DIATREME RESOURCES LIMITED — Capital/Financing Update 2012

Nov 4, 2012

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DIATREME RESOURCES LIMITED

ABN: 33 061 267 061

Postal Address: P.O Box 10288 Brisbane Adelaide Street QLD 4000 Registered Office: Level 2 87 Wickham Terrace Spring Hill QLD 4000 PH: +61 (0)7 3832 5666 FX: +61 (0)7 3832 5300 www.diatreme.com.au manager@diatreme.com.au

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ASX : DRX
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5 November 2012

Dear Shareholder

SHARE PURCHASE PLAN – SHAREHOLDER OFFER

The Directors of Diatreme Resources Limited (“the Company”) are pleased to offer you the opportunity to participate in a Share Purchase Plan (“SPP”).

The SPP is being undertaken at this important time wherein the Company, whilst advancing its flagship Cyclone Zircon Project through the Definitive Feasibility Study (DFS), continues to establish its exploration footprint over other highly prospective mineral sand prospects in Western Australia and Queensland, along with promising base metal projects in Queensland and South Australia. The opportunity for existing shareholders to directly participate in this funding process occurs at a time when the Company’s shares are trading at historic low values, yet the flagship project has been independently valued at least ten times, if not more, than the current total market capitalisation of the Company.

Project Updates

Cyclone Zircon Project – Eucla Basin, WA

The DFS over the 97million tonne @ 2.5% heavy mineral probable ore reserve commenced in early 2012. The Company is currently negotiating with international resource funding institutions to secure DFS financing for the project through to the bankable stage.

Clermont Copper/Gold Project – Central QLD

The reassessment phase of the project over the past six months, incorporating detailed field mapping, core logging and geophysical reinterpretation, has resulted in an improved understanding of the geology and mineralisation of the Rosevale Porphyry Corridor. This work has highlighted outstanding drill-ready porphyry copper targets for early follow-up. Antofagasta Minerals S.A. is now proceeding to the farm-in Phase.

Mandora Heavy Mineral Project – Canning Basin, WA

The Company appears to have initiated a pegging rush into the Canning Basin with its 471 km[2] Mandora exploration licence application (E45/4022) applied for earlier in the year. Substantial tenement areas have since been applied for by Iluka Resources and Sheffield Resources during past months over ground surrounding, and along strike from, the Company’s tenement. Mandora covers an area over a radiometric (geophysical) anomaly which is believed to be related to zircon within an ancient beach system. The zone of interest is over 50km in strike length.

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DIATREME RESOURCES LIMITED

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Noorina Heavy Mineral Project – Eucla Basin, SA

Two exploration licences, lying 80km east of the Cyclone (Zircon) deposit and along the same projected ancient Barton Shoreline, have recently been granted to the Company. The tenements, covering approximately 1,340 sq km, extend along a 100km strike length of the shoreline. With cultural heritage surveys and drilling traverse lines completed, the Company plans to commence on-ground exploration in the near future.

Anabama Copper/Gold/Cobalt Project – SA

The Company is in the process of negotiating a joint venture agreement with a third party that wishes to explore the southern parts of the project tenements for the iron ore potential within the Braemar Iron Formation.

Use of Funds

Proceeds from the SPP will be applied to progress the Cyclone Zircon Project DFS, conduct exploration on other highly prospective, but less advanced, mineral sand / metalliferous projects and for working capital.

SPP Details

We invite you to review the attached SPP document thoroughly in conjunction with publicly available information relating to the Company which is available from the ASX and from the Company’s website (www.diatreme.com.au).

Under the SPP Eligible Shareholders can subscribe for additional Shares, up to a maximum of A$15,000 worth, without paying brokerage or stamp duty. If appropriate, the SPP may also provide the opportunity for Eligible Shareholders to increase their holding into more than a marketable parcel.

The total number of Shares on issue at 2 November 2012 is 441,927,156.

The Offer will open on Friday, 9 November 2012 and will remain open until 5:00pm (AEDT) on Wednesday, 28 November 2012.

The Offer price is $0.025 (2.5 cents) per Share, representing an approximate 15% discount to the volume weighted average closing price for the Company’s shares over the ten trading days immediately prior to and including the Record Date.

Participation in the Offer is optional and is only open to Eligible Shareholders who are registered as holders of shares in Diatreme Resources Limited at 7:00pm (AEST) on Friday 2 November 2012 ( Record Date ) and whose registered address is in Australia or New Zealand. The rights of shareholders to participate under this SPP are not transferable.

Full details of the Offer and how to participate are contained within the attached SPP document.

The Board strongly supports this capital raising initiative. On their behalf I commend this opportunity to you and look forward to your participation and support.

