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Diatreme Resources Limited (ASX:DRX)

ALERT: Price-sensitive ASX Announcement for DRX
Current share price for DRX : $0.014 0.001 (7.69%)+
Announcement
Release
15 Oct 2026 9:36AM
Price at Release
$0.013
Full Release
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Summary
Diatreme Resources announced that its Pre-Feasibility Study for the Northern Silica Project at Cape Flattery in Far North Queensland confirms the project’s potential to become a long-life, low-cost, high-margin producer of low-iron, high-purity silica sand for solar PV and specialty glass markets, supported by a maiden Probable Ore Reserve of 151.25 Mt at 99.25% SiO₂ from the Si2 deposit. The base Phase 1 case models 3 Mtpa over 25 years for 75 Mt of product, delivering a pre-tax NPV of A$1.29 billion, a 36% pre-tax IRR, four-year payback, A$443.5 million construction capex and C1 cash cost of A$25/t FOB, while an optional expansion to 5 Mtpa from Year 3 lifts pre-tax NPV to A$2.419 billion and IRR to 46% with only A$38.5 million extra capex and C1 cash cost of A$18/t FOB. The study assumes an 80% recovery and US$55/t FOB pricing, confirms product quality through bulk metallurgical testwork achieving roughly 89–107 ppm Fe₂O₃, and relies on export through existing underutilised Port of Cape Flattery infrastructure. The project is being advanced through a joint venture with Sibelco, which holds about 26.8% and has invested around A$56 million, with approvals, port access, native title agreements, offtake and financing still to be secured before a final investment decision targeted for Q4 CY2028; the development also emphasises regional benefits including local procurement, a 50% Indigenous employment target, 214 construction jobs and 128 operational roles.
Key Points
  • PFS confirms Northern Silica Project as a potentially profitable new Far North Queensland silica sand mine focused on solar PV and specialty glass markets.
  • Phase 1 base case models 3 Mtpa over 25 years with pre-tax NPV of A$1.29 billion, pre-tax IRR of 36% and a four-year payback.
  • Optional Phase 2 expansion to 5 Mtpa from Year 3 increases pre-tax NPV to A$2.419 billion and pre-tax IRR to 46% with only A$38.5 million additional capex.
  • Maiden Probable Ore Reserve for the Si2 deposit is 151.25 Mt at 99.25% SiO2 and underpins the initial 25-year mine life.
  • The broader Si2 Mineral Resource is 301.5 Mt at 99.20% SiO2 and sits within Diatreme’s global silica sand resource base of about 632.9 Mt at 99.19% SiO2.
  • Bulk metallurgical testwork confirmed the project can produce high-purity low-iron silica sand at recoveries around 81.6% to 85.6% and Fe2O3 levels of about 89 to 107 ppm.
  • PFS pricing assumption is US$55/t FOB with average AUD/USD of 0.68 and 8% real discount rate.
  • Phase 1 construction capex is estimated at A$443.5 million including contingency, with total cumulative capex of A$482.0 million if Phase 2 proceeds.
  • C1 cash cost is estimated at A$25/t FOB for Phase 1 and A$18/t FOB for the expanded case, excluding sustaining capital and royalties.
  • The project plans to use existing spare capacity at the Port of Cape Flattery, with estimated port-related fees and charges of A$3.815/t.
  • The development is being advanced through a joint venture with Sibelco, which holds about 26.8% and is entitled to offtake in line with its ownership share.
  • Key risks and outstanding items include port access arrangements, mining leases, environmental approvals, native title and mining agreements, offtake and financing.
  • Diatreme targets 50% Indigenous employment, approximately 214 construction jobs and 128 operational jobs, with a strong focus on local workforce and procurement.
  • The project is progressing through EIS and approvals processes, with DFS targeted for Q3 CY2028 and final investment decision targeted for Q4 CY2028.
IMPORTANT NOTE: This information is autogenerated and has not been reviewed for accuracy or completeness. You should refer to the full announcement here for further information.