Slide 1: Re-release of Presentation (Mining 2016 Resources Convention)
DIATREM ME RESO URCES LIMITED ABN: 33 061 267 061 A Postal Address: P.O Boox 382 Cooorparoo QLD 4151 Reg gistered Officce: Unit 8, 61 h Street Cooorparoo QLD 4151 1 Holdsworth PH: +61 + (0)7 33997 2222 or 33 397 2255 www.diattreme.com.au manageer@diatremee.com.au For personal use only ASX : DRX Comp
Slide 2: Mining 2016 Resources Convention, Brisbane
For personal use only Brisbane - August 2016 Mining 2016 Resources Convention GOLDEN MINERALS
Slide 3: Disclaimer
DISCLAIMER For personal use only This presentation contains certain forward-looking statements and forecasts which include without limitation, expectations regarding future performance, exploration, mineral resources, the financial position of Diatreme Resources Limited (the “Company”), industry gro
Slide 4: Presentation Outline
PRESENTATION OUTLINE For personal use only • Diatreme Resources Investment overview • Cyclone Zircon Project Delivering a high-zircon mine • Tick Hill Gold Project Capitalising on rising gold price • Strong project pipeline Cape Bedford & more • Conclusion Golden growth ahead 3
Slide 5: Diatreme – Investment Overview
DIATREME – INVESTMENT OVERVIEW For personal use only • GOLD: Tick Hill Gold Project, Qld: Short-term cash flow potential from tailings reprocessing operation, benefitting from A$1,700/oz gold price • ZIRCON: Cyclone Zircon Project, WA: Supply shortage predicted “within 3 years” with zircon price for
Slide 6: Skin in the Game
SKIN IN THE GAME For personal use only DRX— Capital Structure Directors Position Shares on Issue 877 Million William Wang Chairman Options on Issue (Unlisted) 8.0 Million Andrew Tsang Non Executive Director Share Price (16th Aug 2016) A$0.018 Daniel Zhuang Non Executive Director Market Capitalisatio
Slide 7: Experienced Team
EXPERIENCED TEAM For personal use only • Experienced management team focused on streamlining operations with focus on flagship Cyclone Zircon Project: Neil McIntyre – CEO, 25yrs experience in banking, finance, resources Ian Reudavey – Chief Geologist, 25yrs in exploration & mining, 15yrs mineral
Slide 8: Australia-Focused
AUSTRALIA-FOCUSED For personal use only Mineral Sands Cape Bedford Metals Tick Hill Clermont Grays Hill Cyclone 7 7
Slide 9: Mineral Sands Development – Eucla Basin
MINERAL SANDS DEVELOPMENT – EUCLA BASIN For personal use only 8
Slide 10: Diatreme's Flagship: Cyclone Project, WA
DIATREME’S FLAGSHIP: CYCLONE PROJECT, WA For personal use only 9
Slide 11: Cyclone Project Fundamentals
CYCLONE PROJECT FUNDAMENTALS For personal use only • JORC Resource: 211Mt @ 2.3% HM (Cyclone + Cyclone Extended) • JORC Reserve: 138Mt @ 2.6% HM containing 1 Mt Zircon • Beach Strandline Deposit of Tertiary age Thick, multiple strands - broad mining widths (~400m) and 1:1 strip ratio Low slimes (4.5
Slide 12: Cyclone Project Fundamentals
CYCLONE PROJECT FUNDAMENTALS For personal use only • Conventional mining, processing and tails management Use of proven techniques in a similar setting to Iluka JA operation. • Sufficient reserves to support extensive mine life Currently 14 years at 10Mt pa Strand mineralisation gives options for hi
Slide 13: Cyclone Resource – High Zircon Content
CYCLONE RESOURCE – HIGH ZIRCON CONTENT For personal use only Graph sourced from SFX 12
Slide 14: Cyclone Project – Zircon Dominant
CYCLONE PROJECT – ZIRCON DOMINANT For personal use only 13
Slide 15: Cyclone Mining Lease & Site Layout
CYCLONE MINING LEASE & SITE LAYOUT For personal use only Mining Lease M69/141 was granted Nov 2014 for the Cyclone Ore Reserve (red) and the operational activities that will occur around it. These activities include wet concentrating, tailings disposal, HMC stockpiles, offices, workshops, infrastruc