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DIATREME RESOURCES LIMITED

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Should you have specific enquiries about the SPP, please telephone the Company on +61 7 3832 5666.

Yours faithfully

Anthony J Fawdon

Executive Chairman/CEO

Attachment: Diatreme Resources Limited 2012 Share Purchase Plan

Competent Person Statement

The information in this report that relates to Ore Reserves is based on information compiled by Mr Phil McMurtrie, who is a Member of the Australasian Institute 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 mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr McMurtrie consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

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Gilbert River /
CYCLONE Noorina – SA (HM)
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DIATREME RESOURCES LIMITED ABN 33 061 267 061

2012 SHARE PURCHASE PLAN

An invitation to Shareholders of Diatreme Resources Limited to purchase additional fully paid ordinary shares in Diatreme Resources Limited under the terms and conditions of this Share Purchase Plan.

Indicative Timetable *

Record Date	2 November 2012(7.00pm AEST)
Announcement of Share Purchase Plan	5 November 2012
Despatch Offer to Eligible Shareholders	9 November 2012
Share Purchase Plan Offer Opens	9 November 2012
Share Purchase Plan Offer Closes	28 November 2012(5.00pm AEDT)
Allotment and Issue of Shares	4 December 2012
Quotation of Shares on ASX	4 December 2012
Despatch Date	6 December 2012

* Timetable dates are indicative only and the Company retains the right to vary each of these dates without advance notification to shareholders, including by postponing the Closing Date or closing the offer early, or to withdraw or cancel the offer. However, any alteration to these dates will be notified to the ASX.

This is an important document and should be read in its entirety.

This document has been prepared by Diatreme Resources Limited. The Share Purchase Plan provides Shareholders with the opportunity to purchase additional Diatreme Resources Limited shares without brokerage and transaction costs.

The Share Purchase Plan does not take into account the individual investment objectives, financial situation or particular needs of each Shareholder. Accordingly, before making a decision whether or not to subscribe for Shares in the Share Purchase Plan, you should consult your financial or other professional adviser.

This document is not a prospectus or other disclosure document under the Corporations Act 2001 (Cth).

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA OR TO USA PERSONS

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5 November 2012

Diatreme Resources Limited 2012 Share Purchase Plan

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SHARE PURCHASE PLAN

This is an invitation to you as a shareholder of Diatreme Resources Limited ( Company ) to purchase additional fully paid ordinary shares in the Company ( Shares ) under the terms and conditions of the Diatreme Resources Limited Share Purchase Plan ( SPP ). The closing date for this offer is 5pm (AEDT) on 28 November 2012.

Shareholders who are eligible to apply for Shares under the SPP will have the opportunity to subscribe for additional Shares without incurring brokerage or stamp duty.

The SPP is not underwritten.

USE OF FUNDS

Proceeds from the SPP will be applied to progress the Cyclone Zircon Project DFS, conduct exploration on other highly prospective, but less advanced, mineral sand / metalliferous projects and for working capital.

1. Eligibility

You will be eligible to participate in the SPP if you are a holder of Shares at 7.00 pm (AEST) on Friday, 2 November 2012 ( Record Date ), with a registered address in either Australia or New Zealand ( Eligible Shareholder ).

This SPP does not constitute an offer in any jurisdiction in which or to any person to whom it would be unlawful to make such an offer. The Company reserves the right to reject any acceptance in respect of this SPP which it believes comes from a person who is not an Eligible Shareholder.

Participation in the SPP is entirely optional. Offers made under the SPP are not renounceable. This means that shareholders cannot transfer their right to purchase shares under this SPP offer to another person or entity. Participation in the SPP is not compulsory.

2. Participation

This SPP offer is made pursuant to ASIC Class Order 09/425 which was issued by the Australian Securities and Investments Commission (“ASIC”) on 15 June 2009, as amended (“ASIC CO 09/425”). Accordingly, the Company is exempt from the requirements contained in Parts 6D.2 and 6D.3 of the Corporations Act. The Company will not be issuing a prospectus in relation to the Shares offered under the SPP. The Company is not required to seek the approval of shareholders in relation to the offer of Shares under the SPP.

( Single holders ) If you are the only registered holder of a holding of Shares, but you receive more than one offer under the SPP (for example, due to multiple registered holdings), you may only apply for a maximum of up to $15,000 worth of Shares.

( Joint holders ) If you are recorded with one or more other persons as the joint holder of Shares, that joint holding is considered to be a single registered holding for the purpose of the SPP, and the joint holders are entitled to participate in the SPP in respect of that single holding only. If the same joint holders receive more than one offer under the SPP due to multiple identical holdings, whether those joint holdings are in the same registered name of the joint holding, or as an individual holder, the joint holders may only apply for a maximum parcel of up to $15,000 worth of Shares.

