DIATREME RESOURCES LIMITED — Capital/Financing Update 2019

Apr 3, 2019

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Co
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Co m pany Ann o uncement Office Aus t ralian Sec u rities Exchange Lev e l 4, 20 Bri d ge Street Syd n ey NSW 2 000

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4 A p ril 2019

COMPLETION OF PLACEMENT

Diatreme Res o urces Limited (ASX: DRX) (“ Diatreme ” o r “ Company ”) is pl e ased to announce it has co m pleted the p lacement program (“ Initial Placement ”) as announce d to market on 27 Mar c h 2019, to new prof e ssional a n d sophistic a ted invest o rs and exi s ting share h olders.

Foll o wing com p letion of t h e Initial Pl a cement t h e Compan y has now received t o tal funds (before cos t s) of $1, 3 80,733 th r ough the issue of 1 2 5,521,20 5 fully paid ordinary s hares at $ 0.011 pe r share (“ Initial Placement Shares ”). All of the Initi a l Placeme n t Shares h ave been issued un d er the Co m pany’s existing AS X Listing Rule 7.1 cap a city

The Appendix 3 B relating t o the Initial Placement is attached.

In a d dition to t h e Initial Pl a cement, th e Compan y will seek s hareholder approval a t the Com p any’s fort h coming Annual Gene r al Meeting for the foll o wing:

• 1 . Issue o f 1,500,000 fully paid o rdinary sh a res to Non - executive D irector, M r William W ang, who has commit t ed $16,50 0 to the Pla c ement, an d

• 2 . Issue o f the following securiti e s to our le a d manage r Hartleys as consider a tion for ca p ital raising and ongoin g corporate advisory s e rvices :

(a) 5,113,636 fully paid ordin a ry shares e quating to $56,250, a n d (b) 50, 0 00,000 unlisted optio n s, with exercise of $0.024 (2.4 c e nts) and 2 y ear expiry date

Additional Placement

The Company i s also pleased to ann o unce that i n addition t o the abov e Initial Pla c ement an n ounced on 27 Mar c h 2019, it h as receiv e d indicativ e interests o f a further circa $330,000 from i n vestors to s ubscribe f o r sha r es at an is s ue price o f $0.011 per share ( “Additional Placement” ). These in v estors ha v e been given up t o 1 week fr o m today t o remit funds. These s h ares will a l so be issu e d under th e Compan y ’s existing A SX listi n g Rule 7.1 capacity

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A n u mber of in v estors ex p ressed an interest to p articipate i n the Initial Placement but were unable to pro v ide a firm c ommitmen t by 27 Ma r ch 2019. However, gi v en the interest in the Initial Placement, the Co m pany exte n ded offers to those in v estors to s ubscribe f o r shares o n the same t erms as o f fered under the Initi a l Placeme n t. Comple t ion of the A dditional Placement w ill occur as soon as p o ssible afte r receipt of cleared funds b y the Com p any. An A p pendix 3B in respect of these A d ditional Pl a cement sh a res will be lod g ed with th e ASX once those shar e s are issu e d.

The Directors w ish to thank existing s hareholde r s and new investors a n d welcom e them to t h e Compan y .

For and on be h alf of the Board Tuan Do Co m pany Secr e tary

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

DIATREME RESOURCES LIMITED

ABN

33 061 267 061

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Fully paid ordinary shares
	125,521,205
	Fully paid ordinary shares

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

4 Do the[+] securities rank equally in all respects from the[+] issue date Yes - the shares issued rank equally with existing fully paid ordinary shares with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration $0.011 per share 6 Purpose of the issue (If issued as consideration for the Placement to new professional and acquisition of assets, clearly sophisticated investors and existing identify those assets) shareholders 6a Is the entity an[+] eligible entity that Yes has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the[+] securities the subject of this Appendix 3B , and comply with section 6i 6b The date the security holder resolution under rule 7.1A was 30/05/18 passed 6c Number of +securities issued without security holder approval 125,521,205 under rule 7.1 6d Number of[+] securities issued with security holder approval under rule N/A 7.1A

• See chapter 19 for defined terms.

