IMAGE RESOURCES NL — Annual Report 2007

Sep 30, 2007

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ABN: 57 063 977 579

ANNUAL REPORT FINANCIAL YEAR ENDED 30 JUNE 2007

CONTENTS

Corporate Directory	3
Review of Operations	4
Directors’ Report	18
Auditor’s Independence Declaration	26
Corporate Governance Statement	27
Income Statement	32
Balance Sheet	33
Statement of Changes in Equity	34
Cash Flow Statement	35
Notes to and forming part of the Financial Statements	36
Directors’ Declaration	55
Independent Audit Report	56
Tenement Schedule	58
Other Information	61

• 2 -

CORPORATE DIRECTORY

DIRECTORS

PETER THOMAS Non-Executive Chairman

GEORGE SAKALIDIS Managing Director

ROGER THOMSON Executive Director – Exploration

COMPANY SECRETARY

FOR INFORMATION ON THE COMPANY CONTACT

PRINCIPAL & REGISTERED OFFICE 2[nd] Floor

35 Outram Street, West Perth WA 6005 Telephone (08) 9485 2410 Facsimile (08) 9485 2840

SOLICITORS TO THE COMPANY

Smyth & Thomas 10 Walker Avenue, West Perth WA 6005

Robert Lewis

BANKERS

REGISTERED OFFICE

2[nd] Floor 35 Outram Street, West Perth WA 6005 Telephone (08) 9485 2410 Facsimile (08) 9485 2840

WEBSITE www.imageres.com.au

Bank of Western Australia Ltd Hay Street, West Perth WA 6005

AUDITORS

Somes & Cooke Chartered Accountants Level 1, 1304 Hay Street, West Perth WA 6005

STOCK EXCHANGE

Australian Securities Exchange (ASX)

FOR SHAREHOLDER INFORMATION CONTACT

COMPANY CODE

IMA (Fully paid shares)

SHARE REGISTRY

Computershare Investor Services Limited Level 2 Reserve Bank Building 45 St George’s Terrace, Perth WA 6000 Telephone (08) 9323 2000 Facsimile (08) 9323 2033

ISSUED CAPITAL

77,073,850 fully paid ordinary shares

1,785,000 options exercisable at 33.5 cents by 27 November 2008

2,000,000 options exercisable at 39 cents by 26 November 2009

2,000,000 options exercisable at 37 cents by 21 November 2010

2,500,000 options exercisable at $1.80 cents by 16 November 2011

1,000,000 employee options exercisable at $2.38 by 26 March 2012

• 3 -

REVIEW OF OPERATIONS

PROJECTS SUMMARY

Image Resources is a diversified explorer that has applied a strategy of identifying and acquiring areas prospective for gold, mineral sands, nickel and uranium using aeromagnetic data and seeking to add value for shareholders by applying innovative exploration techniques to early stage exploration and by partnering with well funded mid-cap companies.

Following its exploration successes in the North Perth Basin, Image has placed an increasing focus on its core mineral sands projects in order to define mineral resources and advance the projects through the prefeasibility stage.

During the year Image farmed out a large package of 64 exploration licences to Magnetic Resources NL and assisted this company to list on the ASX. The tenements are prospective for gold, nickel and uranium covering some 6,700sq km in the Ravensthorpe-Southern Cross region of Western Australia. A package of ten exploration licences prospective for nickel were farmed out to successful nickel miner Mincor Resources NL in the area south of the Nepean nickel mine. In addition, four exploration licences were farmed out to Meteoric Resources NL at Scorpion Well, Top Well and Mt Remarkable.

Ongoing joint ventures include Emu Lake (nickel, Jubilee Mines 66 ⅔ %); Jilbadgie (nickel, Westonia Mines earning 65%); Woodline (gold and base metals, Sipa Resources and Newmont earning 70%) and Meteoric (gold and base metals, Meteoric Resources 100%, Image returning a 1% gross royalty) – see Figure 1 for location map.

As part of its divestment process to focus on its core mineral sand projects, Image is proposing to farm out a package of nickel properties totalling 2,500sq km in the Kalgoorlie-Leonora-Southern Cross area to Emu Nickel NL and to assist this company to list on ASX. The package includes the Emu Lake project (Image 33 ⅓ %) where high-grade nickel sulphides have been intersected and the Kambalda West JV with Mincor Resources (subject to final documentation of agreements with Mincor and Emu Nickel).

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REVIEW OF OPERATIONS

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Figure 1: Location Map

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REVIEW OF OPERATIONS

NORTH PERTH BASIN MINERAL SANDS

Encouraged by its exploration success in the North Perth Basin Image has increased its landholdings to 1,954 sq km and is now the largest landholder in this world-class mineral sands province – see Figure 2 and Figure 3. The North Perth Basin has been the world’s largest source of high TiO2 (58%-63%) chloride-grade ilmenite, the largest source of zircon and a major source of rutile.

Heavy mineral sands orebodies are most often elongate sand bodies that formed on beaches at times when the sea level was higher than today. They contain minerals that are about twice as heavy as normal sand, hence the name. One of these, ilmenite, is slightly magnetic and Image has developed a magnetic surveying and interpretation technique that allows it to explore for heavy minerals more effectively and cheaply than other explorers. The strength, shape and areal extent of a magnetic response contribute to how seriously Image treats a target, but Image normally summarises targets in terms of their length in km. The following table summarises, for each project in the North Perth Basin, the tenement area, the level of magnetometer surveying completed, the total length of magnetic targets generated, the length of targets drilled, the length of mineralised targets (comparison of these two gives an indication of Image’s success rate) and the amount remaining to be drilled. Resource estimates for the mineralised targets are being prepared.

Table 1

Project	Tenement Area (sq. km)	Percent Image	Groundmag Completed	Groundmag Target Length (km)	Length of Mineralised Targets (potential resources)	Groundmag Targets Left to be Drilled (km)
Bidaminna	191.2	100%	80%	17		17
Bidaminna South	54.7	100%	60%	31	1	28
Bootine	199.7	100%	25%	In progress
Cataby West	35.8	100%	80%	In progress
Cooljarloo	80.1	70%	100%	87	22	60
Cooljarloo Nth.	27.1	100%	100%	34	12	20
Cowalla	462.8	100%	10%	In progress
Gingin	119.1	100%	10%	In progress
McKinley	93.7	100%	40%	12		12
Quinns Hill	489.7	100%	20%	In progress
Wannamal	199.9	100%	0%	N/A

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REVIEW OF OPERATIONS

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Figure 2: Mineral Sands Operations, Tenements and Infrastructure

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REVIEW OF OPERATIONS

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Figure 3: Image Resources North Perth Basin Mineral Sands Projects

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REVIEW OF OPERATIONS

COOLJARLOO (IMAGE 70%)

This project comprises 5 tenements and is a 70:30 fully contributing joint venture with the tenement holders, Metal Sands Pty Ltd.

The following table summarises the historical resources reported by other explorers. Image is presently updating these estimates in the light of its recent drilling results.

Deposit	Inferred Resource Tonnes	Grade % HM	HM Tonnes	Ilmenit e Tonnes	Rutile Tonne s	Leucoxen e Tonnes	Zircon Tonne s
28000	850,000	8.6	73,000	25,000	8,000	6,700	9,800
Mid Level	49,000,000	2.3	1,127,000	531,000	96,000	60,500	91,000
35 AHD	30,860,000	4.0	1,234,000	na	na	na	na
TOTAL	80,710,000	3.0	2,434,000

na - information not available

Composite samples from the main mineralised strands and channels at Cooljarloo are currently being examined to determine mineral assemblage and product quality characteristics. The scope of this work will extend as further drill samples are processed and the residue become available for compositing. Concentrates from 27 composite samples have been generated by Wilfley tabling and will be further processed by heavy liquid separation, high intensity magnetic separation, electrostatic separation and by XRF analysis of the resulting fractions. The results of this test work will better define the markets for which these products are suited and provide firmer estimates of product pricing.

Drilling of the 35 AHD strands in vacant crown land will commence in November 2007 and close the line spacing down to 200 m from 600 m, allowing an indicated resource to be estimated. Over private land the drill line spacing will be reduced to 100 m, allowing a measured resource to be estimated.

Some 60 km of magnetic targets remain to be drill tested at Cooljarloo following completion of landowner access agreements and environmental permitting. Included in the 60 km is 30 km of “channel style” mineralisation, so named because it is thought to have formed in river channels instead of on beaches. The evidence for this is that in the 9 km of channel targets tested thus far, the mineralisation is thick (up to 74 metres), and steep sided. This type of mineralisation has the potential to host huge ore tonnages and is conducive to cheap dredging. Image is confident in its ability to recognise the different magnetic character of this type of mineralisation. Image is optimistic that this style of mineralisation will enable a very large scale dredging operation on the back of the smaller, but high grade mineralisation discovered to date that would be mined by conventional means.

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REVIEW OF OPERATIONS

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Figure 4: Image Resources Cooljarloo Resource and Targets

COOLJARLOO NORTH (IMAGE 100%)

This project contains 5 target areas with several magnetic anomalies within them. Image made a significant heavy mineral discovery in the first of these, target 1, which has been the subject of several ASX releases throughout 2007. The high-grade core of this strand averages 40-80m in width, 4-8m in thickness and from depths of 2-6m.

Drilling of this prospect has been completed to 100 m line and 20 m hole spacing, which will enable a measured resource to be estimated once assaying is complete.

200m line spaced drilling over Target 2 has demonstrated at least four continuous strands at consistent elevations and coincident with magnetic targets, two of which extend individually over a 4.5km length within the northeast part of E70/2892. These have the potential to significantly enhance the economics of the Cooljarloo North project. Indicated resources will be estimated for these projects when assays are finalised.

Image has also completed preliminary drilling at Targets 3 and 5 at Cooljarloo North with significant results including drillhole CN195 with 2m at 17.8% HM from 6 m in target 5. Ground magnetics over these targets suggests the length of these targets is greater than 4 km and will be assessed in the next drilling campaign.

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REVIEW OF OPERATIONS

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Cooljarloo NorthCooljarloo NorthCooljarloo Nort Cooljarloo Nort
Resource AreasResource AreasResour Resour cc Areas Areas
Cooljarloo NorthCooljarloo NorthC C oool ol arloo North jjarloo North
Target 2Target 2Target 2Target 2
Target 5Target 5Target 5Target 5
Target 3Target 3Target 3Target 3
Target 4Target 4TTarget 4 arget 4
Target 1Target 1Target 1Target 1
Cooljarloo NorthCooljarloo NorthCooljarloo Nort Cooljarloo Nort
Magnetic TargetsMagnetic TargetsM M gnetic Tar gnetic Tar ets ets
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Figure 5 Cooljarloo North Resources

CATABY WEST (IMAGE 100%)

Image has applied for a 35.6 sq km exploration licence about 20km SE of Tiwest’s Cooljarloo mine covering aeromagnetic targets along strike from the mine and interpreted to have potential for HM strandlines. Ground magnetic is 80% complete and aircore drilling will be carried out upon grant of the tenement and completion of land access agreements.

BIDAMINNA (IMAGE 100%)

Environmental permitting for the 1.5km strike extension south of Image’s previously reported drilling on the Callisto heavy mineral strand is in progress and is expected to be granted in the next month, opening the way for further drilling. Callisto is situated about 15km NW of Gingin and forms part of Image’s large,

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REVIEW OF OPERATIONS

100%-owned landholding in the Bidaminna area covering known heavy mineral resources outlined by historical drilling.