( Custodians, trustees and nominees ) If you are a Custodian and hold Shares on behalf of one or more persons that are not Custodians (each a Participating Beneficiary ), you may apply for a maximum of up to $15,000 worth of Shares for each Participating Beneficiary subject to providing the Company with a Custodian Certificate – see paragraph 8.

Custodians must establish that the issue of Shares applied for on behalf of a Participating Beneficiary will not result in the beneficiary acquiring Shares under this offer, or under any other share purchase plan or

3 October 2012

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Diatreme Resources Limited 2012 Share Purchase Plan

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similar arrangement, with an application price totalling more than $15,000 in the 12 month period prior to an application under this SPP.

If you hold Shares as a trustee or nominee for another person, but are not a Custodian, you cannot participate for beneficiaries in the manner described above. In this case, the rules for multiple single holders (as above) will apply.

If you hold Shares as a Custodian for joint holders:

• the $15,000 limit applies jointly in relation to those persons as if the Custodian holds the Shares on behalf of a single person; and

• where the terms on which the Shares are held do not cover the giving of instructions of this kind - the Custodian has received such an instruction from any of those persons.

Custodians should contact the Company on +61 7 3832 5666 to request a Custodian Certificate as required under these SPP terms and conditions.

If you are unsure whether you are a Custodian for the purposes of this SPP, you should obtain independent legal advice.

3. Pricing of Shares under the SPP

The offer price for Shares issued through the SPP will be $0.025 (2.5 cents) per Share ( SPP Offer Price ), representing an approximate 15% discount to the volume weighted average closing price for the Company’s shares over the ten trading days immediately prior to and including the Record Date.

Shareholders should be aware that the market price of Shares may rise or fall between the date of this offer and the date when Shares are allotted and issued to you, with the effect that the price or value of the Shares which applicants receive under this SPP may be more or less than the price paid for the Shares. There is no certainty that applicants will be able to sell their Shares for more than or at the same price as they paid for them, or at all. You should obtain your own independent investment advice in relation to the offer, your particular objectives, financial situation and needs and consider price movements of Shares before accepting the offer.

4. Shares offered

The Shares offered under this SPP are fully paid ordinary shares in the capital of the Company. The Shares issued under this SPP will rank equally with, and have the same terms as the Company’s other Shares on issue. Application will be made to ASX for quotation of the Shares issued under this SPP.

Any proposed date in this SPP (whether of quotation or trading of the Shares issued under this SPP or otherwise) is indicative only. Any person who trades any Shares issued under this SPP before receiving a transaction confirmation statement does so at their own risk.

Eligible Shareholders may apply for a number of Shares under one of the following alternative offers:

	Minimum number of Shares
Offer	offered at the SPP Offer Price of	Total amount payable
	$0.025/Share
A	40,000	$1,000
B	80,000	$2,000
C	150,000	$3,750
D	300,000	$7,500
E	440,000	$11,000
F	600,000	$15,000

5. Scale back

Diatreme is seeking to raise $3.31 million ( Maximum Amount ) under the SPP and if there is excess demand it will scale back applications if they exceed the Maximum Amount. The scale back will be conducted at the discretion of the Directors. All fractional entitlements will be rounded down to the next whole Share. If applications are scaled back, the Company will refund the balance of application monies,

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5 November 2012

Diatreme Resources Limited 2012 Share Purchase Plan

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without interest, following allotment by way of cheque to the applicant’s registered address. The Company also reserves the right to scale back applications if it believes that to do otherwise would be contrary to law.

6. Applying for Shares under the SPP

If you would like to apply for Shares under the SPP, please complete the enclosed Application Form and return it, together with your cheque made payable to “Diatreme Resources Limited”, to either of the following addresses:

g addresses:
Postal delivery	Hand delivery
Diatreme Resources Limited	Diatreme Resources Limited
C/- Link Market Services Limited	C/- Link Market Services Limited
Locked Bag 3415	1A Homebush Bay Drive
Brisbane QLD 4001	Rhodes NSW2138

Applications should only be made in one of the designated amounts set out in the Application Form. If the amount of the cheque tendered with the Application Form is not one of the designated amounts, Diatreme reserves the right to return the Application Form and cheque and not allot any Shares to you or to accept the cheque in respect of a lesser number of Shares and refund the balance of your application monies without interest. If any of your details on the Application Form are incorrect, please contact the Company’s Share Registry urgently through their call centre on +61 2 8280 7454.

