Tony Fawdon, Diatreme Resources Limited - Milestones at Cyclone and new projects


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Tony Fawdon, Executive Chairman / CEO, Diatreme Resources Limited delivered the presentation at the 2014 Mineral Sands conference.

The Annual Australian Journal Mining's Mineral Sands Conference is the key meeting place for Australia's Mineral Sands industry.

The event gives delegates the chance to hear from industry experts as they share their perspectives on the hot topics for the mineral sands industry. For more information about the event, please visit the website:

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Tony Fawdon, Diatreme Resources Limited - Milestones at Cyclone and new projects

  1. 1. DIATREME  RESOURCES   Milestones  at  Cyclone   and   New  Projects     March  2014  
  2. 2. Statements   This   presenta;on   contains   certain   forward-­‐looking   statements   and   forecasts   which   include   without   limita;on,   expecta;ons   regarding   future   performance,   explora;on,  mineral  resources,  the  financial  posi;on  of  Diatreme  Resources  Limited  (the  “Company”),  industry  growth  or  other  trend  projec;ons.     Whilst   this   presenta;on   is   based   on   informa;on   from   sources   which   are   considered   reliable,   the   Company,   its   directors,   employees   and   consultants   do   not   represent,  warrant  or  guarantee,  expressly  or  impliedly,  that  the  informa;on  in  this  presenta;on  is  complete  or  accurate.  To  the  maximum  extent  permiOed  by   law,  the  Company  disclaims  any  responsibility  to  inform  any  recipient  of  this  presenta;on  of  any  maOer  that  subsequently  comes  to  its  no;ce,  which  may  affect   any  of  the  informa;on  contained  in  this  document  and  presenta;on.     Nothing  in  this  presenta;on  should  be  construed  as  either  an  offer  to  sell  or  a  solicita;on  of  an  offer  to  buy  or  sell  securi;es.   STATEMENT  IN  ACCORDANCE  WITH  THE  AUSTRALASIAN  CODE  FOR  REPORTING  OF  EXPLORATION  RESULTS,  MINERAL  RESOURCES   AND  ORE  RESERVES   (THE  JORC  CODE)   The  informa;on  in  this  report,  insofar  as  it  relates  to  Explora;on  Results  is  based  on  informa;on  compiled  by  company  personnel  under  the  supervision  of  Mr   David   Jelley,   who   is   a   full   ;me   employee   of   Diatreme   Resources   Limited   and   a   Member   of   the   Australasian   Ins;tute   of   Mining   and   Metallurgy.   Mr   Jelley   has   sufficient   experience   which   is   relevant   to   the   style   of   mineralisa;on   and   type   of   deposit   under   considera;on   and   to   the   ac;vity   which   he   has   undertaken   to   qualify  as  a  Competent  Person  as  defined  in  the  2004  Edi;on  of  the  ‘Australasian  Code  for  Repor;ng  of  Explora;on  Results,  Mineral  Resources  and  Ore  Reserves’.   Mr   Jelley   consents   to   the   inclusion   in   the   report   of   the   maOers   based   on   the   informa;on   in   the   form   and   context   in   which   it   appears.   This   informa;on   was   prepared   and   first   disclosed   under   the   JORC   Code   2004.   It   has   not   been   updated   since   to   comply   with   the   JORC   Code   2012   on   the   basis   that   the   informa;on   has   not  materially  changed  since  it  was  last  reported.     The   informa;on   in   this   report   that   relates   to   Mineral   Resources   is   based   on   informa;on   compiled   by   Mr   Ian   Reudavey,   who   is   a   Member   of   the   Australian   Ins;tute   of   Geoscien;sts,   and   a   full   ;me   employee   of   Diatreme   Resources   Limited.   Mr   Reudavey   has   sufficient   experience   which   is   relevant   to   the   style   of   mineralisa;on  and  type  of  deposit  under  considera;on  and  to  the  ac;vity  which  he  has  undertaken  to  qualify  as  a  Competent  Person  as  defined  in  the  2012   Edi;on  of  the  ‘Australasian  Code  for  Repor;ng  of  Explora;on  Results,  Mineral  Resources  and  Ore  Reserves’.  