DIATREME RESOURCES LIMITED — Capital/Financing Update 2019

Jan 22, 2019

==> picture [54 x 59] intentionally omitted <==

==> picture [55 x 59] intentionally omitted <==

==> picture [55 x 59] intentionally omitted <==

==> picture [55 x 59] intentionally omitted <==

==> picture [54 x 59] intentionally omitted <==

==> picture [55 x 59] intentionally omitted <==

==> picture [49 x 59] intentionally omitted <==

==> picture [54 x 59] intentionally omitted <==

==> picture [55 x 59] intentionally omitted <==

==> picture [55 x 59] intentionally omitted <==

==> picture [55 x 59] intentionally omitted <==

==> picture [54 x 59] intentionally omitted <==

==> picture [55 x 59] intentionally omitted <==

==> picture [49 x 59] intentionally omitted <==

==> picture [54 x 60] intentionally omitted <==

==> picture [55 x 60] intentionally omitted <==

==> picture [49 x 60] intentionally omitted <==

ASX ANNOUNCEMENT

==> picture [30 x 66] intentionally omitted <==

==> picture [54 x 66] intentionally omitted <==

==> picture [55 x 66] intentionally omitted <==

==> picture [34 x 66] intentionally omitted <==

23 January 2019

Corporate advisers appointed to advance Cyclone’s development

• Diatreme appoints corporate advisory firm, Blackbird Partners, to support management’s progression of Cyclone Zircon Project’s successful development

• Blackbird has significant experience structuring mineral sands projects, including third party project entry, financial modelling and advice on offtake strategy and development.

Emerging miner a l sands min e r Diatreme Resources L imited (ASX : DRX) announced today t he appoint m ent of spe c ialist corporate advis e rs Blackbird Partners, with the aim o f ensuring m aximum sh a reholder b e nefit from the Compan y ’s flag s hip Cyclone Zircon Proj e ct in Weste r n Australia.

The a ppointment of Blackbird follows la s t year’s pos i tive DFS for Diatreme’s f lagship project (refer A S X ann o uncement 1 5 November 2018), which showed p ositive afte r ‐tax financi a l results, in c luding an e s timated NP V of A$1 1 3 million, a n internal ra t e of return of 27% and c apital payb a ck within t h ree years, w ith an esti m ated mine l i fe exceeding 13 ye a rs.

Foll o wing the re l ease of the successful DFS, Diatrem e has comm e nced the p r ocess of en g agement w i th potential dev e lopment partners with t he assistan c e of study authors Chin a ENFI Engin e ering Corp o ration (ENFI) under the ter m s of the “C o operation a n d Consulting Services” a greement signed with D iatreme (re f er ASX ann o uncement 1 1 January 2018) , w ith a goal of securing m ajor develo p ment partner(s) as soo n as possible.

In a d dition to E N FI’s assistance, Australi a ‐based Blac k bird have now been en g aged to pr o vide independent speci a list corporate and fi n ancial advi s ory services to Diatrem e to facilitat e and optimise commer c ial outcomes from the proj e ct’s develo p ment and t h e work bei n g undertak e n by ENFI.

Diat r eme’s Chai r man, Mr Gr e g Starr said Blackbird o f fered the n e cessary ex p erience and industry kn o wledge to ens u re a succes s ful outcom e for shareh o lders.

==> picture [26 x 112] intentionally omitted <==

==> picture [55 x 112] intentionally omitted <==

==> picture [55 x 112] intentionally omitted <==

==> picture [55 x 112] intentionally omitted <==

==> picture [46 x 112] intentionally omitted <==

==> picture [54 x 112] intentionally omitted <==

==> picture [55 x 112] intentionally omitted <==

==> picture [27 x 112] intentionally omitted <==

==> picture [54 x 61] intentionally omitted <==

==> picture [55 x 61] intentionally omitted <==

==> picture [55 x 61] intentionally omitted <==

==> picture [55 x 61] intentionally omitted <==

==> picture [54 x 61] intentionally omitted <==

==> picture [55 x 61] intentionally omitted <==

==> picture [17 x 122] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

“Following the r e cent releas e of Cyclone ’ s DFS unde r taken by E N FI Engineering and their ongoing as s istance in sourcing potenti a l project in v esting parties, we iden t ified the ne e d to appoint a specialis t corporate a dvisory fir m with experience in the heav y minerals s e ctor to ens u re we achie v e the best c ommercial a nd financia l outcome f o r Diat r eme from t h e develop m ent, joint v e nture or sa l e of Cyclon e ,” Mr Starr s aid.

