Aug/2014 DNI METALS INC Portfolio of 7 Fracsand Projects Athabasca Region, Alberta, Canada – 1,218 sq km - DNI 100% Teck:Frontier DNI Sunshine Oilsands: Harper Shell: Pierre River Suncor: Fort Hills Athabasca Oil Sands: Birch CNRL: Horizon Value Creation: Terre deGrace CNRL: Birch Mountain CNRL: Horizon Shell: Muskeg River Mine Imperial Oil: Kearl Value Creation: Terrede Grace Shell: Jackpine Mine Husky: Sunrise Thermal Sunshine Oilsands: Legend Lake Sunshine Oilsands: West Ells Athabasca Oil Sands: Leduc TAGD Total: JoslynNorth Mine Syncrude: Syncrude Mine Syncrude: MildredLake Suncor: MacKayRiver Athabasca Oil Sands: Dover West Dover Operating Corp: Dover MarathonOil Corp: Birchwood Suncor: Lewis Sunshine Oilsands: Thickwood Suncor: Voyageur South Southern Pacific: STP MacKay Athabasca Oil Sands: MacKay River Shell: Woodenhouse Suncor:Suncor Oil Sands Suncor: Voyageur E-T Energy: Poplar Creek Fort McMurray Ivanhoe Energy: Tamarack Ivanhoe: Tamarack Alberta Oil Sands: Clearwater West Value Creation: Tristar Alberta Oil Sands: Hangingstone Laricina Energy: Germain OpenPit Upgrader Oak Point Energy: Lewis Suncor: Baseand Millenium Athabasca Oil Sands: Dover West Clastics CNRL: Wabasc a Nor In-Si tu th Cenovus: Telephone Lake Suncor:Firebag Griz zly Oil Sands: Algar Lake Nexen: LongLake Laricina Energy: Saleski CNRL: Gregoire Lake Jacos: Hangingstone Koch: Muskwa Cenovus: Pelican Lake III N-Solv Corp: Dover Nexen: Long Lake Conoco Phillips: Surmont Suncor: MeadowCreek MEG Energy: Surmont CNRL: Brintnell OpenPit In-Situ Upgrader Connacher: Algar CNRL: South Brintnell Cenovus: Pelican LakeGrand Rapids Cavalier Energy Inc:Hoole Suncor: Chard Connacher: Great Divide Safe Harbour Statement: This presentation includes forward looking statements. While these statements represent our best current judgment, they are subject to risks and uncertainties that could cause actual results to vary. For further details, see NI-43-101 Technical Report1and DNI’s Annual Information Form available from DNI’s website and SEDAR www.dnimetals.com This presentation was prepared by S.Sabag, DNI’s president and Qualified Person for this Project. Statoil: Comer 30km DNI TSX-Ven DNI Alberta Fracsand Projects Fast Expanding North America Tight Oil/Gas Plays 80%+ of Fracsand Price is Cost of Transport Access & Proximity to Market is an Imperative Users DNI Sources & Rail incl “greenfield” projects SBH Property *Only partial selection shown for USA suppliers 2 DNI Alberta Fracsand Projects Expanding Western Canada Tight Oil/Gas Plays DNI Property Within 400km-600km of Canadian Tight Oil/Gas Plays Access to Roads + Rail 3 DNI Alberta Fracsand Projects Large Land Position – 1,218 sq km – 7 Sand Projects Buckton Deposit PEA Mineable Resource 4.5 billion tonnes Ni-U-Zn-Cu-Co-REE-Y 22 sq km – “Open” Pelican Formation Sandstone Exposed Buckton South Zone Along Erosional Edge Of Birch Mountains D Inferred Resource 497 million tonnes 3.3 sq km - Open I N Fron tier - Te ck Equ inox - Te ck re She ll Pier 2nd White Speckled Shale Fm Exposed or Near Surface 20m-40m thick Labiche Shale Fm Exposed or Near Surface 13m-100m+ thick Ho r izon - CN RL ja Ad O nt e c d an S il s M 7 Fracsand Projects In ~100km Corridor Intermittent Pelican Fm Surface Exposures Pelican Formation Sandstone 30m30m-60m 4 Oil Sands Deposits 40m-60m thick es in DNI Alberta Fracsand Projects Portfolio of Projects - Good Infrastructure+Access 450,000 to ne Tp102 So Ronald Lake ut h DNI Tr ib 6,410,000 S GO d 26TH BASE LINE GOS Cr. Cr . on Cr 6,390,000 Ath ab Asphalt Cr. . Mid Cr. ha ba sc a Pierre R. Tar R. R. 6,350,000 or iz on w y to 59km urray Ft. McM H 63 Fort Fort MacKay MacKay 10km R14 R13 R12 R11 R10 120km by Roads to Fort McMurray Railhead 6,340,000 H Gas Distribution McClelland Lake us ke g Edg e n ya s al on an elic R15 ew d Tp095 a i os Pierre R. p hi tC or Roads-Highway ad Ro Joslyn Cr. o Er F R Sampled 2014 P At 174-B Tp097 es in el p Pi r te in W M Tp098 Ri ve Cr as 25TH