Diatreme Resources Limited · ASX:DRX
Diatreme Resources — Noosa Mining Virtual Conference 2020
33 slides from Diatreme Resources's conference presentation, Jul 17, 2020
Slide 1: Time to shine.
ASX:DRX Time to shine. Advanced, high grade, low-cost silica project located adjacent to the world’s largest silica sand mine. Noosa Mining Virtual Conference 17 July 2020
Slide 2: Disclaimer
Diatreme Resources Disclaimer This presentation contains certain forward-looking statements and forecasts which include Additional Information ASX:DRX without limitation, expectations regarding future performance, exploration, mineral resources, the financial position of Diatreme Resources Limited (
Slide 3: Diatreme Resources vision and projects
Diatreme Resources Diatreme Resources ASX:DRX Our vision is to become a producer of high-quality silica and mineral sands for use in growing global solar PV and ceramics markets. • Galalar is a high-grade silica sands project near production in close proximity to the world’s largest silica sands pro
Slide 4: Corporate overview
Diatreme Resources Corporate overview Ilwella P/L (Flannery) 14.8% ASX:DRX Directors & Share price Market capitalisation Management A$0.010 10 July 2020 close A$18.5m 8.9% 52 week high $0.015, low $0.008 Shares on issue Cash 1,855m A$1.33m As at 10 July 2020 Performance rights Options 3.3m 231.7m 50
Slide 5: World class projects
Diatreme Resources World class projects ASX:DRX Galalar Silica Project Cyclone Zircon Project Total Mineral Resource* Total Mineral Resource* 47.5Mt @ 99% silica oxide 203Mt @ 2.3% HM One of the world’s purest silica sands projects Shovel ready-project • Production target 2022 • One of the major zir
Slide 6: Galalar Silica Sands Project
GALALAR SILICA SANDS PROJECT
Slide 7: Premium quality silica
Diatreme Resources Galalar Silica Project Premium quality silica • Project located 20km north of Cooktown, FNQ adjacent to world’s ASX:DRX largest silica sand mine at Cape Flattery (Mitsubishi-owned) operating 30 years plus • Diatreme holds huge dominant position in known silica province at over 500
Slide 8: Scoping study snapshot
Diatreme Resources Galalar Silica Project Scoping study snapshot ASX:DRX Annual ore feed Annual production Silica price Annual gross revenue Gross revenue 950,000tpa 750,000tpa US$75/t* A$80m x 15 years A$1.2b Project life *The price assumption is for a ‘low iron’ silica sand product suitable for so
Slide 9: Near-term production
Diatreme Resources Galalar Silica Project Near-term production ASX:DRX 2020 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Prepare & submit draft EIS (develop and consult on draft terms of reference (DToR), undertake various Finalise DToR technical & economic studies) Final public consult period on EIS Final
Slide 10: Multiple exploration targets
Diatreme Resources Galalar Silica Project Multiple exploration targets ASX:DRX • Regional potential > 1 billion tonnes. • Regional exploration program has identified potential resource extensions at Elim Road North and Elim Road South, with high SiO2 results > 99% • Potential heavy minerals discover
Slide 11: High quality silica product
Diatreme Resources Galalar Silica Project High quality silica product ASX:DRX • The sand from the Galalar project is some of the world’s purest • Solar panel manufacturers’ feed stock requires >99% purity silica with “low iron” less than 100ppm iron oxide levels • Bulk sample testwork confirms abili
Slide 12: Offtake MOU agreements in place
Diatreme Resources Galalar Silica Project Offtake MOU agreements in place ASX:DRX • Diatreme has secured an MOU off-take agreement with the Fengsha Group, China’s largest processor and supplier to solar photovoltaic panels manufacturers and specialty high end silica sand related products • Agreement
Slide 13: Fengsha facilities, China
Diatreme Resources Galalar Silica Project Fengsha facilities, China ASX:DRX Slide | 13 Chemical pickling vats Mineral Separation Plant Thin Film Transistor line
Slide 14: Strong stakeholder support
Diatreme Resources Galalar Silica Project Strong stakeholder support ASX:DRX • Project being developed with support of traditional owners, Hope Vale Congress Aboriginal Corporation (12.5% direct “free carry” stake), the RNTBC representative body • Traditional owners hold freehold and native title ov
Slide 15: Expanding mineral resource
Diatreme Resources Galalar Silica Project Expanding mineral resource ASX:DRX • Scoping Study production target derived from 2018 JORC • Significant JORC Exploration Target highlights potential to Resource expand resource • Planned drilling in 2020 to expand and upgrade the size of the existing resou
Slide 16: Simple processing system
Diatreme Resources Galalar Silica Project Simple processing system ASX:DRX • Amenable to low capex & opex • No caustic chemicals or dust Front end loader Hopper conveyor Trommel Spiral separator Slide | 16 Hydrocyclone Wet high-intensity Classifiers Attrition scrubber product stacker magnetic separa
Slide 17: Export option: Cooktown
