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QUeensLAnD

Diatreme on the

front-foot with

Galatar

ver the past 12 months, Diatreme Re-
Osources Ltd has quietly progressed
the Galalar silica sands project in North Diatreme recently announced a 26%
Queensland from promising supporting EIS which Diatreme hopes will streamline uplift in the resource at Galalar,
asset to rapidly emerging development regulatory approvals for both state and about 200km north of Cairns
opportunity. federal requirements.
While the Brisbane-based company re- “Our focus has always been front-foot billing at Diatreme while the search contin-
mains confident of finding a JV partner to rather than back-foot in terms of moving ues for a JV partner for Cyclone.
facilitate development of the $130 million through the regulatory process,” McIntyre “We still remain very positive on bringing
Cyclone zircon project in Western Aus- said. in a suitable major partner to help us with
tralia’s Eucla Basin, Galalar is mounting “We acknowledge that we will have to do that,” McIntyre said.
a strong case to assume flagship status Commonwealth as well as state approvals “It’s no secret that we have a number of
within the portfolio. because we’re in quite a sensitive area of major Chinese SOEs involved in that pro-
Diatreme recently expanded the re- North Queensland. So, this voluntary pro- cess and they were shut down effectively
source at Galalar – 200km north of Cairns cess effectively allows us to do both [state in January and February due to the current
– by 26% to 38mt of plus-99% silicon di- and federal approvals] concurrently, rather health scare, but we’re now starting to re-
oxide. It preceded the company lodging than the more passive lodgement, letting engage actively there.”
applications for a mining lease and under- the agencies set the EIS terms and waiting McIntyre said some of the stimulus
taking a voluntary EIS in a bid to fast-track for the process to slowly move forward. packages being mooted by the Chinese
project development. “By going through a voluntary process Government to help revive the country’s
In a further boost for Diatreme, the re- and by already undertaking significant en- economy post the coronavirus were very
source remains open both to the north and vironmental studies, we think we can re- encouraging for both the heavy mineral
the east, suggesting Galalar could be a main on the front-foot and positively direct and silica sand industries.
long-term supplier of premium silica sand the approval process.” Forecasters had already indicated the
to key Asian markets. Permitting is expected to take at least global silica sands market will edge past
Diatreme chief executive Neil McIntyre a year, by which time Diatreme is likely to $US10 billion in annual revenues by 2022,
acknowledged that while his company have completed a DFS. while the solar photovoltaic glass market
could continue to expand the resource at An initial scoping study last year found could reach $US48 billion by 2025, a sub-
Galalar, now was the time to advance per- just $24.4 million was needed to build a stantial jump from its $US3.3 billion valua-
mitting and finalise its assessment of the “low cost and premium quality” silica op- tion only four years ago.
project economics. eration at Galalar. Key metrics reported in “From our discussions over on the Chi-
“We’re not resource-constrained at all; in that study were a pre-tax NPV of $231 mil- nese side, that market has been increas-
fact, we’ve identified exploration targets of lion, an IRR of 150% and payback within ing by over 30% year-on-year,” McIntyre
over 1bt to the north-west of the resource eight months. said. “And where they’ve traditionally been
and within our tenement area of similar Annual operating costs are estimated sourcing some of that silica product from is
characteristics,” McIntyre told Paydirt. at $43.5 million, based on the trucking of being shut down, particularly in places like
“Our focus is producing a very high spec, product 63km for transhipment. Vietnam, Cambodia and Malaysia and oth-
high quality product to meet the demands Galalar has in some ways assumed top er places where supply might have come
of the photovoltaic sector in China for from illegal river sand.
manufacturing purposes. So, we’re spend- “Along with the extra demand, I think
ing a lot of time looking at the exact nature the market is becoming more discerning
of the resource and how we can maximise as well. If you’re undertaking a green solar
recovery of that high spec product.” project, you want to know that all aspects
McIntyre expects the company will con- of your supply chain have been green-
vert a sizeable proportion of the Galalar re- sourced, or sourced from sustainable min-
source to mineable reserves over the next ing methods, and that’s exactly what Aus-
12 months, underpinning the first few years tralian projects like Diatreme’s can offer.”
of silica sands production. A key aspect of Diatreme last year signed MoUs with
that process will be identifying parts of the two private Chinese groups and also land-
resource with lower iron content. ed a new cornerstone investor, Ilwella Pty
A mining lease application was lodged Ltd – representing Flannery Family Office,
in December for an area encompassing from a $3.6 million placement.
523ha. This was followed in February by – Michael Washbourne
an application to undertake a voluntary
Neil McIntyre
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