Slide 16: Cyclone Resource – Plan View
CYCLONE RESOURCE – PLAN VIEW For personal use only M69/141 • Large scale deposit • Mineralisation along 10km strike • Two beach strandline systems 1.7km wide 10km long R69/1 15
Slide 17: Cyclone Resource – Oblique View
CYCLONE RESOURCE – OBLIQUE VIEW For personal use only 0.9km wide West Strand East Strand 7km long 10km long 2.3km wide 16
Slide 18: Cyclone Resource – Typical Ore Section
CYCLONE RESOURCE – TYPICAL ORE SECTION For personal use only East Strand Pit - 360m wide West Strand Pit - 700m wide Overburden - 20m Overburden - 14m Ore - 15m Ore - 24m Beach Resource Nearshore Resource 5 x vertical exaggeration 1m vertical = 5m horizontal 17
Slide 19: Cyclone Mining Proposal
CYCLONE MINING PROPOSAL For personal use only Strip Ratio 1:1 Mining Rate 1,300 tonnes per hour 2 x 650tph dozer traps Mine Production 19 tonnes / hour HMC production Heavy Mineral Concentrate (HMC) 144,000 t/a @ 96% HM Road transport by truck 240km - 100 tonne loads to Forrest rail siding Transport
Slide 20: Cyclone MSP Products from HMC
CYCLONE MSP PRODUCTS FROM HMC For personal use only AVERAGE ANNUAL MSP PRODUCTION and PRODUCT QUALITY Zircon – 65,000 tonnes HiTi87 – 10,000 tonnes HiTi67 – 46,000 tonnes 19
Slide 21: Proposed Mining Methods
PROPOSED MINING METHODS For personal use only 20
Slide 22: Transport Options
TRANSPORT OPTIONS For personal use only HMC loaded into containers at Cyclone. 33 tonne per container. 240 kilometre truck transport by road CYCLONE 1,100 kilometre rail transport from Cyclone to Forrest rail siding in from Forrest siding to Port Pirie Road Rail 100 tonne loads. in 3,000 tonne loads
Slide 23: Cyclone Project Milestones
CYCLONE PROJECT MILESTONES For personal use only ACTIVITY SCHEDULE Pre-Feasibility Study Completed - March 2012 Definitive Feasibility Study (most permits) Q4 2016 – Q1 2017 Project Financing Q2 2017 Construction & Development Q3 2017 Mining & Production Q3 2018 22
Slide 24: Cyclone Project Enhancement Study
CYCLONE PROJECT ENHANCEMENT STUDY For personal use only • Study completed in May 2016 by Sedgman Limited (a leading mineral sands consultancy) • Independent confirmation of project financials and feasibility • Based on JORC Ore Reserve of 138Mt @ 2.6% HM • * CAPEX of $A161 million and annual average
Slide 25: Cyclone Project Builds Momentum
CYCLONE PROJECT BUILDS MOMENTUM For personal use only Water Supply - Extensive groundwater aquifer discovered and test bore completed close to the mine. Bore flow estimated at 40 litres/second. Native Title and Mining Agreement – Agreement executed with the Native Title Holders on 15 November 20
Slide 26: Zircon Supply Deficit Forecast
ZIRCON SUPPLY DEFICIT FORECAST For personal use only “Zircon from existing producers declining due to depletion and decline in grade and assemblage… Absent new investment there is a zircon supply challenge within 3 years” (Iluka Resources, February 2016) 25
Slide 27: Mineral Sands Demand Increasing
MINERAL SANDS DEMAND INCREASING For personal use only * Urbanisation set to increase demand for mineral sands, including zircon: WORLD BANK REPORT, JANUARY 2015 • Almost 200 million people moved to urban areas in East Asia from 2000-10 • Overall proportion of urbanites rose from 29% to 36% - but les
Slide 28: Mineral Sands Pricing Outlook
MINERAL SANDS PRICING OUTLOOK For personal use only Industry forecaster TZMI says conditions now “tighter than at any time since 2012” for titanium pigment (TiO2) Analysts Beer & Co expect zircon price to reach US$1,500/t by 2018, rutile US$1,200, with benefit of weak AUD UK market researcher