Previously reported scout drilling by Image identified a broad zone of mineralisation more than 500m in width at Callisto with a best intersection of 12m at 5.4% HM from 34m. Modal analysis of a composite sample from this broad zone indicates a high total valuable heavy mineral content of 93% composed of 84% ilmenite, 0.4% rutile, 2.3% leucoxene and 6% zircon.

BOOTINE (IMAGE 100%)

Image has added the 190sq km Bootine tenement (E70/3192) northwest of the operating Gingin mine to its extensive North Perth Basin land package (see Figure 3). The tenement effectively links the Gingin project with the Bidaminna project and covers the whole spectrum of mineralised strands from 0m RL to 130m RL.

Over 30 new targets, totalling more than 87km in length, have been identified from a recently flown aeromagnetic survey within E70/3192. Surprisingly, very little drilling has been carried out on the tenement which is prospective for both strandline mineralisation and the newly discovered channel-style mineralisation.

Image views this as an excellent opportunity to apply its magnetic mapping technique in an attempt to validate the existing aeromagnetic targets and to identify other targets that have not been discriminated by the airborne survey. Ground magnetic surveying at Bootine is in progress with 120 line km of surveying completed so far. It is important to note that the heavy mineral strand being mined at the Gingin mine is evident on an older aeromagnetic survey and points to the prospectivity of the Bootine tenements situated only 5km to the northwest.

GINGIN – M[C] KINLEY (IMAGE 100%)

These tenements cover the prospective Gingin Scarp south of Iluka Resources’ Gingin Minesite. Ground mag surveys have commenced and drilling will commence when land access agreements have been finalised. Twelve km of magnetic targets have already been identified at McKinley.

COWALLA – QUINNS HILL – WANNAMAL (IMAGE 100%)

These exploration licences cover paleo shoreline targets in Mesozoic sediments east of the Gingin scarp and have the potential to host channel style mineralisation similar to that discovered at Cooljarloo. Image has commenced reconnaissance ground magnetic surveys on the Cowalla and Quinns Hill tenements. Cowalla contains a prominent interpreted shoreline feature more than 40km in length with potential for concentration of heavy minerals.

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REVIEW OF OPERATIONS

EUCLA BASIN MINERAL SANDS

Within the Eucla Basin, Image directly holds 8 tenement applications in WA covering 1,496 km2, a735 sq km tenement application in SA and is earning 70% in the Barton joint venture with Mithril Resources over another 993 km2. The Eucla Basin is the world’s most exciting zircon exploration province. It stretches from the eastern goldfields of WA to the Eyre Peninsular in SA, and contains a series of ancient coastlines each over 1,500 km in length. In the past few years, 5 discoveries of zircon rich heavy mineral placers have been made on stranded shorelines within the basin, the most recent of which is Diatreme Resources Ltd’s Cyclone discovery which is immediately adjacent to Image’s Serpentine Lakes tenements.

Image is most encouraged by the discovery of zircon-rich mineral sands next to its Eucla Basin tenements and views this as a further opportunity to expand its heavy mineral interests.

These tenement applications lay adjacent to Diatreme’s Cyclone discovery. The discovery lies on the Barton paleocoastline of the Eucla Basin, the most landward of the ancient shorelines. This paleocoastline is interpreted to pass through the Image tenements for a distance of at least 28km, as shown on Figure 6. The proximity of this discovery, its local thickening to 2.3km and its correlation with the same paleocoastline over such large distances is felt to be significant, and it is highly probable that the 2.3km width of strand mineralisation intersected by Diatreme passes directly into the Image ground. This prospective paleoshoreline corridor ranges up to more than 9km in width within the Image tenements and contains several favourable geomorphological features conducive to heavy mineral deposition.

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Figure 6: Eucla Basin Tenement Applications

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REVIEW OF OPERATIONS

SERPENTINE LAKES (IMAGE 100%)

Image is already making plans for access with the local landholders and interpreting aeromagnetic data prior to carrying out extensive ground magnetic mapping surveys. Image’s adjacent Serpentine Lake tenements total 466km² in size and are interpreted to contain multiple parallel paleocoastlines which will provide exploration targets.

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Cyclone HM DiscoveryCyclone HM DiscoveryCyclone HM DiscoveryCyclone HM Discovery
Postulated Barton Shorelines
Prospective Area
Image Resources EL Applications
Project AreaProject AreaProject AreaProject Area
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Figure 7: Serpentine Lakes El Applications and Cyclone HM Discovery

WANNA SOUTH (IMAGE 100%)

Following Diatreme’s announcement, Image applied for a new tenement E69/243, Wanna South, which is 288km² in area and parallels the NW-trending coastline held by Diatreme.

FORREST LAKES (IMAGE 100%)

Image holds tenements at Forrest Lakes totalling 740km² covering the Oldea Range paleocoastline which passes through Iluka’s Jacinth and Ambrosia heavy mineral discoveries.

BARTON (IMAGE EARNING 70%)

Image is farming in to Mithril Resources' Barton project situated 50km northeast of Iluka's recent zircon-rich mineral sand discoveries at Jacinth and Ambrosia in the Eucla Basin of South Australia. Image may earn up to a 70% interest in the mineral sand rights by expenditure of $500,000 within five years. The joint venture will commence upon finalising heritage and land access agreements with the traditional owners.

The 992sq km joint venture tenement covers part of the Barton Range Shoreline, an older but similar paleo coastal barrier to that which hosts the Jacinth and Ambrosia discoveries. Wide-spaced government drilling within the tenement has identified heavy mineral concentrations comprising 56% altered ilmenite, 17% zircon, 15% leucoxene and 3% rutile at a depth of 16-22m, demonstrating the presence of potentially economic mineral sands. Image plans to use its magnetic mapping technique to identify drill targets.

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REVIEW OF OPERATIONS

EMU LAKE (IMAGE 33⅓ %)

Situated 30km east of the high-grade Silver Swan nickel mine, the Emu Lake project has a demonstrated potential for high-grade nickel mineralisation where drilling at the Gossan Zone has identified nickel sulphide mineralisation over a 400m strike length on an ultramafic contact. To date, ten high-grade drill intersections have been made at grades between 3%-10% Ni with best intersections of 2m at 6.2% Ni, 1.8% Cu and 2.2g/t PGE from 336.0m and 2m at 2.0% Ni, 1.0% Cu and 4.2g/t PGE from 343.5m.

Under the terms of a revised joint venture with Sir Samuel Mines NL, a wholly owned subsidiary of nickel miner Jubilee Mines NL, the joint venturers have acquired the interest of minority party Skyrne Hill Pty Ltd increasing Image Resources interest to 33⅓% with Sir Samuel Mines earning the remaining interest by sole expenditure of $3.25

million within three years at a minimum spending rate of $1 million per annum. Upon Sir Samuel Mines confirming its interest, Image Resources will contribute its share to the joint venture. In the event that Sir Samuel Mines does not confirm its interest then that interest will revert to Image Resources. Skyrne Hill Pty Ltd will retain a 1.75% royalty interest in the Emu Lake tenements.

KAMBALDA WEST (IMAGE 100%, DILUTING)

During the year Image reached agreement with Kambalda nickel miner Mincor Resources for a joint venture on ten granted, 100%-owned Image tenements in the Nepean district south of Coolgardie. The 725km ² tenement package was original following interpretation of newly released regional aeromagnetic data and is considered to have potential for nickel sulphide mineralisation.

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Figure 8: Kambalda West Joint Venture Tenements

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REVIEW OF OPERATIONS

Under the terms of the agreement Mincor may earn 51% interest by expenditure of $750,000 within three years and may elect to increase this by a further 19% interest by expenditure of an additional $750,000 within a further two years ie up to 70% for $1.5 million.

Mincor completed a 73-hole, 3010m RAB and aircore drilling programme over an 8km strike length of interpreted ultramafic rocks south of the Nepean nickel mine. The drilling intersected a sequence of amphibolites, ultramafics and metasediments intruded by felsic rocks with best result of 6m at 1.84% Ni from 18m. The stratigraphy is believed to be similar to that at the Nepean mine and importantly, interpreted to contain the footwall contact of the ultramafic. Mincor is planning to carry out airborne EM surveys (VTEM) over several targets on the joint venture tenements when a suitable aircraft becomes available.

WOODLINE (IMAGE 100% DILUTING)

The Woodline project is situated on the Tropicana-Beachcomber structural trend, a current focus of extensive gold exploration activity following the Tropicana gold discovery. Joint venturer Sipa Resources reached agreement with Newmont to earn a majority interest in Sipa’s gold and base metal project, part of which includes two Image tenements. Under the terms of the agreement Newmont may earn a 51% interest in the Image tenements diluting Image and Sipa to 30% and 19% respectively.

Sipa/Newmont have completed 290 line kilometres of helicopter-borne EM surveys (Hoistem) on the Image tenements and several anomalies have been identified for follow up. In addition, several gold-in-calcrete geochemical anomalies have been identified for follow up.

METEORIC 2 JV (IMAGE 100%, DILUTING)

Image concluded a second agreement with Meteoric Resources for a joint venture on three gold projects at Scorpion Well, Top Well and Mt Remarkable in the Eastern Goldfields of WA. Image has carried out preliminary exploration at Scorpion Well, 10km southeast of the +2Moz Centenary gold mines and confirmed the presence of host rocks favourable for Centenary-style gold mineralisation within a structural corridor passing through the Darlot and Centenary mines.

At Top Well, 85km west of Leonora, and at Mt Remarkable, 80km southwest of Laverton, Image has interpreted aeromagnetic and gravity data to identify potential greenstone sequences below cover and considered to be prospective for gold.

Under the terms of the joint venture Meteoric may earn a 30% interest in 244sq km of granted tenements by expenditure of $300,000 within two years. Meteoric may then elect to earn a further 21% interest by expenditure of $200,000 within an additional two years. Meteoric may make a further election to earn an additional 19% interest by expenditure of another $200,000 within a further two years i.e. up to a 70% interest by expenditure of $700,000 within six years.

MT HAYS (IMAGE 90%)

A 10-hole, 300m shallow open hole percussion drilling programme was completed at the Mt Hays gold project situated 65km ENE of Nullagine, WA and along-trend from Wedgetail Mining’s 860,000oz Nullagine Gold Project. The drilling tested the extent of shallow mineralisation up dip or adjacent to previous drilling where previously reported gold intercepts include: 2m at 52.1g/t from 92m in MHRC-03; 1m at 8.1g/t from 34m in MHDRB-02 and 2m at 4.0g/t from 33m in MHDRB-06A (ASX Release 5 August 2005).

The recent percussion drilling tested a central 200m-long section within a 650m-long zone of quartz veining and stockworks containing anomalous gold values. Results of the drilling are shown in Table 2, with best gold intercepts of 8m at 4.5g/t from 4m and 4m at 3.0g/t from 8m. Further drilling to follow up these encouraging results is being planned.

