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In this latest episode: Dan Wier, the Executive Chairman for DNI Metals sits down with Proven and Probable to provide shareholders updates on the Flagship Project Vohitsara located in Madagascar. Specifically, shareholders will have the latest updates on mapping, roads, drilling, and trenching as Mr. Weir walks shareholders through the latest mapping updates.
Maurice Jackson: Welcome to Proven and Probable where we focus on metals, mining, and more. I’m your host, Maurice Jackson. Our featured issuer has established himself to become one of the world’s leading graphite producers. DNI Metals trades on CSE symbol DNI and on the OTC, DMNKF. Joining us for a conversation is the Executive Chairman of DNI Metals, Mr. Dan Weir. Thank you for joining us today, sir.
Dan Weir: Good afternoon, Maurice.
Maurice Jackson: 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.
Dan, for first time listeners, what is graphite, where is it used, and why should investors care?
Dan Weir: Graphite is very common all over the earth. We know it best in being used in a pencil. That’s where everybody would have used it before. But you also have to remember that graphite touches everything or graphite has touched pretty much everything that you see in your life. Every piece of steel that is manufactured has touched graphite in some way.
Graphite is used to line the crucibles that melt the iron ore that ultimately makes the steel. Graphite also is used in the electrodes for melting steel because steel can be made two ways. One is used in burning coal to heat up the metal. The other way is using electricity. And graphite having very good cut activity principles, it’s used in the electrodes for melting the steel when they use electricity.
But in the future, the big growth demand for graphite is used in lithium-ion batteries. It’s one of the biggest inputs into a lithium-ion battery. In fact, Elon Musk put it this way. That lithium in a lithium-ion battery is really just like the salt in a salad. Graphite is anode in a lithium-ion battery. And again, it’s one of the biggest components. In fact, it’s the second large components besides the packaging of the plastic that holds the battery together.
Maurice Jackson: Thank you for that brief overview. Now, Dan, when we last spoke in May, you and I were returning from Madagascar visiting DNI Metals flagship project, Vohitsara. It has been a month. And I understand you just returned last week from Madagascar. Talk to shareholders about the latest developments beginning with infrastructure.
Dan Weir: So when you were there last time, Maurice, we were building our road. We’re very lucky because there is a paved highway that runs right through our property. Our property is 63 square kilometers in size in miles that we equate to what, maybe about 50 square miles is the size of it. So it’s a very large land package. We sit 50 kilometers or 30 miles from a port. I’ll show you a picture in a few minutes of exactly where it is in relationship to the port.
But we had to do was a build a 2-mile or 3-kilometer road off the paved road back to where the main zone of graphite is on our property. The main zone that we know of at this point in time, we’re sure that there’s going to be multiple other zones. But at this point in time, it’s our main zone that we’re focused on. In fact, as we put the road in, we had seen other layers of graphite or other potential zones as we’ve been putting the road in.
So it has been very exciting to see all of this developed. It has been two and a half years that I’ve been working on this project. It’s great to see that now, I can actually drive back to the main zone instead of having to walk all the way through that – through the jungle and everything else to get there.
And Maurice knows well that we walked in and out of there. It’s a nice walk but after years of walking back and forth through there, it’s kind of nice to be able to drive back to the main zone.
Maurice Jackson: Dan, let’s give our listeners a visual and let’s talk about the most important thing up in here which is drilling. So let’s give our listeners here a visual.
Dan Weir: Maurice, this is a map showing both Madagascar and where our property is in relationship to the port. As I mentioned earlier, we’re only 50 kilometers to the port. So I’m going to use my cursor here.
First of all, here is Madagascar. Madagascar is one of the largest islands in the world. It’s approximately 1,500 kilometers long and its widest point about 500 kilometers wide. Our property sits in this square area right here. So, this outside square is this square area, so central-eastern side of the island.
What’s very important about where we’re situated in the island is because of the other mining and the other material in this area. As you can see here, there is basically a ridge that runs right down along the eastern coast here. The wind comes in off the ocean from the east. And what happens is, is this ridge is about 1.2 to 1.4 kilometers high. So three quarters of a mile to almost a mile high.
What happens is as this warm, moist air comes in off the ocean, it dumps all the rain in this area. And you can actually kind of see on this small map here. You can see basically it’s all green along the coast and it’s quite drier throughout the rest of the country.
What’s important about that is when you have a hot climate where you get a lot of rainfall, you have withering of the material. When you have a withering of the material, it’s called saprolite. It’s the name of it. And again, all it is is a fancy word for a meaning. It has been hard rock that has been withered.
That’s how we differentiate what we’re doing in Madagascar with what you find in North America or what you would find in places like Germany, Norway, Sweden, and in fact, China as well.
So, when you have the saprolitic-type material, the withering of the rock can be anywhere from about 25 meters deep down to as much as 100 meters deep. In this area of Madagascar, we tend to find the withering goes 25 meters through about 50 meters deep. It is fantastic.
