The Company is currently conducting a definitive feasibility study on the Cyclone Deposit after completing a prefeasibility study that showed very positive results.

The Prefeasibility study shows potential for the Cyclone Zircon Project to mine 10 million tonnes per annum ore for 10 years, yielding approximately 147,000 tonnes per annum heavy mineral concentrate. Cyclone Attributes:

• Capital investment of $223 million, with average annual sales revenue of $191 million and annual NPAT of $78 million.
• Net present value of $194 million and internal rate of return of 32%, with payback period of 2.1 years (based on realistic base case).
• Strong fundamentals for main mine products of zircon (66% ZrO₂) and titanium products HiTi87 (86.6% TiO₂) and HiTi67 (67.3% TiO₂), with constrained global supply and upward pricing pressures.
• Estimated average annual production rates from MSP:

                 Zircon 65,000 tonnes

                 HiTi87 10,000 tonnes

                 HiTi67 46,000 tonnes

In February 2012, a JORC compliant ore reserve for the Cyclone Deposit was announced as a Probable Ore Reserve of 97 million tonnes at 2.5% heavy minerals, containing 2.4Mt heavy mineral, including 770kt of Zircon.

Combined with the JORC resource announced by Image Resources NL in July 2010 over their neighbouring Cyclone Extended Deposit, the deposit is shaping as a significant new Zircon development project.

Sigificant heavy mineral potential remains within the Eucla Basin, as shown in the Company's geological model and regional drilling program for the area.

Cyclone represents potential for new, long-term, heavy mineral supply source for both Australian and overseas industries.

The Company also holds mineral sands exploration ground in the Arckaringa Basin (SA), Elliston (SA), Mandora (WA), Cape Bedford (QLD) and Grays Hill (QLD).

COPPER, GOLD & BASE METALS

Diatreme holds metalliferous exploration projects as follows:

Clermont (QLD): copper/gold (Farm-In by Antofagasta Minerals)

Tick Hill (QLD): gold (Farm-In by Superior Resources)

Anabama (SA): copper and iron ore (Farm-In by Braemar Iron)

Grays Hill (QLD): copper/gold

Gilbert River & Ironhurst (QLD): base metals/gold

At Clermont, the Company has conducted deep diamond drilling within the Rosevale Porphyry Corridor in its quest to investigate the potential for the area to host a major mineralised porphyry copper/gold system. The Clermont tenements are being explored under a Farm-In Agreement with Antofagasta Minerals.

Company's ASX Share Price and Announcements
The Company's current share price, trading history and announcements under the code "DRX", may be viewed here.