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REVIEW OF OPERATIONS

Table 2 Mt Hays Drilling Results

Hole No	Collar Coordinates	Collar Coordinates	Azimuth	From	To	Interval	Gold Grade
	E	N		m	m	m	g/t
MHAT 02	61945	86935	161	4	12	8	4.5
MHAT 04	61809	86949	190	24	28	4	1.7
MHAT 08	61760	86943	150	24	30	6	1.0 eoh
MHAT 09	61760	86933	142	0	4	4	1.5
				12	24	12	0.6
MHAT 10	61766	86927	142	8	12	4	3.0

EMU NICKEL JV

Image is proposing to seek shareholders approval to farm out a package of its nickel projects to a subsidiary with a view to distributing shares in the subsidiary to Image shareholders prior to application for listing as ASX. It is anticipated that the proposed farm out will add value for Image shareholders and allow Image to focus on its core mineral sands projects. The proposed farm out package includes Image’s interest in the Emu Lake, Kambalda West, Woongaring, Ward Springs, Lookout Well, Koolyanobbing, Moorine Rocks, Boodarding, Gnamma Hole, Bronzite, Beetle Lake and Dingo Dam projects.

Under the proposed arrangement Emu Nickel will:

• Reimburse Image 6% of the funds raised as promoters and establishment fees.

• Be obligated to spend a minimum of $1 million in the first year.

• Spend a minimum of $2 million within two years of listing on any or all of the projects to earn an 80% interest in the tenements.

• Have the right to increase its interest to 100% by spending in aggregate $3 million over the next three years and converting Image’s interest to 1% gross royalty (with the exception of Emu Lake).

• 17 -

DIRECTORS' REPORT

Your directors present their report on the Company for the year ended 30 June 2007.

DIRECTORS

The following persons were directors of Image Resources NL (“Image”) during the whole of the year (unless otherwise stated) and up to the date of this report:

Peter Thomas George Sakalidis Roger Thomson

PRINCIPAL ACTIVITIES

The principal activities of the Company during the year were the acquisition of additional tenements and the exploration of mineral tenements in Western Australia, Northern Territory and South Australia.

RESULTS FROM OPERATIONS

During the year the Company recorded an operating loss of $2,973,657 (2006: $1,889,046).

DIVIDENDS

No amounts have been paid or declared by way of dividend by the Company since the end of the previous financial year and the Directors do not recommend the payment of any dividend.

REVIEW OF OPERATIONS

A review of operations is covered elsewhere in this Annual Report.

EARNINGS PER SHARE

Basic Loss per share for the financial period was 4.12 cents (2006: 3.17 cents). Diluted Loss per share is not significantly different from Basic Loss per Share.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

Significant changes in the state of affairs of the Company during the financial period were the receipt of funds as a consequence of the exercise of 13,210,893 options exercisable at $0.25 on or before 25 August 2006, 65,000 options exercisable at $0.335 on or before 27 November 2008 and 735,000 employee options exercisable at $0.25 on or before 4 July 2007;

The Company entered into a Joint Venture Agreement and a Royalty Deed with Magnetic Resources NL whereby Magnetic acquired the right to acquire interests in various tenements by exploring and developing those tenements. Magnetic, with Image's assistance, arranged a successful IPO and was admitted to the ASX on 5 April 2007. Image retains an investment of 6,000,000 fully paid shares in Magnetic, all of which are subject to escrow restrictions until 5 April 2009.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL PERIOD

Since the end of the financial year, the Company has received funds of $75,000 in respect of the exercise of 300,000 employee options which were due to expire 4 July 2007 and $4,000,000 in respect of two share placements to sophisticated investors of 1,000,000 shares each at an issue price of $2.00 each share.

No other material matters have occurred subsequent to the end of the financial year which require reporting on other than the matters referred to in the previous paragraph or as reported to ASX.

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DIRECTORS' REPORT

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Likely developments in the operations of the Company and the expected results of those operations in future financial years have not been included in this report as the directors believe, on reasonable grounds, that the inclusion of such information would be likely to result in unreasonable prejudice to the Company.

ENVIRONMENTAL ISSUES

The Company carries out operations in Western Australian, South Australia and the Northern Territory which are subject to environmental regulations under both Commonwealth and State legislation in relation to its exploration activities.

The Company has formal procedures in place to ensure regulations are adhered to. During or since the financial period there have been no known significant breaches of these regulations.

INFORMATION ON DIRECTORS AND COMPANY SECRETARIES

Peter Thomas

Chairman

Mr Thomas, a commercial solicitor with specialist expertise within the resource sector, is and has been been a director of various listed companies. He is non-executive chairman of ASX listed Image Resources NL (since 19.4.2002), Magnetic Resources NL (since the company was incorporated on 23.8.2006) and Meteoric Resources NL (since the company was incorporated on 13.2.2004). He was non-executive chairman of Sandfire Resources NL from June 2003 to December 2006.

Mr Thomas has a relevant interest in 619,000 ordinary fully paid shares, 400,000 unquoted options exercisable at $0.335 each by 27 November 2008, 400,000 unquoted options exercisable at $0.39 each by 26 November 2009, 400,000 unquoted options exercisable at $0.37 each by 21 November 2010 and 600,000 unquoted options exercisable at $1.80 each by 16 November 2011. None of these shares or options are subject to escrow provisions.

George Sakalidis

Managing Director

Mr Sakalidis is an exploration geophysicist with over twenty-five years industry experience, during which time his career has included extensive gold, diamond, base metals and mineral sands exploration. He was involved in the compilation of what the Board believes to be one of the largest aeromagnetic databases held by any Australian junior explorer, which is now held by Image. Using this database, Mr Sakalidis has been involved in a number of significant mineral discoveries, including the Three Rivers and Rose gold deposits in Western Australia and the tenement applications over the Silver Swan nickel deposit. He was also instrumental in the design of the magnetic surveys and exploration drilling program that led to the discovery of the large mineral sands resources at Magnetic Minerals Limited's Dongara Project. He is managing director of ASX listed Magnetic Resources NL (since the company was incorporated on 23.8.2006). and executive technical director of Meteoric Resources NL (since the company was incorporated on 13.2.2004).

Mr Sakalidis has a relevant interest in 6,521,220 ordinary fully paid shares, 585,000 unquoted options exercisable at $0.335 each by 27 November 2008, 800,000 unquoted options exercisable at $0.39 each by 26 November 2009, 800,000 unquoted options exercisable at $0.37 each by 21 November 2010 and 950,000 unquoted options exercisable at $1.80 each by 16 November 2011. None of these shares or options are subject to escrow provisions.

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DIRECTORS' REPORT

Roger Thomson

Exploration Director

Mr Thomson is a geologist with more than 30 years experience in mineral exploration, mining geology and management in Australia, Africa, South America and Southeast Asia. He has held the positions of General Manager Exploration with Delta Gold Ltd and Sons of Gwalia Ltd and has been responsible for, or closely associated with, making economic discoveries of gold and tantalum in Australia. Mr Thomson successfully managed the exploration programme that led to the discovery of the multi-million ounce Sunrise gold deposit near Laverton in Western Australia. He is an Associate of the Royal School of Mines, a Member of the Australasian Institute of Mining and Metallurgy and a Member the Australian Institute of Geoscientists. Mr Thomson is a director of (ASX listed companies). He is managing director of ASX listed Meteoric Resources NL (since the company was incorporated on 13.2.2004), executive technical director, Magnetic Resources NL (since the company was incorporated on 23.8.2006) and AIM listed Mariana Resources Limited.

Mr Thomson has a direct interest in 1,175,015 ordinary fully paid shares, 800,000 unquoted options exercisable at $0.335 each by 27 November 2008, 800,000 unquoted options exercisable at $0.39 each by 26 November 2009, 800,000 unquoted options exercisable at $0.37 each by 21 November 2010 and 950,000 unquoted options exercisable at $1.80 each by 16 November 2011. None of these shares or options are subject to escrow provisions

Robert Lewis

Company Secretary – Appointed 19.10.2006

Mr Lewis is a Fellow Chartered Accountant and has extensive business consulting, IT and project management experience.

Malcolm K Smartt

Company Secretary – Resigned 19.10.2006

Mr Smartt has held a number of senior finance positions within the resource sector over the past 20 years and completes the finance and company secretarial functions for several listed resources companies.

AUDIT COMMITTEE

At the date of this report the Company does not have a separately constituted Audit Committee as all matters normally considered by an audit committee will be dealt with by the full board.

NON AUDIT SERVICES

The only non audit services provided by the auditor were for option valuation services performed during the year ended 30 June 2006 as shown at Note 5.

A copy of the Auditor’s Independence Declaration as required by Section 307c of the Corporations Act is set out separately in this financial report immediately after this Directors’ Report.

MEETINGS OF DIRECTORS

During the financial period ended 30 June 2007, there were 8 meetings of directors. All meetings were attended by all the directors.

• 20 -

DIRECTORS' REPORT

DIRECTORS AND EXECUTIVES REMUNERATION REPORT

The Company’s policy for determining the nature and amount of emoluments of board members and senior executives (if any) of the Company is set out below:

The remuneration structure for executive officers, including executive directors, seeks to emphasise payments for results through providing various reward schemes, for example the incorporation of Share Option Incentive Schemes. The objective of the reward schemes is to both re-enforce the short and long term goals of the Company and to provide a common interest between management and shareholders is set out below:

(a) The names of directors who have held office during the financial year are -

Peter Thomas George Sakalidis Roger Thomson

(b) Retirement and Superannuation Payments

Prescribed benefits were provided by the Company to all executive directors by way of superannuation contributions to complying superannuation funds during the year. These benefits were paid in accordance with the statutory superannuation contribution guarantee requirements.

(c) Non-executive director

Fees and payments to the only non-executive director, the Chairman, reflects the demands made on him and his responsibilities. His director’s fees are reviewed annually by the Board and are determined independently to the fees of executive directors and are based on comparative roles in the external market. The Chairman is not present at any discussions relating to determination of his own remuneration. Non-executive directors may receive share based payments which are required to be approved by shareholders in general meeting.

(d) Directors fees

The current base remuneration was effective from 1 July 2005 and was last reviewed August 2005. The Chairman's remuneration is inclusive of fees paid whilst chairing the meetings of executives and officers while executive directors who chair a meeting receive no additional yearly fees. Non-executive directors’ fees are determined within an aggregate directors' fee pool limit, which is periodically recommended for approval by shareholders. The maximum currently stands at $150,000 per the group of non-executive directors.

(e) Retirement allowances for director

The Company does not have a policy for the payment of retirement allowances to non-executive directors.

• 21 -

DIRECTORS' REPORT

(f) Executive pay

The executive pay and reward framework has three components:

Base pay; Incentive options; Other remuneration such as superannuation.

The combination of these comprise the executives' total remuneration.

Base Pay

Structured as a total employment cost package which may be delivered as a mix of cash and prescribed non-financial benefits at the executives’ discretion.

The executives have been offered a competitive base pay that comprises the fixed component of pay and rewards. Base pay for the senior executives is reviewed annually. At the expiry of the term of employment, the executives' base pays are reviewed to remain competitive with the market. There are no guaranteed base pay increases fixed in the senior executives' contracts.

The emoluments of each Director and each executive officer for the financial period are as follows:

	Year ended 30 June 2007
Executive and Position	Primary Salary & Salary Equivalents	Post Employment Superannuation	Equity Options (1)	Total
Peter Thomas Non-Executive Chairman	$36,697	$3,303	$108,900	$148,900
George Sakalidis Executive ManagingDirector	$173,607	$15,624	$172,425	$361,656
Roger Thomson Executive Director	$113,934	$10,254	$172,425	$296,613
Mal Smartt (Resigned 19.10.2006) CompanySecretary	-	-	-	-
Robert Lewis (Appointed 19.10.2006) CompanySecretary	$2,843	-	-	$2,843
Total	$327,081	$29,181	$453,750	$810,012

Note (1) Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 16 November 2006. These options have been valued at grant date using a combination of the Black-Scholes and Binomial option pricing models.