It’s very easy and what I mean by withering is, is it’s clay, sandy material where you can just comb with an excavator and dig it up and process it. You do not have to drill it, blast it, grind it up really fine before you process it.
Our capital costs are significantly lower because you’re not having to have all these different types of mills and grinding circuits. And our operating costs can be as much as half of what it is in a hard rock type deposit.
So, let me zoom in here just a little bit here and just sort of show you. This is our property. It’s an L-shaped property. Being a good Canadian, I call it a hockey stick. If you are Australian, you might call it a boomerang.
But you can see here this shape. And this is 63 square kilometers. The yellow line here is the national highway and it’s all paved and it goes right up to the main port for the country, which seats right here. So, we’re only 50 kilometers or 30 miles on this paved highway right up to the port itself.
Dan Weir: Maurice, now what I’ve been on this picture, I have zoomed in to a very small portion of the hockey stick or the L-shape part of our property. Over to the side here, you can see the highway that runs right up through here. From the highway over to where the main zone that we’re focusing on, if you went by the crow fly is approximately one mile.
Now, because it’s fairly hilly up and down, we built a new road that comes into here and the new road runs for about 3 kilometers or about 2 miles. All right?
So, let’s start and show you. Now, most of you don’t get excited about a road, but remember, I’ve been walking in and out of here on this black trail through here for two and a half years so it’s really nice to have a nice, new road that runs along here back to the main part of the property. It’s very exciting for me to see that all being developed.
So, what we did is that we had found a new zone that sat fairly close to the highway. So as we are putting the road in, we decided to drill some holes in this secondary zone that we have. There are other spots along on the road which in the future interviews, Maurice, I will show you some of these other spots and we’re going to sample some of those spots in the future. So I’ll come back to those. But there are other spots along the road, new type zones that we have found as we’ve gone.
What we have decided to do was drill off the secondary zone first as we continue to build and complete the road. And now, we’ve started drilling in the main zone.
But first of all, I want to focus on the secondary zone down over here. Now Maurice, if you remember, you went on to this secondary zone. And since you were there last, you saw one drill hole which was this one here being drilled. We drilled a total of 12 holes on this secondary zone.
What was very exciting was and I’m going to draw – I’m sorry, I didn’t want to do that. We’re going to draw where we saw the majority of the graphite. So these six holes in here is where we had lots of mineralization that came out of the holes. The other holes had a little bit of graphite in but these really showed large amounts of graphite in these drill holes.
We also right here have a cut in the road which is just showing this really dark concentration of graphite. So what we’re thing is that the zone extends not this way but to the east going over this way. So we’ll come back and drill some holes in secondary zone. We’ll drill one here. We’re likely drill one out here. And we’ll drill some down in this area.
We think that this whole area down through here contains all the graphite. We know there’s a small river or creek right here. Then on the other side, there are outcroppings of graphite as well. We’ll go and drill some holes over here eventually as well. But this is very exciting because this could be a beautiful mine on its own. Eventually again, I really emphasize this, could be, we still have to see all the results and we have to prove that there is actually graphite out here by drilling holes. But I’m very, very excited just about this part of it.
Maurice Jackson: Dan, allow me to interject here. Can you confirm? Are we doing diamond drilling here?
Dan Weir: No. This is what you call air core drilling. Some people call it reverse circulation drilling. Because the material is a sandy, clay type material, you can basically use air. High pressure air is pumped down the outside part of the pipe and then it hits the material and blows it back up the center of the pipe and you collect as you’re doing that.
So, the drilling is very, very simple to do. We will bring in another drill – a core type drill and do some sampling with it as well just to prove and show for 43-101 Standards that relationship between the air core and the core type drilling just to make sure that all those numbers match.
Maurice Jackson: And before you leave the secondary zone, talk to us about the depth of this drilling.
Dan Weir: The depth of this drilling – different holes went down to a few a different depths. They range anywhere from about 20 meters in depth down to about 40 meters in depth in this zone. And again, that’s the saprolitic-type material. We stop when we hit the hard rock. The hard rock will contain graphite as well but that’s not something that we’re testing. We’re really focused on this saprolitic or withered type material.
Now, I’m going to move along here and again, this is this new road that we put in all along here back to the main zone. Our main zone here runs for over 3 kilometers. This is not 3 kilometers. This only, where all these dots are, really is an area that’s about 900 to 1,000 meters meaning, about a kilometer. But this zone does go from the south here goes north over a distance of about 3 kilometers. The width here is anywhere from about 300 to 500 meters wide is where we see the graphite mineralization.
So what we’ve done is if you look in the index here, these are holes that are finished and drilled or these green dots. So on this map, we show that there has been 10 holes drilled in the main zone. We’re now up to about 15 holes that now have been completed in the main zone. And one complete trench that runs, which is this line here, that runs for 300 meters.