Slide 29: Diatreme's Project Pipeline
DIATREME’S PROJECT PIPELINE For personal use only 28
Slide 30: Exploration Overview
EXPLORATION OVERVIEW For personal use only • Consolidation of exploration tenure – currently 6 exploration properties, 4 ML and 1 RL, down from 29 (incl. 13 applications) in March 2014 • Mineral sands exploration tenure comprises Cyclone (WA), Cape Bedford (Qld) and Yeppoon (Qld) • Focus on progress
Slide 31: Tick Hill, QLD
TICK HILL, QLD For personal use only Tick Hill, QLD Gold 3 Granted ML’s Tick Hill Size: 3.9 sq. km 30
Slide 32: Tick Hill, QLD
TICK HILL, QLD For personal use only Tick Hill Gold Mine (circa 1993) looking easterly Produced 500,000 oz. gold from 700,000 tonnes of ore at 22.6g/t Au 31
Slide 33: Tick Hill – Potential for Near-Term Cash Flow
TICK HILL – POTENTIAL FOR NEAR-TERM CASH FLOW For personal use only • High grade historic gold production, 513,333 ounces of gold at a recovered grade of 22.6 g/t gold • JV in place with Superior Resources Ltd, “surface” gold 50/50 JV, below ground $750k earn in for 50%. • Excellent exploration targ
Slide 34: Cape Bedford, QLD
CAPE BEDFORD, QLD For personal use only Cape Bedford, QLD Cape Bedford Silica Sand, Heavy Mineral Sands EPM Grant June 2016 Size: 554 sq. km 33
Slide 35: Cape Bedford, QLD
CAPE BEDFORD, QLD For personal use only Lookout Pt Large sand dune system with known silica sand and mineral sand occurrences over an area 50km x 15km in dunes up to 100m high. Historical exploration indicates HM mineralised horizons in sand mass High grade silica in previous drilling samples. Sampl
Slide 36: Cape Bedford Demand Outlook
CAPE BEDFORD DEMAND OUTLOOK For personal use only Meeting quality demands: Whiteness (a strong indicator of purity) and sizing of silica sand meets the demands of the glass and foundry industries Large Asian market demand: Particularly in China, Japan, Korea and Taiwan Proximity to existing pr
Slide 37: Cape Bedford, QLD
For personal use only CAPE BEDFORD, QLD 36
Slide 38: Cape Bedford, QLD
CAPE BEDFORD, QLD For personal use only Mineralisation on the current beach shedding from the dunes 37
Slide 39: Cape Bedford, QLD
CAPE BEDFORD, QLD For personal use only Major dune field with high grade silica sand overlying heavy mineral sand potential 38
Slide 40: DRX Recent Significant Announcements
DRX RECENT SIGNIFICANT ANNOUNCEMENTS For personal use only Dec 2015: Cyclone Ore Reserve increased by 47%, mine life lengthened to 14 years following incorporation of acquired Cyclone Extended resource. Jan 2016: Cyclone Project substantially de-risked, with award of Mining Lease, agreement with
Slide 41: Diatreme: Delivering Value
DIATREME: DELIVERING VALUE For personal use only • Experienced management/board with ‘skin in the game’ • Highly prospective tenement portfolio in mineral sands, gold & more • Cyclone Zircon Project: Flagship project advancing through approvals and DFS in world-class zircon province; de-risking proc
Slide 42: Appendix: Cyclone Project Resource & Reserve Estimate
APPENDIX 1 For personal use only Cyclone Project Resource & Reserve Estimate MINERAL RESOURCE Head Grade HM Resource Material HM HM Slime OS Zircon cut-off Zircon Rutile Leuc HiTi Alt Ilm Si TiOx Category Mt % Mt % % Kt % % % % % % % MEASURED 1.0 156 2.4 3.79 4.2 5.1 0.69 0.08 0.17 0.52 0.26 0.55 1,
Slide 43: Appendix: Tick Hill Tailings Resource Estimate
APPENDIX 2 For personal use only Tick Hill Tailings Resource Estimate Au Material Material Material Au Au Au Category Location cut-off Volume Density ‘000 t g/t kg t oz g/t ‘000 m3 INDICATED West Paddock 0.5 245 1.4 345 0.80 275 8,800 INDICATED East Paddock 0.5 205 1.4 285 1.42 405 13,000 INDICATED