DIATREME RESOURCES LIMITED — AGM Information 2011

Apr 18, 2011

Diatreme Resources Limited ABN 33 061 267 061

Notice of 2011 Annual General Meeting of Shareholders

to be held at the office of the Company, Level 2, 87 Wickham Terrace, Spring Hill, Qld, Thursday, 26 May 2011 at 11:00am

The details of the resolutions contained in the Explanatory Notes accompanying this Notice of Annual General Meeting should be read together with and form part of this Notice of Annual General Meeting.

Ordinary Business

FINANCIAL STATEMENTS

Receive and consider the Financial Statements for the year ended 31 December 2010 incorporating the Profit and Loss Account for the year, and the Balance Sheet as at that date, together with the Directors’ Report and the Auditor’s Report thereon.

RESOLUTIONS

To consider and, if thought fit, resolve:

Resolution 1: RE-ELECTION OF DIRECTOR – Mr David Hall

To consider and, if thought fit, pass the following Ordinary Resolution:

“That Mr David Hall, who retires by rotation in accordance with the Company’s Constitution and being eligible, offers himself for re-election, be re-elected as a Director of the Company.”

Resolution 2: RE-ELECTION OF DIRECTOR – Mr Andrew Tsang

To consider and, if thought fit, pass the following Ordinary Resolution:

“That Mr Andrew Tsang, who retires by rotation in accordance with the Company’s Constitution and being eligible, offers himself for re-election, be re-elected as a Director of the Company.”

Resolution 3: REMUNERATION REPORT (Non-binding resolution)

To consider and, if thought fit, pass the following Advisory Resolution:

“That the remuneration report for the year ended 31 December 2010 (as set out in the Directors’ Report) is adopted.”

NB: This resolution shall be determined as if it were an ordinary resolution, but under Section 250R(3) of the Corporations Act, the vote does not bind the directors of the Company.

Resolution 4: DIRECTORS FEES

To consider and, if thought fit, pass the following Ordinary Resolution:

“That for the purposes of clause 21.3 of the Company’s constitution and Listing Rule 10.17 and for all other purposes, the maximum aggregate amount of remuneration that may be paid out of the funds of the Company to the Directors (excluding executive Directors) for their services be increased by $150,000 to a maximum of $300,000, to be divided among those Directors in such manner as they may determine.”

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Voting exclusion statement

The Company will disregard any votes cast on Resolution 4 by:

• Mr Anthony Fawdon, Mr David Hall, Mr George White and Mr Andrew Tsang; and

• any of their associates.

However, the Company need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or

• it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as their proxy decides.

General Business

To consider any other business as may be lawfully put forward in accordance with the Constitution of the Company.

By Order of the Board of Directors

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Leni Stanley Company Secretary

Dated 19 April 2011

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Voting and Proxies

1. Voting

Diatreme Resources Limited (DRX) has determined in accordance with Regulation 7.11.37 of the Corporations Regulations 2001 that for the purposes of voting at the Meeting securities will be taken to be held by those persons recorded on the Company's share register as at 7:00pm (Sydney time) on 24 May 2011. Accordingly, share transfers registered after that time will be disregarded in determining entitlements to attend and vote at the Meeting.

If you have any queries on how to cast your votes then telephone Ms Leni Stanley on 07 3221 6022 or Mr David Hall on 07 3832 5666 during business hours.

2. Proxies

(a) Any member entitled to attend and vote is entitled to appoint not more than two proxies to attend and vote in his or her stead.

(b) If a shareholder appoints more than one proxy, the appointment of the proxy may specify the proportion or number of that shareholder's votes that each proxy may exercise. If the appointment does not specify the proportion or the number of the shareholder's votes each proxy may exercise, each proxy may exercise one half of the votes.

(c) Where a shareholder appoints more than one proxy neither proxy is entitled to vote on a show of hands.

(d) A proxy need not be a shareholder of DRX.

(e) To be effective, DRX must receive the completed Proxy Form and, if the form is signed by the shareholder's attorney, the authority under which the Proxy Form is signed (or a certified copy of the authority) by no later than 48 hours before the commencement of the meeting. Proxy Forms and other documentation may be lodged at the registered office of the Company or as follows:

By posting, delivery or	Diatreme Resources Limited Share Registry
facsimile:	C/- Link Market Services Limited
	Locked Bag A14 Sydney South NSW 1235
	Facsimile: (02) 9287 0309
By delivery:	Level 12, 680 George Street Sydney NSW 2000
Online:	Lodging it online at Link’s website (www.linkmarketservices.com.au) in
	accordance with the instructions given there (you will be taken to have
	signed your Proxy Form if you lodge it in accordance with the
	instructions given on the website)

(f) Proxies given by corporate shareholders must be executed in accordance with their constitutions, or under the hand of a duly authorised officer or attorney.