The Company reserves the right to reject an application received, and/or may refuse to issue Shares under the SPP if the Company believes that acceptance of the application or the issue of the Shares would be contrary to any applicable law, the terms of ASIC CO 09/425 (or any replacement class order), the Listing Rules of ASX, or the terms and conditions of this SPP.

The Company may amend or complete any application received if such amendment would assist or permit the Company to issue and/or the applicant to receive Shares under this SPP, provided no amendment shall result in the number of Shares to be issued exceeding the number of Shares which may be issued at the offer price represented by the application monies received. If a cheque or other form of payment of application monies is not honoured, the Company may at its sole discretion issue Shares in response to the application and recover the application monies as a debt due or reject the application.

You can also remit funds electronically using BPAY[®] as indicated on the Application Form. Please be sure to type the customer reference number and biller code exactly as it appears on your Application Form. If you receive more than one Application Form you are required to use the Customer Reference Number and Biller Code found on each form to make your applications.

Duly completed Application Forms together with payment must be received by 5:00 pm (AEDT) on Wednesday, 28 November 2012 ( Closing Date ). Applications received after that time will not be accepted.

Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment, and should therefore take this into consideration when making payment.

Custodians must obtain a separate Application Form from the Company or the Company’s Share Registry if they wish to accept multiple parcels on behalf of distinct beneficiaries. The lodgement of the personalised Application Form which accompanies this offer may be treated by the Company as an acceptance by the holder named on the form and not as being made on behalf of distinct beneficiaries.

When requesting a separate Application Form from the Company or the Company’s Share Registry, Custodians must allow time for the dispatch, completion and return of the form. Requests should be made in writing or by facsimile. Requests made on or after the fifth business day before the Closing Date may not result in a separate Application Form being received in sufficient time to allow for lodgement before 5pm (AEDT) time on the Closing Date.

The return of the Application Form with the application monies, or the remittance of funds via BPAY[®] will constitute the Eligible Shareholder’s offer to subscribe for Shares on the terms and conditions of this SPP. Once an application has been made, it cannot be revoked. No notice of acceptance of the application will be provided.

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5 November 2012

Diatreme Resources Limited 2012 Share Purchase Plan

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Neither the Company nor the Company’s Share Registry accepts any liability for lost, delayed or misdelivered Application Forms or application monies.

7. Certification by Eligible Shareholders

By making payment by cheque, money order, bank draft or BPAY[®] , you certify that:

(a) you are an Eligible Shareholder, as defined in paragraph 1;

(b) you have read, understood and agree to be bound by the terms and conditions of the SPP and agree not to do any act or thing that would be contrary to the spirit, intention or purpose of the SPP;

(c) your application is irrevocable and unconditional;

(d) you agree to be bound by the terms of the Company’s constitution;

(e) the aggregate of the application price for the following does not exceed $15,000:

i. the Shares the subject of the application; and

ii. any other Shares issued to you under the SPP or any similar arrangement in the 12 months before the application; and

iii. any other Shares that you have instructed a Custodian to acquire on your behalf under the SPP; and

iv. any other Shares that have been issued to a Custodian under an arrangement similar to the SPP in the 12 months before the application as a result of an instruction given by you to the Custodian to apply for Shares on your behalf under an arrangement similar to the SPP.

(f) you accept the risk associated with any refund that may be sent to your address or to your nominated bank account as shown on the Company’s share register;

(g) you acknowledge that no interest will be paid on any application monies held pending the allotment of the SPP Shares refunded to you for any reason;

(h) you acknowledge that the Company and the Share Registry have not provided any investment advice or financial product advice, and that none of them has any obligation to provide this advice in relation to your consideration as to whether or not to participate in the SPP;

(i) you acknowledge that the Company (and each of its officers and agents) is not liable for any consequences of the exercise or non-exercise of its discretions referred to in the SPP;

(j) you acknowledge that the SPP Shares have not, and will not be, registered under the US Securities Act of 1933 (“ US Securities Act ”) or the securities law of any other jurisdiction outside Australia or New Zealand and, accordingly, the SPP Shares may not be offered, sold or otherwise transferred except in accordance with an available exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and any other applicable securities laws. You may sell your SPP Shares in standard brokered transactions on the ASX where neither you nor any person acting on your behalf has reason to know that the sale has been pre-arranged with a person in the United States of America;

(k) you agree not to send the SPP or any other material relating to the SPP to any person in the United States of America or any other country outside Australia and New Zealand;

(l) you authorise the Company (and each of its officers and agents) to correct any error in, or omission from, the Application Form and complete the Application Form by inserting any missing details;

(m) you acknowledge that the Company may at any time irrevocably determine that your application is valid, in accordance with the terms and conditions of the SPP, even if the Application Form is incomplete, contains errors or is otherwise defective;

(n) you are responsible for any dishonour fees or other costs the Company may incur in presenting a cheque or money order for payment that is dishonoured; and

(o) If two or more persons are recorded in the Company’s register of members as jointly holding Shares or interest in the Company, they are taken to be a single registered holder and a certification given by any of them is taken to be a certification given by all of them.

