DIATREME RESOURCES LIMITED — Capital/Financing Update 2012

Jul 5, 2012

==> picture [72 x 74] intentionally omitted <==

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

==> picture [39 x 40] intentionally omitted <==

ASX : DRX

Companies Announcement Office Australian Securities Exchange Level 4, 20 Bridge Street Sydney NSW 2000

6 July 2012

COMPLETION OF CAPITAL RAISING

Diatreme Resources Limited ( ASX:DRX ) is pleased to announce that it has successfully negotiated placements totalling 29,729,730 ordinary shares at $0.037 (3.7 cents) each to sophisticated and professional investors to raise a total of $1.1 million.

The placements are expected to be completed in three separate allotments due to the significant contribution being made by interests associated with the Company’s largest shareholder and director, Mr Andrew Tsang, which will require shareholder approval.

Funds raised from the placements are to be used in the continued development of the Cyclone Zircon Project in the Eucla Basin and for working capital.

Diatreme’s Executive Chairman Mr Tony Fawdon said:

“ We thank our existing major shareholder, Mr Andrew Tsang, for his continued support and welcome the addition of well regarded investors from Australia and Asia to our register. We believe this is an exciting time for the Company with the zircon market still experiencing supply issues, a situation which has in-turn driven the zircon price to levels at over US$2,500/t. Chinese urbanization is still the key demand factor. China accounts for approximately 40% of zircon demand worldwide.

Our Cyclone Zircon Deposit continues to be developed and we remain active in our continued negotiations with several parties who have expressed an interest in project funding”.

The company engaged Octa Phillip to act as lead manager of the Placement.

This announcement ends the Trading Halt requested by the Company on 4 July 2012.

==> picture [75 x 30] intentionally omitted <==

Leni Stanley

Company Secretary