Mercuria eyes equity in African assets, new metals boss says
“You will see us very present in Africa and putting our money where our mouth is in respect of the Copperbelt,” Kostas Bintas said.
Dan Weir, executive chairman of DNI Metals, speaks with Maurice Jackson of Proven and Probable about the progress his company has made with its graphite project in Madagascar, as well as developments with its Alberta project.
Maurice Jackson: Joining us for a conversation is Dan Weir, the executive chairman of DNI Metals Inc. (DNI:CSE; DMNKF:OTC), which is establishing itself to become one of the world’s leading graphite producers. Mr. Weir, welcome to the show, sir.
Dan Weir: Hi, Maurice, and greetings from Madagascar.
Maurice Jackson: Glad to have you back on the program. We brought you on today to provide us with an update on a number of important topics for current and prospective shareholders. But before we delve into today’s interview, for first time listeners, who is DNI Metals, and what is the thesis you’re attempting to prove?
Dan Weir: DNI Metals is a public company. It’s been around for about 35 years. DNI had a number of different projects. It first started out as a nickel company. It used to be called Dumont Nickel Incorporated, and it was shortened to DNI Metals. And it had, at one point, a gold asset in Utah. We still own a royalty on that gold asset. And then the previous management was focusing on a very large polymetallic deposit up in Alberta, which I think we’ll talk about a little bit later. When I took over in late 2014, we decided to focus the company on graphite in Madagascar. Our projects in Madagascar are the company’s main focus, and that focus is to get our projects in Madagascar into production.
Maurice Jackson: Speaking of Madagascar, in our last interview, you referenced your commitment to getting the environmental permit and a purposed timeline. What can you share with us regarding the environmental permit?
Dan Weir: What I’ve tried to do over the last two months is put out press releases to the market and discuss how we’ve been moving forward with the environmental permits. In one of our press releases in October, we mentioned that we had terminated our previous team. We brought a whole new team in to complete the work. I’ve been spending a lot of time in Madagascar to make sure that that is all happening. And you can see from a lot of press releases we have been making great headway. Some of the documents weren’t filed properly with the government agency, the Office National pour l’Environnement Madagascar, also called the ONE. And we have those documents filed. We have to do two site visits, a technical site visit and then a public consultation visit.
On December 5 and 6 when I was here, we did the technical visits. They went very well. And in mid-January we will do the public consultations, three public consultations, one for the district and then one for Marofody and Vohitsara, respectively. Thereafter, DNI Metals will have completed everything to receive the environmental permit. We are very excited that we’ve been moving forward. So it’s been great, Maurice.
Maurice Jackson: Speaking of the Vohitsara, can you provide us with an update on the resource estimate?
Dan Weir: Yes. We have hired Micon, a company from Toronto. It is very well known around the world for its expertise in resource studies. In the first week in January, Micon will be coming to visit our flagship project, the Vohitsara in Madagascar, to conduct a site review. DNI Metals believes that we can have the main resource for the Vohitsara property completed by late January, early February. We are very excited about the timing because around the same time we should be receive the environmental permits, so very exciting times coming for DNI Metals shareholders.
Maurice Jackson: Moving onto Canada, Dan, you referenced the Alberta Black Shells Deposit, which also a part of the DNI project portfolio. It’s been overshadowed with your projects in Madagascar. Tell us a little bit more about this deposit and why is the market is specifically excited about the deposit there?
Dan Weir: We had put the project on hold. It was a really a non-core asset. Previous management spent over $6.7 million. There are six outcroppings or six mineralized zones that we know of stretching well over 30 to 50 kilometers right near the tar sands or the oil sands in northern Alberta in Canada. It’s what they call a polymetallic. So all sorts of different minerals are in the there, rare earths, uranium, cobalt, nickel, zinc. But what’s been really exciting lately is the fact that it has a lot of vanadium in it and cobalt and lithium. As the world moves forward with battery metals, those are key components, as well as the graphite being a key component of a lithium-ion battery.
So we’re very excited about all of that. We’ve had a number of people come to us who are interested in doing something with that project. Again, I want to emphasize this, that we’re focused on graphite. We will continue to focus on graphite. But we have done a great deal where a group is going to earn into our property in Alberta. It is going pay us a cash component and will spend a minimum of $1 million to earn into 50% of the project. At that point DNI will have 49% of the project, and we will have a carried interest to a full bankable feasibility study.