8. Certification by Custodians

Custodians wishing to apply on behalf of one or more Participating Beneficiaries need to provide a custodian certificate which complies with the requirements of ASIC Class Order [CO 09/425] to the Company ( Custodian Certificate ).

Please contact the Company, on +61 7 3832 5666 to obtain a copy of the Custodian Certificate.

If you are a Custodian, you represent to the Company that you have provided a Custodian Certificate and that you:

(a) hold an Australian financial services licence that:

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Diatreme Resources Limited 2012 Share Purchase Plan

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i. covers the provision of a custodial or depository service (as defined by section 766E of the Corporations Act 2001 (Cth); or

ii. includes a condition requiring you to comply with the requirements of ASIC Class Order 02/294; or (b) are exempt from the requirement to hold an Australian financial services licence for the provision of a custodial or depository service under:

i. paragraph 7.6.01(1)(k) or (na) of the Corporations Regulations 2001 (Cth);

• ii. ASIC Class Order 05/1270 to the extent that it relates to ASIC Class Order 03/184;

iii. ASIC Class Orders 03/1099, 03/1100, 03/1101, 03/1102, 04/829 or 04/1313;

iv. an individual instrument of relief granted by ASIC in terms similar to one of the ASIC Class Orders referred to in (iii) above;

• v. section 911A(2)(h) of the Corporations Act; or

• (c) are a trustee of a:

• i. self-managed superannuation fund; or

• ii. superannuation master trust; or

(d) are the responsible entity of an IDPS-like scheme (as defined in ASIC Class Order CO 02/296 or any class order that replaces that class order); or

(e) are the registered holder of Shares and are noted on the register of members as holding the Shares on account of another person.

9. Issue of Shares

The Company will not be obliged to allot Shares and the applicant will not be entitled to receive or be issued Shares until the Directors resolve to allot the Shares.

Shares under the SPP will be allotted and issued on or about 4 December 2012. After all Shares have been allotted, the Company will promptly make application to ASX for the Shares to be admitted to quotation.

Holding statements will be despatched shortly after the Allotment and issue of Shares under the SPP.

10. Indicative Timetable

Record Date	2 November 2012(7.00pm AEST)
Announcement of Share Purchase Plan	5 November 2012
Despatch Offer to eligible shareholders	9 November 2012
Share Purchase Plan Offer Opens	9 November 2012
Share Purchase Plan Offer Closes	28 November 2012(5.00pm AEDT)
Allotment and Issue of new Shares	4 December 2012
Quotation of Shares on ASX	4 December 2012
Despatch Date	6 December 2012

These dates are indicative only. The Company may vary the dates and times of this offer or withdraw it without notice. Accordingly, Eligible Shareholders are encouraged to submit their Application Forms as early as possible.

11. Additional Terms of this SPP

The requirements of the ASIC CO 09/425 are incorporated into this SPP.

Under ASIC CO 09/425, the yearly limit that can be raised from a participant in a share purchase plan is $15,000. Accordingly, no Eligible Shareholder (including through joint holdings, multiple share accounts or any holding in which the Eligible Shareholder may have a beneficial interest) will be issued with Shares under this or any other share purchase plan with an application value totalling more than $15,000 in any consecutive 12 month period.

All Shares issued under the SPP will rank equally with existing Shares.

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5 November 2012

Diatreme Resources Limited 2012 Share Purchase Plan

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The SPP is administered by the Board which may determine in any manner it thinks fit, any difficulties, anomalies or disputes which may arise in connection with or by reason of the operation of the SPP whether generally or in relation to any participant, or application, or Shares and the determination of the Board will be conclusive and binding on all participants and other persons to whom the determination relates.

The Board reserves the right to withdraw this SPP and any offer under it at any time prior to the allotment of Shares and to waive strict compliance with any provision of these terms and conditions, including but not only by accepting applications received after 5pm (AEDT) time on the Closing Date, or to amend or vary these terms and conditions and to suspend or terminate the SPP at any time. If the SPP is withdrawn, or an application is rejected for any reason, all application monies will be refunded without interest.

This SPP, offer, and these terms and conditions (including the Application Form) are governed by the laws applying in the State of Queensland. By applying for Shares, applicants agree to submit to the exclusive jurisdiction of the Courts of that State and the Courts of Appeal from those Courts.

