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Corporate Spotlight

Diatreme Resources (ASX: DRX) is an emerging Australian producer of mineral/silica sands. The company’s Galalar Silica Project in North Queensland is in a world-class silica province near the world’s biggest silica mine, while in WA, its Cyclone Zircon Project is de-risked and ready for development.
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NEW SILICA TARGETS

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Regional exploration identifies new silica targets,
 plus new heavy minerals discovery at Galalar


ASX Announcement 11 April 2019 



  • Results from March 2019 regional exploration program confirm target areas for resource extensions at Galalar Silica Project for high purity silica sand, as well as newly identified Heavy Mineral Sands (HMS) 


  • Sampling confirms Elim Road North Prospect and Elim Road South Prospect contain high-quality, high purity silica sands, with potential to add to existing Galalar Silica resource along the same dune system


  • Exploration reveals HMS exploration target at Gubbins Range, containing significant TiO2 levels (up to 1.17% Ti02), with the potential for a major new HMS discovery


Prospects for a new silica mine in North Queensland continue to strengthen, with emerging silica sands explorer and developer, Diatreme Resources Limited (ASX: DRX) announcing today new exploration targets at its Galalar Silica Project, including both high-quality silica sands and potentially a major new Heavy Minerals Sands (HMS) discovery.


Regional Exploration Results


In March 2019, Diatreme completed an initial helicopter sampling program of all the target sand dunes (refer Fig 1.). Sampling was completed using a sand auger to vertically drill test a nominal 1m sample interval below the identifiable topsoil layer. A 1m sample was deemed sufficient for a first pass program. Generally, at least 2 samples were collected at most sample locations, at least 100m apart to determine potential variation in the sand dune. Bagged samples were dispatched to independent laboratory ALS in Townsville for detailed analysis.  Analysis is used to determine SiO2, heavy minerals, iron and for selective samples further particle size distribution analysis.


Test Results now received from the testing program confirm high purity silica sand in the priority target areas as well as highlighting significantly elevated TiO2 within the Gubbins Range sand dune system. Key outcomes from the regional exploration/sampling program include:


  • Potential Existing Resource Extensions - Elim Road North & South – High Purity Silica Sands: Sampling of the sand dunes where accessible returned high SiO2 results, including a high of 99.67% in situ purity and averaging 98.95% Si02 over the whole sampling area   This confirms the aerially large dune system could potentially host a large and significant occurrence of high purity silica sand. These areas will continue to be prioritised for their potential to add significant additional high purity silica resource to the existing discovery.


  • Heavy Minerals - Gubbins Range HMS: Sampling highlighted elevated TiO2 within the dune system immediately east of the Gubbins Range. Gubbins Range is a large basement high which forms the western boundary to the sand dune system to the south of the McIvor River (see Figure 2).


The Gubbins Range dune system consists predominantly of longitudinal sand dunes, all of which are approximately 6,000m in length and vary in height and size. The northern sand dune terminates into a large active elongate parabolic dune sometimes referred to as “Seagrens Dune” near the McIvor River.


In all, 12 sand auger samples were collected from the Gubbins Range dune system at six locations on three of the sand dunes.  TiO2 percentages ranged from 0.32 to 1.17% and averaged 0.8%.   This confirms historic sampling conducted in the dune system in 1981 by Essington Breen (exploration company).



Figure 1. Galalar Exploration Tenement, Regional Targets and Existing Silica Resource Area


Next Steps 


Silica Resource Expansion


An exploration program is being developed to better test the Elim Road silica sand target areas as well as the Gubbins Range HMS target. This program will involve more thorough low impact coverage of target areas with sand augering testing to determine quality continuity and confirm first pass results.


Confirmation of targets will then lead to high impact targeted drilling to undertake a selective deeper sampling program to determine potential resources and testing of bulk sample mineralogy, with a particular focus on identifying the silica deposits that are capable of meeting the standards required for the high value product.


Further exploration activity is planned for early May with results, following drilling sample independent testing, to follow some weeks later.


Heavy Minerals Strategy


The elevated Ti02 (titanium minerals) and zircon minerals indicate the potential for mineable quantities of heavy minerals within the Gubbins Range dune system. Further sample metallurgical testing is immediately underway to determine the following:


  • Mineral assemblage within the Ti02 – to determine the potential value of the contained heavy minerals;
  • More detailed metallurgical analysis to determine ease of separation of the contained mineral assemblage;
  • Determine variation within the samples to examine grade and composition trends within the heavy mineral deposition at Gubbins Range deposit;
  • Enable prioritisation within the Gubbins Range for further targeted exploration and drilling activity.