• 22 -

DIRECTORS' REPORT

	Year ended 30 June 2006
Executive and Position	Primary Salary & Salary Equivalents	Post Employment Superannuation	Equity Options (2)	Total
Peter Thomas Non-Executive Chairman	$40,000	100% of salary equivalents by way of salary sacrifice	$58,920	$98,920
George Sakalidis Executive Managing Director	$143,772	$12,939	$117,840	$274,551
Roger Thomson Executive Director	$95,323	$8,579	$117,840	$221,742
Mal Smartt (Appointed 16.6.06) Company Secretary	-	-	-	-
Rudolf Tieleman (Resigned 16.6.06) CompanySecretary	$40,327	-	-	$40,327
Total	$319,422	$21,518	$294,600	$635,540

Note (2) Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 21 November 2005. These options have been valued at grant date using the Black-Scholes option pricing model.

Service agreements -

Remuneration and other terms of employment have been agreed with G Sakalidis and RM Thomson. Major provisions of the agreement relating to remuneration are set out as follows:

	Term of agreements	Base remuneration	Reviewperiods	Increase
G Sakalidis	3 years from 4 July 2005	$109.69 per hour	Annually on 4 July	Discretionary by Board
RM Thomson	3 years from 4 July 2005	$109.69 per hour	Annually on 4 July

EMPLOYEES

Aside from directors (all of whom are, for tax purposes treated as employees), the Company had six noncasual employees at 30 June 2007 (2006: Three).

• 23 -

DIRECTORS' REPORT

DIRECTORS’ INTERESTS

The relevant interest of each director in the shares and options over such instruments issued by the Company as notified by the directors to the Australian Securities Exchange in accordance with Section 205G(1) of the Corporations Act 2001, at the date of this report is as follows:

	Fully Paid Ordinary Shares		Options over Ordinary Shares	Options over Ordinary Shares	Options over Ordinary Shares
		Expiring 27.11.2008	Expiring 26.11.2009	Expiring 21.11.2010	Expiring 16.11.2011
Peter Thomas	619,000	400,000	400,000	400,000	600,000
George Sakalidis	6,521,220	585,000	800,000	800,000	950,000
Roger Thomson	1,176,015	800,000	800,000	800,000	950,000

SHARE OPTIONS GRANTED TO DIRECTORS AND OFFICERS

During or since the end of the financial year, the Company granted options for no consideration over unissued ordinary shares to the following directors:

Peter Thomas	600,000 options exercisable at$1.80 on or before 16.11.2011
George Sakalidis	950,000 options exercisable at$1.80 on or before 16.11.2011
Roger Thomson	950,000 options exercisable at$1.80 on or before 16.11.2011

The issue of options were approved by shareholders at the Annual General Meeting on 16.11.2006.

• 24 -

DIRECTORS' REPORT

CORPORATE STRUCTURE

Image Resources NL is a no liability company incorporated and domiciled in Australia.

INDEMNIFICATION & INSURANCE OF DIRECTORS AND OFFICERS

The Company has entered into agreements indemnifying, to the extent permitted by law, all the directors and officers of the Company against all losses or liabilities incurred by each director and officer in their capacity as directors and officers of the Company.

OPTIONS

As at the date of this report there are the following options over un-issued ordinary shares in the Company:

Unquoted:

• (a) 1,785,000 exercisable at $0.335 per option on or before 27 November 2008;

• (b) 2,000,000 exercisable at $0.39 per option on or before 26 November 2009;

• (c) 2,000,000 exercisable at $0.37 per option on or before 21 November 2010;

• (d) 2,500,000 exercisable at $1.80 per option on or before 16 November 2011;

• (e) 1,000,000 employee options exercisable at $2.38 per option on or before 26 March 2012;

During the year:

• (a) 2,500,000 unquoted options were issued to the directors as approved at the Company's annual general meeting held on 16 November 2006;

• (b) 13,210,893 quoted options were exercised at $0.25 each;

• (c) 735,000 unquoted employee options were exercised at $0.25 each;

• (d) 65,000 unquoted options were exercised at $0.335 each;

• (e) 1,000,000 unquoted employee options were issued pursuant to the Company’s Employee Share Option Plan;

Since the end of the financial year, 300,000 unquoted employee options have been exercised at $0.25 each.

Signed in accordance with a resolution of the directors

G SAKALIDIS

Director Perth 28th September 2007

• 25 -

AUDITOR’S INDEPENDENCE DECLARATION

---

==> picture [95 x 109] intentionally omitted <==

Image Resources NL

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Image Resources NL.

As lead audit partner for the audit of the financial statements of Image Resources NL. for the year ended 30 June 2007, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

• (ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

SOMES and COOKE

K. C. Somes

28 September 2007 1304 Hay Street West Perth WA 6005

• 26 -

CORPORATE GOVERNANCE STATEMENT

GOOD GOVERNANCE AND PRACTICE RULES

The Australian Securities Exchange Corporate Governance Council has determined a total of ten Governance and Good Practice Rules which must be listed and an explanation provided on whether the Company complies with the rule, or a reason why it does not.

PRINCIPLE	COMPLIANCE OR DETAILS OF PLANNING
PRINCIPLE 1: Lay solid foundations for management and oversight
1.1 Formalise and disclose the functions reserved to the Board and those delegated to management	A committee has been established to prepare document for Board consideration.
PRINCIPLE 2: Structure the Board to add value
2.1 A majority of the Board should be independent directors	Not complied with for economic reasons.
2.2 The Chairperson should be an independent director	Not complied with.
2.3 The roles of Chairperson and Chief Executive Officer should not be exercised bythe same individual	Complied with.
2.4 The Board should establish a nomination committee	The Board fulfils the role of Nomination Committee.
PRINCIPLE 3: Promote ethical and responsible decision-making
3.1 Establish a code of conduct to guide the directors, the Chief Executive Officer (or equivalent), the Chief Financial Officer (or equivalent) and any other key executives as to: 3.1.1 The practices necessary to maintain confidence in the Company’s integrity; 3.1.2 The responsibility and accountability of individuals for reporting or investigatingreports of unethicalpractices.	Not complied with. The law embodies sufficient codes of conduct for a company of this size.
3.2 Disclose the policy concerning trading in Company securities by directors, officers and employees.	A strict policy has been adopted and signed by each director.
PRINCIPLE 4: Safeguard integrity in financial reporting
4.1 Require the Chief Executive Officer (or equivalent) to state in writing to the Board that the Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial condition and operational results and are in accordance with relevant accounting standards.	Completed by a Director after consulation with the company secretary and auditor.
4.2 The Board should establish an audit committee.	The role of Audit Committee has been assumed bythe full Board.
4.3 Structure the audit committee so that it consists of: Only non-executive directors A majority of independent directors An independent chairperson who is not the chairperson of the Board At least three members	Not complied with – see 4.2 above.
4.4 The audit committee should have a formal operating charter.	Not complied with – see 4.2 above.

• 27 -

CORPORATE GOVERNANCE STATEMENT

PRINCIPLE 5: Make timely and balanced disclosure

PRINCIPLE 5: Make timely and balanced disclosure
5.1 Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance.	No written policy as such, other than in relation to 3.2 above. Minutes of Board meetings frequently address compliance issues. Both the Chairman and the company secretary have detailed knowledge of and long working backgrounds in application of those rules. The executive directors have a good general grasp of these rules and consult the Chairman and company secretary as required. Every member of the Board and company secretary is fully familiar with requirements of continuous disclosure rules and standards expected of them in relation to tradingin companysecurities.
PRINCIPLE 6: Respect the rights of shareholders
6.1 Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation atgeneral meetings.	Fully designed and disclosed by directors’ conduct.
6.2 Request the external auditor to attend the annual general meeting and be available to answer shareholder questions about the audit and the preparation and contents of the auditor’s report.	Complied with.
PRINCIPLE 7: Recognise and manage risk.
7.1 The Board or appropriate board committee should establish policies on risk oversight and management.	Complied with.
7.2 The Chief Executive Officer (or equivalent) should state to the Board in writing that: 7.2.1 The statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board. 7.2.2 The Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material aspects.	Complied with.
PRINCIPLE 8: Encourage enhancedperformance.
8.1 Disclose the process for performance evaluation of the Board, its’ committees and individual directors and key executives.	Complied with.
PRINCIPLE 9: Remunerate fairly and responsibly.
9.1 Provide disclosure in relation to the Company’s remuneration policies to enable investors to understand the cost and benefits of these policies and the link between remuneration paid to directors and key executives and corporateperformance.	Complied with.
9.2 The Board should establish a remuneration committee.	Complied with.
9.3 Clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors.	Complied with.
9.4 Ensure that payment of equity-based executive remuneration is made in accordance with thresholds set in plans approved by shareholders.	Complied with.
PRINCIPLE 10: Recognise the legitimate interest of stakeholders.
10.1 Establish and disclose a code of conduct to guide compliance with legal and other obligations to legitimate stakeholders.	See 3.1 and 5.1 above.

• 28 -

CORPORATE GOVERNANCE STATEMENT

General:

The Board of Directors of Image Resources NL is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable.

The substance of the best practice recommendations of the ASX Corporate Governance Council, including corporate governance practices and suggested disclosures (which in unabridged form may be accessed from the ASX website) as adopted with variations by the Company, are set out herein and have been applied for the entire financial year ended 30 June 2006. Where there has been any variation from the recommendations it is because the Board believes that the Company is not as yet of a size, nor are its financial affairs of such complexity to justify some of those recommendations and as such those practices continue to be the subject of the scrutiny of the full Board.

Board Composition:

The Board is comprised of three Directors, of which the Managing Director and Exploration Director are the Executive Directors.

The skills, experience and expertise relevant to the position of each Director who is in office at the date of the annual report, his attendance at meetings and his term of office are detailed in the Directors’ Report. Due to the size of the Company, it has no independent Director. This situation will be monitored and changes made as the Board sees fit. The names of the Directors of the Company in office at the date of this statement are:

Name	Position	Committees
Peter Sisley Thomas	Non Executive Chairman	Refer details
		herein
George Sakalidis	Managing Director	Refer details
		herein
Roger Michael Thomson	Exploration Director	Refer details
		herein

When determining whether a Director is independent, the Board has determined that the Director must not be an executive and:

• is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;

• within the last three last years has not been employed in an executive capacity by the Company been a Director after ceasing to hold any such employment;

• within the last three years has not been a principal or employee of a professional adviser or a consultant to the Company or an employee associated with the service provided where the quantum of the remuneration in respect thereof are regarded as material to either the company or that person;

• is not a material supplier or customer of the Company or an officer of or otherwise associated directly or indirectly with a significant supplier or customer;

• has no material contractual relationship with the Company other than as a Director of the Company;

• is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.

Directors have the right to seek independent professional advice in the furtherance of their duties as Directors, at the Company’s expense, subject to those expenses being reasonable or incurred with the chairman's approval, such approval not to be unreasonably withheld.

• 29 -

CORPORATE GOVERNANCE STATEMENT

The Board and Board Nominations:

The Company does not operate a nomination committee. As such, the full Board (subject to members' voting rights in general meeting) is responsible for selection of new members and has regard to a candidate’s experience and competence.