12. Why should you subscribe for Shares pursuant to this SPP?

Shares offered under this SPP are offered at a slight discount to their market value prior to the date when the SPP was announced. There is no brokerage, commissions or other participation costs payable by you in respect of any acquisition of Shares under this SPP.

13. Excluded Applicants

A Shareholder who alone or with its associates would obtain an interest in more than 20% of the issued voting shares of the Company may be ineligible to accept an offer under this SPP. The Company reserves the right to refuse an application if the applicant (alone or with its associates) would obtain an interest in more than 20% of the issued voting shares of the Company. The Company may amend any application received such that the applicant’s interest alone or with its associates is no more than 20% of the issued voting shares of the Company. In the event that an application is adjusted, the Company will refund to the applicant by cheque without interest the difference between the application monies received by the Company and application monies payable for the number of Shares actually issued to the applicant.

Applicants resident in countries outside Australia and New Zealand should consult their professional advisers as to whether any governmental or other consent are required or whether formalities need to be observed to enable them to apply for and accept Shares. Accordingly this document does not constitute an offer of Shares in any place in which, or to any person to whom, it would not be lawful to make such an offer. Return of an Application Form or payment of application monies will be taken by the Company to constitute a representation that there has been no breach of such requirements.

14. Consider obtaining financial advice

(a) The offer to purchase Shares under the SPP is not a recommendation to purchase Shares. You should make your own independent investigation and assessment of the Company, its business, assets and liabilities, prospects and profits and losses and the risks associated with investing in the Company. You should obtain professional financial and/or taxation advice to assist you in determining whether or not, and the extent to which, you wish to participate in the SPP and acquire Shares or other securities of the Company.

(b) Nothing in this SPP, the Application Form or any other accompanying documentation constitutes investment or financial product advice or is intended to influence your decision whether or not to participate in the SPP.

15. New Zealand

(a) The Shares are not being offered or sold to the public within New Zealand other than to existing shareholders of the Company with registered addresses in New Zealand to whom the offer of Shares is being made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand).

(b) This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Securities Act 1978 (New Zealand). This document is not an investment statement or prospectus under New Zealand law and is not required to, and may not, contain all the information that an investment statement or prospectus under New Zealand law is required to contain.

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Diatreme Resources Limited 2012 Share Purchase Plan

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16. United States of America

This document may not be released or distributed in the United States of America. The Shares have not been and will not be registered under the US Securities Act or the securities laws of any state or other jurisdiction of the United States of America.

The Shares may not be taken up by persons in the United States of America or by persons who are acting for the account or benefit of a person in the United States of America. The Shares may not be offered, sold or resold in the United States of America except in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and the applicable securities laws of any state or other jurisdiction in the United States of America.

17. Queries

You should seek independent legal and/or financial advice if you are in any doubt about the terms of this offer or whether to accept this offer.

If you have any queries concerning the SPP, please call the Company on +61 7 3832 5666.

18. Glossary

Application Form	means the personalized application and acceptance form which accompanies
	this offer document.
Custodian	means a custodian, trustee or, nominee within the definition of ‘custodian’ in
	ASIC CO 09/425, that:
	• holds an Australian financial services licence that:
	– covers the provision of a custodial or depository service; or
	– includes a condition requiring the holder to comply with ASIC Class
	Order [CO 02/294]; or
	• is exempt under:
	– paragraph 7.6.01(1)(k) of the Corporations Regulations 2001; or
	– ASIC Class Order [CO 05/1270] to the extent that it relates to ASIC
	Class Order [CO 03/184]; or
	– ASIC Class Orders [CO 03/1099], [CO 03/1100], [CO 03/1101],
	[CO 03/1102], [CO 04/829] or [CO 04/1313]; or
	– an individual instrument of relief granted by ASIC to the person in
	terms similar to one of the class orders referred to in the above
	paragraph; or
	– section 911A(2)(h) of the Act;
	from the requirement to hold an Australian financial services licence for the
	provision of a custodial or depository service; or
	• that is a trustee of a:
	– self-managed superannuation fund; or
	– superannuation master trust; or
	• that is the responsible entity of an IDPS-like scheme; or
	• that is the registered holder of shares or interests in the class and is noted on
	the register of members of the body or scheme (as the case may be) as holding
	the shares or interests on account of anotherperson.
Company	means Diatreme Resources Limited[ACN 061 267 061]
Director	means a director of the Company
Shareholder	means aperson who holds anyShares
Shares	means fully paid ordinaryshares in the Company.

