DIATREME RESOURCES LIMITED - Capital/Financing Update 2012

ASX:DRX

ASX ANNOUNCEMENT

30 October 2012

CLERMONT COPPER PROJECT ANTOFAGASTA MINERALS S.A. FARM-IN AGREEMENT

Diatreme Resources Limited (ASX:DRX) is pleased to announce that, following a six month assessment period, Antofagasta Minerals S.A. (“Antofagasta”) will now proceed to the Farm-In Phase over the Clermont Copper Project in central Queensland.

The commitment by this international miner confirms DRX’s belief that significant potential exists, particularly in the central tenement areas, for the discovery of large scale porphyry mineralisation.

Antofagasta is targeting the highly prospective Rosevale Porphyry Corridor (RPC), a geological zone hosting copper, gold, silver and molybdenum porphyry-style mineralisation discovered by DRX in 2008, and now identified as the Rosevale Project.

Following strategic outcomes from the Initial Assessment Phase, it has been agreed between the parties that an initial exploration budget of US$700,000 be applied, with DRX as operator, toward reverse circulation (RC) and diamond drilling at three prospects - Gollan, Red Dog and Electra. Dependent upon positive results, Antofagasta would then expand its work program under the terms of the Farm-in Agreement, wherein they can earn a 51% interest in a defined area of interest by funding US$8 million in exploration expenditure over a four (4) year period.

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Diatreme Resources is an Australian based diversified mineral explorer with significant projects in heavy mineral sands, copper, base metals and gold.

The Company owns the world class Cyclone Zircon Deposit in Western Australia, situated within the recognised Eucla Basin province, along with extensive areas of underexplored ground prospective for heavy mineral sands.

The Board and senior personnel exhibit wide experience, ranging through the exploration and development phases of resource management.

Australian Securities Exchange Codes: DRX and DRXO

Securities Ordinary shares (DRX): 384,327,156 Listed 15c options (30/09/13)(DRXO): 88,650,035

Board of Directors Executive: Tony Fawdon - Chairman/CEO David Hall - Operations Non-executive: George White Andrew Tsang William Wang Neil McIntyre Joint Company Secretaries: Leni Stanley Tuan Do

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Key Projects:

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Eucla Basin Cyclone Zircon Project

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Clermont Copper Project

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Anabama Copper Project

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Gilbert River Base Metals Project

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Diatreme Resources Contact: Tony Fawdon Executive Chairman/CEO Phone: +61 7 3832 5666 Fax: +61 7 3832 5300

Share Registry: Link Market Services Level 15, ANZ Building 324 Queen Street, Brisbane, Q4000

DIATREME RESOURCES LIMITED ABN 33 061 267 061 Level 2, 87 Wickham Terrace, Spring Hill, Qld, 4000 PO Box 10288 Brisbane Adelaide Street Qld 4000 Telephone : +61 7 3832 5666 Facsimile : +61 7 3832 5300

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[email protected] www.diatreme.com.au

DIATREME RESOURCES LIMITED

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The RPC (now identified as the Rosevale Project ) has been identified as having potential for large buried porphyry copper - gold - molybdenum mineralised systems. Significant mineral exploration has been conducted by DRX prior to Antofagasta’s interest, including geological mapping and sampling, ground geophysics and over 6,300 metres of diamond drilling. This work resulted in the successful discovery of mineralisation at a number of individual prospects with many prospects requiring further drill testing. DRX’s Clermont Copper Project area extends over two granted tenements (EPM17968, Clermont; and EPM19189, Parapet) and one tenement application (EPMA19544, Expedition Creek) – see location plan, Figure 1 . Antofagasta’s efforts are expected to be concentrated on the Rosevale Project which lies about 15km southwest of Clermont township.

Antofagasta’s Initial Assessment Phase has led to the definition of subsurface targets for further evaluation through drilling and improved upon the geological understanding of the area as a whole, from an exploration and resource perspective. The US$700,000 budget involves a 700900m deep diamond drillhole at Gollan, where affinities with Cadia Ridgeway (NSW) host rock alteration styles have been identified, and up to 2,100m of RC percussion drilling at Elektra North and Red Dog, where previous wide intercepts of mineralisation have been drilled by DRX.