(g) If a proxy is not directed how to vote on an item of business, the proxy may vote, or abstain from voting as he or she thinks fit.

(h) If a shareholder appoints the Chairman of the meeting as the shareholder's proxy and does not specify how the Chairman is to vote on an item of business, the Chairman will vote, as proxy for that shareholder for that item.

NOTE: APPOINTMENT OF PROXY FORM IS ENCLOSED

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DIATREME RESOURCES LIMITED (ACN 061 267 061) Explanatory Notes

These Explanatory Notes have been prepared for the information of members in connection with the business to be conducted at the Annual General meeting of Diatreme Resources Limited to be held at the Registered Office of the Company, Level 2, 87 Wickham Terrace, Spring Hill, Qld, on 26 May 2011 at 11:00am.

These Explanatory Notes form part of and should be read in conjunction with the accompanying Notice of Annual General Meeting.

If the Chairman of the Meeting has an interest in a resolution being put to the meeting, another Director will chair the meeting for voting on that resolution.

RESOLUTION 1:

RE-ELECTION OF MR DAVID HALL AS A DIRECTOR

Mr Hall has been a director of the Company since January 2001. He retires by rotation in accordance with the Constitution of the Company, but being eligible, offers himself for re-election. Details of Mr Hall’s experience and qualifications are set out in the section “Information on Directors” within the Annual Report.

The Directors recommend that the resolution be passed.

RESOLUTION 2:

RE-ELECTION OF MR ANDREW TSANG AS A DIRECTOR

Mr Tsang has been a director of the Company since January 2009. He retires by rotation in accordance with the Constitution of the Company, but being eligible, offers himself for re-election. Details of Mr Tsang’s experience and qualifications are set out in the section “Information on Directors” within the Annual Report.

The Directors recommend that the resolution be passed.

RESOLUTION 3:

REMUNERATION REPORT (non-binding resolution)

Pursuant to the Corporations Act 2001 the Annual General Meeting of a listed company must propose a resolution that the Remuneration Report, contained within the Annual Report, be adopted. Also pursuant to the Corporation Act 2001, the vote on this Resolution is advisory only and does not bind either the Directors or the Company.

The purpose of Resolution 3 is to lay before the Shareholders the Company's Remuneration Report so that Shareholders may ask questions about or make comments on the management of the Company in accordance with the requirements of the Corporations Act 2001 and vote on a non-binding resolution to adopt the Remuneration Report for the year ended 31 December 2010.

RESOLUTION 4:

DIRECTORS’ REMUNERATION

Under the Company’s constitution, the fees payable to non-executive directors for their services are determined by the Board within a maximum aggregate amount approved by the shareholders for that purpose. The present maximum of $150,000 per annum was approved by the shareholders on 31 May 2002.

Shareholder approval is sought for the purposes of clause 21.3 of the Company’s constitution, Listing Rule 10.17 and for all other purposes, to increase the maximum aggregate amount of remuneration that may be paid out of the funds of the Company to the Directors (other than executive Directors) for their services to $300,000, an increase of $150,000.

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Increasing the maximum amount of non-executive remuneration payable does not mean that the whole of the new maximum aggregate fee pool will be used immediately. There are currently no plans to increase the remuneration of specific Directors. The Company undertakes periodic reviews of the fees paid to nonexecutive Directors to ensure that the fees paid by the Company are competitive, and to enable the Company to attract and retain high calibre Directors. Increasing the fee pool will provide the Board with the flexibility to increase the non-executive Director’s fees over time, to ensure that the fees paid remain competitive and if appropriate, to appoint additional Directors without needing to seek further shareholder approval to increase the fee pool. Since the last increase in Directors’ fees was approved in May 2002, the Board size has increased from four to five directors. However, keeping the future direction of the Company in mind, the Company may need to consider the appointment of further directors in due course.

Shareholders should note that the proposed increase in the Directors’ remuneration does not relate to the salaries paid to executive Directors, of which there are two at this time.

Each of the Company’s Directors has an interest in Resolution 5 and makes no recommendation in relation to it.