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5 November 2012

Diatreme Resources Limited 2012 Share Purchase Plan

Share Registry means Link Market Services Limited [ACN 083 214 537] Record Date means 7.00pm (AEST), 2 November 2012

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19. Further Information

Please refer to the Company’s latest releases either directly on the ASX website (www.asx.com.au) using the code “DRX” or on the Company’s website (www.diatreme.com.au). Up to 2 November 2012, these releases include:

s include:
Release Date	Release
2 November 2012	Mining 2012 Conference Presentation
1 November 2012	Becominga substantial holder
1 November 2012	Change in substantial holding
31 October 2012	September 2012 Quarterly Activities Report
30 October 2012	Section 708A Notice
30 October 2012	Placement and Appendix 3B
30 October 2012	Clermont Copper Project Media Release
30 October 2012	Clermont Copper Project Antofagasta Farm-in
5 October 2012	Placement to raise $1.44million
11 September 2012	Change in Substantial Holding
10 September 2012	Change in Substantial Holding
07 September 2012	Placement
30 August 2012	Results of General Meeting
21 Aug 2012	Half Year Financial Report 30 June 2012
14 Aug2012	Placement
08 Aug 2012	Tick Hill Gold Project – Mining Lease Renewals
24 Jul 2012	June 2012 QuarterlyActivities Report
24 Jul 2012	June 2012 Quarterly Cash flow
06 Jul 2012	Placement
24 May 2012	AGM Chairman’s Address
30 Apr 2012	March 2012 QuarterlyActivities Report
27 Apr 2012	2011 Annual Report to Shareholders
26 Apr 2012	March 2012 QuarterlyCash Flow
16 Apr 2012	Investor Roadshow Presentation
27 Mar 2012	Clermont Copper Proposed Farm-In Agreement
20 Mar 2012	Positive PFS Study Results Cyclone Zircon Project

Hardcopies of company announcements may be requested directly from the Company by telephoning the Brisbane office on +61 7 3832 5666.

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5 November 2012

All Registry communications to: Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia Telephone: 1300 554 474 From outside Australia: +61 2 8280 7454 ASX Code: DRX

ABN 33 061 267 061

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Website: www.linkmarketservices.com.au

SrN/hIN:

Entitlement Number: record Date: 2 November 2012 Offer Opens: 9 November 2012 Issue Price per Share: A$0.025 Offer Closes 5:00pm (AEDT): 28 November 2012

ShArE PUrChASE PLAN (“SPP”) APPLICATION FOrM

How do I apply for Shares under this offer?

How do I apply for Shares under this offer? • Carefully read the SPP Terms and Conditions accompanying this form. • Decide on the amount you wish to apply for. • Pay for the Shares in accordance with the instructions outlined in the Terms and Conditions Booklet and further important instructions on the reverse of this form. Option 1: Paying by Bpay[®] . Option 2: Paying by Cheque, Bank Draft or Money Order. • Payments must be in Australian dollars. PAYMENT OPTIONS Option 1: Paying by Bpay[®] Option 2: Paying by Cheque, Bank Draft or Money Order If paying by Bpay[®] , you do NOT need to complete or return the Acceptance If paying by cheque, bank draft or money order, complete and return the Slip attached to this Application Form below. Payment must be received by Acceptance Slip attached to this Application Form with your Application the Registry by Bpay[®] by 5:00pm (AEDT) on 28 November 2012. By paying Payment. by Bpay[®] , you will be deemed to have completed an Application Form for A. Tick the box beside the amount you wish to apply for, either A$1,000, the number of Shares the subject of your Application Payment. A$2,000, A$3,750, A$7,500, A$11,000 or A$15,000. If you make a payment by Bpay[®] and Diatreme Resources Limited receives B. Enter your cheque, bank draft or money order details. The amount of an amount which is not equal to either A$1,000, A$2,000, A$3,750, A$7,500, your Application Payment should be equal to the amount applied for in A$11,000 or A$15,000, Diatreme Resources Limited may round down the section A of the Acceptance Slip. Cheques, bank drafts or money orders number of Shares that you are applying for to the next lowest parcel at their must be drawn on an Australian branch of a financial institution in discretion. Your payment must be for a minimum of A$1,000. Australian currency, made payable to “Diatreme Resources Limited” and crossed “Not Negotiable”. Please ensure sufficient cleared funds Biller Code: 136754 are held in your account, as your cheque will be banked as soon as it is received. If you provide a cheque, bank draft or money order for an Ref: amount that is not equal to either A$1,000, A$2,000, A$3,750, A$7,500, A$11,000 or A$15,000, Diatreme Resources Limited may round down Telephone & Internet Banking – Bpay[®] the number of Shares that you are applying for to the next lowest parcel Contact your bank or financial institution to make this payment from at their discretion. Your payment must be for a minimum of A$1,000. your cheque, savings, debit or transaction account. More info: www.bpay.com.au C. Enter your contact telephone number at which we may contact you ® Registered to Bpay Pty Ltd ABN 69 079 137 518 regarding your application for Shares, if necessary. ThIS IS A PErSONALISED FOrM FOr ThE SOLE USE OF ThE ShArEhOLDEr AND hOLDING rECOrDED ABOVE. Please detach and enclose with payment SRN/HIN:

