DIATREME RESOURCES LIMITED — AGM Information 2017

Apr 27, 2017

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Diatreme Resources Limited ABN 33 061 267 061

NOTICE OF ANNUAL GENERAL MEETING EXPLANATORY MEMORANDUM

PROXY FORM

Date of Meeting: Tuesday 30 May 2017 Time of Meeting: 2.00 pm (Brisbane time) Place of Meeting: Unit 8 61 Holdsworth Street Coorparoo QLD 4151

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NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the Annual General Meeting of Shareholders of Diatreme Resources Limited ( Company ) will be held at 2.00 pm (Brisbane time) on Tuesday 30 May 2017 at the office of the Company, Unit 8, 61 Holdsworth Street, Coorparoo, Queensland.

AGENDA

ORDINARY BUSINESS

• a) Financial Statements and Reports

• b) Resolution 1: Remuneration Report

• c) Resolution 2: Re- election of Mr. Andrew Tsang

SPECIAL BUSINESS

• d) Resolution 3: Ratify the Issue of Shares under Previous Placement

SPECIAL RESOLUTION

• e) Resolution 4: Approval to issue 10% of the issued capital of the Company over a 12 month period pursuant to Listing Rule 7.1A

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ORDINARY BUSINESS

Financial Statements and Reports

To receive and consider the Financial Report and the Reports of the Directors and the Auditor in respect of the year ended 31 December 2016 ( Reports ).

Neither the Corporations Act nor the Company’s Constitution requires Shareholders to vote on such reports. However Shareholders will be given ample opportunity to raise questions about the Reports at the meeting.

Resolution 1: Remuneration Report

To consider and, if thought fit, pass the following advisory resolution:

“That the Company be authorised to adopt the Remuneration Report for the year ended 31 December 2016”.

Advisory Vote

The vote on this Resolution 1 is advisory only and does not bind the Directors of the Company.

Voting exclusion statement

A vote on this resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

• (a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or

• (b) a Closely Related Party of such member,

However, the above persons may cast a vote on Resolution 1 as a proxy if the vote is not cast on behalf of a person described above and either:

• (a) the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on the resolution; or

• (b) the voter is the Chair and the appointment of the chair as proxy:

• (i) does not specify the way the proxy is to vote on the resolution; and

• (ii) expressly authorises the chair to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel

.

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.”

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SPECIAL BUSINESS

Resolution 3: Ratification of prior issue of shares

To consider and, if thought fit, pass the following ordinary resolution:

“That for the purposes of Listing Rule 7.4 and for all other purposes, the issue of 19,583,333 fully paid ordinary shares in the capital of the Company to a sophisticated investor, for the purpose and otherwise on the terms described in the Explanatory Notes, be ratified.”

Voting exclusion statement

The Company will disregard any votes cast on Resolution 3 by:

• a person who participated in the issue; and

• an associate of any of those persons.

However, the Company need not disregard a vote if:

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

• it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

SPECIAL RESOLUTION

Resolution 4: Approval of 10% placement facility

To consider and if thought fit, pass the following as a Special Resolution:

“That for the purposes of Listing Rule 7.1A and for all other purposes, shareholders approve the issue of Equity Securities up to 10% of the issued capital of the Company (at the time of issue) calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Memorandum.”

Voting exclusion statement

The Company will disregard any votes cast on this Resolution by a person (and any associates of such a person) who may participate in the issue of the Shares and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of Shares, if this Resolution is passed. 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 proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

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Voting entitlements

In accordance with regulation 7.11.37 of the Corporations Regulations 2001 (Cth), the Board has determined that for the purpose of voting at the Meeting, Shareholders eligible to vote at the Meeting are those persons who are the registered holders of Shares at 7.00pm (Sydney time) on Sunday 28 May 2017.

If you are not the registered holder of a relevant share at that time, you will not be entitled to vote at the Meeting.

How to Vote

You may vote by attending the Meeting in person, by proxy or authorised representative. Registration will commence just prior to the Meeting. To vote in person, attend the Meeting on the date and at the place set out above.

Voting at the Meeting

Ordinary resolutions require the support of more than 50% of the votes cast. Special resolutions require the support of at least 75% of the votes cast. All the Resolutions at this Meeting, other than Resolution 4, are ordinary resolutions. Resolution 4 is a special resolution.