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6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and +class of all +securities quoted on ASX (_including_the+securities in section 2 if applicable)	N/A	N/A
	N/A
	N/A
	N/A
	Rule 7.1: 74,024,461 Shares Rule 7.1A: 133,030,444 Shares Total: 207,054,905 Shares
	4 April 2019
	Number	+Class
	1,455,825,647	Fully paid ordinary shares (DRX)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Number +Class 9 Number and +class of all +securities not quoted on ASX 6,000,000 Unlisted options ( including the +securities in exercisable at 10 section 2 if applicable) cents each expiring 30 April 2019 60,847,327 Listed options exercisable at 3 cents each expiring 16 Dec 2019

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

N/A

Part 2 - Pro rata issue

11 Is security holder approval N/A required? 12 Is the issue renounceable or nonN/A renounceable? 13 Ratio in which the[+] securities will N/A be offered 14 +Class of +securities to which the N/A offer relates 15 +Record date to determine N/A entitlements 16 Will holdings on different registers N/A (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in N/A relation to fractions 18 Names of countries in which the N/A entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of N/A acceptances or renunciations

• See chapter 19 for defined terms.

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20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of[+] securities ( tick one )

(a) � +Securities described in Part 1

(b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities (Not applicable)

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

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Entities that have ticked box 34(b)

38 Number of[+] securities for which +quotation is sought 39 +Class of +securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted[+] securities? If the additional[+] securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security) Number +Class 42 Number and[+] class of all[+] securities quoted on ASX ( including the +securities in clause 38)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

  • Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Sign here: ............................................................ Date: 4 April 2019 (Company Secretary) Print name: Tuan Do

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• See chapter 19 for defined terms.

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Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1 –

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

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Insert number of fully paid [+] ordinary 1,054,309,591
securities on issue 12 months before the
+ issue date or date of agreement to issue
Add the following:
• Number of fully paid [+] ordinary securities 25,000,000 (App 3B – 5/4/18)
issued in that 12 month period under an 20,000,000 (App 3B – 13/4/18)
exception in rule 7.2
• Number of fully paid [+] ordinary securities 13,888,889 (Approved at 28 Feb 2019 EGM)
issued in that 12 month period with 46,240,000 (Approved at 28 Feb 2019 EGM)
shareholder approval 106,876,154 (Approved at 28 Feb 2019 EGM)
1,818,500 (Approved at 28 Feb 2019 EGM)
87,171,308 (Approved at 11 Oct 2018 EGM)
• Number of partly paid [+] ordinary
securities that became fully paid in that
12 month period
Note:
• Include only ordinary securities here –
other classes of equity securities cannot
be added
• Include here (if applicable) the securities
the subject of the Appendix 3B to which
this form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
Subtract the number of fully paid [+] ordinary 25,000,000
securities cancelled during that 12 month
period
“A” 1,330,304,442
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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”

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“B” 0.15
[Note: this value cannot be changed]
Multiply “A” by 0.15 199,545,666
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1
that has already been used
Insert number of [+] equity securities issued
or agreed to be issued in that 12 month
125,521,205 (Subject of this App 3B)
period not counting those issued:
• Under an exception in rule 7.2
• Under rule 7.1A
• With security holder approval under rule
7.1 or rule 7.4
Note:
• This applies to equity securities, unless
specifically excluded – not just ordinary
securities
• Include here (if applicable) the securities
the subject of the Appendix 3B to which
this form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
“C” 125,521,205
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining
placement capacity under rule 7.1
“A” x 0.15 199,545,666
Note: number must be same as shown in
Step 2
Subtract “C” 125,521,205
Note: number must be same as shown in
Step 3
Total [“A” x 0.15] – “C” 74,024,461
[Note: this is the remaining placement
capacity under rule 7.1]
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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Part 2 –

Rule 7.1A – Additional placement capacity for eligible entities Step 1: Calculate “A”, the base figure from which the placement capacity is calculated “A” 1,330,304,442 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 133,030,444 Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used Insert number of[+] equity securities issued or agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items “E” Nil

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	133,030,444
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	133,030,444 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 12

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