Diatreme Resources Limited identified an additional potential transport pathway for exports from its Galalar Silica Sand Project (GSSP) predominantly through its existing EPM 17795 to the Port of Cape Flattery, potentially providing enhanced permitting and approvals certainty while reducing marine impacts and transport costs. The move follows the Company's signing of a Memorandum of Understanding (MOU) with government-owned corporation Far North Queensland Ports Corporation (Ports North), the relevant port authority for the Port of Cape Flattery, concerning planned silica exports from Diatreme's Northern Silica Project. Diatreme is assessing the best outcomes for GSSP's development and is consulting with regulatory and permitting agencies, both State and Federal, about the new potential alternative export pathway.

The new export corridor is consistent with the Sustainable Ports Development Act and Reef 2050 Plan as it confines marine barging and loading operations to the existing port limits, which are already excluded from the Great Barrier Reef Marine Park. The establishment of an alternative export corridor for the Company's most advanced project, the GSSP has the potential to provide a number of benefits: · Greater regulatory and permitting certainty (de-risking approvals process); · Leverages and builds on the existing EIS permitting studies and extensive regional stakeholder engagement, whilst potentially allowing for a simpler permitting pathway via an EA process; · Significant reduction in carbon emissions from the use of a low impact slurry pipeline compared to barging from Nob Point to the Port of Cape Flattery; · Potential for enhancing fundamental economics by reducing costs of production and transport of product to market. Potential for examination of higher product processing targets (product delivery tonnage) · Potential for cost saving initiatives from sharing of associated delivery infrastructure Investigation of the pipeline corridor alignment, the use of open access infrastructure at Cape Flattery Port and undertaking barging and shipping activities within the port limits will form part of further studies, including revised economics, environmental, project planning and other matters of practical implementation.

Diatreme is advancing the GSSP and NSP in parallel, allowing for the development of two high-grade silica sand mining operations. Diatreme's ESG principles govern its delivery of low impact projects, aligned to Australia's 2022 Critical Minerals Strategy, which recognises the importance of silica in the transition to lower global carbon emissions. The NSP involves the establishment and operation of a high-grade silica sand mining operation, with the ability to export product via the Port of Cape Flattery.

Whilst the GSSP remains more advanced in terms of the permitting, approvals and financial studies process, Diatreme has identified considerable synergies with the NSP, including the shared use of product export methodologies and associated infrastructure, the use of shared plant and equipment and the use of hybrid power solutions such as solar, wind and hydrogen to minimise the Company's carbon footprint. The recent signing of a non-binding MOU with Ports North (whilst specific to the NSP) has allowed for effective planning, project design, establishment of key capital cost parameters and related matters, including further investigation of onshore and offshore infrastructure, land access, shipping activities and review of approvals documentation. As these matters progress and Diatreme continues its internal economic and development assessments, broader development options are being explored to ensure Diatreme achieves its objective of becoming a tier one asset developer of scale with the lowest possible quartile production costs.

Diatreme now plans the following activities to further progress the development of its silica sand projects: Review lodgment of revised MLA (Infrastructure) for the northern pipeline transport option; Finalise discussions with State and federal regulatory agencies to facilitate the GSSP delivery option decision making process; Revision of any required Galalar PFS studies and environmental studies; Further rapid advancement of the NSP, in parallel with Galalar's development.