Every question arising at this Meeting will be decided in the first instance by a show of hands. A poll may be demanded in accordance with the Company’s Constitution.

On a show of hands, every Shareholder who is present in person or by proxy, representative or attorney, will have one vote. Upon a poll, every person who is present in person or by proxy, representative or attorney will have one vote for each Share held by that person.

Proxy Votes

A Shareholder who is entitled to attend this Meeting and vote is entitled to appoint a proxy to attend and vote for the Shareholder at the Meeting. A proxy need not be a Shareholder. If the Shareholder is entitled to cast two or more votes at the Meeting the Shareholder may appoint two proxies and may specify the proportion or number of votes which each proxy is appointed to exercise. A form of proxy accompanies this Notice

. To be valid, the appointment of a proxy (made using a properly completed and executed Proxy Form) must be received by the Company no later than 48 hours before the commencement of the meeting.

Proxy Forms can be submitted by the below methods:

By posting: Diatreme Resources Limited Share Registry C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 By facsimile: (02) 9287 0309 By delivery: Link Market Services Limited Either: 1A Homebush Bay Drive Rhodes NSW 2138, or 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).

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Please note that if the Chairman of the Meeting is your proxy (or becomes your proxy by default), you expressly authorise the chair to exercise your proxy on Resolution 1 even though they are connected directly or indirectly with the remuneration of a member of the Key Management Personnel for the Company, which includes the chair. If you appoint the chair as your proxy you can direct the chair to vote for or against or abstain from voting on any of Resolutions 1, 2, 3 and 4 by marking the appropriate box on the Proxy Form.

Voting Intention of the Chair for all Resolutions

Shareholders should be aware that any undirected proxies given to the Chair will be cast by the Chair and counted in favour of the Resolutions the subject of this Meeting, subject to compliance with the Corporations Act.

By Order of the Board

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Tuan Do Company Secretary Dated 28 April 2017

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EXPLANATORY MEMORANDUM

This Explanatory Memorandum is provided to Shareholders of Diatreme Resources Limited (Company) to explain the Resolutions to be put to Shareholders at the Annual General Meeting to be held at 2:00 pm on Tuesday 30 May 2017 at Unit 8, 61 Holdsworth Street, QLD 4151.

The Directors recommend Shareholders read the accompanying Notice of Meeting and this Explanatory Memorandum in full before making any decision in relation to the Resolutions.

Financial Statements and Reports

In accordance with the Constitution, the business of the Meeting will include receipt and consideration of the Annual Report together with the declaration of the directors, the directors’ report, the Remuneration Report and the auditors’ report.

The Company will not provide a hard copy of the Company’s Annual Report to Shareholders unless specifically requested to do so. The Company’s Annual Report can be found on its website at www.diatreme.com.au.

Resolution 1: Remuneration Report

Section 300A of the Corporations Act requires the Directors’ Report to include a separately identified Remuneration Report. Listed entities are further required to submit the Remuneration Report for adoption by way of a non-binding advisory resolution at the Company’s Annual General Meeting (AGM), in accordance with Section 250R(2) of the Corporations Act.

The Remuneration Report is set out in the Directors’ Report section of the Annual Report for the year ended 31 December 2016.

“Two Strikes”

The Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2001 (Cth) which came into effect on 1 July 2011, amended the Corporations Act to provide that Shareholders will have the opportunity to remove the whole Board except the Managing Director if the Remuneration Report receives a ‘no’ vote of 25% or more (Strike) at two consecutive annual general meetings.

Where a resolution on the Remuneration Report receives a Strike at two consecutive annual general meetings, the Company will be required to put to Shareholders at the second annual general meeting a resolution (Spill Resolution) on whether another meeting should be held (within 90 Days) (Spill Meeting), at which all Directors (other than the Managing Director) who were in office at the date of approval of the applicable Directors’ Report, must cease to hold office immediately before the end of the Spill Meeting and must stand for re-election, unless the Company put to Shareholders a Spill Resolution at the first annual general meeting.

The Company did not receive a Strike at its 2016 Annual General Meeting and as a result, if the Remuneration Report receives a Strike at this Meeting, the Company will not be required to put a Spill Resolution. However, if the Remuneration Report receives a Strike at this Meeting and a second Strike at the 2018 Annual General Meeting, the Company is then required to put a Spill Resolution.

