DIATREME  RESOURCES  

Milestones  at  Cyclone  and  

New  Projects  

   

March  2014  

Statements  

2  

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  

3  

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    

12  

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  

14  

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