DNI completes first tranche interim financing for drilling at Alberta
polymetallic black shale projects, Athabasca region, Alberta

(DNI : TSX-Ven, DG7 : Frankfurt)

TORONTO, Aug. 4 /CNW/ - DNI Metals Inc. (DNI:TSX-Ven, DG7:FSE) is pleased to announce that it has completed the first tranche of a non-brokered private placement of flow-through and non-flow-through shares, with arm's length and non-arm's length parties, for aggregate gross proceeds of $812,990. The securities issued under the private placements are subject to a four-month hold period expiring on December 5, 2010.

The financing consisted of: (i) placement of 4,445,643 units at a price of 14 cents per unit, for gross proceeds of $622,390, each unit consisting of one common share and one half of a common share purchase warrant, each full warrant entitling the holder to purchase an additional common share of the company at a price of 20 cents for a period of eighteen months from closing; and (ii) placement of 1,361,429 flow-through shares at a price of 14 cents per share, for gross proceeds of $190,600. Insiders participated in the placements to an aggregate of $329,400, including $29,400 from two directors.

A commission will be paid in connection with some of the placements, consisting of an aggregate of $17,856 and issuance of 127,543 broker warrants entitling the holder to purchase an additional common share of the company at a price of 14 cents for a period of eighteen months from closing. Shares underlying the broker warrants are subject to a four-month hold period expiring on December 5, 2010.

The current closing is part of a larger private placement financing to be concluded shortly, on terms which contemplate: (a) issuance of up to 15,000,000 flow-through shares at a price of 14 cents each, for gross proceeds of up to $2,100,000; and (b) issuance of up to 10,000,000 units at a price of 14 cents per unit, for gross proceeds of up to $1,400,000, each unit consisting of one common share and one half of one share purchase warrant entitling the holder to purchase an additional common share of the company at a price of 20 cents for a period of eighteen months from closing.

Proceeds of the financing will be applied toward DNI's polymetallic shale properties, Athabasca region, Alberta, toward expanded metals leaching R&D testwork and a winter drilling program, to advance the two Potential Mineral Deposits previously identified (announced November 10, 2008) through resource studies toward scoping and economic studies. A portion of the funds will also be applied toward short term operating working capital requirements.

DNI continues to focus its efforts on its polymetallic black shale Properties in Alberta, and on its carried interest in the diamond discovery on its Attawapiskat Property, Ontario.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

DNI - TSX Venture

DG7 - Frankfurt

Issued: 23,236,001 (29,043,073 post-financing)

%SEDAR: 00010711E

SOURCE DNI Metals Inc.

For further information: For further information: DNI Metals Inc. - Shahe Sabag, President & CEO or Denis Clement, Chairman - 416-595-1195, email ir@dnimetals.com. Also visit www.dnimetals.com

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DNI Metals Inc.

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