Approval for Antofagasta to move into the Farm-in Phase has now been received and the Farmin Agreement is currently being drafted. Subsequent to DRX’s announcement of a Memorandum of Understanding with Antofagasta in March 2012, the parties have renegotiated certain commitments under the proposed agreement, which will now contain terms as follow:

Demarcate areas of the tenements deemed prospective for copper mineralisation as “the defined area of interest”.
Antofagasta to earn a 51% interest in the defined area of interest by funding US$8 million in exploration expenditures over a four (4) year period.
Antofagasta has the right to withdraw from the defined area of interest without earning any interest after spending up to US$1.5 million within the first year, subject to a minimum expenditure commitment of US$700,000. After meeting the US$700,000 commitment, Antofagasta may continue to spend, but can withdraw at any time without earning any interest.
On earning its 51% interest in the defined area of interest, Antofagasta has the option to earn, at its sole expense, an additional 9% interest (total 60%) by delivering a JORCcompliant inferred resource and completing a scoping study on at least one mineral deposit.
The vested interests in the defined area of interest of the parties upon completion of a JORC-compliant inferred resource and scoping study would be Antofagasta 60% and DRX 40%.
Forward expenditure at this stage would be prorata, with industry standard dilution practises being applied.
Should Antofagasta decide to withdraw from the project after vesting at 51%, DRX will retain management control of the defined area of interest and will dilute Antofagasta’s interest in accordance with industry standard practice.
If either party dilute to less than a 10% interest, then the diluted party shall relinquish its equity position and revert to a 1.5% net smelter return royalty.
DRX will be the operator in the Farm-in Phase of the project.
Under certain circumstances, DRX will have the right to reacquire a 100% interest in the defined area of interest by reimbursement to Antofagasta of 150% of all defined area of interest related exploration costs incurred during the farm-in period.

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DIATREME RESOURCES LIMITED

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Figure 1: Clermont Project Location Plan showing prospects

The exploration funding and expertise Antofagasta brings to the Rosevale Project is of immense value to DRX in advancing the potential identification, delineation and development of a large polymetallic porphyry-style mining operation in the Clermont area.

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Copper oxide mineralisation Chalcopyrite sulphide mineralisation Electra Prospect West Copperfield

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DIATREME RESOURCES LIMITED

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For further information: For media queries: Tony Fawdon Anthony Fensom Executive Chairman/CEO BWH Ph: 07 3832 5666 Ph: 07 3368 2355

About Antofagasta Minerals S.A.

Antofagasta Minerals S.A. is wholly owned by Antofagasta plc, a London Stock Exchange listed company and a constituent of the FTSE-100 Index, with interests major interests in mining in addition to transport and water distribution. Currently, Antofagasta plc activities are primarily concentrated in Chile where it owns and operates four copper mines: Los Pelambres, Esperanza, El Tesoro and Michilla. Total production in 2011 was 640,500 tonnes of copper, 9,900 tonnes of molybdenum and 196,800 ounces of gold. A fifth mine, Antucoya, is now starting construction. Antofagasta plc also has exploration, evaluation and/or feasibility programs in North America, Latin America, Europe, Asia, Australia and Africa.

About Diatreme Resources Limited

Diatreme Resources Limited (ASX code: DRX) is a diversified Australian mineral explorer with significant projects in heavy mineral sands, copper, base metals and gold. The Company owns the world-class Cyclone Zircon Deposit in Western Australia, situated within the recognised Eucla Basin province, along with extensive areas of ground prospective for heavy mineral sands, copper, base metals and gold.

The Board and senior personnel exhibit wide experience, ranging through the exploration and development phases of resource management.

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DIATREME RESOURCES LIMITED Capital/Financing Update 2012

64787_rns_2012-10-29_f50e52a7-3039-4e19-8fa6-23d2e970ad53.pdf

ASX:DRX

ASX ANNOUNCEMENT

CLERMONT COPPER PROJECT ANTOFAGASTA MINERALS S.A. FARM-IN AGREEMENT

About Diatreme Resources Limited

AI assistant

DIATREME RESOURCES LIMITED — Capital/Financing Update 2012

64787_rns_2012-10-29_f50e52a7-3039-4e19-8fa6-23d2e970ad53.pdf

ASX:DRX

ASX ANNOUNCEMENT

CLERMONT COPPER PROJECT ANTOFAGASTA MINERALS S.A. FARM-IN AGREEMENT

About Diatreme Resources Limited

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