Results from this further minerals testing are anticipated within two to three weeks.


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$1.5M PLACEMENT

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$1.5m placement to progress Galalar Silica Project

ASX Announcement 27 March 2019 


Emerging silica sands explorer and developer, Diatreme Resources Limited (ASX:DRX) announced today the completion of a bookbuild to raise $1.5 million (before costs) via a placement of approximately 136 million fully paid ordinary shares at an issue price of 1.1 cents, with the funds targeted towards the Company’s emerging Galalar Silica Project in North Queensland.


The placement was well supported by new sophisticated and professional investors and existing shareholders, with leading Australian financial services company Hartleys Limited acting as Lead Manager.


The funds raised from the placement will be used to advance the Galalar project, including:


  • Further resource drilling focussed on major resource extension targets Elim Road North/South;
  • Bulk testing and product definition - delivery of larger bulk samples to potential off-takers;
  • Advancement of permitting and development approvals (mining lease, environmental and other approvals); 
  • Advancement of project economic studies; and
  • Working capital.


The successful fund-raising follows Diatreme’s recent announcement  of an initial silica sands Exploration Target ranging from 210 million tonnes (Mt) to 2.1 billion tonnes (refer ASX announcement 25 March 2019), and the previous upgrade of its Inferred Mineral Resource estimate to 26.4 Mt > 99% SiO2 (silicon dioxide) (refer ASX announcement 7 March 2019).


Commenting on the placement, Diatreme’s Chief Executive Officer, Neil McIntyre, said: “Diatreme thanks the support of shareholders and welcomes new investors to our register following this significant investment in the future of our Company.


“We continue to advance the Galalar project at a rapid pace in this world-class silica province, with previous results showing our ability to produce premium-grade silica for fast-growing Asian markets (refer ASX announcement 9 January 2019).


“Our recent mineral resource upgrade and large maiden regional Exploration Target have further demonstrated the project’s potential to make an important contribution to the region’s development, in partnership with the traditional owners, Hopevale Congress.


“We will now further test priority exploration targets and further delineate resource extensions, along with other studies evaluating Galalar’s ability to deliver genuine economic returns for the benefit of all stakeholders.”


Placement Details


The new shares will be issued on the same terms and rank equally in all respects with the existing fully paid ordinary shares in the Company. The allotment of the placement (except for Director participation) is not subject to shareholder approval and will fall within the Company’s 15% placement capacity under ASX LR 7.1 shares.


Settlement is expected on or around Wednesday, 3 April 2019


Click here to view the full announcement 

PRESENTATION

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LARGE SILICA EXPLORATION

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Large silica exploration target boosts Galalar prospects

ASX Announcement 25 March 2019 


  • Galalar Silica Project located in world-class silica exploration province, adjacent to world’s largest operating silica mine at Cape Flattery


  • Potential major resource extension targets identified at Elim Road North Prospect and Elim Road South Prospect


  • Current exploration program maiden Exploration Target set in range of 210 million tonnes (Mt) to 2.1 billion tonnes (Bt) of silica


  • New program follows recent upgrade of Galalar’s Inferred Mineral Resource estimate and amid solid demand for premium-quality silica


  • Preliminary sample testing program underway to define and select priority targets for further exploration and drilling programs (commencing from second quarter 2019)


Emerging silica sands explorer and developer, Diatreme Resources Limited (ASX:DRX) announced today an initial silica sands Exploration Target (see Table 1 and Figure 1 below) and plans for further exploration activity at its Galalar Silica Project in North Queensland, amid solid demand growth for premium-quality silica from Asian markets. 


Located around 200km north of Cairns, the Galalar Silica Project lies within the same sand dune system and in close proximity to the world’s largest operating silica mine at Cape Flattery (owned by Mitsubishi Corporation).


The Exploration Target follows the recent upgrade of Galalar’s Inferred Mineral Resource estimate to 26.4 million tonnes (Mt) > 99% SiO2 (silicon dioxide) (refer ASX announcement 7 March 2019). Bulk testing results have demonstrated an ability to produce premium-grade silica using standard processing techniques, meeting the requirements for high-end glass and solar panel manufacturing and capable of attracting premium prices (refer ASX announcement 9 January 2019).


Table 1: Exploration Target, Galalar Silica Project


Prospects

Surface Area

Ave Dune Height (m)

Resource Target Range (Mt)

       From                      To

Elim Road North

6,000m x 3,000m


40

100

1,000

Elim Road South

4,000m x 800m

20

10

100

Other Regional Targets

See Table 2 in Appendices for more information

100

1000

Combined



210

2,100


Note: The potential quantity and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration completed to date to estimate a Mineral Resource in accordance with the JORC 2012 Edition Guidelines. It is uncertain if further exploration will result in the estimation of a Mineral Resource.


