$DMNKF Signs LOI Valued up to $4.5 Million

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DNI completes a Letter Of Intent "LOI", with Cougar Metals to develop DNI's Vohitsara, Madagascar Graphite Project.

Cougar owns 8 drill rigs, and has competence to complete a 3,000m drilling program, a 1,000m trenching program, a NI 43-101 resource study, and a NI 43-101 PEA for DNI's Vohitsara Project. As per the LOI, this work should be completed by June 30, 2017.

Summary of the $4.5 million potential.

1.Cougar pays DNI Cash payments of A$300,000

2.Cougar pays Cash payment of U$150,000 (approx. C$196,000) to previous owner of the Vohitsara project (last payment owed by DNI)

3.When Cougar completes the drilling/resource/PEA, (by June 30, 2017), Cougar will earn 49% of the Vohitsara project. DNI's board had set a budget of C$1.5 million to complete the drilling/resource/PEA.

4.If DNI opts out of its first right, Cougar can purchase DNI's remaining 51% for AUD$2.5 million.

The specific terms of the deal are below.

Cougar's directors believe the greatest strength of the Toamasina Saprolitic Graphite Project lies in its ability to deliver a high quality product with a low cost base into an existing market. With over a century of supply history, coarse flake graphite concentrates from the Toamasina area of Madagascar are well known in the global end-user market and the Toamasina project is ideally suited to capitalize on this existing 'brand awareness'.

It is expected that the Toamasina Saprolitic Graphite Project can be placed into production with modest capital costs and can cost effectively expand to meet the demand for its product.

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