DIATREME Resources has been backed to the tune of $A2.1 million by unlisted Doral Mineral Industries, giving Doral an 8.86% stake in Diatreme, a move which could possibly be a pre-cursor to a takeover, according to Diatreme managing director Tony Fawdon.
Fawdon told MiningNews.net Doral's move onto the Diatreme register, making it the largest individual shareholder in the company, could lead to a takeover offer contingent on Diatreme having success at its zircon-mineral sands project in the Eucla Basin on the Western Australia-South Australia border.
"It's not our plan to get taken over … but if we start to become successful in the Eucla basin then yes, probably there will be overtures," Fawdon said.
"Well, there have already been overtures from major sand miners (and) many of them, not just one, so our position I would say, unless we can fend those off, we'll probably become takeover material."
Fawdon also said the spin-off of Diatreme's gold and copper assets could also take place in the future, with the company probably retaining a controlling stake.
Doral's parent company, Japan's Iwatani, is one of the biggest traders of zircon and mineral sands in China and Japan.
Fawdon said the group has expertise in engineering, chemical processing and downstream activities but had no exploration exposure, making Diatreme a good fit.
He said Doral experience would be employed once Diatreme established a resource in the Eucla Basin and he was looking at starting feasibility studies, possibly within the next two years.
Fawdon said Diatreme would also likely provide support when it comes to raising future capital.
"The (planned drill) program is going to cost us about $A2 million in the Eucla Basin alone … and after we spent about two years or $A4-5 million, then we would expect to be in a position where we expect to have some sort of resource," Fawdon said.
Diatreme has 40,000m of drilling planned for the Eucla Basin tenements this year, providing it can establish agreements with native title holders on both sides of the WA-SA border. Fawdon said negotiations are well underway and he hoped the company could start drilling in the second half of the year.
Meanwhile as part of the deal, Doral director George White will join Diatreme as a non-executive director. White has more than 30 years experience in the mineral sands industry.
Shares in Diatreme were off 0.5c (1.4%) at 34.5c in midday trade.
DIVERSIFIED explorer Diatreme Resources has begun the process of transferring 13 of its gold tenements into a separate, wholly-owned subsidiary, which is expected to list some time this year.
Speaking to MiningNews.net today, Diatreme executive chairman Anthony Fawdon said the tenements – principally gold projects with other commodities in them – will be transferred to new company Xtreme Resources.
Fawdon said Xtreme will list this year, with most of the prospectus already been written, but so far a decision on where to list has not been decided.
On listing, Diatreme will maintain a controlling interest in Xtreme.
The new company's projects include Nymbool and Georgetown Inlier, and Diatreme will also assign interests in the Tick Hill gold project to Xtreme by way of deed of assignment. All the projects are in Queensland.
Fawdon said Xtreme's board will largely remain the same as its parent company, however Neil Stewart will be managing director and new recruit John Stacpoole will take the role of exploration manager.
Diatreme said Stacpoole has broad-based exploration and mining experience and has worked for a number of companies including Zinifex, Bemax and Consolidated Minerals.
Fawdon said Diatreme's main focus will be on exploring for zircon in the Eucla Basin that straddles Western Australia and South Australia.
The news of the transfer had a positive effect on Diatreme's shares, which gained 3.5c (10%) to close at 38.5c today.
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