BASE LINE G 5 mu nd s R. 174-A Tp096 r t al Ey Mid Cr. r Ta NAMUR LAKE IR R16 asc a a o R ph As s ad Ro Gardiner Lakes FrAccess_2014-08-06.srf Buckton Airstrip Big Cr Big Island Birch Lake Mountains Wildland Tp094 Birch Tower and Airstrip ake d L 6,400,000 L 6,380,000 st ~100km Corridor Of Intermittently Exposed Targets 6,370,000 ne 6,360,000 e gl Ea s Tp101 IR 201G Buckton Cr. Cr Buckton Portfolio of 7 Fracsand Projects (Large Properties) gR Tp100 CHIPEWYAN Dianne Lakes a Fireb San Tp099 CHIPEWYAN IR 201F Trib BucktonTower Sampled 2014 Pelican Tr ib li ay Gr or McIv 480,000 6,430,000 ys Ri ve r G re 470,000 PARK 27TH BASE LINE Cr ng Athabasca Minerals McIvor Fracsand Project Tp104 Trib Pelican 460,000 NATIONAL C KR st We r Alice C Tp103 440,000 6,420,000 430,000 BUFFALO R09 6,330,000 420,000 WOOD Rive r 410,000 Two Areas Sampled 2014 DNI Alberta Fracsand Projects Typical Large Pelican Sandstone Exposures Intermittent Exposures ~1km+ ea In ~100km Corridor Erosional Edge of Birch Mtns Poorly Consolidated Clean Coarse White Sand Sections Tar River Clean Coarse White Sand Sections 6 Tar River Project Area DNI Alberta Fracsand Projects Typical Large Pelican Sandstone Exposures Intermittent Exposures ~1km+ ea In ~100km Corridor Erosional Edge of Birch Mountains Poorly Consolidated Clean Coarse White Sand Sections Asphalt Creek Clean Coarse White Sand Sections 7 Asphalt Creek Project Area DNI Alberta Fracsand Projects Typical Pelican Sandstone Exposures Pelican Sandstone Being Explored by Others For Fracsand Adjacent to DNI Property Clean Coarse Silica Horizons Fracsand Being Produced From Equiv Formation Peace River, Alberta 8 DNI Alberta Fracsand Projects Pelican Sandstone is Under Entire Property 440,000 Ronald Lake Tp102 h Tr ib DNI IR 201G Buckton Cr. 6,410,000 GOS Cr. Big Cr ph As nd so n Cr . Asphalt Cr. Gardiner Lakes r Ta ha ba sc a Mid Cr. NAMUR LAKE IR Pierre R. R. 174-B At 174-A Tp097 F Mid Cr. W t in er Pierre R. hi tC or w pe n ya McClelland Lake Tar R. Joslyn Cr. R. Tp096 25TH BASE LINE H or iz on Hw y Oil/Gas Well Tp094 63 Pelican Formation Outcrops & Sampling Fort MacKay Fort MacKay R16 R15 003_Permits_Expiry_Dates_2013-04-23.srf 9 R14 R13 R12 Extends Under Entire Property Typically 30m-60m Thick Confirmed In Downhole Info ~600 Oil/Gas Wells 6,350,000 Tp095 M us ke g Sampled 2014 Pelican Sandstone ad Ro 6,370,000 . Cr Ey mu Ri ve r t al Big Island Birch Lake Mountains Wildland Tp098 6,390,000 e R11 6,340,000 ak d L Ath ab asc a Birch Tower and Airstrip San ag R Fireb 26TH BASE LINE Cr 6,400,000 L Collective Potential New Fracsand District 6,380,000 st ne 6,360,000 e gl Ea 10km R10 R09 6,330,000 Tp101 CHIPEWYAN Dianne Lakes Cr Buckton S GO Tp100 Cr ng So ut BucktonTower Sampled 2014 CHIPEWYAN IR 201F Tr ib 6,430,000 on e 480,000 li ay Gr Tp103 ys t 470,000 PARK 27TH BASE LINE Trib Trib or McIv 460,000 Ri ve r Tp104 G re C KR st We Alice Cr Tp099 450,000 NATIONAL 6,420,000 430,000 BUFFALO River 420,000 WOOD Athabasca Minerals 410,000 20m-30m Coarse Sand Sections DNI Alberta Fracsand Projects Downhole Geophysics & Logs - Confirmation Prospective Fracsand Horizons in Downhole Logs & Geophysics Large Database ~600 Oil/Gas Wells Localized Channels Coarse Clean Sand Good Yields 16/20/40 Mesh Variable 40/70 Mesh Coarse Sand Sections Confirmed By DNI 2014 Sampling at Two Project Areas 10 DNI Alberta Fracsand Projects Initial Sampling 2014 – Tar & Asphalt Projects 430,000 480,000 Riv er Pelican Tri b CHIPEWYAN IR 201F Ronald Lake th BucktonTower CHIPEWYAN Dianne Lakes IR 201G Buckton Cr. Cr River ca McClelland Lake a Tar R. us ke g 6,350,000 6,340,000 w y to 59km Murray Ft. Mc H 63 R13 R12 R11 R10 R09 Good Roundness & Sphericity 6,330,000 H ori zo n Fort Fort MacKay MacKay R14 Clean Coarse Sand Sections Confirmed M Edg ad Ro s Tp095 d Tp094 ip Ch a e o Tp096 R R15 r te in Joslyn Cr. al on si 10km R16 W Pierre R. rt Fo n ya ew 6,380,000 Mid Cr. Pierre R. n lica Pe FrAccess_2014-08-06.srf Tar R. + Asphalt Cr