DIATREME RESOURCES
Milestones at Cyclone and
New Projects
March 2014
Statements
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This presenta;on contains certain forward-‐looking statements and forecasts which include without limita;on, expecta;ons regarding future performance, explora;on, mineral resources, the financial posi;on of Diatreme Resources Limited (the “Company”), industry growth or other trend projec;ons. Whilst this presenta;on is based on informa;on from sources which are considered reliable, the Company, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the informa;on in this presenta;on is complete or accurate. To the maximum extent permiOed by law, the Company disclaims any responsibility to inform any recipient of this presenta;on of any maOer that subsequently comes to its no;ce, which may affect any of the informa;on contained in this document and presenta;on. Nothing in this presenta;on should be construed as either an offer to sell or a solicita;on of an offer to buy or sell securi;es.
STATEMENT IN ACCORDANCE WITH THE AUSTRALASIAN CODE FOR REPORTING OF EXPLORATION RESULTS, MINERAL RESOURCES AND ORE RESERVES (THE JORC CODE)
The informa;on in this report, insofar as it relates to Explora;on Results is based on informa;on compiled by company personnel under the supervision of Mr David Jelley, who is a full ;me employee of Diatreme Resources Limited and a Member of the Australasian Ins;tute of Mining and Metallurgy. Mr Jelley has sufficient experience which is relevant to the style of mineralisa;on and type of deposit under considera;on and to the ac;vity which he has undertaken to qualify as a Competent Person as defined in the 2004 Edi;on of the ‘Australasian Code for Repor;ng of Explora;on Results, Mineral Resources and Ore Reserves’. Mr Jelley consents to the inclusion in the report of the maOers based on the informa;on in the form and context in which it appears. This informa;on was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the informa;on has not materially changed since it was last reported. The informa;on in this report that relates to Mineral Resources is based on informa;on compiled by Mr Ian Reudavey, who is a Member of the Australian Ins;tute of Geoscien;sts, and a full ;me employee of Diatreme Resources Limited. Mr Reudavey has sufficient experience which is relevant to the style of mineralisa;on and type of deposit under considera;on and to the ac;vity which he has undertaken to qualify as a Competent Person as defined in the 2012 Edi;on of the ‘Australasian Code for Repor;ng of Explora;on Results, Mineral Resources and Ore Reserves’. Mr Reudavey consents to the inclusion in the report of the maOers based on the informa;on in the form and context in which it appears.. The informa;on in this report that relates to Ore Reserves is based on informa;on compiled by Mr Phil McMurtrie, who is a Member of the Australasian Ins;tute of Mining and Metallurgy. Mr McMurtrie is a director of Tisana Pty Ltd, and is a consultant to Diatreme Resources Limited. Mr McMurtrie has sufficient experience which is relevant to the style of mineralisa;on and type of deposit under considera;on and to the ac;vity which he has undertaken to qualify as a Competent Person as defined in the 2004 Edi;on of the ‘Australasian Code for Repor;ng of Explora;on Results, Mineral Resources and Ore Reserves’. Mr McMurtrie consents to the inclusion in the report of the maOers based on the informa;on in the form and context in which it appears. This informa;on was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the informa;on has not materially changed since it was last reported.
Diatreme Projects
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Mandora
Cyclone Eucla Basin
Elliston
Glenthompson
Anabama
Grays Hill Clermont
Cape Bedford
Tick Hill
Mineral Sands Explora@on
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Cyclone Project Fundamentals
• PROBABLE RESERVE: 97 million tonnes @ 2.5% heavy minerals.
• 770kt of high value Zircon
• Resource: 137Mt @ 2.2%. Poten@al for addi@onal resources.
• Joint Venture by Perpetual Mining Holdings Limited (Hong Hong)
over Cyclone.
• Cyclone JV funding to establish: Water, Environmental & Heritage
milestones.
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Proposed Mining Methods
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Cyclone Mining Stats – PFS
Strip Ra@o 1.1 : 1
Mining Rate (Dry) 1,300 tonnes per hour – 2 x Dozer traps
Mine Site Wet Concentra@on Plant Product
26 Tonnes / Hour HMC produc@on 147,000 t PA @ 98.5% HM Concentrate
Transport -‐ Road 240km -‐ 4 trucks x 110 tonnes to Forrest.
Transport -‐ Rail 1,000km
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OPTIONS
Mineral Separa@on Plant in Australia
Mineral Separa@on Plant in China or Other Country
Direct sale of HMC within Australia
Direct sale of HMC offshore – Most likely op@on.
Transport Op@ons
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CYCLONE
Perth
Adelaide
Esperance Port Pirie
Forrest
Haul Road Corridor
Initial Environmental Surveys - Completed
Initial Cultural Heritage Surveys - Completed
Formal Referral to the EPA - Completed
Referral for Environmental Approval Process - Underway
Cyclone Project Milestones
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Water supply - Major water aquifer discovered on site. Bore complete. Supply assured.
