EQ RESOURCES LIMITED — Interim / Quarterly Report 2006

Jul 27, 2006

28 July 2006

Ouarterly Report for Period Ended 30 June 2006

Icon Resources Ltd ('Icon') is pleased to provide the following report on the Company's activities for the three month period ending 30 June 2006. Other information on the Company's projects and its previous announcements are available on the website at www.iconresources.com.au

Highlights

• Icon completed its capital raising of \$4 million and listed on the ASX on 6 June 2006. $\bullet$
• Icon drilled its SE Old 'Crystal Mt' project in June. A large mineralised system was $\bullet$ defined, but the gold and basemetal grades were disappointing. However the 'technical success' has direct application to other projects.
• Further targets have been identified at the Tara prospect in central NSW and drilling is $\bullet$ scheduled to commence mid-August 2006.
• $\bullet$ Icon has applied for and negotiated several new tenements in NSW prospective for gold.
• 3D IP geophysical surveys are planned for the Grenfell and Weabonga properties in August $\bullet$ with early follow up drilling.
• Field visits made to Icon's 'Peel Fault' projects as part of a plan for a larger joint ventured $\bullet$ gold exploration program.
• Icon gained 100% control of the Professor tenements containing the Grieves Siding zinc $\bullet$ deposit, western Tasmania.
• Icon now owns 100% of all its tenements. $\mathbf{a}$

Central NSW Projects

EL6532 (Tara), EL6291 (Hiawatha), EL6559 (Grenfell)

Grenfell

EL6559 is located approximately 12km south of the town of Grenfell and covers several historic gold workings. An agreement has been reached whereby Icon has secured 100% ownership of this licence in exchange for 370,286 fully paid leon shares to a private prospector. It is expected that the agreement will be settled and the shares issued in August 2006

Grenfell has a significant historic gold production and Icon's Board is very encouraged with its prospectivity and is planning an immediate start to exploration activities. Specifically, Icon will be targeting a buried intrusive interpreted from the magnetics, located beneath the old workings. Landholders have been notified and a 3D IP survey will commence in mid-August.

Tara

Land access has been secured and a drill rig is scheduled to commence drilling in mid-August.

As outlined in the prospectus, Tara has been recognised by the Geological Survey of NSW as a significant intrusion related gold and base metal project. A re-evaluation of the geophysical data collected over Tara has reinforced the central magnetic-low target and this will be tested with the planned drilling program.

Previous exploration at Tara has concentrated on the magnetic high where anomalous basemetal grades are associated with pyrrhotite mineralisation. However in some of the Cobar orebodies, the economic mineralisation is significantly removed from the pyrrhotite and Icon has identified a chargeable zone not related to the magnetic pyrrhotite. Testing of this new target is also planned during the forthcoming drilling program.

Hiawatha

Recent heavy rains and cropping has unfortunately delayed the planned 3D IP survey until later in 2006. However, Icon is negotiating an increase in the tenure period to ensure it can effectively explore the permit without the previously restrictive time constraints.

Peel Fault Project, NSW

EL6297 (Crow King), ELA2655 (Upper Hunter), ELA2656 (Golden Crystal), ELA2657 (Weabonga), EL6837 (Coramba), EL6298 (Reefline)

Since listing Icon has progressed the ELAs and these are expected to be granted by the end of July.

Weabonga

Recent field work has resulted in an 'upgrade' to Weabonga's priority. We will be 'fast tracking' this particular area so that 3D IP surveying can take place immediately following the Grenfell survey.

Peel Fault

Icon's EL6297, Crow King Project, lies on the Peel Fault, a major crustal structure in the New England district of NSW. Commencement of field work at Crow Mountain has confirmed Icon's opinion that the Peel Fault is an analogue of the famous Mother Lode in California. Historically, the Mother Lode is one of the main gold producing trends in the USA (14+ Moz) and has been mined for gold almost continuously since its discovery in 1848.

Icon's review of modern exploration along the Peel Fault indicates that the Mother Lode model has not been tested. Accordingly Icon has applied for several more Exploration Licences along the Peel Fault, and is developing a major exploration program to test the concept.

No work was carried out on the Reefline and Coramba areas.

Stanthorpe Projects, SE Old EPM15007 (Warwick), EPMA15401 (Glentanna)

The extensive anomaly defined by the 3D IP survey carried out at Crystal Mt in the preceding quarter (and reported in the prospectus) was drilled in the June quarter. A total of 1354 metres were drilled of which 210 were core with the rest RC.

Crystal Mt was a large gold/copper conceptual target in a greenfields project. The drilling program conducted during the quarter confirmed the presence of a large mineralised system but with little encouragement for economic metal grades. Whilst disappointing in itself, this technical success lends some support to our adjacent 'Glentanna' project has the potential to host a similar target style.