So, in essence, another group is going to manage the project. It will do all the work on the project. I will help, but really it won’t take up any of my time, and it allows me to focus on Madagascar and the graphite. But it allows DNI to have a 49% interest in a very big vanadium, cobalt, lithium, rare earth-type deposits. That has some potential. So we’re very excited. Again, we get a carried interest all the way to the bankable feasibility study. And at that point we can decide whether or not we want to put up the capital to build the processing plant or get diluted down to a 2% royalty. We’ll see at that point.
Maurice Jackson: Dan, before we leave the deposit there, I want to discuss vanadium a little bit more in detail here. Most investors know very little about the metal. Can you share with us where the demand will be coming from regarding vanadium?
Dan Weir: Some investors may not have heard about a vanadium redox battery. It’s very different from a lithium-ion battery. Vanadium redox tend to be used for very, very large storage of energy. So if you had a wind farm or if you had a solar farm and you wanted to store the energy, a vanadium redox battery would be a very good battery for that. It’s not a good battery to use in a car, a cell phone, or your laptop. That’s where a lithium-ion battery has its use. These are big stationary-type batteries. But what’s really driven the price in vanadium lately, and remember when we did the feasibility studies on the Alberta property, vanadium was at around $5.80. It’s now well over $22 a pound.
The primary reason for the price increase in vanadium is that China has just put in new construction laws where a higher percentage of rebar, which is used to strengthen concrete, has to have vanadium in it. That is for two reasons, strengthening the rebar, and helping in the corrosion factors of the rebar. Therefore demand is going through the roof for vanadium.
Maurice Jackson: Switching gears. Dan, DNI will be conducting a financing. Can you share the details with us?
Dan Weir: Yes. As DNI Metals completes our environmental licenses/permits, and as we move forward on the resource study, our ultimate goal is to complete those, we would do a much larger financing to build the pilot plant, buy the machinery needed. And by machinery, I mean the bulldozers and excavators and additional equipment. But in the meantime, you will see also from our press release, we’re negotiating with some of the locals to buy some of their land. It’ll actually likely be more of a 99-year lease, which we can renew for another 99 years. Again, we’re negotiating all of that. To have some money in the bank right now to be able to use what I’m negotiating will help us.
So it’s nice right now to have some money in the bank. It lets me continue my work, what I need to do here in Madagascar, and sets us up for the next financing. Hopefully in and around some time in February or March that’ll be the time when we want to do a much larger financing to build everything. So we decided to come up with a convertible debenture where investors who buy the debenture, if they hold on to the debenture for one year, there’s a one-year term on the debenture, we’ll pay them a 12% coupon. At that point you can convert the debenture into stock at 8 cents (CAD). You get a unit on the conversion, and all the details are in our press release. Or you can take the cash. Your choice at the end of one year. So this is really a short-term type loan to the company as we develop some of the things we need to do over the coming months.
Maurice Jackson: Dan, to summarize what we’ve covered today, what is the next unanswered question for DNI Metals? When should we expect results, and what determines success?
Dan Weir: As you’ve seen from a lot of our press releases recently, I have really tried to be open to the market and give exact details of what we’re doing and how we’re doing things for the environmental licenses, for the resource report, and now for potentially developing some of the Alberta projects. So there’s not a lot else out here right now that hasn’t been made public. We’re working our butts off to get things done in Madagascar. I’m staying on top of it and moving it all forward.
Maurice Jackson: What did I forget to ask?
Dan Weir: I don’t think you forgot to ask anything. Maurice. You’ve been to the property twice. You’ve seen how exciting it is. I’m really pushing to make sure that we get this into production and get there as soon as possible. That’s my mandate, and that’s what I’m doing.
Maurice Jackson: Dan, for someone who wants to get more information regarding DNI Metals, please share the contact details.
Dan Weir: The best thing to do is email me, because I will be going back and forth between Toronto and Madagascar. It’s [email protected] and the website is www.DNIMetals.com.
Maurice Jackson: And as a reminder, DNI Metals trades on the CSE: DNI. And on the OTC: DMNKF. DNI Metals is a sponsor of Proven and Probable, and we are proud shareholders for the virtues conveyed in today’s interview. And last but not least, please visit our website www.provenandprobable.com where we interview the most respected names in the natural resource space. You may reach us at [email protected].
Dan Weir of DNI Metals, thank you for joining us today on Proven and Probable.
Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.
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Disclosure:
1) Dan Weir: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: DNI Metals. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: DNI Metals.
2) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: DNI Metals. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: DNI Metals is a sponsor of Proven and Probable. Proven and Probable disclosures are listed below.
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