Proxies

Resolution 1 is an ordinary resolution.

The Corporations Act places certain restrictions on the ability of “Key Management Personnel” (including the Chairman of the Meeting) and their “Closely Related Parties” to vote on Resolution 1 and also places restrictions on “Key Management Personnel” and their “Closely Related Parties” where they are voting as proxy for another shareholder on resolutions connected with the remuneration of Key Management Personnel.

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To ensure that your vote is counted on Resolution 1, you are encouraged to direct your proxy how to vote on that item by indicating your preference by completing the “For”, “Against” or “Abstain” boxes on the Proxy Form. If you provide an undirected proxy in relation to Resolution 1 to a director (other than the Chairman of the Meeting) or other Key Management Personnel or their Closely Related Parties, such a proxy will not vote on Resolution 1. To allow such a proxy to vote on Resolution 1, you must direct the proxy how to vote by completing the “For”, “Against” or “Abstain” boxes on the Proxy Form.

If you appoint the Chairman of the Meeting as your proxy in relation to Resolution 1, but do not complete the “For”, “Against” or “Abstain” boxes on the Proxy Form for Resolution 1, the Chairman will exercise your proxy even though Resolution 1 is connected directly or indirectly with the remuneration of Key Management Personnel. The Chairman intends to vote all available proxies in favour of Resolution 1. If you wish to appoint the Chairman as proxy with a direction to vote against, or to abstain from voting on, Resolution 1 you must specify this by completing the “Against” or “Abstain” box on the Proxy Form.

Recommendation: The Board unanimously recommends that Shareholders vote in favour of adopting the Remuneration Report. A vote on this resolution is advisory only and does not bind the Directors or the Company.

Resolution 2: Re-Election of Mr Andrew Tsang as a Director

Pursuant to the Constitution of the Company, one-third of the Directors or, if their number is not a multiple of three, the number nearest to one-third, except the Managing Director, are required to retire by rotation at each Annual General Meeting. Additionally, under ASX Listing Rule 14.4, a Director must not hold office without re-election past the third annual general meeting following the director's appointment, or three years whichever is longer. A Director who retires in accordance with these provisions is eligible for re-election.

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 “Directors’ Report” within the Annual Report.

Recommendation: The Directors recommend that the resolution be passed.

Resolution 3: Ratification of prior issue of shares

This Resolution seeks shareholder ratification pursuant to ASX Listing Rule 7.4 for the prior issue of a total of 19,583,333 Shares to sophisticated investor VW Pty Limited (which is an exempt investor and is not a related party of the Company). These shares from part of the placement as announced to ASX on 20 July 2016.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

ASX Listing Rule 7.4 provides that where a company’s shareholders ratify the previous issue of securities made pursuant to ASX Listing Rule 7.1 (provided that the previous issue of securities did not breach ASX Listing Rule 7.1) those securities will be deemed to have been issued with shareholder approval for the purposes of ASX Listing Rule 7.1.

By ratifying the prior issue of 19,583,333 Shares to VW Pty Limited, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity without the requirement to obtain prior shareholder approval.

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The following information is provided in accordance with the requirements of ASX Listing Rule 7.5:

• (a) The number of securities previously issued was 19,583,333 Shares;

• (b) The issue price of the Shares was $0.012 (1.2 cents) per Share;

• (c) The securities issued were fully paid ordinary Shares in the Company having the same terms and rights as, and ranking equally with, the Company's existing listed fully paid ordinary Shares;

• (d) The Shares were issued to sophisticated investor VW Pty Limited, which is an exempt investor and is not a related party of the Company;

• (e) Funds raised by the issue of the shares were used to fund the Company’s project activities and for working capital;

• (f) A voting exclusion statement is contained in the Notice of General Meeting.

Recommendation: The Directors recommend that the resolution be passed.

Resolution 4: Approval of 10% placement facility

Introduction and purpose of resolution

Under Resolution 4 the Company is seeking shareholder approval to create an ability to issue up to 10% of the issued share capital of the Company under ASX Listing Rule 7.1A during the 12 month period following this Meeting ( 10% Placement Facility ), without subsequent Shareholder approval and without using the Company’s 15% placement capacity under Listing Rule 7.1.

Resolution 4 is a special resolution. Accordingly, at least 75% of votes cast by Shareholders present and eligible to vote at the Meeting must be in favour of Resolution 4 for it to be passed.

