Europe. Keith Minty Director Mining Engineer, MBA Keith has more than 30 years professional experience in mineral resource exploration and development in precious and base metals, industrial minerals. Mr. Minty obtained extensive graphite technical and operating experience at both North Coast Industries (now Northern Graphite Corporation) Bissett Creek Graphite and Cal Graphite Corporation (now Ontario Graphite Inc.) Kearney graphite mine and has experience of in the development of several past and new Sri Lanka graphite projects. Mr. Minty has had the opportunity of conducting Madagascar precious metals project valuations and is knowledgeable of the political and social requirements associated with Madagascar project development and operations.
- 24. THE DNI TEAMIS DEDICATED AND COMMITTED TO BEING A FULL PARTICIPANT IN THE CLEAN ENERGY REVOLUTION. Contact: Daniel J. Weir, CEO Tel: 416-720-0754 danweir@dnimetals.com 24