Under the Company’s Constitution:

• the maximum number of Directors on the Board is ten;

• a Director (other than the Managing Director) may not retain office for more than three years without submitting for re-election; and

• at the Annual General Meeting each year effectively one third of the Directors in office (other than the Managing Director) retire by rotation and must seek re-election by shareholders.

Securities Trading Policy:

The Company has adopted a formal securities trading policy whereby Directors and employees are restricted from acting on material information until it has been released to the market in accordance with the ASX requirements of continuous disclosure and the market has had sufficient time to absorb that information.

Directors’ Remuneration and Policies:

The Company forms a remuneration committee comprising members of the Board and sometime a member of the board and the company secretary who do not have a personal interest in the remuneration and policies being discussed. Due to the number of directors on the Board at this time, any decision is therefore required to be unanimous.

All compensation arrangements for Directors including the Managing Director are determined by disinterested Directors after taking into account the current competitive rates prevailing in the market.

The amount of remuneration for all Directors including the full remuneration packages, comprising all monetary and non-monetary components of the Executive and Non Executive Directors, are detailed in the Directors’ Report.

Executives receive base salary, superannuation and in some cases, fringe benefits and share-based incentives. These packages are reviewed on an ongoing basis.

All remuneration paid to present or future executives is accounted for in accordance with the law.

The Board expects that the remuneration structure that is implemented will result in the Company being able to attract and retain the best executives to manage the Company. It will also provide the executives with the necessary incentives to work to grow long-term shareholder value.

The Board can exercise its discretion in relation to approving incentives, bonuses and options.

There are no schemes for retirement benefits other than statutory superannuation for any of the Directors.

External auditors:

The auditors of the Company have open access to the Board of Directors at all times. Somes & Cooke have audited the Company for the last four years. Somes & Cooke attend the Company’s annual general meeting.

• 30 -

CORPORATE GOVERNANCE STATEMENT

Audit committee:

The Company does not operate an audit committee separate from the Board, however, there is a recognition that a separate committee may be required in the future in order to comply with good Corporate Governance.

Managing risks:

The Board meets regularly to evaluate, control, review and implement the Company’s operations and objectives.

Regular controls established by the Board include:

• detailed financial reporting;

• delegation of authority to the Managing Director within the constraints of approved expenditures;

• implementation of operating plans, cash flows and expected expenditures by management and Board monitoring of progress against approvals; and

• procedures to allow Directors, and management in the furtherance of their duties, to seek independent professional advice via the utilisation of various external technical consultants.

The Board recognises the need to identify areas of significant business risk and to develop and implement strategies to mitigate these risks.

Commitment to stakeholders & ethical standards:

The Board supports high standards of corporate governance and requires its members and the management and staff of the Company to act with integrity and objectivity in relation to:

• compliance with laws and regulations affecting the Company’s operations;

• the ASX’s Corporate Governance;

• employment practices;

• responsibilities to:

• the community;

• the individual;

• the environment;

• conflict of interests;

• confidentiality;

• ensuring that shareholders and the financial community are at all times fully informed in accordance with the spirit and letter of the ASX’s continuous disclosure requirements;

• protection of and proper use of the Company’s assets.

Monitoring of the Board’s Performance and Communication to Shareholders:

In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the performance of all Directors is regularly reviewed by the Chairman. The Company does not have an evaluation of the Board or Board members performed by an independent consultant.

The Board of Directors aims to ensure that shareholders are informed of information necessary to assess the performance of the Company. Information is communicated to the shareholders, subject to the exceptions to the requirements for continuous disclosure permitted by law, through:

• the Quarterly Reports;

• the Half-Yearly Report;

• the Annual Report;

• adherence to continuous disclosure requirements;

• the Annual General Meeting and other meetings so called to obtain shareholder approval for Board action as appropriate; and

• the provision of the Company's website containing all of the above mentioned reports and its constant update and maintenance.

• 31 -

INCOME STATEMENT For the Year Ended 30 June 2007

Notes Revenue from ordinary activities 2 Revenue/(loss) from non-ordinary activities Borrowing expenses Depreciation and amortisation expense 2 Exploration costs written-off 2 Share based payments 2 Other expense from ordinary activities 2 (Loss) from ordinary activities before related income tax expense Income tax expense 3 (Loss) from ordinary activities after related income tax expense Net (loss) attributable to members of Image Resources NL Basic (loss) per share - cents per share 6 Diluted (loss) per share - cents per share 6	2007 ($) 325,242 - - (23,726) (1,695,169) (899,409) (680,895) (2,973,957) - (2,973,957) (2,973,957) (4.12) (4.12)	2006 ($) 223,752 - - (21,741) (1,222,027) (294,600) (574,430)
		(1,889,046) -
		(1,889,046)
		(1,889,046)
		(3.17)
		(3.17)

The accompanying notes form part of these financial statements.

• 32 -

BALANCE SHEET As at 30 June 2007

Notes Current Assets Cash Assets 7 Receivables 8 Prepayments 9 Non-Current Assets Plant and equipment 10 Aeromagnetic database 11 Mineral interests 12 Other financial assets 13 TOTAL ASSETS Current Liabilities Payables 14 NET ASSETS Equity Contributed equity 15 Reserves Accumulated (losses) TOTAL EQUITY	2007 ($) 3,511,834 141,858 26,940 3,680,632 99,691 - - 1,055,256 1,154,947 4,835,579 138,955 4,696,624 14,671,747 1,979,980 (11,955,103) 4,696,624	2006 ($) 2,125,507 187,421 10,570
		2,323,498 45,983 - - 1,246,115
		1,292,098
		3,615,596
		87,152
		3,528,444
		11,458,098 1,346,093 (8,981,147)
		3,528,444

The accompanying notes form part of these financial statements.

• 33 -

STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2007

Balance at 1.7.2005 Shares issued during the period Share based payments Changes in fair value of available for sale assets Share issuance costs (Loss) for period Balance at 30.6.2006 Balance at 1.7.2006 Shares issued during the period Share based payments Changes in fair value of available for sale assets (Loss) for period Balance at 30.6.2007	Share Capital ($) Available for Sale Financial Assets Reserve Capital ($) Employee Benefit Reserve ($) Accumulated Losses ($) Total ($) 9,911,943 (7,092,101) 2,819,842 1,280,516 1,280,516 294,600 294,600 1,051,493 1,051,493 (28,961) (28,961) - (1,889,046) (1,889,046)
	11,163,498 1,051,493 294,600 (8,981,147) 3,528,444
	11,163,498 1,051,493 294,600 (8,981,147) 3,528,444
	3,508,249 3,508,249
	899,409 899,409
	(265,522) (265,522)
	(2,973,957) (2,973,957)
	14,671,747 785,971 1,194,009 (11,955,103) 4,696,624

The accompanying notes form part of these financial statements.

• 34 -

CASH FLOW STATEMENT For the Year Ended 30 June 2007

Notes CASH FLOWS FROM OPERATING ACTIVITIES Receipt from customers Cash payments to suppliers and contractors Interest and dividends received Net cash (used in) operating activities 16 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of plant and equipment Proceeds from sale of equipment Payments for exploration and evaluation Purchase of new prospects Recoupment of exploration costs Purchase of investments Proceeds on sale of investments Intercompany debt repayment Net cash (used in) / provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from new issues of shares Share issue expenses Net cash provided by financing activities Net (decrease) / increase in cash held Cash at the beginning of the financial period Cash at the end of the financial period 7	2007 ($) - (530,682) 246,736 (283,946) (84,457) 7,023 (1,822,646) (103,256) 232,705 (96,856) 23,899 7,585 (1,836,003) 3,508,249 - 3,508,249 1,386,327 2,125,507 3,511,834	2006 ($) - (545,332) 158,952
		(386,380)
		(3,545) - (1,314,731) (122,217) 180,958 (139,621) - -
		(1,399,156)
		1,280,516 (28,961)
		1,251,555
		(533,981) 2,659,488
		2,125,507

The accompanying notes form part of these financial statements.

• 35 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The following is a sumary of the material accounting policies adopted by the Company in the preparation of the financial report.

Basis Of Preparation

The accounting policies set out below have been consistently applied to all periods presented, unless otherwise stated.

ReportingBasis and Conventions

The financial report has been prepared on an accruals basis and is based on historical costsmodified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Accounting Policies

(a) Revenue

Interest revenue is recognised on a proportional basis taking into account interest rates applicable to the financial asset. All revenue is stated net of the amount of goods and services tax (GST).

(b) Employee Benefits

Provision is made for the company’s liability for employee benefits arising from services rendered by non-casual employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. There is no liability to Long Service Leave entitlements.

(c) Exploration and Evaluation Expenditure

All exploration and evaluation expenditure is expensed to profit and loss as incurred. The effect of this write-off is to increase the loss incurred from ordinary activities as disclosed in the Income Statement and to decrease the carrying values in the Balance Sheet.

(d) Acquisition of Assets

The cost method is used for all acquisitions of assets regardless of whether shares or other assets are acquired. Cost is determined as the fair value of assets given up at the date of acquisition plus costs incidental to the acquisition.

Costs relating to the acquisition of new areas of interest are classified as either exploration and evaluation expenditure or mine properties based on the stage of development reached at the date of acquisition.

• 36 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(e) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST except where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable. Rreceivables and payables in the balance sheet are shown inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Balance Sheet.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(f) Income Tax

The charge for current income tax expense is based on the profit for the period adjusted for any nonassessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred tax assets are recognized to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

(g) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with orginal maturities of three months or less, and bank overdrafts . Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

(h) Impairment of Assets

At each reporting date, the company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement.

• 37 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(i) Earnings Per Share

• (i) Basic Earnings Per Share – Basic earnings per share is determined by dividing the loss from ordinary activities after related income tax expense by the weighted average number of ordinary shares outstanding during the financial period.

• (ii) Diluted Earnings Per Share Diluted EPS is calculated as net loss attributable to members, adjusted for:

• costs of servicing equity (other than dividends);

• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

• other discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares.

(j) Non-current Assets

Each class of plant, equipment and motor vehicles is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Items of plant, equipment and motor vehicles are recorded at cost, being the fair value of consideration provided plus incidental costs. This cost is written off over its expected economic life, adjusted for any salvage value, if applicable. Estimates of remaining useful lives range between 3 and 5 years.

Non-current assets are not carried at an amount greater than their recoverable amount and where carrying values exceed this recoverable amount, assets are written down. In determining recoverable amount the expected net cash flows have not been discounted.

(k) Financial Instruments

Financial Assets: Security deposits are recognised at their fair value. Other receivables are carried at nominal amount due less any provision for doubtful debts. An estimate of doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. Sundry debtors and other receivables are non-interest bearing and have repayment terms between 30 and 90 days.

Financial Liabilities: Liabilities for trade creditors and other accruals are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Company. Trade creditors are normally settled on 30 day terms.

Available-for-sale Financial Assets: Available-for-sale financial assets include any financial assets not included in the above categories and are initially measured at cost being the fair value of the consideration and including acquisition charges associated with the investment. Unrealised gains and losses arising from changes in the fair value of the investment are taken directly to equity.

(l) Interests in Joint Venture

Interest in joint venture operations are brought to account by including in the respective classifications, the share of individual assets employed, liabilities and expenses incurred and revenue from the sale of joint venture output. Interest in joint venture operations are brought to account by including assets and liabilities in their respective classifications using the cost method.