Mr  Reudavey  consents  to  the  inclusion  in  the  report   of  the  maOers  based  on  the  informa;on  in  the  form  and  context  in  which  it  appears..         The  informa;on  in  this  report  that  relates  to  Ore  Reserves  is  based  on  informa;on  compiled  by  Mr  Phil  McMurtrie,  who  is  a  Member  of  the  Australasian  Ins;tute   of   Mining   and   Metallurgy.   Mr   McMurtrie   is   a   director   of   Tisana   Pty   Ltd,   and   is   a   consultant   to   Diatreme   Resources   Limited.   Mr   McMurtrie   has   sufficient   experience  which  is  relevant  to  the  style  of  mineralisa;on  and  type  of  deposit  under  considera;on  and  to  the  ac;vity  which  he  has  undertaken  to  qualify  as  a   Competent   Person   as   defined   in   the   2004   Edi;on   of   the   ‘Australasian   Code   for   Repor;ng   of   Explora;on   Results,   Mineral   Resources   and   Ore   Reserves’.   Mr   McMurtrie  consents  to  the  inclusion  in  the  report  of  the  maOers  based  on  the  informa;on  in  the  form  and  context  in  which  it  appears.  This  informa;on  was   prepared   and   first   disclosed   under   the   JORC   Code   2004.   It   has   not   been   updated   since   to   comply   with   the   JORC   Code   2012   on   the   basis   that   the   informa;on   has   2   not  materially  changed  since  it  was  last  reported.  
  3. 3. Diatreme  Projects   Cape Bedford Mandora Tick Hill Clermont Grays Hill Cyclone Eucla Basin Elliston Anabama Glenthompson 3  
  4. 4. Mineral  Sands  Explora@on     4  
  5. 5. Cyclone  Project  Fundamentals     •  PROBABLE  RESERVE:  97  million  tonnes  @  2.5%  heavy  minerals.     •  770kt  of  high  value  Zircon   •  Resource:    137Mt  @  2.2%.  Poten@al  for  addi@onal  resources.     •  Joint  Venture  by  Perpetual  Mining  Holdings  Limited  (Hong  Hong)   over  Cyclone.     •  Cyclone  JV  funding  to  establish:  Water,  Environmental  &  Heritage   milestones.       5  
  6. 6. Proposed  Mining  Methods     6  
  7. 7. Cyclone  Mining  Stats  –  PFS   Strip  Ra@o   1.1  :  1   Mining  Rate  (Dry)   1,300  tonnes  per  hour  –  2  x  Dozer  traps   Mine  Site     Wet  Concentra@on  Plant  Product   26  Tonnes  /  Hour  HMC  produc@on   147,000  t  PA  @  98.5%  HM  Concentrate   Transport  -­‐  Road   240km  -­‐  4  trucks  x  110  tonnes    to  Forrest.   Transport  -­‐  Rail   1,000km     OPTIONS   Mineral  Separa@on  Plant  in  Australia   Mineral  Separa@on  Plant  in  China  or  Other  Country   Direct  sale  of  HMC  within  Australia   Direct  sale  of  HMC  offshore  –  Most  likely  op@on.   7  
  8. 8. Transport  Op@ons     CYCLONE   Forrest   Perth   Esperance   Haul Road Corridor Port  Pirie   Adelaide   Initial Environmental Surveys - Completed Initial Cultural Heritage Surveys - Completed Formal Referral to the EPA - Completed Referral for Environmental Approval Process - Underway 8  
  9. 9. Cyclone  Project  Milestones   •  Agreement in place with Chinese party to earn initial 6% for $2M additional to $1.6M expended on project received as placement in 2013. •  Able to farm-out further interest in return for funding and still maintain sizeable equity. Water supply - Major water aquifer discovered on site. Bore complete. Supply assured. Haul road - Progressing environmental studies and permitting of haul road from mine site to rail siding. Mining Lease - Finalise agreement with Traditional Owners. 9  
  10. 10. Drilling  for  Water  -­‐  Cyclone   •  Successful water discovery beneath proposed mine site. •  Water discovery as important as mineral discovery at Cyclone. •  High yielding sandstone aquifer below 530m depth, extending to the base of test borehole (803m). •  Appears to be part of an extensive Officer Basin aquifer system. •  Brackish water quality amenable to mineral processing requirements. •  Drill hole cased and developed for future production bore. 10  
  11. 11. Drilling  for  Water  -­‐  Cyclone   Preliminary flow of 40 l/sec at salinity of 20,000TDS 11  