The Board recommends that Shareholders vote in favour of Resolution 4.

Eligibility criteria

Under Listing Rule 7.1A an “eligible entity” may, subject to shareholder approval by way of Special Resolution, issue Equity Securities comprising up to 10% of its issued share capital in addition to the normal 15% new issue capacity under Listing Rule 7.1. An “eligible entity” for the purposes of Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. The Company is an “eligible entity”.

Placement capacity under Listing Rule 7.1 and 7.1A

The 10% Placement is for a period of 12 months from the date of the AGM and is in addition to a listed entity’s usual 15% placement capacity under Listing Rule 7.1.

As at the date of finalisation of this Notice of Meeting, the Company has 876,732,679 Shares on issue and therefore, in addition to any other Equity Securities which it can issue under the permitted exceptions to Listing Rules 7.1 and 7.1A, it has the capacity to issue:

• 131,509,902 Equity Securities under Listing Rule 7.1; and

• subject to shareholder approval being obtained under Resolution 4, 87,673,268 Equity Securities under Listing Rule 7.1A.

The actual number of Shares that the Company will have capacity to issue under Listing Rule 7.1A will be calculated at the date of issue of the Shares in accordance with the formula in Listing Rule 7.1A.2

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Formula for calculating 10% Placement Facility

Listing Rule 7.1A.2 provides that eligible entities that have obtained Shareholder approval at an annual general meeting may issue or agree to issue, during the ‘placement period’ (see section 3.6 below), a number of Equity Securities calculated in accordance with the following formula:

(A x D) – E

Where:

• A is the number of ordinary securities on issue 12 months before the date of issue or agreement to issue:

• plus the number of fully paid ordinary securities issued in the 12 months underan exception in Listing Rule 7.2;

• plus the number of partly paid ordinary securities that became fully paid in the 12 months;

• plus the number of fully paid ordinary securities issued in the 12 months with approval of holders of ordinary securities under Listing Rules 7.1 or 7.4 (but note that this does not include an issue of fully paid ordinary securities under the entity’s 15% placement capacity without Shareholder approval); and

• less the number of fully paid ordinary securities cancelled in the 12 months

• D is 10%

• E is the number of Equity Securities issued or agreed to be issued under Listing Rule7.1A.2 in the 12 months before the date of the issue or agreement to issue that are not issued with the approval of shareholders under Listing Rules 7.1 or 7.4.

Minimum issue price

In accordance with Listing Rule 7.1A, Equity Securities issued by the Company under a 10% Placement Facility can only be issued at a price that is not less than 75% of the VWAP (volume weighted average price) of the Shares calculated over the 15 trading days on which trades in its Shares were recorded immediately before:

• the date on which the issue price of the Equity Securities is agreed; or

• the issue date (if the Equity Securities are not issued within five trading days of the date on which the issue price is agreed).

Placement period

Shareholder approval under Listing Rule 7.1A is valid from the date of this AGM until the earlier to occur of:

• 12 months after the date of the AGM; and

• the date of approval by Shareholders of a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities) or Listing Rule 11.2 (disposal of main undertaking), or such longer period if allowed by ASX.

Dilution to existing shareholdings

If Resolution 4 is approved by Shareholders and the Company issues Equity Securities under the 10% Placement Facility, there is a risk of economic and voting dilution to existing Shareholders as a result.

There is a risk that:

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a) the market price for the Company's Equity Securities may be significantly lower on the date of the issue of the Equity Securities than on the date of the Meeting; and

b) the Equity Securities may be issued at a price that is at a discount to the market price for the Company's Equity Securities on the issue date or the Equity Securities are issued as part of consideration for the acquisition of a new asset, which may have an effect on the amount of funds raised by the issue of the Equity Securities.

As required by Listing Rule 7.3A.2, the table below shows a number of hypothetical scenarios for a 10% Placement where variable “A” in the formula in Listing Rule 7.1A.2 (representing the Company’s share capital) has increased by either 50% or 100%, and the share price has decreased by 50% or increased by 100% from the approximate share price as at the date of finalisation of this Notice of Meeting.