• 38 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(m) Contributed Equity

Ordinary share capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

(n) Share-based Payments

Share-based compensation benefits provided to directors are approved in general meeting by members. Share-based benefits provided to non-directors are approved by the Board of Directors and form part of that employee’s remuneration package.

No expense is recognised in respect of share options granted prior to 1 January 2005. The shares will be recognised if and when the options are exercised and the proceeds are received and allocated to share capital.

In respect of share options granted after 1 January 2005, the fair value is recognised as an employee benefit expense with a corresponding increase in equity. The fair value of the options is calculated by an independent risk and assurance consultant at the date of grant using calculation principles taking into account the terms and conditions upon which the options were granted. The model has been adjusted for the effects of non-transferability, exercise restrictions and behavioural considerations. In particular, options granted to employees have been valued using the Hull-White binomial algorithm valuation model. Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital.

(o) Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial period.

Critical Accounting Estimates and Judgements

The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best availabe current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data obtained both externally and from within the Company.

Key Estimates - Impairment

The Company assesses impairment at each reporting date by evaluating conditions specific to the Company that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

• 39 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Change In Accounting Policy

The following Australian Accounting Standards have been issued or amended and are applicable to the company but are not yet effective. They have not been adopted in preparation of the financial statements at reporting date.

statements at	reporting date.
AASB	AASB Standard Affected	Nature of Change /	Standard	Application
Amendment		Impact	Application	Date
			Date
AASB 2005-10: Amendments to Australian
Accounting Standards
	AASB 1: First-time Adoption of	No change, no	1 January 2007	1 July 2007
	AIFRS	impact
	AASB 4: Insurance Contracts	No change, no	1 January 2007	1 July 2007
		impact
	AASB 101: Presentation of	No change, no	1 January 2007	1 July 2007
	Financial Statements	impact
	AASB 114: Segment Reporting	No change, no	1 January 2007	1 July 2007
		impact
	AASB 117: Leases	No change, no	1 January 2007	1 July 2007
		impact
	AASB 133: Earnings per Share	No change, no	1 January 2007	1 July 2007
		impact
	AASB 1023: General Insurance	No change, no	1 January 2007	1 July 2007
	Contracts	impact
	AASB 1038: Life Insurance	No change, no	1 January 2007	1 July 2007
	Contracts	impact
	AASB 139: Financial Instruments:	No change, no	1 January 2007	1 July 2007
	Recognition and Measurement	impact
AASB 7: Financial Instruments: Disclosures
	AASB 132: Financial Instruments:	No change, no	1 January 2007	1 July 2007
	Disclosure and Presentation	impact

• 40 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 2 OPERATING LOSS Operating loss before income tax includes: Revenue from ordinary activities Interest received Dividends received Profit on sale of investments Other revenues Expenses Depreciation and amortisation Exploration costs written-off Share based payments Occupancy costs Filing and ASX Fees Corporate and management Other expenses from ordinary activities	2007 ($) 242,315 4,421 1,705 76,801 325,242 (23,726) (1,695,169) (899,409) (59,248) (32,762) (181,628) (407,257) (680,895)	2006 ($) 157,523 1,429 64,800
		223,752
		(21,741)
		(1,222,027)
		(294,600)
		(57,518) (19,750) (111,999) (385,163)
		(869,030)

• 41 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 3 INCOME TAX

NOTE 3 INCOME TAX 2007 ($) The amount of income tax provided for in the accounts differs from the amount prima facie payable on the operating loss. The difference is reconciled as follows: Loss from ordinary activities before income tax 2,973,957 Prima facie tax benefit attributable to loss from ordinary activities before income tax at 30% (2006: 30%) 892,187 Add: Tax effect of Non-allowable items - Share based payments (269,822) - Other 6,561 Tax losses not brought to account as future income tax benefit (628,926) Income tax attributable to operating loss -	2006 ($) 1,889,046
	566,714 (88,380) (1,884) (656,978)
	-

Unbooked future income tax benefits

The Company has accumulated tax losses of $7,845,703 (2006: $5,779,276).

The potential future income tax benefit of these losses $2,353,711 will only be realised if:

• (i) the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the losses and deductions to be released;

• (ii) the Company continues to comply with the conditions for deductibility imposed by the law; and

• (iii) no changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the losses.

NOTE 4 DIRECTORS AND EXECUTIVES REMUNERATION AND RETIREMENT BENEFITS

• (a) The names of directors who have held office during the financial year are – Peter Thomas George Sakalidis Roger Thomson

(b) Retirement and Superannuation Payments –

Prescribed benefits were provided by the Company to all executive directors by way of superannuation contributions to complying superannuation funds during the year. These benefits were paid in accordance with the statutory superannuation contribution guarantee requirements.

• 42 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 4 DIRECTORS AND EXECUTIVES REMUNERATION AND RETIREMENT BENEFITS (Continued)

(c) Non-executive directors –

Fees and payments to the only non-executive director, the Chairman, reflects the demands made on him and his responsibilities. His director’s fees are reviewed annually by the Board and are determined independently to the fees of executive directors and are based on comparative roles in the external market. The Chairman is not present at any discussions relating to determination of his own remuneration. Non-executive directors may receive share based payments which are required to be approved by shareholders in general meeting.

(d) Directors fees –

The current base remuneration has been effective from 1 July 2005. The Chairman’s remuneration is inclusive of fees paid whilst chairing the meetings of executives and officers while executive directors who chair a meeting receive no additional yearly fees.

Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically recommended for approval by shareholders. The maximum currently stands at $150,000 per the group of non-executive directors.

(e) Retirement allowances for directors –

The Company does not have a policy for the payment of retirement allowances for non-executive directors.

(f) Executive pay –

The executive pay and reward framework has three components:

Base pay;

Incentive options;

Other remuneration such as superannuation.

The combination of these comprise the executives’ total remuneration.

Base Pay –

Structured as a total employment cost package which may be delivered as a mix of cash and prescribed non-financial benefits at the executive’s discretion.

The executives have been offered a competitive base pay that comprises the fixed component of pay and rewards. Base pay for the senior executives are reviewed at the expiry of the term of employment to ensure the executives’ pays are competitive with the market.

There are no guaranteed base pay increases fixed in the senior executives’ contracts.

• 43 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 4 DIRECTORS AND EXECUTIVES REMUNERATION AND RETIREMENT BENEFITS (Continued)

The emoluments of each director and each executive officer for the financial period are as follows:

The emoluments of each director and each executive officer for the financialperiod are as follows:	The emoluments of each director and each executive officer for the financialperiod are as follows:	The emoluments of each director and each executive officer for the financialperiod are as follows:	The emoluments of each director and each executive officer for the financialperiod are as follows:	The emoluments of each director and each executive officer for the financialperiod are as follows:
	Year ended 30 June 2007
Executive and Position	Primary Salary & Salary Equivalents	Post Employment Superannuation	Equity Options (1)	Total
Peter Thomas Non-Executive Chairman	$36,697	$3,303	$108,900	$148,900
George Sakalidis Executive ManagingDirector	$173,607	$15,624	$172,425	$361,656
Roger Thomson Executive Director	$113,934	$10,254	$172,425	$296,613
Mal Smartt (Resigned 19.10.2006) CompanySecretary	-	-	-	-
Robert Lewis (Appointed 19.10.2006) Company Secretary	$2,843	-	-	$2,843
Total	$327,081	$29,181	$453,750	$810,012

Note (1) Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 16 November 2006. These options have been valued at grant date using a combination of the Black-Scholes and Binomial option pricing models.

• 44 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 4 DIRECTORS AND EXECUTIVES REMUNERATION AND RETIREMENT BENEFITS (Continued)

	Year ended 30 June 2006
Executive and Position	Primary Salary & Salary Equivalents	Post Employment Superannuation	Equity Options (2)	Total
Peter Thomas Non-Executive Chairman	$40,000	100% of salary equivalents by way of salary sacrifice	$58,920	$98,920
George Sakalidis Executive ManagingDirector	$143,772	$12,939	$117,840	$274,551
Roger Thomson Executive Director	$95,323	$8,579	$117,840	$221,742
Mal Smartt (Appointed 16.6.06) CompanySecretary	-	-	-	-
Rudolf Tieleman (Resigned 16.6.06) CompanySecretary	$40,327	-	-	$40,327
Total	$319,422	$21,518	$294,600	$635,540

Note (2) Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 21 November 2005. These options have been valued at grant date using the Black-Scholes option pricing model.

Service agreements -

Remuneration and other terms of employment have been agreed with G Sakalidis and RM Thomson. Major provisions of the agreement relating to remuneration are set out as follows:

	Term of agreements	Base remuneration	Reviewperiods	Increase
G Sakalidis	3 years from 4 July 2005	$109.69 per hour	Annually on 4 July	Discretionary by Board
RM Thomson	3 years from 4 July 2005	$109.69 per hour	Annually on 4 July

• 45 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 4 DIRECTORS AND EXECUTIVES REMUNERATION AND RETIREMENT BENEFITS (Continued)

Option Holdings –

The number of options over ordinary shares in the Company held during the financial year by each director (or their personally related entities) are set out below:

Name	Balance at the start of the year	Granted during the year	Exercised during the year	Other changes during the year	Balance at the end of the year	Vested exercisable at the end of theyear
Peter S Thomas	1,320,000	600,000	(120,000)	-	1,800,000	1,800,000
George Sakalidis	2,250,000	950,000	(65,000)	-	3,135,000	3,135,000
Roger M Thomson	3,316,015	950,000	(916,015)	-	3,350,000	3,350,000

These are the only options granted, vested, exercised or sold in which any of the directors had an interest (directly or indirectly) during the year.

Shareholdings –

The number of shares in the Company held during the financial year by each director, (or respective personally-related entities), are set out below:

Name	Balance at the start of theyear	Shares movements	Balance at the end of theyear
Peter S Thomas	449,000	170,000	619,000
George Sakalidis	6,080,220	280,000	6,360,220
Roger M Thomson	260,000	916,015	1,176,015

Related Party Transactions -

Information on related party transactions are disclosed in Note 22

NOTE 5 AUDITORS REMUNERATION Amounts received or due and receivable by the auditors of the Company for: Auditing and reviewing the financial report Other valuation services	2007 ($) 20,670 - 20,670	2006 ($) 12,500 650
		13,150

• 46 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 6 EARNINGS PER SHARE The following reflects the income and share data used in the calculation of basic and diluted earnings per share Net (loss) Adjustments: Nil Earnings used in calculating basic and diluted earnings per share Weighted average number of ordinary shares used in calculating basic earnings per share Effect of dilutive securities: Share options Adjusted weighted average number of ordinary shares used in calculating diluted earnings per share	2007 ($) (2,973,957) - (2,973,957) 60,687,085 - 60,687,085	2006 ($) (1,889,046) - (1,889,046)
		59,597,684 -
		59,597,684

– The Company had 9,285,000 (2006 20,149,393) options over fully paid ordinary shares on issue at balance date. Options are considered to be potential ordinary shares. However, they are not considered to be dilutive in nature as their exercise will not result in earnings per share being diluted. The options have not been included in the determination of diluted earnings per share.