B. Enter your cheque, bank draft or money order details. The amount of your Application Payment should be equal to the amount applied for in section A of the Acceptance Slip. Cheques, bank drafts or money orders must be drawn on an Australian branch of a financial institution in Australian currency, made payable to “Diatreme Resources Limited” and crossed “Not Negotiable”. Please ensure sufficient cleared funds are held in your account, as your cheque will be banked as soon as it is received. If you provide a cheque, bank draft or money order for an amount that is not equal to either A$1,000, A$2,000, A$3,750, A$7,500, A$11,000 or A$15,000, Diatreme Resources Limited may round down the number of Shares that you are applying for to the next lowest parcel at their discretion. Your payment must be for a minimum of A$1,000.

SRN/HIN: Entitlement Number: ABN 33 061 267 061 9999999 A I/we wish to purchase a parcel of Shares to the dollar amount of (tick one box only): 40,000 Shares 80,000 Shares 150,000 Shares 300,000 Shares 440,000 Shares 600,000 Shares A$1,000 OR A$2,000 OR A$3,750 OR A$7,500 OR A$11,000 OR A$15,000 B Make your cheque, bank draft or money order payable to “Diatreme Resources Limited” and crossed “Not Negotiable” Drawer Cheque Number BSB Number Account Number Amount of Cheque A$ .00 C* Telephone Number – Business Hours Telephone Number – After Hours Contact Name ( ) ( )

IMPOrTANT INFOrMATION

1. This is an important document which requires your immediate attention. If you are in any doubt as to how to deal with this Application Form, please consult a professional adviser.

2. If you do not wish to purchase additional Shares under this SPP, there is no need to take action.

3. Please ensure you have read and understood the SPP Terms and Conditions and this Important Information, before you make the Application Payment by Bpay[®] or you submit your Acceptance Slip with your Application Payment.

4. This SPP is non-renounceable. Applications can only be accepted in the name printed on the Application Form.

5. If you are a custodian, trustee or nominee within the definition of “custodian” in ASIC Class Order [CO 09/425] you must complete and submit an additional Schedule that contains additional certifications and details that must be provided (“the Schedule”) before your Application will be received. The Schedule can be obtained by contacting Diatreme Resources Limited on +61 7 3832 5666. Applications received by custodians that are not accompanied by the Schedule will be rejected.

6. For applicants that are not required to complete the Schedule, by submitting the Acceptance Slip (with a cheque, bank draft or money order) or making payment by Bpay[®] , you certify that the aggregate of the Application Payment paid by you for:

• the parcel of New Shares indicated on this Application Form or Bpay[®] payment; and

• any other Shares applied for by you, or which you have instructed a Custodian to acquire on your behalf under the SPP or any other similar arrangement in the 12 months prior to the date of submission of the Acceptance Slip or payment by Bpay[®] does not exceed A$15,000.

• 1. Diatreme Resources Limited reserves the right to make amendments to this Application Form where appropriate. 8. Applicants are not assured of receiving the Shares for which they have applied as Diatreme Resources Limited may scaleback applications in its discretion.

How to Lodge your Acceptance Slip and Application Payment

A reply paid envelope is enclosed for you to return your Acceptance Slip and Application Payment. No postage stamp is required if it is posted in Australia.

Acceptance Slip and the payment for New Shares must be received by the Registry no later than the closing date shown overleaf. If paying by Bpay[®] you do not need to complete or return the Application Form. You should check the processing cut off-time for Bpay[®] transactions with your bank, credit union or building society to ensure your payment will be received by the Registry by the close of the offer.

Mailing Address or Hand Delivery Diatreme Resources Limited Diatreme Resources Limited C/- Link Market Services Limited C/- Link Market Services Limited Locked Bag 3415 1A Homebush Bay Drive Brisbane QLD 4001 Rhodes NSW 2138 (Please do not use this address for mailing purposes)

Make sure you send your Acceptance Slip and Application Payment allowing enough time for mail delivery, so Link Market Services Limited receives them no later than 5:00pm (AEDT) on 28 November 2012. Please ensure sufficient cleared funds are held in your account, as your cheque will be banked as soon as it is received. Diatreme Resources Limited reserves the right not to process any Acceptance Slips and Application Payments received after the Closing Date.

If you require information on how to complete this Acceptance Slip please contact Diatreme Resources Limited on +61 7 3832 5666.