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LODGE YOUR VOTE

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ABN 33 061 267 061

By mail:  Diatreme Resources Limited  [By fax:][ +61 2 9287 0309] C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia



All enquiries to: Telephone: 1300 554 474

Overseas: +61 2 8280 7454

X99999999999

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ShAREhOLDER VOTING FORM

I/We being a member(s) of Diatreme Resources Limited and entitled to attend and vote hereby appoint:

APPOINT A PROXY

STEP 1 APPOINT A PROXY the Chairman OR if you are NOT appointing the Chairman of the of the Meeting Meeting as your proxy, please write the name of the (mark box) person or body corporate (excluding the registered shareholder) you are appointing as your proxy or failing the person/body corporate named, or if no person/body corporate is named, the Chairman of the Meeting, as my/our proxy and to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at 11:00am on Thursday, 26 May 2011, at Level 2, 87 Wickham Terrace, Spring hill, QLD and at any adjournment or postponement of the meeting.

Proxies will only be valid and accepted by the Company if they are signed and received no later than 48 hours before the meeting. Please read the voting instructions overleaf before marking any boxes with an X

STEP 2 VOTING DIRECTIONS For Against Abstain * For Against Abstain * Resolution 1 Resolution 3 Re-Election of Director – Mr David Hall Remuneration Report Resolution 2 Resolution 4 Re-Election of Director – Directors Fees Mr Andrew Tsang

 * If you mark the Abstain box for a particular Item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

STEP 3 IMPORTANT – VOTING EXCLUSIONS If the Chairman of the Meeting is appointed as your proxy, or may be appointed by default and you do not wish to direct your proxy how to vote as your proxy in respect of Item 4 above, please place a mark in this box. By marking this box, you acknowledge that the Chairman of the Meeting may exercise your proxy even though he/she has an interest in the outcome of that Item and that votes cast by him/her for that Item, other than as proxyholder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on Item 4 and your votes will not be counted in calculating the required majority if a poll is called on this Item.

The Chairman of the Meeting intends to vote undirected proxies in favour of Item 4.

STEP 4 SIGNATURE OF ShAREhOLDERS – ThIS MUST BE COMPLETED

Shareholder 1 (Individual) Joint Shareholder 2 (Individual) Joint Shareholder 3 (Individual) Sole Director and Sole Company Secretary Director/Company Secretary (Delete one) Director

This form should be signed by the shareholder. If a joint holding, either shareholder may sign. If signed by the shareholder’s attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the company’s constitution and the Corporations Act 2001 (Cth).

DRX PRX102

hOW TO COMPLETE ThIS PROXY FORM

Your Name and Address

This is your name and address as it appears on the company’s share register. If this information is incorrect, please make the correction on the form. Shareholders sponsored by a broker should advise their broker of any changes. Please note: you cannot change ownership of your shares using this form.

Appointment of a Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box in Step 1. If the person you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the name of that person in Step 1. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a shareholder of the company. A proxy may be an individual or a body corporate.

Votes on Items of Business – Proxy Appointment

You may direct your proxy how to vote by placing a mark in one of the boxes opposite each item of business. All your shares will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the items of business, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

Appointment of a Second Proxy

You are entitled to appoint up to two persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company’s share registry or you may copy this form and return them both together.

To appoint a second proxy you must:

• (a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of shares applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.

• (b) return both forms together.

Signing Instructions

You must sign this form as follows in the spaces provided:

Individual: where the holding is in one name, the holder must sign.

Joint holding: where the holding is in more than one name, either shareholder may sign.

Power of Attorney: to sign under Power of Attorney, you must lodge the Power of Attorney with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001 ) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

Corporate Representatives

If a representative of the corporation is to attend the meeting the appropriate “Certificate of Appointment of Corporate Representative” should be produced prior to admission in accordance with the Notice of Meeting. A form of the certificate may be obtained from the company’s share registry.

Lodgement of a Proxy Form

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 11:00am on Tuesday, 24 May 2011, being not later than 48 hours before the commencement of the meeting. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxy Forms may be lodged using the reply paid envelope or:



by mail:

Diatreme Resources Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia



by fax:

+61 2 9287 0309



by hand:

delivering it to Link Market Services Limited, Level 12, 680 George Street, Sydney NSW 2000.

If you would like to attend and vote at the Annual General Meeting, please bring this form with you. This will assist in registering your attendance.