Since the end of the financial year, the company has received funds in respect of the exercise of 300,000 unquoted employee options due to expire on 4 July 2007 and 2,000,000 ordinary shares at an issue price of $2.00 each. The company has also issued 75,872 shares at an issue price of $1.977 in respect of a contracted tenement acquisition.

Since the end of the financial year no ordinary shares have been issued pursuant to the employee share incentive scheme.

There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of potential ordinary shares since the reporting date and before the completion of this financial report.

NOTE 7 CASH ASSETS Cash at bank Deposits at call NOTE 8 CURRENT RECEIVABLES Other receivables	2007 ($) 496,503 3,015,331 3,511,834 2007 ($) 141,858	2006 ($) 5,744 2,119,763
		2,125,507
		2006 ($) 187,421

• 47 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 9 OTHER CURRENT ASSETS Prepayments NOTE 10 PLANT AND EQUIPMENT Plant and equipment Less: Accumulated depreciation Reconciliations of the carrying amounts of plant and equipment at the beginning and end of the current and previous financial years. Plant and Equipment Carrying amount at beginning of year Additions Disposals Depreciation expense Total plant and equipment at end of year NOTE 11 AEROMAGNETIC DATABASE Aeromagnetic database - at cost Less: Accumulated depreciation NOTE 12 MINERAL INTERESTS Exploration Expenditure Areas of interest in exploration and evaluation phases Opening balance Net Expenditure incurred during the year Tenements disposed of during the year Expenditure written off Closing balance	2007 ($) 26,940 2007 ($) 208,538 (108,847) 99,691 45,983 84,457 (7,023) (23,726) 99,691 2007 ($) 2,800,000 (2,800,000) - 2007 ($) - 1,695,169 - (1,695,169) -	2006 ($) 10,570
		2006 ($) 149,869 (103,886))
		45,983
		64,179 3,545 - (21,741)
		45,983
		2006 ($) 2,800,000 (2,800,000)
		-
		2006 ($) - 1,222,027 - (1,222,027)
		-

• 48 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 13 OTHER FINANCIAL ASSETS Non-Current Securities in unlisted corporations Securities in listed corporations	2007 ($) - 1,055,256 1,055,256	2006 ($) 2,000 1,244,115
		1,246,115

Under AASB 139, available for sale financial assets are revalued to fair value at reporting date. All adjustments resulting from changes in fair value are taken directly to equity. If AASB 1039 had been applied retrospectively, financial assets reflected at cost in the comparative year would have been adjusted to fair value at 30 June 2006. This would have resulted in an increase carrying value attributable to financial assets at 30 June 2006 and a corresponding increase in reserves at that date.

NOTE 14	CURRENT PAYABLES	2007	2006
		($)	($)
Trade creditors and accruals		138,955	87,152

• 49 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 15 ISSUED CAPITAL Contributed Equity – Ordinary Shares At the beginning of reporting period Issue of shares at $0.33 Issue of shares at $0.25 Issue of shares at $0.335 Share issuance costs Closing balance: Total Equity Options The Company had the following options over un-issued fully paid ordinary shares at the end of the reporting period: Options exercisable at $0.25 on or before 25.8.2006 Options exercisable at $0.25 on or before 4.7.2007 Options exercisable at $0.335 on or before 27.11.2008 Options exercisable at $0.39 on or before 26.11.2009 Options exercisable at $0.37 on or before 21.11.2010 Options exercisable at $1.80 on or before 16.11.2011 Options exercisable at $2.38 on or before 26.3.2012 Total Options	2007	2007	2006
	No. 60,687,085 - 13,945,893 65,000	$ 11,163,498 - 3,486,474 21,775 -	No. $ 56,543,590 9,911,943 3,058,030 1,009,150 1,085,465 271,366 - - (28,961)
	74,697,978	14,671,747	60,687,085 11,163,498
	- 300,000 1,785,000 2,000,000 2,000,000 2,500,000 1,000,000	14,671,747	11,163,498 13,264,393 1,035,000 1,850,000 2,000,000 2,000,000 - - 20,149,393
	9,585,000

During the year:

• (a) 2,500,000 options were issued to the directors as approved at the Company's annual general meeting held on 16 November 2006.

• (b) 13,210,893 listed options were exercised at $0.25 each;

• (c) 53,500 listed options lapsed due to not being exercised;

• (d) 735,000 unquoted employee options were exercised at $0.25 each;

• (e) 65,000 unquoted options were exercised at $0.335 each.

Terms and conditions of contributed equity

Ordinary shares have the right to receive dividends as declared and, in the event of winding up of the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of shares held, regardless of the amount paid up thereon.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

• 50 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 16 CASH FLOW INFORMATION Reconciliation of operating loss after income tax with funds used in operating activities Operating loss after income tax Depreciation and amortisation Exploration expenditure written off (Profit) / loss on sale of investments Share based payments Changes in operating assets and liabilities: (Increase) / Decrease in receivables (Increase) / Decrease in prepayments Increase / (Decrease) in payables	2007 ($) (2,973,957) 23,726 1,695,169 (1,705) 899,409 37,979 (16,370) 51,803 (283,946)	2006 ($) (1,889,046) 21,741 1,222,027 - 294,600 (7,183) 3,386 (31,905)
		(386,380)

NOTE 17 TENEMENT EXPENDITURES AND LEASING COMMITMENTS

The Company has entered into certain obligations to perform minimum exploration work on tenements held. These obligations vary from time to time in accordance with contracts signed. Tenement rentals and minimum expenditure obligations which may be varied or deferred on application, are expected to be met in the normal course of business. The minimum statutory expenditure requirements on the granted tenements for the next twelve months amounts to $2,479,960. Of this, $920,480 is expected to be met by JV participants as a result of various joint ventures entered into.

The Company has leased office premises in West Perth. The lease has been formally extended for two years until 30 September 2009. The lease commitment for the year ended 30 June 2008 is $33,097.

NOTE 18 SEGMENTS

The Company operates only in one business, being the exploration for and development of minerals. Geographically, the Company's activities are conducted mainly within Western Australia and South Australia. Exploration expenditure was incurred predominantly on Western Australia tenements as exploration activities had not yet significantly commenced on the South Australian tenements.

• 51 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 19 JOINT VENTURES

The Company has interests in the following unincorporated exploration joint ventures:

Name of Project % Interest Mithrill Barton JV 70 Peak Hill Gold JV 70 Metal Sands JV 70	Carrying Amount - Upon granting, Image will earn by sole funding – rights are only as to mineral sands - Image has earned its interest - Image has earned its interest

NOTE 20 TENEMENT ACCESS

The interests of holders of freehold land encroached by the Tenements are given special recognition by the Mining Act (WA). As a general proposition, a tenement holder must obtain the consent of the owner of freehold before conducting operations on the freehold land. There can be no assurance that the Company will secure rights to access those portions of the Tenements encroaching freehold land but, importantly, the grant of freehold extinguished native title so wherever the Tenements encroach freehold the Company is in the position of not having to abide by the Native Title Act albeit aboriginal heritage matters still be of concern.

NOTE 21 SUPERANNUATION COMMITMENTS

Superannuation contributions are made to at least satisfy the statutory Superannuation Contribution Guarantee Act and in satisfaction of any salary sacrifice requests. All contributions were made to accumulation type funds selected by the employee and accordingly actuarial assessments were not required.

NOTE 22 EVENTS SUBSEQUENT TO REPORTING DATE

Since the end of the financial year, the Company has received funds of $75,000 in respect of the exercise of 300,000 employee options which were due to expire 4 July 2007 and $4,000,000 in respect of two share placements to sophisticated investors of 1,000,000 shares each at an issue price of $2.00 each share.

No other material matters have occurred subsequent to the end of the financial year which require reporting on other than the matters referred to in the directors’ report or as reported to ASX.

NOTE 23 RELATED PARTY TRANSACTIONS

• (a) Other transactions with directors and director related entities

Peter S Thomas provided legal services to the Company during the financial period on terms and conditions which were more favourable to the Company than Thomas otherwise provides to clients generally. He was paid $41,790 (Net of GST) for legal services not connected with the management of the Company.

Total amounts owing to directors or their associated entities at 30 June 2007 was $10,242 (2006: $5,654).

• (b) Image subscribed for one share in Magnetic Resources NL on incorporation of that company. That one share was sub-divided into 6,000,000 ordinary shares and upon the successful listing of Magnetic on the ASX, was subject to escrowed holding restrictions until 5 April 2009.

Image entered into a Serviced Office Agreement with Magnetic whereby Image agreed to provide various administrative services for a one year period at $4,000 per month commencing 5 April 2007.

Image also entered into a Joint Venture Agreement (Agreement) with Magnetic whereby Image agreed to farm out various interests in various of its tenements.

• 52 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 24 CONTINGENT LIABILITIES

Native Title

The Company has been notified of a number of native title claims impacting its tenements.

The Company is not in a position to assess the likely effect of any native title claim impacting the Company.

The existence of native title and the policy of the West Australian state government in particular represent, as a general proposition, a serious threat to explorers and miners, not only in terms of delaying the grant of tenements and the progression of exploration development and mining operations, but also in terms of costs arising consequent upon dealing with aboriginal interest groups, claims for native title and the like.

• 53 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2007

NOTE 25 FINANCIAL INSTRUMENTS DISCLOSURE

(a) Interest Rate Risk

The Company's exposure to interest rate risk, which is the risk that a financial instruments value will fluctuate as a result of changes in market rates and the effective weighted average interest rates on classes of financial assets and liability, is as follows:

2006 Financial Assets Cash Assets Other Receivables Held for sale investments Total Financial Assets Weighted Average Interest Rate Financial Liabilities Payables 2007 Financial Assets Cash Assets Other Receivables Held for sale investments Total Financial Assets Weighted Average Interest Rate Financial Liabilities Payables	Floating Interest Rate Non Interest Bearing Total 2,119,763 5,744 2,125,507 - 187,421 187,421 - 1,246,115 1,246,115
	2,119,763 1,439,280 3,559,043
	5.81% - 87,152 87,152
	Floating Interest Rate Non Interest Bearing Total 3,511,634 200 3,511,834 - 141,858 141,858 - 1,055,256 1,055,256
	3,511,634 1,197,314 4,708,948
	6.19% - 138,955 138,955

(b) Credit Risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount, net of any provisions for doubtful debts, as disclosed in the Balance Sheet and notes to the financial statements.

The Company does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the Company.

(c) Net Fair Values

For assets and liabilities, the net fair value approximates their carrying value except for other financial assets as disclosed in Note 13.

No financial assets and financial liabilities are readily traded on organised markets in standardised form other than listed investments.

• 54 -

DIRECTORS’ DECLARATION

The directors of the Company declare that:

1. the accompanying financial report and notes are in accordance with the Corporations Act 2001 and;

2. (a) comply with Accounting Standards and the Corporations Act 2001; and

3. (b) give a true and fair view of the financial position as at 30 June 2007 and performance for the year ended on that date of the Company.

4. the Chief Executive Officer has declared that:

5. (a) the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;

6. (b) the financial statements and the notes for the financial year comply with Accounting Standards; and

7. (c) the financial statements and notes for the financial year give a true and fair view;

8. in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors:

George Sakalidis DIRECTOR

PERTH

Dated this 28th day of September 2007

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INDEPENDENT AUDIT REPORT TO THE MEMBERS OF IMAGE RESOURCES NL

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INDEPENDENT AUDITOR’S REPORT

To the members of Image Resources NL

Report on the Financial Report

We have audited the accompanying financial report of Image Resources NL, which comprises the balance sheet as at 30 June 2007, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration.

