DIATREME RESOURCES LIMITED ABN 33 061 267 061 Level 2, 87...

DIATREME RESOURCES LIMITED
ABN 33 061 267 061

Level 2, 87 Wickham Terrace, Spring Hill, Qld, 4000
PO Box 10288
Brisbane Adelaide Street
Queensland 4000

ASX Code: DRX

Telephone : 61 7 3832 5666
Facsimile : 61 7 3832 5300
Email : [email protected]
Website : www.diatreme.com.au


Company Announcement Office
Australian Stock Exchange Limited
Level 4, 20 Bridge Street
Sydney NSW 2000

Discovery of New “Zircon Rich” Heavy Minerals in Eucla Basin.

Diatreme Resources Limited is pleased to announce the discovery of very large heavy mineral
(HM) prospect over a series of 18 drill intersections at Wanna Lakes Project ( E. 69/1920) in the
Central Eucla Basin in Western Australia.
The exploration was conducted by tenement holder, Lost Sands Pty Limited a subsidiary
company owned 75% by Diatreme Resources Limited and 25% owned by Minerals Corporation
Limited.

NEW DISCOVERIES OF HEAVY MINERALS

• The Cyclone Prospect
• The Hurricane Prospect

An initial reconnaissance aircore drilling program has potentially identified two mineralised
strand systems in the Wanna Lakes area, at the Cyclone Prospect in the south and the
Hurricane Prospect, 25 kilometres further to the north west .

THE CYCLONE PROSPECT

Best Results
• Average estimated grade 4.5% Heavy Minerals Averaging 5 metres thick, with thickest
at 20 metres ( 1% estimated heavy minerals (EHM) cutoff)
• Highest grade 40% estimated heavy Minerals
• 18 drill holes(drillholes WL030-WL 50) intersect above 1% estimated heavy minerals

At the Cyclone Prospect, a close spaced (100 metre) drill traverse has encountered high grade
zircon rich HM mineralisation over a distance of 2.3 kilometres. Drilling is perpendicular
across the strike of the paleo strand line.
The mineralisation is characterised by several high grade HM cores and has estimated HM
grades of up to 40% with observed zircon content estimated up to 50% of the mineral
assemblage. There is a large continuous envelope of 1% estimated heavy mineral surrounding
the higher grade core with total thicknesses up to 20 metres.
The bulk of the HM mineralisation is relatively near surface, being within 15 to 17 metres
depth.

The mineralisation is open laterally to the north, east and south, though mineralisation has
been identified 2.9 kilometres to the north and the intervening terrain has yet to be drilled.
Clay content is very low being less than 1%, and HM grain size is generally in the 100 to 200
micron range and consequently very amenable to recovery.

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THE HURRICANE PROSPECT
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Reconnaissance drilling was conducted at the Hurricane Prospect, which is 30 kilometres to
the northwest of the Cyclone Prospect, within the northern area of Wanna Lake Prospect.
Estimated HM grades from two drill hole intersections are 2metres @ 10% EHM, and
4.5metres @1% EHM and a drill hole intersection 10 kilometres to the south east, along the
interpreted strand line, recovered an intersection of 4.5metres @ 3.8% EHM, the drilling is very
wide spaced (10 kilometres between drill lines). The HM grain sizes are in the 100 to 150
micron range. The mineralisation is shallow being 12 metres depth below the surface.

WATER AQUIFERS IDENTIFIED

Two water aquifers have identified 6 kilometres west of Hurricane prospect in the drilling
program, with an upper aquifer at 18 to 25 metres of brackish water, and another aquifer at 37
to 45 metres of saline water. Further work will be conducted on salinity, volume and flow rates
of the aquifers. The discovery of water so early in the exploration program is welcome and
considered a bonus, as water resources will be required to treat heavy minerals for their
recovery in a mining operation.

SAMPLE ASSAYING

Samples were taken at 1.5 metre intervals, and all samples above 0.5% estimated heavy
minerals were submitted for assay.
Samples have been sent to Amdel Limited in Perth WA for comprehensive assays of HM grade
content and mineral composition and should be available in two weeks, and the drill samples
have been sent to Diamantina Laboratory in Perth WA and the Company will report the results
of the assaying and drill hole locations once they have been received.

PLANNED DRILLOUT AT CYCLONE AND WILLY WILLY

• Drill out of Cyclone Prospect WA
• Drilling of Shell Lake Project WA
• Reconnaissance drilling at Ooldea Prospect SA
• Reconnaissance drilling at Maurice Prospect SA
• Follow up of 2%EHM surface sample in western SA

The Company is continuing to drill at the Wanna Lakes Prospect and is planning to clear
further close spaced drill traverse lines for drill rig access to drill test for extensions of the
Cyclone Prospect. Reconnaissance drilling is planned at Shell Lakes Project 140 kilometres
to the South West after the Wanna Lakes Prospect drilling has been completed.
The Directors are now confident that exploration model the company pursued in this
unexplored terrain, is coming to fruition, by virtue of the discoveries at Wanna Lakes Project
and particularly at the Cyclone Prospect, which now has an overall width of 2,300 metres.
Diatreme’s Current drilling program in 2007 exploration season, will include targeting
extending the size of the prospect, both along strike and width. Further drilling is planned in
South Australia, including extending the potential mineralisation at the Willy Willy Prospect. A
sample tested surface sands in the far western part of the South Australian tenement
(EL3614), recovered an estimated 2% HM, Diatreme will investigating the mineral occurrence.



Page 3 of 4


CENTRAL EUCLA BASIN POTENTIAL FOR DIATREME

This opens up the potential for major resources to be identified by Diatreme, in the 500
kilometres long, central section of the Eucla Basin, which could be similar to other large
discoveries made in the eastern Eucla Basin as at Jacinth, Ambrosia, Tripitaka and more
recently Typhoon.




Anthony J Fawdon
Executive Chairman/CEO

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled
by Mr John Stacpoole, who is a Chartered Professional Member of the Australasian Institute of Mining and Metallurgy. Mr Stacpoole has
sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he
has undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’. Mr Stacpoole consents to the inclusion in the report of the matters based on the
information in the form and context in which it appears.


Diatreme Resources Limited, as an Australian ASX listed company based in Brisbane, Queensland, operates as a diversified mineral
explorer with advanced commodity holdings in zircon, copper and gold. The Company is currently exploring the southern Australia “Eucla
Basin HMS Project”, the Queensland “Clermont Copper Project” and numerous Queensland gold projects. By conducting substantial
exploration over its quality projects, the Company aims to bring successful projects to production status at the same time as increasing
shareholder wealth.


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CYCLONE PROSPECT
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Line 6
WL038
WL033
WL035
WL030
WL031
WL032
WL034
WL036
WL037
WL039
WL040
WL042WL043
WL044
WL045
WL046
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CYCLONE PROSPECT
HURRICANE PROSPECT
LOST SANDS - Eucla Basin Tenements
Line 1
Line 2
Line 6
LOST SANDS PTY LTD
WANNA LAKES PROSPECT
EL 69/1920
Legend
< 1% EHM
>1% EHM
EHM : Visual Estimated
Heavy Minerals
A
A