Diatreme Resources : expands Northern Resource Project exploration

ASX
ANNOUNCEMENT
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23 February 2022
use	Diatreme expands Northern Resource Project exploration
• Drilling programs in Diatreme's Northern Resource Project (NRP) target specific dunes extending over 150
	sq km, in proximity to Cape Flattery Port, Far North Queensland.
personal	• 2021 drilling campaign successfully tested further extents to the Si2 North dune towards the coast within
EPM 17795, intersecting up to 44.5m of high purity silica sand.
• Resource upgrade studies underway at Si2 North and expected to be completed in March 2022, targeting
significant increases in both known resource and with potential for new discoveries.
• Hand auger reconnaissance drilling underway and continuing throughout wet season, focused on areas
located to the north of the Point Lookout Track. This will evaluate another extensive area of lower profile
silica dunes, in proximity to the Cape Flattery Silica Mine leases.
• Further drilling prioritised at Si1 North through Q2 2022, with potential for additional multiple high purity
silica resource discoveries following January's high-grade silica sand discovery.

Emerging silica sands explorer and high purity silica producer, Diatreme Resources Limited (ASX: DRX) (the Company) continues to expand its silica sand resource base, with new exploration drilling underway throughout the Company's Northern Resource Project (NRP) area.

ForThe drilling is selectively testing extensions to dunes with low impact exploration activities. This includes the involvement of a number of Aboriginal clan groups, assisting in field programs within their respective clan areas.

The move follows recent success in discovering a second, high-grade silica sand resource within the northern area of the Cape Bedford (EPM17795) tenement area, the Si2 North Project (refer ASX release 10 January 2022). Diatreme is now building an extensive knowledge base on the dune systems located within the NRP area, adding to the established silica sand resource at the Galalar Silica Sand Project (refer ASX release 20 September 2021).

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Diatreme's CEO Neil McIntyre said: "Our immediate priority remains the delivery of the Galalar Silica Project in the
southern part of our tenement area, which we are currently advancing through permitting and approvals towards
mi	ing.
"H	wever, our late 2021 and early 2022 northern exploration programs have allowed us to advance quickly on

resource assessment and project development planning on our northern tenement area, with the potential for multiple mining operations of high purity silica.

use"Working in partnership with the Traditional Owners, these new discoveries will only further enhance the potential of our projects to deliver long-term benefits to all stakeholders, including new jobs and regional investment, while positively contributing to the decarbonisation of the global economy."

Drilling to the southeast of Si2 North has continued to extend into the core of the Si2 dune. The Company's Si2 North Project, comprising 53.2 million tonnes @ 99.32% SiO2, (refer ASX release dated 10 January 2022), is the base from which the drilling is extending. Initial drilling now extends over approximately 6km of the Si2 dune system.

Further to the north, silica dune thickness reduces, and exploration is focussed on a broad dune field extending north to the Cape Flattery Silica Mine leases. This area is transacted by the Point Lookout Track (PLT). Extensive field reconnaissance and planning in early 2022 has allowed access for Diatreme's exploration teams to initiate drilling, which will continue throughout the wet season.

Exploration activities at Si1 South were completed in 2021, with the sand quality remarkably consistent throughout the dune system. Assay results indicated the elevated heavy mineral sands (HMS) contain up to 0.07 % ZrO2 and 0.58% TiO2. Colouration in the sand is primarily due to clays.

Drilling to date in the Northern Resource Project (NRP) comprises:
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For	Area	Air Core drilling	Hand Auguring
	(holes/m)	(holes/m)
Si2 North	94/2004	NA
PLT	51/450	NA
Si1 North reconnaissance	46/382	NA
Si1 South	22/614	95/460

Diatreme has commenced assessing infrastructure options, environmental permitting and associated planning towards a development plan for the NRP. Meetings with government and the state-owned port authorities have commenced along with meetings with regional stakeholders to examine and advance areas for mutual co-operation.

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onlyFurther progress towards the lodgement of mining lease applications (MLA's) and associated infrastructure leases is anticipated in Q2 2022 covering the northern sections of EPM17795.

Diatreme's minimised footprint mining and processing plant solutions, combined with progressive supported rehabilitation will also be applied in the NRP, aimed at delivering a low impact standalone operation.

Exploration - EPM 19995

useIn the latter half of 2021, Diatreme targeted the extensive dune systems located to the north of the McIvor River and west of Cape Flattery. The exploration area covers in excess of 150 km2 and includes several major identified dunes including the Si1 and Si2 dune system. The NRP exploration is a separate program of work and compliments the advancing Galalar Silica Project, located to the south in proximity to Cape Bedford.

The NRP dune systems are accessed by established public roads and landholder access tracks. Marine access

supporting exploration activities is also possible.

personalAs previously reported, Diatreme has established an exploration base at Starke near the McIvor River to service the exploration. Logistical challenges are well managed, and the exploration has continued through the wet season with

periodic delays.

Diatreme utilises specialised drilling equipment designed to have a low impact and delivers solutions on accessing undulating dune terrains. The equipment facilitates rapid movement between shallow drill holes, optimising field activities with minimised vegetation disturbance.

Exploration teams include indigenous personnel from clan areas, undergoing training on drilling and exploration, whilst also completing daily cultural heritage monitoring.

As of 1 February 2022, Diatreme had drilled 281 vacuum holes for a total of 4,455.7m and 141 hand auger holes, with some located in areas of thick vegetation or difficult terrain for a total of 538.4m. Geochemical results are reported to date, with delays in laboratories hindering delivering of the latter sampling. This will be reported in subsequent

u dates.

ForAll holes drilled are logged, sampled and photographed on-site during field operations. A representative sub-sample is retained as a record of the drilling and for future reference.

Initial exploration holes are located using a handheld GPS, and Shuttle Radar Topography Mission (SRTM) topography was used as the topographic surface. Collar RL's draped against this surface verifies the accuracy of the hole locations. Aerial imagery was utilised as a base map.

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onlyFigure 1: Northern Resource Project location plan, drilling and Si2 North resource

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Si2 North Resource Extension Drilling
The Si2 North deposit is located on the north-
eastern half of the Si2 dune complex and is made up
f a stratified elongate parabolic dune system. The
dunes are the highest and potentially largest
accumulation of aeolian sand within the entire Cape
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B dford-Cape Flattery dune field. Vegetation
coverage ranges from nil to low level heath, with
pockets of denser vegetation. The latter is mapped
and demarcated prior to the progression of
exploration activities.
The Si2 dune complex extends 12km in strike and is
up to 4km in width, ranging in elevation between
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40m and 140m. Dune margins are defined by
interdunal lowlands, often hosting isolated lakes
nd wetlands.
Drilling from Q4 2021 to early Q1 2022 followed
vegetation and cultural heritage clearance surveys.
Vacuum and hand auger drilling was prioritised
southward along the dune system alignment, with
the aim of extending the Si2 North resource
footprint.
An additional 34 holes were completed for 921.3m.
Drill holes were generally collared on the crest of a
large elongate parabolic dune systems
su erimposed on older dunes. Sand quality is white
to cream in colour and geological logging indicates a
continuation of high purity silica sand extending
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f om the Si2 North resource area. Assay results are	Figure 2: Si2 North extension drilling
pending.
Objective
Targeting a significant resource increase from 53m
tonnes pending the receipt of assay testing results,
expected by the end of Q1 2022.

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