Variable “A” In Listing Rule 7.1A.2		10% Voting Dilution	10% Voting Dilution	10% Voting Dilution
		$0.005 50% decrease in Market Price	$0.010 Market Price	$0.015 50% increase in Market Price
Current Variable “A” 876,732,679 Shares	Shares issued	87,673,268 New Shares	87,673,268 New Shares	87,673,268 New Shares
	Funds raised	$438,366	$876,733	$1,315,099
50 % increase in current Variable “A” 1,315,099,019 Shares	Shares issued	131,509,902 New Shares	131,509,902 New Shares	131,509,902 New Shares
	Funds raised	$657,550	$1,315,099	$1,972,649
100% increase in current Variable “A” 1,753,465,358 Shares	Shares issued	175,346,536 New Shares	175,346,536 New Shares	175,346,536 New Shares
	Funds Raised	$876,733	$1,735,465	$2,630,198

The table has been prepared on the following assumptions:

• The Company issues the maximum number of Equity Securities available under the 10% Placement.

• No Options are exercised into Shares before the date of issue of the Equity Securities.

• The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.

• The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Placement, based on that Shareholder’s holding at the date of the Annual General Meeting.

• The table shows only the effect of issues of Equity Securities under Listing Rule 7.1A, not under the 15% placement capacity under Listing Rule 7.1.

• The market price is 1.0 cent, being the closing price of the Shares on ASX on 20 April 2017.

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Purpose of the 10% Placement Facility

The Company may seek to issue the Equity Securities for the following purposes:

• non-cash consideration for the acquisition of new assets and investments. In such circumstances the Company will provide a valuation of the non-cash consideration as required by Listing Rule 7.1A.3; or

• cash consideration. In such circumstances, the Company intends to use the funds raised towards an acquisition of new assets or investments (including expenses associated with such acquisition), continued and increased production, exploration and feasibility study expenditure on the Company’s current assets and/or general working capital.

The Company will provide further information at the time of issue of any Equity Securities under the Additional 10% Placement Facility in compliance with its disclosure obligations under Listing Rules 7.1A.4 and 3.10.5A.

Allocation under the 10% Placement Facility

The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the Additional 10% Placement Facility. The identity of the allottees of Equity Securities will be determined on a case-by-case basis having regard to the factors including but not limited to the following:

• the methods of raising funds that are available to the Company, including but not limited to, a rights issue or other issues in which existing security holders can participate;

• the effect of the issue of the Equity Securities on the control of the Company;

• the financial situation and solvency of the Company; and

• advice from corporate, financial and broking advisers (if applicable).

The allottees under the 10% Placement Facility have not been determined as at the date of this Notice of Annual General Meeting but may include existing Shareholders and/or new Shareholders, who are not Related Parties or associates of a Related Party of the Company.

Further, if the Company is successful in acquiring new assets or investments, it is likely that the allottees under the 10% Placement Facility will be the vendors of the new assets or investments.

Previous approval

The Company has previously obtained Shareholder approval under Listing Rule 7.1A at the Annual General Meeting held on 26 May 2016.

As the Company has previously obtained Shareholder approval under Listing Rule 7.1A, the following information is provided to Shareholders, in accordance with Listing Rule 7.3A.6, regarding the Equity Securities issued in the previous 12 months preceding the date of the AGM (that is, since 26 May 2016):

Number of equity securities on issue at commencement of 12 month period	462,287,960 Shares 114,179,704 Listed Options 21,505,000 Unlisted Options 597,972,664 Equity Securities Total)
Number of equity securities issued in the prior 12 month period	66,765,120
Percentage previous issues of total number of equity securities on issue at commencement of 12 month period	7.70%

Details of equity securities issued in previous 12 months:

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Date	Number of equity securities	Type of equity security	Summary of terms	Names of recipients	Issue price of equity securities and discount to market price (if any)	If issued for cash – the total consideration received, and what it was spent on	Amount of cash consideration spent	Intended use for remaining amount of cash	If issued for non-cash consideration – a description of the consideration and the current value of the consideration
20 July 2016	47,181,787	Fully paid ordinary shares	Share Purchase Plan	Various	1.1 cents Nil discount	$519,000 Funding of the Company’s project activities and for working capital	$519,000	N/A	N/A
20 July 2016	19,583,333	Fully paid ordinary shares	Placement of shares to sophisticated investor	VW Pty Ltd	1.2 cents Nil discount	$235,000 Funding of the Company’s project activities and for working capital	$235,000	N/A	N/A

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Voting Exclusion

A voting exclusion statement is included in the Notice of Meeting. At the date of the Notice of Meeting, the Company has not approached any particular existing shareholder or security holder or an identifiable class of existing security holder to participate in the issue of the Equity Securities which would be issued under Listing Rule 7.1A. No existing shareholder's votes will therefore be excluded under the voting exclusion in the Notice of Meeting.