Diatreme Resources Galalar Silica Project Export option Scoping Study: Cooktown ASX:DRX • Nine trucks operating 12 hours per day via existing road network from mine site to Cooktown (60km). 50 tonnes per truck, 42 loads daily, 360 days per year • Stockpile up to 25,000 tonnes at barge loading facili
Slide 18: Export option 2: Nob Point
Diatreme Resources Galalar Silica Project Export option 2: Nob Point Optimised transport solution ASX:DRX • Construction of new 3.6km road from mine site to purpose-built barge ramp at Nob Point (subject to Qld Govt approvals), saving significant trucking opex costs • Reduces truck and barge impacts
Slide 19: Silica market: growing global demand
Diatreme Resources Silica market Growing global demand ASX:DRX • Silica sand has many uses, the market is experiencing increasing demand from emerging consumers such as China TRENDS 2009 - 2022 and India from foundry, automotive and construction industries including the solar PV market • IMARC forec
Slide 20: Silica market: solar consuming more sand
Diatreme Resources Silica market Solar market consuming more sand for panel manufacturing ASX:DRX • Solar panel PV market forecast to reach US$48.2 billion by 2025, with a CAGR of 34.7%* • World Bank estimates global renewable capacity will grow by over 1TW from 2018 to 2023, up 46%, with solar PV a
Slide 21: A compelling opportunity
Diatreme Resources Diatreme Resources A compelling Annual gross revenue opportunity A$80m ASX:DRX Annual operating costs A$42m Annual silica Annual consumption 250Mt DRX silica Annual operating margin production A$37m 0.75Mt x 15 years Project life Total net revenue A$555m Slide | 21
Slide 22: Resource statement: Galalar Silica Project
Diatreme Resources Resource statement Galalar Silica Project ASX:DRX Slide | 22 Note: Refer ASX release dated 11 May 2020 - “Galalar Silica resource expands 25% to 47.5Mt”. Diatreme confirms this resource statement as current, with no material change as at the time of this presentation.
Slide 23: Appendix
APPENDIX —_ »S DIATREME _~ Resources
Slide 24: Cyclone Zircon Project
CYCLONE ZIRCON PROJECT DIATREME Resources / —_ a
Slide 25: Cyclone Zircon Project: ready for development
Diatreme Resources Cyclone Zircon Project Ready for development ASX:DRX • Corporate advisers appointed to support progression of the project and ensure maximum shareholder benefit received • JORC Resource: 203Mt @ 2.3% HM (1% HM cut-off grade), containing 4.7Mt HM & 1,262 Kt zircon • Strategic metal
Slide 26: Zircon market
Diatreme Resources Zircon market Valuable heavy mineral ASX:DRX • Most valuable heavy mineral, with current prices US$1,487/t (2018: US$1,351/t)* • Global zircon production in 2018 approx. 1.2Mt • Zircon primarily used to produce ceramic tiles, as well as other applications including refractories, f
Slide 27: Titanium market
Diatreme Resources Titanium market Growing global demand ASX:DRX • Around 7.4m tpa global market (2018)* • Rutile price averaged US$1,142/t in 2019 (2018: US$952/t)* • Used primarily in pigments • Demand increasing due to higher environmental standards in China and technological advancements Slide |
Slide 28: Low-cost transportation
Diatreme Resources Cyclone Zircon Project Low-cost transportation ASX:DRX • HMC loaded into containers at Cyclone. 33 tonnes per container • 240 kilometre truck transport by road from Cyclone to Forrest rail siding in 100 tonne loads • 1,100 kilometre rail transport from Forrest siding to Port Adela
Slide 29: Easy mining process
Diatreme Resources Cyclone Zircon Project Easy mining process ASX:DRX Project Development Options: Mining & Logistics • Mineral Separation Plant in Australia – final products from Strip Ratio 1:1 Australia Mining Rate (Dry) 1,300 tonnes per hour – 2 x Dozer traps • Mineral Separation Plant in China
Slide 30: Project fundamentals
Diatreme Resources Cyclone Zircon Project Project fundamentals ASX:DRX • All primary project approvals in place: Mining Lease, traditional owner agreements, environmental approvals • Sufficient reserves to support a long mine life: - Currently 14 years at 10Mt pa - Strand mineralisation gives option
Slide 31: Resource statement: Cyclone Zircon Project
Diatreme Resources Resource statement Cyclone Zircon Project ASX:DRX Notes: • Refer to ASX release 15 June 2016 “Cyclone Study Reaffirms Project Profitability” for more detail • Rounding may generate differences in last decimal place • A constant SG of 1.7 has been used to derive material tonnes • S
Slide 32: Competent person's statement
Diatreme Resources Competent person’s statement ASX:DRX Statement in accordance with the Australasian code for reporting of exploration The information in this report, insofar as it relates to Mineral Resources at the Cyclone results, mineral resources and ore reserves (the JORC code) Project is bas
Slide 33: Diatreme contact details
DIATREME CONTACT DETAILS Neil McIntyre, Chief Executive 07 33972222 or 0468 370 660 neil.mcintyre@diatreme.com.au Phil McMurtrie – Project Manager 07 33972222 or 0417715228 phil.mcmurtrie@diatreme.com.au Unit 8, 61 Holdsworth Street Coorparoo QLD 4151
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