“We have identi f ied the Bla c kbird team a s eminentl y suitable fo r this task and look forw a rd to their a ssistance in tran s itioning th e project thr o ugh these f i nal stages and unlockin g its value for the benefi t of all stakeholders.”

Blackbird’s Mandate

Blac k bird has be e n appointe d to manag e a structure d , formal pr o cess to undertake and p rogress a d e tailed scop e of wor k focused on assembling strategic th i rd party int e rest for the funding an d developm e nt of the Cy c lone projec t .

This includes de t ailed assessment and e v aluation of f uture offer s for participation in the project via d irect invest m ent, join t venture or p roject sale including so u rcing, stru c turing and p ricing of po t ential debt o r similar st r uctured fin a ncial inst r ument to e n sure the ec o nomic dev e lopment m o del and ret u rns are optimised for D i atreme sha r eholders. Blac k bird will also further as s ist Diatrem e with relev a nt parties t h rough to fi n ancial close.

Blac k bird’s Nick M artin said: “Blackbird i s delighted t o work with Diatreme a s it progress e s the Cyclo n e Zircon Proj e ct’s develo p ment. We l o ok forward to playing a n integral p a rt in assessing and impl e menting the best finan c ial plan for the Co m pany.”

Diat r eme’s CEO, Neil McIntyre added: “ T his latest initiative for C y clone refle c ts our dete r mination to advance th e proj e ct’s develo p ment as quickly as possible, as recommended by ENFI, taki n g advantag e of the mar k et opportu n ity for h igh‐grade zircon.

“To g ether with o ur recent p r ogress at the Galalar Sil i ca Project i n North Que e nsland, wh i ch has been proven cap a ble of p r oducing pr e mium‐grad e silica, we a n ticipate a s u ccessful ye a r ahead for Diatreme i n delivering i n creased shareholder val u e.”

==> picture [55 x 67] intentionally omitted <==

----- Start of picture text -----

s s.
----- End of picture text -----

Diat r eme will co n tinue to ke e p sharehol d ers and ot h er stakehol d ers informed througho u t this proce s s.

Neil McIntyre Greg Starr Chief Executive O fficer Chairman

==> picture [26 x 111] intentionally omitted <==

==> picture [55 x 111] intentionally omitted <==

==> picture [55 x 111] intentionally omitted <==

==> picture [55 x 111] intentionally omitted <==

==> picture [47 x 111] intentionally omitted <==

==> picture [54 x 61] intentionally omitted <==

==> picture [55 x 61] intentionally omitted <==

==> picture [55 x 61] intentionally omitted <==

==> picture [55 x 61] intentionally omitted <==

==> picture [54 x 61] intentionally omitted <==

==> picture [55 x 61] intentionally omitted <==

==> picture [17 x 122] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

Cont a ct – Mr Neil McIntyre ‐ Ph – 0 7 33972222 Web s ite ‐ diatreme. c om.au E‐ma i l ‐ manager@ d iatreme.com. a u

Forward looking statements: Thi s document ma y contain forwa r d looking state m ents. Forwar d looking state m ents are often, but not alway s , identified by the use of words such a s “seek”, “indi c ate”, “target”, “ a nticipate”, “for e cast”, “believe ” , “plan”, “estim a te”, “expect” a n d “intend” and state m ents that an e v ent or result “ m ay”, “will”, “sh o uld”, “could” or “might” occur o r be achieved a nd other simil a r expressions. Indications of, a nd inter p retations on, future expected e xploration results or technical o utcomes, pro d uction, earning s , financial pos i tion and perfor m ance are also forward-looking stat e ments. The fo r ward-looking s t atements in thi s presentation a re based on c u rrent interpret a tions, expectat i ons, estimates, assu m ptions, foreca s ts and projecti o ns about Diatr e me, Diatreme’ s projects and a ssets and the industry in whic h it operates as well as other f a ctors that m anagement believes to be rel e vant and reas o nable in the ci r cumstances at the date that s u ch statements a re made. The forward-lookin g state m ents are subj e ct to technical, business, economic, competit i ve, political an d social uncerta i nties and conti n gencies and m ay involve kno w n and u nknown risks a n d uncertaintie s . The forward - looking statem e nts may prove to be incorrect. Many known a nd unknown f a ctors could ca u se actual events or res u lts to differ materially from the estimated or a n ticipated even t s or results expressed or impli e d by any forw a rd-looking state m ents. All forw a rd-looking statements made i n this presentat i on are qualifie d by the foregoi n g cautionary s t atements.