Glentanna has just been granted (mid-July) and offers several important exploration targets. The first target is gold/copper mineralisation associated with altered (silicified) Texas Beds which had been previously mapped as unprospective felsic volcanics. A recent field inspection has also revealed a previously unmapped gossan extending for several hundreds of metres. A third target is follow-up work on the previously identified zinc mineralisation at Grieves Quarry (not to be confused with the Grieves zinc deposit in the Professor Project, Tasmania).

Icon is currently preparing an initial exploration program which will include a geochemical survey over the gossan and the area previously mapped as felsic volcanics but reinterpreted by Icon to be pervasively silicified. With encouragement from either of these programs, Icon will initiate a 3D IP survey to identify any chargeable anomalies at depth that can be tested by drilling.

North Queensland Project

EPM14589 (Elizabeth Creek), EPMA15368 (Burketown), EPMAs 15386-15388 (Leichhardt)

Elizabeth Creek

This licence is prospective for Pb/Zn mineralisation as well as containing significant iron ore. Zinifex is earning equity in the tenement and is the operator of the exploration program. A late wet season has delayed the start of the work program which is now expected to start in August.

Burketown and Leichhardt

Both of these licences are still at the application stage. No field visits have been made but the concept of a possible iron-oxide copper gold deposit associated with the coincident magnetic and gravity responses at Burketown is being developed in tandem with the Voisey's Bay nickel model.

Professor Project, Western Tasmania

EL47/2004 (Henty Rd) and EL8/2005 (Amber Creek)

Icon has now secured 100% of the Professor project which includes the Grieves zinc deposit. While metallurgical work on samples from Grieves is on-going, broad scale exploration will commence with geophysical surveys which are planned for January 2007 when ground conditions are expected to be most suitable.

Discussion

It was stated in our IPO Prospectus that Icon would focus on "early stage" or greenfields exploration. This is a high risk venture but given the right choice of targets, the rewards will be commensurate: ie. Icon will choose areas where the conditions are encouraging for 'world-class' ore deposits.

It is therefore disappointing to note the recent fall in Icon's share price. The Board advises that the fundamental strategy of Icon remains intact including its 'conveyor belt concept' whereby we will rapidly evaluate, test and then either develop or relinquish as many properties as possible. We assume the recent weakness is a function of some short term investors seeking quick rewards with the initial drilling at Crystal Mt and following the disappointing results, exiting in a relatively illiquid market.

The company has an active exploration program going forward on a number of high quality prospects and we are confident of providing better odds in exploration than most other explorers.

Finance and Corporate

During the June quarter the Company completed its IPO and raised \$4 million through the issue of 20 million shares at 20 cents. Trading commenced on ASX on 6 June 2006. Cash expenditure by Icon on exploration for the quarter was \$432,000. The Company has no borrowings. Cash funds available at the end of the quarter were \$3.3 million.

Icon Resources Ltd

John Bishop Managing Director

The information in this report that relates to Exploration Results is based on information compiled by John Bishop, who is a member of the Australian Institute of Geoscientists. John is a full-time employee of Icon, and has sufficient experience relevant to the styles of mineralisation and types of deposits under consideration and to the activity he is undertaking 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". John consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Icon at a Glance

Directors

Dr Andrew White, Chairman Dr John Bishop, Managing Director Mr Steve Bartrop, Director

Company Secretary Mr Robert Waring

Registered Office

Suite 302, 25 Lime St Sydney, NSW 2000 Australia Ph +612 9279 1252 Fax +612 9279 2727 Email info@iconresources.com.au

Number of Shareholders

At 21 July 2006 Icon had 670 shareholders.

Major Shareholders

The share register records the following as major shareholders at 21 July 2006:

$\alpha$

Chambridge

мнат сполест
Troppo Resources Pty Ltd	11.18
Fallon Nominees Pty Ltd	10.86
Golden Reef Enterprises Pty Ltd	7.71
John Richard Bishop	3.86
Sarah Victoria Bishop	3.86
Roger James Gollan Lewis	3.66
Amelia Barbara Lewis	3.47
Gage Resources Pty Ltd	1.57
St Jude Exploration Pty Ltd	1.57
Jogib Investments Pty Ltd	1.00

Cash Balance

At 30 June 2006 Icon's cash balance was approximately \$3.3 million.

ASX Listing Code

The Company's ASX listing code is III.

Issued Capital

At 28 July 2006 Icon's issued capital was 40,000,000 ordinary shares and 1,200,0000 unlisted options exercisable at 30 cents by 8 March 2011.

Shareholder Enquiries

Matters relating to shares held and change of address should be directed to the share registry:

Computershare Investor Services Pty Ltd Level 2, 45 St Georges Terrace Perth WA 6000 Ph: +1300 557 010

To receive Icon's announcements by email, please fax your e-mail address to 02 9279 2727 or email info@iconresources.com.au

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Website

Please visit Icon's website for the latest announcements and news: www.iconresources.com.au

General Enquiries

Contact John Bishop on 0418 373 429

Figure: Icon's tenement location plan