Cautionary Statement: An Exploration Target is a statement or estimate of the exploration potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade (or quality), relates to mineralisation for which there has been insufficient exploration to estimate a Mineral Resource.


Diatreme’s CEO, Neil McIntyre said: “The recent resource upgrade (7 March 2019) has demonstrated the project’s potential to become a source of premium-quality silica, giving the Company confidence in our investment in further exploration at Galalar. In addition, the maiden Exploration Target announced today further outlines the targeted size and scale of the potential in-situ silica resource in a world-class silica exploration province. 

“We plan to test each of the targets quickly and further delineate resource extensions and prioritise those areas capable of genuine economic return.” 


“North Queensland needs new jobs and investment and that is exactly what we aim to deliver, working closely with our partners, traditional owners Hopevale Congress, with a goal of increasing value for all stakeholders.”


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RESOURCE EXPANDED

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Galalar Silica resource expanded by 22% to 26.4m Tonnes  

ASX Announcement 7 March 2019 


  • Galalar Silica Project’s Inferred Resource upgraded by 22% to an estimated 26.4 million tonnes (Mt) > 99% SiO2 (silicon dioxide) following recent drilling and testing


  • Independent analysis suggests resource capable of being further upgraded to ‘Indicated’ status following further bulk density sampling, providing increased confidence in quality and size of the resource


  • Resource remains open for significant expansion to the north and east of currently defined resource area 


  • Result further boosts North Qld project amid continued demand for premium quality silica sand from growing Asian markets. 


Emerging mineral and silica sands miner Diatreme Resources Limited (ASX:DRX) announced today an expanded resource estimate for its Galalar Silica Project in North Queensland, further demonstrating the project’s potential to become a source of premium quality silica sand for growing Asian markets.


Based on an independent assessment by Ausrocks Pty Ltd, the project’s Inferred Mineral Resource estimate has been upgraded to 26.4 Mt > 99% SiO2, up 22% on the maiden resource estimate of 21.6 Mt >99% Si0(refer ASX announcement 13 August 2018). The analysis also showed the potential for the resource to be further upgraded to ‘Indicated’ status, representing increased confidence in its quality, following further bulk density sampling.


Previous bulk testing results have demonstrated the project’s ability to produce premium-grade silica (< 100 ppm Fe2O3) using standard processing techniques, meeting the requirements for high-end glass and solar panel manufacturing and capable of attracting premium prices (refer ASX announcement 9 January 2019). Excellent recovery rates were obtained for the final product, with the results also showing the potential for secondary, high-value heavy mineral sands, adding to the project’s value.


Commenting on the latest results, Diatreme’s CEO, Neil McIntyre said: “Our confidence in the Galalar Silica Project continues to increase and this analysis has further shown the project’s potential to become a valuable source of premium-quality silica. 


“Working closely with our traditional owner partners, Hopevale Congress, we aim to advance this project as quickly as possible to deliver much-needed new jobs and investment for North Queensland and increased wealth for shareholders.”


Located around 200km north of Cairns, the Galalar project lies within the same sand dune system and in close proximity to the world’s largest operating silica mine at Cape Flattery. 


The global silica sand market is seen reaching nearly US$10 billion in annual revenues by 2022, with a compound annual average growth rate of 7.2% (source: IMARC Group).


Next Steps - Mining Scoping Study Expectations


Mining is expected to be a simple operation due to the small amount of overburden which can easily be removed, and the resource material is free digging sand dune above the water table. 


An initial mining operation with annual production of 300,000 to 500,000 tonnes of high grade silica product is envisaged. Based on discussions with potential customers and the likely initial market penetration for the project this may be increased to 1m tonnes progressively.


The Galalar project will initially be developed as a long-life operation of 20 plus years allowing exploration to expand further north and west in EPM17795, with the objective of identifying additional silica and heavy mineral resources.


Desk top commercial assessments are underway with a focus on identifying key infrastructure requirements for the establishment of export and product loading facilities.


Discussions have commenced with key regulatory and permitting agencies to define the project scope, environmental impact and pathway to final permitting approvals. Ongoing advanced discussions with potential offtakers indicate a  ready market into Asia for sub 100ppm Fe (Low iron) 99% plus Si02 Silica product.


Note: Any potential mining activity including its scope and size is conceptual only at this point as the Company is progressing through various internal and specialist consultant studies focusing on permitting and approvals, environmental and infrastructure assessments.


Click here to view the full announcement 

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