Disclaimer: Diatre m e and its relat e d bodies corporate, any of the i r directors, offi c ers, employee s , agents or co n tractors do not make any repre s entation or wa r ranty (either e x press or implied) as to the ac c uracy, correctness, completeness, adequacy, reliability or lik e lihood of fulfil m ent of any f o rward-looking s tatement, or a n y events or re s ults expressed or implied in a n y forward looking statement, e xcept to the extent required b y law. Diatr e me and its rel a ted bodies cor p orate and eac h of their respe c tive directors, o fficers, employ e es, agents an d contractors di s claims, to the maxi m um extent per m itted by law, a ll liability and r e sponsibility for any direct or indirect loss or d a mage which m ay be suffered by any person (including because of fault or neglig e nce or otherwise) through us e or reliance on anything conta i ned in or omitt e d from this presentation. Oth e r than as re q uired by law a n d the ASX Listing Rules, Diat r eme disclaims a ny duty to up d ate forward looking statement s to reflect new developments.

About Blackbird Partners

Blac k bird is a pri v ate indepe n dent and s p ecialist cor p orate advis e r to the mi n ing sector. In particula r , Blackbird i s focused on assis t ing junior t o mid‐tier c o mpanies de v elop new m ines across a wide rang e of commo d ities and gl o bal loca t ions. Black b ird’s team i s comprised of senior mi n ing industr y and banki n g professio n als who col l ectively bri n g extensive track records in pr o ject financ e and devel o pment, mergers and ac q uisitions pl u s strategic a dvice (ww w .blackbird p artners.net ) .

About Cyclone Zircon Project

Disc o vered in 2 0 07, the Cycl o ne Zircon deposit is loc a ted along t h e Barton s h oreline wit h in the Wan n a Lak e s area of th e northern E u cla Basin, 25 kilometre s from West e rn Australi a ’s state bor d er with So u th Australia and 22 0 kilometre s north of th e transconti n ental railw a y.

In N o vember 20 1 4, Western Australia’s D epartment of Mines an d Petroleum granted a M ining Lease (M6 9 /141) for t h e project, w hich follow e d the signing of a Proje c t Agreement with the t r aditional o w ners, the S pinifex Peo p le. In January 2017, the project rec e ived final m inisterial co n sent allowi n g for the dev e lopment of a mineral sands mine a n d associate d infrastruct u re.

==> picture [26 x 111] intentionally omitted <==

==> picture [55 x 111] intentionally omitted <==

==> picture [55 x 111] intentionally omitted <==

==> picture [55 x 111] intentionally omitted <==

==> picture [47 x 111] intentionally omitted <==

==> picture [54 x 61] intentionally omitted <==

==> picture [55 x 61] intentionally omitted <==

==> picture [55 x 61] intentionally omitted <==

==> picture [55 x 61] intentionally omitted <==

==> picture [54 x 61] intentionally omitted <==

==> picture [55 x 61] intentionally omitted <==

==> picture [17 x 122] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

A D e finitive Fea s ibility Study was compl e ted in Nove m ber 2018 b y China EN F I Engineering Corp., par t of the lead i ng China Minmetal s group, rea f firming Cycl o ne’s poten t ial as the la r gest undev e loped zirco n project in t he world‐cl a ss Eucl a Basin (refer map belo w ).

Figure 1: Cyclone Project Location

==> picture [38 x 87] intentionally omitted <==

==> picture [9 x 430] intentionally omitted <==

==> picture [55 x 63] intentionally omitted <==

==> picture [55 x 63] intentionally omitted <==

==> picture [54 x 63] intentionally omitted <==

==> picture [55 x 63] intentionally omitted <==

==> picture [55 x 63] intentionally omitted <==

==> picture [55 x 63] intentionally omitted <==

==> picture [54 x 63] intentionally omitted <==

==> picture [55 x 63] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [38 x 87] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [38 x 87] intentionally omitted <==

==> picture [55 x 63] intentionally omitted <==

==> picture [55 x 63] intentionally omitted <==

==> picture [54 x 63] intentionally omitted <==

==> picture [55 x 63] intentionally omitted <==

==> picture [55 x 63] intentionally omitted <==

==> picture [55 x 63] intentionally omitted <==

==> picture [54 x 63] intentionally omitted <==

==> picture [55 x 63] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [38 x 87] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [38 x 86] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [54 x 62] intentionally omitted <==

==> picture [55 x 62] intentionally omitted <==

==> picture [26 x 111] intentionally omitted <==

==> picture [55 x 111] intentionally omitted <==

==> picture [55 x 111] intentionally omitted <==

==> picture [55 x 111] intentionally omitted <==

==> picture [47 x 111] intentionally omitted <==