Diatreme’s Project Approvals and Asset Sale Pose Execution Risks Ahead

Northern Silica Project Gains Momentum

Diatreme Resources has made significant strides in advancing its flagship Northern Silica Project (NSP) in Far North Queensland. The Queensland Government granted Major Project Status to the NSP and associated tenements, a critical regulatory milestone that streamlines development approvals and underscores the project's strategic importance. Complementing this, an updated Mineral Resource Estimate for the Si2 Deposit and bulk metallurgical testwork confirmed the silica sand's high purity and low iron content, aligning with photovoltaic glass manufacturing standards.

The company is actively progressing its Environmental Impact Statement (EIS) toward final approval, with plans to submit the draft EIS for adequacy review in the coming quarter. Diatreme is also engaged in ongoing negotiations with native title holders, including the Gulaal People and Hopevale Congress Aboriginal Corporation, aiming to secure mutually beneficial agreements that balance economic development with cultural heritage preservation.

Strategic Sale of Clermont Copper/Gold Project

In a move to sharpen its focus on silica and heavy mineral sands, Diatreme agreed to sell its Clermont Copper/Gold Project to Moonlight Resources Limited. The transaction, structured as part of Moonlight's upcoming ASX initial public offering (IPO), will see Diatreme receive ordinary shares and performance rights valued at $3.25 million, plus $250,000 in cash. Post-IPO, Diatreme is expected to hold a significant 17.1% to 19.9% stake in Moonlight, with rights to appoint a board nominee, maintaining exposure to the project's future upside while transferring operational responsibilities to a specialist team.

Cyclone Zircon Project Shows Processing Advances

At the Cyclone Zircon Project in Western Australia, metallurgical testwork has yielded encouraging results, with improved recoveries of zirconium dioxide and titanium dioxide in heavy mineral concentrates. These enhancements, achieved through innovative processing techniques, are expected to inform an optimized flowsheet design by the end of November 2025. Discussions with potential partners and investors continue, as Diatreme explores options to maximise value, including possible joint ventures or asset spin-outs.

Financial Position and Operational Outlook

Despite recording a net loss of $727,754 for the half year ended 30 June 2025, Diatreme improved its financial performance with a 22% reduction in losses compared to the prior period. The company maintains a robust cash position of $2.81 million, supplemented by $7.98 million held within its silica projects joint venture, providing a solid foundation for ongoing exploration and development activities. Payments to related parties during the quarter totalled $163,000, primarily for director fees and specialist consultancy services.

Looking ahead, Diatreme plans to finalise the NSP’s Pre-Feasibility Study and Maiden Ore Reserves, continue exploration drilling, and advance community and native title engagement. The company also aims to capitalise on synergies between its Northern Silica Project and the Cape Flattery Silica Project to optimise infrastructure and reduce capital expenditure.