Haul road - Progressing environmental studies and permitting
of haul road from mine site to rail siding. Mining Lease - Finalise agreement with Traditional Owners.
• Agreement in place with Chinese party to earn initial 6% for
$2M additional to $1.6M expended on project received as
placement in 2013.
• Able to farm-out further interest in return for funding and still
maintain sizeable equity.
Drilling for Water -‐ Cyclone
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• Successful water discovery beneath proposed mine site.
• Water discovery as important as mineral discovery at Cyclone.
• High yielding sandstone aquifer below 530m depth, extending to
the base of test borehole (803m).
• Appears to be part of an extensive Officer Basin aquifer system.
• Brackish water quality amenable to mineral processing
requirements.
• Drill hole cased and developed for future production bore.
Drilling for Water -‐ Cyclone
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Preliminary flow of 40 l/sec at salinity of 20,000TDS
Mineral Sands Explora@on
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Possible Beach Strandline Diatreme Tenement Topography Background
WA Eucla Basin Tenements
Highly Prospective
Zephyr
Cyclone Legend
Cape Bedford, QLD
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Cape Bedford, QLD EPM Application Size: 554 sq km Silica Sand, Heavy Mineral Sands
Cape Bedford
Cape Bedford, QLD
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Large sand dune system with known silica sand mineralisation cover an area 50km x 15km. (50 – 100m high). Previous exploration for silica sand indicates heavy minerals are present in a number of horizons. High grade silica established from former drilling above heavy minerals. Existing port at Cape Flattery and potential port sites at Nob Pt & Lookout Pt. Culture of mining with indigenous landowners with Cape Flattery silica sand mining operation. Issues with the proposed Cape York Regional Plan to be resolved. T.O support for granting tenement.
Lookout Pt
Nob Pt
Cape Bedford, QLD
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Sand Dunes, Cape Bedford.
Cape Bedford, QLD
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Heavy Minerals on beach, Cape Bedford.
Cape Bedford, QLD
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Mineralisation on the current beach shedding from the dunes
Cape Bedford, QLD
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Major dune field with high grade silica sand overlying heavy mineral sand potential
Cape Bedford, QLD
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Overburden comprising high quality silica sand grading up to 99.9% silica
Elliston, SA
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Elliston Project, SA EL Application Size: 994 sq km Heavy Mineral Sands
Elliston
Elliston, SA
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Elliston, SA
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Prospective for heavy mineral sands along a ridge 35 km long and 5km wide Tested by BHP-Utah in 1990 as part of an assessment of the Eucla Basin, but only one drill traverse of 1km spaced shallow (<30m) holes completed at the far northern end of the feature. BHP results: • TA0010 - 14m at 0.4% HM from 16m (open at depth) • TA0011 - 9m at 0.3% HM from 18m (open at depth) • TA0012 - 10m at 0.3% HM from 16m (open at depth) Mineralogy: • 25% Zircon (23 – 27%) • 5% Rutile (4 – 7%) • 17% Leucoxene (12 – 23%) • 31% Ilmenite (26 – 37%) BHP were exploring for rutile and found very little in the Eucla Basin so abandoned the project.
Mandora, WA
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Mandora Project, SA EL Application Size: 472 sq km Heavy Mineral Sands
Mandora
Mandora, WA
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Easily accessible for exploration
Good network of tracks and fence lines for access
Diatreme first mineral sands company into the Southern Canning Basin.
Mandora, WA
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Mandora Project, Canning Basin, WA Large (50km long) radiometric anomaly behind current beach. Will be explored for heavy mineral sands using Company’s aircore drill rig.
Mandora Project
Broome
Port Headland
Mandora, WA
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DRX Prospec@vity
• Cyclone – One of the best undeveloped zircon deposits in the World.
• Cape Bedford, Qld – 554 sq km of massive silica sand & @tanium
mineralisa@on.
• Elliston SA -‐ Virtually unexplored with known heavy mineral poten@al.
• Mandora, WA – Unexplored radiometric high within Canning Basin.
• Exci@ng porphyry copper explora@on projects in Queensland, Victoria
& South Australia.
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Investment Fundamentals • Programs funded and underway for the Environmental, Heritage and Haul
Road Licencing requirements at Cyclone Zircon Deposit.
• Poten@al funding op@ons at project level to crystallise shareholder value. Currently 100% ownership by DRX -‐ Agreement in place with Chinese party to earn ini@al 6% for $2M.
• A renounceable en@tlement rights issue to shareholders currently on offer.
• High JV interest in DRX project porjolio. Nego@a@ons currently for Tick Hill gold and Clermont copper projects.
• Massive imbalance between DRX share price and value of Cyclone
Deposit. Investment opportunity at DRX current low share price. 28
DIATREME RESOURCES
Towards Development at Cyclone New Projects. High Prospec;vity
March 2014