When you were there, Maurice, you saw about 80 meters of it over on this side. It now extends over here 300 meters. And we did start digging a trench up here to the north which we start to drill – sorry, digging to the east. We now focused on moving a little bit further to the west.
The samples from the secondary zone and from the two holes from the main zone are on their way back to a lab here in Canada. And over the next few weeks, a lot of those assays will start coming out as well as the assays from parts of this trench right here.
It’s important to notice, the reason why we do the trenching here is trenching can actually give you better results than drilling because – especially if your material is at surface, which a lot of our material is at surface. You can get a better picture of the mineralization and the zones across that mineralization than just a small hole that goes up and down. You get a much better picture.
These trenches are about 1.8 to 2 meters deep. They’re about one and a half meters in width. And as I mentioned, this first trench that is here runs for about 300 meters.
I’m very excited about what has happened here. A bunch of the holes here are starting to show beautiful mineralization. And it will be very exciting to see the assay results when they come in.
Maurice Jackson: Well, I’m quite excited myself to see the developments. It’s quite aggressive and it was aggressive when we were there actually. But let me ask you this as well while we have this picture here, talk to us about community relations now. So, a month has gone by and a lot of activities occur here. What’s the relationship like?
Dan Weir: We have an amazing relationship with all the local people. Most of the people here are quite poor that live out on the property. And by poor, what I mean is they live basically in a shack with a roof made out of palm leaves. A lot of them don’t even own shoes. That’s how poor they are. In general, they sort of live off a dollar to a dollar and a half a day which we can’t even imagine trying to live off of that. But they do out here.
They plant fruit trees and stuff to basically sustain themselves. They will make charcoal. They do not exercise proper farming techniques. They tend to be a slash and burn, meaning that they will just cut down everything to plant a few fruit trees. They grow over a certain amount of years. As it gets overgrown, they just cut it all down it again, burn it and do the same thing all over again. They need to learn proper farming techniques. But to try and get them to change on that would be a very slow process.
Us coming in and first of all, putting a road in, they were very excited about that because they never had a road back here. There is a village that sits here and it’s now serviceable by a road. This red-looking building right here is a school. We now brought the road that runs right up by their school right over close to the village. So they’re extremely excited that hey, now that you can actually bring vehicles right back to their village and they’re very excited about that.
What we have done, any fruit trees of theirs that we’ve cut down, we’ve compensated them for that and we begin – have begun planting fruit trees all along the side of the road as well. So, they’re very, very excited to see all of this happening here. They’re also very excited to see as we develop this that there’s potential for them to have jobs.
Our ultimate goal is in doing CSR work here too is to do other things for the community which could include, I’m not saying it will exactly, medical facilities for them and schools and different things as well in the future.
Maurice Jackson: It sounds like a win-win proposition and it’s something we’re delighted to be a part of as well here in Proven and Probable. Dan, last question here. All the work has been done. Talk to us about permitting.
Dan Weir: So, our property is fully permitted. That’s another very exciting part about what we have here. If I want to put this thing into production tomorrow, we can. And you try and get a permit done anywhere else in the world, it can take a year or years and years in order to get those permits. It’s exciting that we already have that as we develop this project.
One of the things I want to also note to you, Maurice, that I have a local group that is getting samples done up for us from here. In the next two weeks, you will see that we’re going to pull 1 to 2 tons of concentrate from this area. We’re also going to pull 1 or 2 tons of material from this area as well.
We have a number of groups that are very eager to get those samples and work with us in the future with this material. Our ultimate goal is to build a small processing plant here to begin with. What I’d like to do is make it a portable plant where we can do testing here. We can do testing here or potentially, on some of the other zones along here and start stock piling some of the material and start selling some of the concentrate if we can over time here. And I think we can do that.
Ultimate goal here is actually build a full-on plant that will produce approximately 10,000 tons a year of graphite and which that we can scale up very quickly to whatever size or whatever demand of material that we have out here.
A $10 million plant is going to cost us somewhere around $10 million. Remember that if you are in hard rock, it will be double, triple, or quadruple that price to build the same – a similar type plant. And again, it will take you years to get permits in order to be able to do that.
Maurice Jackson: Dan, on behalf of all the shareholders, we want to thank you for a job well done. Let me ask you this as well, if investors want to get more information regarding DNI Metals, please share the contact information.
Dan Weir: Yes. They can call me directly. They can call me any time on my cellphone, 416-720-0754. That’s 416-720-0754. Or email me, which is even better, [email protected] So that’s [email protected]
Maurice Jackson: And please share the website as well.
Dan Weir: It’s www.DNIMetals.com.
Maurice: And last but not the least, please visit our website, www.ProvenandProbable.com where we interview the most respected names in the natural resource space. The website again is www.ProvenandProbable.com.
You may reach us at [email protected] 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.
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