  12. 12. Mineral  Sands  Explora@on     WA Eucla Basin Tenements Zephyr Legend Possible Beach Strandline Diatreme Tenement Topography Background Cyclone Highly Prospective 12  
  13. 13. Cape  Bedford,  QLD   Cape Bedford, QLD Cape Bedford EPM Application Size: 554 sq km Silica Sand, Heavy Mineral Sands 13  
  14. 14. Cape  Bedford,  QLD   Lookout Pt Large sand dune system with known silica sand mineralisation cover an area 50km x 15km. (50 – 100m high). Previous exploration for silica sand indicates heavy minerals are present in a number of horizons. High grade silica established from former drilling above heavy minerals. Existing port at Cape Flattery and potential port sites at Nob Pt & Lookout Pt. Nob Pt Culture of mining with indigenous landowners with Cape Flattery silica sand mining operation. Issues with the proposed Cape York Regional Plan to be resolved. T.O support for granting tenement. 14  
  15. 15. Cape  Bedford,  QLD   Sand Dunes, Cape Bedford. 15  
  16. 16. Cape  Bedford,  QLD   Heavy Minerals on beach, Cape Bedford. 16  
  17. 17. Cape  Bedford,  QLD   Mineralisation on the current beach shedding from the dunes 17  
  18. 18. Cape  Bedford,  QLD   Major dune field with high grade silica sand overlying heavy mineral sand potential 18  
  19. 19. Cape  Bedford,  QLD   Overburden comprising high quality silica sand grading up to 99.9% silica 19  
  20. 20. Elliston,  SA   Elliston Project, SA EL Application Size: 994 sq km Heavy Mineral Sands Elliston 20  
  21. 21. Elliston,  SA   21  
  22. 22. Elliston,  SA   Prospective for heavy mineral sands along a ridge 35 km long and 5km wide Tested by BHP-Utah in 1990 as part of an assessment of the Eucla Basin, but only one drill traverse of 1km spaced shallow (<30m) holes completed at the far northern end of the feature. BHP results: •  TA0010 - 14m at 0.4% HM from 16m (open at depth) •  TA0011 - 9m at 0.3% HM from 18m (open at depth) •  TA0012 - 10m at 0.3% HM from 16m (open at depth) Mineralogy: •  25% Zircon (23 – 27%) •  5% Rutile (4 – 7%) •  17% Leucoxene (12 – 23%) •  31% Ilmenite (26 – 37%) BHP were exploring for rutile and found very little in the Eucla Basin so abandoned the project. 22  
  23. 23. Mandora,  WA   Mandora Project, SA EL Application Mandora Size: 472 sq km Heavy Mineral Sands 23  
  24. 24. Mandora,  WA   Easily accessible for exploration Diatreme first mineral sands company into the Southern Canning Basin. Good network of tracks and fence lines for access 24  
  25. 25. Mandora,  WA   Mandora Project, Canning Basin, WA Broome Large (50km long) radiometric anomaly behind current beach. Will be explored for heavy mineral sands using Company’s aircore drill rig. Mandora Project Port Headland 25  
  26. 26. Mandora,  WA   26  
  27. 27. DRX  Prospec@vity     •  Cyclone  –  One  of  the  best  undeveloped  zircon  deposits  in  the  World.     •  Cape  Bedford,    Qld  –  554    sq  km  of  massive  silica  sand  &  @tanium   mineralisa@on.   •  Elliston  SA  -­‐  Virtually  unexplored  with  known  heavy  mineral    poten@al.   •  Mandora,  WA  –  Unexplored  radiometric  high  within  Canning  Basin.   •  Exci@ng  porphyry  copper  explora@on  projects  in  Queensland,  Victoria   &  South  Australia.   27  
  28. 28. Investment  Fundamentals     •  Programs  funded  and  underway  for  the  Environmental,  Heritage  and  Haul   Road  Licencing  requirements  at  Cyclone  Zircon  Deposit.     •  Poten@al  funding  op@ons  at  project  level  to  crystallise  shareholder  value.   Currently  100%  ownership  by  DRX  -­‐  Agreement  in  place  with  Chinese   party  to  earn  ini@al  6%  for  $2M.     •  A  renounceable  en@tlement  rights  issue  to  shareholders  currently  on   offer.     •  High  JV  interest  in  DRX  project  porjolio.  Nego@a@ons  currently  for  Tick   Hill  gold  and  Clermont  copper  projects.       •  Massive  imbalance  between  DRX  share  price  and  value  of  Cyclone   Deposit.  Investment  opportunity  at  DRX  current  low  share  price.     28  
  29. 29. DIATREME  RESOURCES   Towards  Development  at  Cyclone   New  Projects.  High  Prospec;vity     March  2014