DIATREME RESOURCES LIMITED — AGM Information 2018

May 29, 2018

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DIATREME RESOURCES LIMITED ABN: 33 061 267 061 Postal Address: P.O B o x 382 Co o rparoo QLD 4151 Registered Office: U nit 8 55-6 1 Holdswort h Street Co o rparoo QLD 4151 PH: +61 (0)7 3 3 97 2222 www.dia t reme.com.au manag e r@diatrem e .com.au

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ASX : DRX

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30 Ma y 2018

CHAIRMAN’S ADDRESS Presented to Annual General Meeting of Shareholders Wednesday 30 May 2018

Dear s h areholders

Good a f ternoon an d thank you for attendi n g today’s A n nual General Meeting.

As sho w n in our A nnual Rep o rt, there h a ve been s o me significant achiev e ments for D iatreme Resour c es Limited over the p ast year. I would lik e to draw y our attent i on to som e of the highlights.

Cyclone – WA’s next mineral sands mine

The C y clone Zircon Project i s our flags h ip project a nd recent developme n ts have b e en very heartening for the c reation of a new miner a l sands mi n e in the world-class E u cla Basin.

In 201 7 , we subs t antially co m pleted th e de-risking of the pro j ect, there b y boosting investor confide n ce. This w a s signified by the award in Janua r y 2017 of W estern Au s tralian Go v ernment approv a l for the de v elopment a nd operati o n of a new m ineral san d s mine.

Congra t ulations ar e in order for our Bo a rd and m a nagement team for t h eir succes s in this proces s , and to o u r sharehol d ers for your patience. It was not an easy pr o cess but u ltimately should p rove highl y rewarding.

Regula t ory approv a l followed a de-risking process th a t included the discov e ry of the n e cessary water s u pply; a Na t ive Title an d Mining A g reement with the traditional land o wners; the a ward of a Minin g Lease; the acquisition of the ad j acent Cycl o ne Extend e d; and an independe n t project study t o enhance C yclone’s ec o nomics.

The re w ard for our efforts wa s shown in S eptember 2 017, when we signed a non-binding MOU with C h ina ENFI E ngineering Corporati o n (ENFI) f or the co m pletion of C yclone’s b ankable feasibili t y study (B F S). ENFI is a significa n t corporati o n. It is bac k ed by one of China’s l argest stat e -owned en t erprises and pa r t of the Chi n a Minmetals group, w h ich has an e stimated A$327 billion in total ass e ts.

In Janu a ry this yea r , we conve r ted the initi a l MOU int o two agree m ents with E NFI.

These c omprised a Cooperati o n Agreem e nt, under w hich ENFI is accessi n g its network within China’s SOE and banking sectors to as s ist in sou r cing project investors, offtakers a nd debt funding . It also inv o lved a Co n sulting Ser v ices Agreement, detailing the re m aining BFS aspects to be c o mpleted by ENFI and i t s world-lea d ing team o f engineers and other analysts.

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I can advise that the BFS is progressing well and we expect to announce the results early in the third quarter of 2018.

We would expect a market re-rating of DRX shares to follow this announcement, given the reaction to our January 11 announcement concerning ENFI, when our share price significantly increased.

The market’s renewed interest in Diatreme follows an uptick in mineral sands prices and forecasts of constrained supply, spurring demand for new, independent projects such as Cyclone.

In February, major producer Iluka Resources Limited increased its zircon reference price by nearly 15% to US$1,410 per tonne. It reported a 40% rise in the zircon price since the start of 2017, with continued demand from industrialising Asia and other major economies.

During a recent visit to China, we were delighted by the interest in our project from potential partners. While these discussions are at an early stage, we are working to formalise such interest to help secure new project partners.

Together with our partner ENFI, we are confident of driving this project towards production, generating valuable new jobs and investment for Western Australia and wealth for our shareholders.

Expanding project pipeline

In addition to Cyclone, Diatreme is in a fortunate position to have other projects capable of increasing shareholder value.

Foremost among these is our Cape Bedford Silica/Heavy Mineral Sands project located north of Cairns. Situated near the world’s largest silica sand mining operation, Cape Bedford is considered highly prospective for both silica and heavy mineral sands.

Similar to Cyclone, Diatreme has worked hard to ensure community support for the project. We have developed a good relationship with the traditional owners, the Hopevale Congress, having signed Conduct and Compensation as well as Cultural Heritage agreements in 2017.

Initial exploration work at Cape Bedford has been promising, showing the potential for highquality silica sand. Results from the reconnaissance drilling and initial metallurgical testwork have been released to the ASX and I would refer you to our announcement dated 2 March 2018 for further details.

We are now looking to advance exploration drilling, with the aim of compiling a Mineral Resource estimate for the Nob Point dune system.

Notably, the Cape Bedford project is favourably located as the closest high-grade undeveloped project to the world’s largest silica sand markets in Asia. Notably, the silica sand market is seen reaching nearly US$10 billion in annual revenues by 2022, including from automotive and construction demand.

Elsewhere in our project pipeline, we continue to explore opportunities to unlock value from other projects such as the Tick Hill Gold Project and the Clermont Copper Project. Our aim is to minimise expenditure commitments while maximising potential gains for shareholders, amid solid copper and gold prices.

Strengthened Board

I would also like to introduce you to our recently appointed new Non-Executive Director, Mr Gregory Starr, who joined the Board last October. Greg has more than 20 years’ international

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experience in the mining industry, including companies listed on the Australian and Canadian stock exchanges. His industry expertise and experience in merger and acquisition and capital raisings is highly valuable to Diatreme and he has already made an excellent contribution to our Company.

Greg adds to an already experienced Board and management team with experience across all stages of mining project development. As we grow as a Company, we will continue to evaluate our team to ensure we have the right people in the right places to enhance shareholder value, while also maintaining strong corporate governance.

I would also like to thank our shareholders and new investors for supporting our capital management initiatives over the past year. These have ensured Diatreme is well placed to advance our key projects at the right time in the cycle.

Strong outlook

Looking ahead, the outlook appears extremely favourable for our Company.

Globally, the world is now enjoying synchronised growth for the first time since the global financial crisis. The world’s largest economies, including China, Europe and the United States, are all expanding, while emerging economies in Asia continue to pick up speed.

Domestically, we are seeing an upturn in confidence in the resources sector. Share prices are rising, investors are investing again and miners are increasing exploration activity.

And as I highlighted earlier, the mineral sands industry is seeing an upturn, which we are already benefitting from as investors re-examine our sector.

Put these factors together and there is a very positive environment for Diatreme, both globally and domestically.

As an emerging mineral sands miner in Australia, we are perfectly placed to capitalise on these promising conditions, with the support of all our stakeholders.

Of course Diatreme is subject to the normal challenges pertaining to ASX listed exploration companies with small market capitalisation, and obtaining appropriate levels of funding remains a challenge for Diatreme to achieve all its goals. However we remain positively focussed on those challenges and our major project progress will certainly aid in that task.

On behalf of the Board, I wish to thank all shareholders, employees, contractors, management and everyone involved with Diatreme for your important contribution to our recent successes.

More successes lie ahead of us in 2018, and I am very confident our team will deliver.

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William Wang Chairman

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