Project Areas 6,390,000 Ath ab as Asphalt Cr. 6,370,000 Cr. R. 174-B Tp097 un ds on es o Er Initial Sampling 2014 6,360,000 s d a o Tp100 R Cr. s 174-A lin pe Pi Buckton Airstrip Ey m Mid Cr. . rR Ta NAMUR LAKE IR GOS Cr. Big Cr ad Ro Gardiner Lakes 26TH BASE LINE Cr Birch Tower and Airstrip La ke Big Island Birch Lake Mountains Wildland as 25TH BASE LINE G GOS ag R Fireb Tar R. Sampled 2014 6,400,000 L R iv er st sc ne gle ab a Ea Ath Tp101 6,410,000 Buckton r gC DNI Tri b alt ph As Tp099 ne 470,000 PARK 27TH BASE LINE Trib So u Tp102 r McIvo 460,000 ylin Gra Athabasca Minerals McIvor Fracsand Project Tp104 Trib Pelican Sand Tp098 450,000 NATIONAL G re ys to C KR t Wes Alice Cr Tp103 440,000 BUFFALO 6,430,000 420,000 WOOD 6,420,000 410,000 Road Access Tar River Project se ar Co nd Sa ion ct Se Tar River Project Area 11 Samples Review Ongoing Analytical Testwork Pending DNI Alberta Fracsand Projects Sand Pics – DNI 2014 Sampling DNI Sands – Tar River & Asphalt Creek Projects Initial Sampling Size fraction concentrates from rough sieving under field conditions. Better concentrates achievable under laboratory conditions 12 Other Sands – Canada & US Third-Party concentrates from sieving under laboratory conditions DNI Alberta Fracsand Projects What Makes a Good Fracsand Deposit? Sand Quality API Specs • Quartz (SiO2)% >99% SiO2 • Size Fraction Quality Sand 20/40 40/70 70/120 mesh • Roundness & Sphericity >0.6 at the Right Place • Crush Resistance max fines% @4,000-6,000 psi 20% 6/12; 10% 30/50 14% 20/40; 6% 40/70 • Acid Solubility <2%-3% solubles • Turbidity Deposit Quality • Location - Markets • Size • Road Access • Rail Access • Power/Gas 13 Not Too Small Not Too Big DNI Alberta Fracsand Projects All Fracsands Not Created Equal Consumption Mostly Tier 1 & Tier 2 No Source of Tier 1 in Canada Mid-continental US Sands are entrenched in the market - prized for their high roundness, sphericity and good crush qualities. Tightening US supply, freight bottlenecks, new US work safety regulations and transborder transport cost savings are shifting market share to Canadian deposits nearer Canadian Oil/Gas plays. All Oil/Gas Basins Don’t Need The Same Sand Coarser Sands Have So Far Dominated Market Emerging Canadian Basins Shifting To Finer Sands *Both tables after J.Renkes, Proptester Inc, Canadian Fracsand & Logistics Conf, Calgary, April 2014 14 DNI Alberta Fracsand Projects Fast Expanding Canadian Demand Fast Expanding Demand Current Supply Capacity in Canada is ~0.5MM-1MM tpa New Greenfield Projects 2014 - Collectively Only ~5MM tpa Capacity MidMid-continental US Sands are entrenched in the market prized for their high roundness, sphericity and good crush qualities. Tightening US supply, freight bottlenecks, new US work safety regulations and transborder transport cost savings are shifting market share to Canadian deposits nearer Canadian Oil/Gas plays. Where will the new sands come from? 15 *Claim Post Resources Corporate Presentation 2014 and Hart Energy 2013 DNI Alberta Fracsand Projects DNI Next Steps - Sample & Test Sand Quality API Specs • Quartz (SiO2)% Focus of DNI’s 2014 Sampling & Testing Program • Size Fraction Initial sampling completed July 2014 Analytical Testwork Pending • Roundness & Sphericity • Crush Resistance Drilling and Resource Definition 20142014-2015 • Acid solubility Washed out in processing • Turbidity Washed out in processing Deposit Quality ! Location - Markets … 16 DNI projects within 400km-600km of emerging tight Oil/Gas Basins ! Size … Portfolio of 7 Projects (aka Properties) over a 100km strike corridor – 1,218 sq km ! Road Access … Good access at south end, logging roads, to highway, 5km from Horizon Mine Pit ! Rail Access … 120km by road/Highway from Fort McMurray railhead ! Power/Gas … Gas distribution network, power DNI METALS INC www.dnimetals.com DNI : TSX-Ven 17 25 Adelaide Street East - #1711 Toronto, ON, M5C3A1, 416-595-1195
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