Recommendation:

The Directors believe that the 10% Placement Facility is beneficial for the Company as it will give the Company the flexibility to issue further Equity Securities representing up to 10% of the Company’s share capital during the next 12 months. Accordingly, the Board unanimously recommends that Shareholders approve Resolution 4.

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

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ABN 33 061 267 061

LODGE YOUR VOTE

ONLINE www.linkmarketservices.com.au

BY MAIL  Diatreme Resources Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia  BY FAX +61 2 9287 0309

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
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BY HAND Link Market Services Limited 1A Homebush Bay Drive, Rhodes NSW 2138; or Level 12, 680 George Street, Sydney NSW 2000

 ALL ENQUIRIES TO Telephone: 1300 554 474 Overseas: +61 1300 554 474

X99999999999

X99999999999

PROXY FORM

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

APPOINT A PROXY

the Chairman of the OR if you are NOT appointing the Chairman of the Meeting as your proxy, please write the name of the person or Meeting (mark box) body corporate you are appointing as your proxy

or failing the person or body corporate named, or if no person or body corporate is named, the Chairman of the Meeting, as my/our proxy to act on my/our behalf (including to vote in accordance with the following directions or, if no directions have been given and to the extent permitted by the law, as the proxy sees fit) at the Annual General Meeting of the Company to be held at 02:00pm on Tuesday, 30 May 2017 at Unit 8, 61 Holdsworth Street, Coorparoo QLD 4151 (the Meeting ) and at any postponement or adjournment of the Meeting. Important for Resolution 1: If the Chairman of the Meeting is your proxy, either by appointment or by default, and you have not indicated your voting intention below, you expressly authorise the Chairman of the Meeting to exercise the proxy in respect of Resolution 1, even though the Resolution is connected directly or indirectly with the remuneration of a member of the Company’s Key Management Personnel ( KMP ). The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.

VOTING DIRECTIONS

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 T

Resolutions

For Against Abstain * Special Resolution For Against Abstain * 1 Remuneration Report 4 Approval to issue 10% of the issued capital of the Company over a 12 month period pursuant to Listing 2 Re- election of Mr. Andrew Tsang Rule 7.1A Special Business For Against Abstain *

• 3 Ratify the Issue of Shares under Previous Placement

 * 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.

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 PRX1701N

HOW TO COMPLETE THIS SHAREHOLDER 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 PROXY

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box in Step 1. If you wish to appoint someone other than the Chairman of the Meeting as your proxy, please write the name of that individual or body corporate in Step 1. A proxy need not be a shareholder of the Company.

DEFAULT TO CHAIRMAN OF THE MEETING

Any directed proxies that are not voted on a poll at the Meeting will default to the Chairman of the Meeting, who is required to vote those proxies as directed. Any undirected proxies that default to the Chairman of the Meeting will be voted according to the instructions set out in this Proxy Form, including where the Resolution is connected directly or indirectly with the remuneration of KMP.

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; and

• (b) return both forms together.

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 02:00pm on Sunday, 28 May 2017, 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:

ONLINE 

www.linkmarketservices.com.au

Login to the Link website using the holding details as shown on the Proxy Form. Select ‘Voting’ and follow the prompts to lodge your vote. To use the online lodgement facility, shareholders will need their “Holder Identifier” (Securityholder Reference Number (SRN) or Holder Identification Number (HIN) as shown on the front of the Proxy Form).

BY MOBILE DEVICE

QR Code

Our voting website is designed specifically for voting online. You can now lodge your proxy by scanning the QR code adjacent or enter the voting link www.linkmarketservices.com.au into your mobile device. Log in using the Holder Identifier and postcode for your shareholding.

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To scan the code you will need a QR code reader application which can be downloaded for free on your mobile device.

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* 1A Homebush Bay Drive Rhodes NSW 2138

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.

or

Level 12 680 George Street Sydney NSW 2000

• During business hours (Monday to Friday, 9:00am–5:00pm)

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 or online at www.linkmarketservices.com.au.

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.