Directors’ Responsibility for the Financial Report

The directors of Image Resources NL are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (Including the Australian Accounting Interpretations) and the Corporation Act 2001. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards (IFRS) ensures that the financial report, comprising the financial statement and notes, complies with IFRS.

The directors of the Company are also responsible for the remuneration disclosures contained in the directors’ report

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. Our responsibility is also to express an opinion on the remuneration disclosures contained in the directors’ report based on our audit.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not

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INDEPENDENT AUDIT REPORT TO THE MEMBERS OF IMAGE RESOURCES NL

for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report and the disclosures contained in the directors’ report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , provided to the directors of Image Resources NL on (date), would be in the same terms if provided to the directors as at the date of this auditor’s report.

Auditors Opinion

In our opinion:

• a) the financial report of Image Resources NL is in accordance with the Corporations Act 2001 , including:

• i. giving a true and fair view of Image Resources NL’s financial position as at 30 June 2007 and of its performance for the year ended on that date ; and

• ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.

• b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

In our opinion the remuneration disclosures that are contained in the directors’ report comply with Australian Accounting Standard AASB 124 Related Party Disclosures.

Kevin Somes

Date: 28 September 2007

Somes and Cooke 1304 Hay Street West Perth WA 6005

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TENEMENT SCHEDULE

Tenement Nature of Interest Project Equity (%)

E15/0883	Granted	Woolgangie South	100%
E15/0884	Granted	Yilmia 1	100%
E15/0885	Granted	Victoria Rocks	100%
E15/0886	Granted	Burra Rock	100%
E15/0887	Granted	Banks Rock	100%
E15/0888	Granted	Cave Hill West	100%
E15/0889	Granted	Cave Hill	100%
E15/0890	Granted	Yilmia 2	100%
E15/0958	Application	Dingo Dam	100%
E16/0307	Granted	Ularing	100%
E16/0320	Granted	Mt Walton	100%
E27/0084	Granted	Emu Lake	33.33%
E27/0168	Granted	Emu Lake	33.33%
E27/0353	Application	Emu Lake	33.33%
E27/0354	Application	Emu Lake	33.33%
E27/0359	Application	Emu Lake	33.33%
E28/1328	Granted	Junction Lake	100%
E28/1377	Granted	Bronco Plains	100%
E28/1400	Granted	Talc Lake	100%
E28/1496	Granted	Junction Lake East	100%
E28/1569	Application	Bronco Plains	100%
E28/1656	Application	Ponton	100%
E29/0547	Granted	TopWell	100%
E30/0287	Granted	Ward Springs	90%
E30/0310	Granted	Gnamma Hole	100%
E37/0745	Granted	Scorpion Well	100%
E37/0787	Granted	Lookout Well	100%
E38/1871	Application	Adam Range	100%
E39/1020	Granted	Mt Remarkable	100%
E39/1059	Granted	Mt Remarkable	100%
E45/2447	Granted	Warrawoona	100%
E45/2555	Granted	Glenherring	90%
E46/0409	Granted	Mt Hays	100%
E46/0709	Application	Mt Hays	100%
E51/1111	Granted	RubyWell 3	70%
E52/1453	Granted	Wilthorpe	100%
E52/2067	Application	Wilthorpe	100%
E59/0879	Granted	Jarbora Hill	100%
E59/1338	Application	Jarbora	100%
E63/0977	Granted	Taylor Rock	100%
E63/0978	Granted	SundaySoak	100%
E63/1098	Application	Beetle Lake	100%
E63/1099	Application	Bronzite	100%
E69/2033	Application	Serpentine Lakes	100%
E69/2034	Application	Serpentine Lakes	100%
E69/2035	Application	Serpentine Lakes	100%
E69/2036	Application	Forrest Lakes	100%
E69/2037	Application	Forrest Lakes	100%
E69/2038	Application	Forrest Lakes	100%

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TENEMENT SCHEDULE

Tenement	Nature of Interest	Project	Equity (%)
E69/2039	Application	Forrest Lakes	100%
E70/2636	Granted	Metals SandsJV	70%
E70/2825	Granted	Lake Spade	100%
E70/2844	Application	Bidaminna North	100%
E70/2845	Application	Bidaminna North	100%
E70/2892	Granted	Cooljarloo North	100%
E70/2898	Granted	Metal SandsJV	70%
E70/2926	Granted	Chitterberrin	90%
E70/3032	Application	Lake Muckenburra	100%
E70/3033	Application	McKinley	100%
E70/3050	Application	Kwangan Plains	100%
E70/3051	Application	Kwangan Plains	100%
E70/3068	Application	CatabyWest	100%
E70/3086	Application	Black Boy	100%
E70/3092	Application	Cowalla	100%
E70/3093	Application	Wannamal	100%
E70/3100	Application	Quinns Hill	100%
E70/3192	Application	Bootine	100%
E77/0914	Granted	Bullfinch	100%
E77/1132	Granted	Jilbadgie	100%
E77/1144	Granted	Woongaring	100%
E77/1172	Granted	Woongaring	100%
E77/1179	Granted	Woongaring	100%
E77/1212	Granted	Koolyanobbing	100%
E77/1222	Granted	Woongaring	100%
E77/1241	Application	Hyden North 5	100%
E77/1260	Granted	Woongaring	100%
E77/1261	Granted	Woongaring	100%
E77/1266	Granted	Woongaring	100%
E77/1284	Granted	Moorine Rocks	100%
E77/1288	Application	Boodarding	100%
E77/1491	Application	Surprise Bore	100%
E77/1492	Application	Barlee	100%
EL23764	Granted	Warrego North	100%
EL24138	Granted	Warrego North	100%
EL24255	Application	Warrego North	100%
EL24257	Application	Warrego North	100%
M27/0408	Application	Emu Lake	33.33%
M27/0409	Application	Emu Lake	33.3%
M27/0410	Application	Emu Lake	33.33%
M27/0457	Application	Emu Lake	33.33%
M27/0458	Application	Emu Lake	33.33%
M27/0459	Application	Emu Lake	33.33%
M27/0460	Application	Emu Lake	33.33%
M27/0461	Application	Emu Lake	33.33%
M27/0462	Application	Emu Lake	33.33%
M27/0463	Application	Emu Lake	33.33%
M27/0464	Application	Emu Lake	33.33%
M46/0364	Application	Mt Hays	100%
M52/0807	Application	Wilthorpe	100%

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TENEMENT SCHEDULE

Tenement	Nature of Interest	Project	Equity (%)
M52/0808	Application	Wilthorpe	100%
M52/0836	Application	Wilthorpe	100%
M59/0646	Application	Jarbora Hill	100%
P27/0359	Application	Emu Lake	100%
P27/1750	Application	Emu Lake	100%
P27/1751	Application	Emu Lake	100%
P27/1752	Application	Emu Lake	100%
P29/1799	Granted	TopWell	100%
P45/2504	Granted	Warrawoona	100%
P46/1376	Granted	Mt Hays	100%
P46/1620	Application	Mt Hays	100%
P52/1215	Application	Wilthorpe	100%
P70/1490	Granted	Bidaminna	100%
P70/1502	Granted	CooljarlooJV	70%
P70/1516	Granted	CooljarlooJV	70%
P70/1520	Application	CooljarlooJV	70%
P70/1521	Application	CooljarlooJV	70%
P70/1540	Granted	Cadda Springs	100%
P70/1541	Granted	Cadda Springs	100%
P77/3498	Application	FlyingFox	100%
P77/3589	Application	Jilbadgie	100%
P77/3590	Application	Jilbadgie	100%
P77/3591	Application	Jilbadgie	100%
P77/3592	Application	Jilbadgie	100%
SA 2004/265	Application	MithrillJV(Mineral Sands only)	0%
SA 2004/921	Application	Oolden Range	100%

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OTHER INFORMATION

The following information was applicable as at 24 September 2007.

Share and Option holding

Category(Size of	Fully Paid	Options	Options	Options	Options	Employee
Holding)	Ordinary	27.11.2008	26.11.2009	21.11.2010	16.11.2011	Options
	Shares					26.3.2012
1 to 1,000	344
1,001 to 5,000	881
5,001 to 10,000	372
10,001 to 100,000	448
100,001 and over	82	3	3	3	3	1
Total	2,127	3	3	3	3	1

The number of shareholdings held in less than marketable parcels is 42. There are no listed options.

The names of the substantial shareholders listed in the Company's register as at 24 September 2007:

	Number	%
Shareholder Name
Frederick D L Ribton	7,113,006	9.50
Fortis Clearing Nominees Pty Ltd	5,593,733	7.47
Brispot Nominees Pty Ltd	5,358,277	7.16
Invia Custodian Pty Ltd	5,093,338	6.80
George Sakalidis	3,997,320	5.34

Twenty largest fully paid shareholders:

Shareholder Name 1. Frederick D L Ribton 2. Fortis Clearing Nominees Pty Ltd 3. Brispot Nominees Pty Ltd 4. Invia Custodian Pty Ltd 5. George Sakalidis 6. Cairnglen Investments Pty Ltd 7. RBC Dexia Investor Services Aust Nominees PL 8. Auto Management Pty Ltd 9. Peter W and Maureen J Taylor 10. Roger M Thomson 11. Lindsay and Valerie Baskerville (Super Fund) 12. Gilpin Park Pty Ltd 13. Lindsay and Valerie Baskerville 14. Jove Management Pty Ltd 15. Fobira Pty Ltd 16. Classic Choice Pty Ltd 17. Eric R and Judith F Terace (Super Fund A/c) 18. Top Nominees Pty Ltd 19. ANZ Nominees Ltd 20. Denis F and Jennifer Ribbton (Super Fund A/c) Total	Number of Shares 7,113,006 5,593,733 5,358,277 5,093,338 3,997,320 2,259,208 1,685,376 1,311,924 1,100,000 1,066,015 1,060,000 1,024,643 862,000 772,629 722,381 650,000 550,000 500,000 481,000 459,000 41,659,850	% of Issued Share Capital 9.50 7.47 7.16 6.80 5.34 3.02 2.25 1.75 1.47 1.42 1.42 1.37 1.15 1.03 0.96 0.87 0.73 0.67 0.64 0.61
		55.63

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OTHER INFORMATION

Twenty largest option-holders - Unquoted Options:

Optionholder Name 1. Roger M Thomson 2. George Sakalidis 3. Peter S Thomas 4. PS Thomas and SA Goodwin (Trustee) Total	Number of Options Expiring 27.11.2008 Number of Options Expiring 26.11.2009 Number of Options Expiring 21.11.2010 Number of Options Expiring 16.11.2011 % Held 800,000 800,000 800,000 950,000 40.43 585,000 800,000 800,000 950,000 37.84 400,000 600,000 12.07 400,000 400,000 9.66
	1,785,000 2,000,000 2,000,000 2,500,000 100.00

All Employee option-holders (being less than 20 holders) Unquoted Employee Options expiring 26 March 2012:

ll Employee option-holders (being less than 20 holders) nquoted Employee Options expiring 26 March 2012:
Optionholder Name 1. Scott Carruthers Total	Number of Options 1,000,000 1,000,000	% Held 100.00
		100.00

There is a total of 77,073,850 (2006: 73,897,978) fully paid ordinary shares on issue, all (2006: All) of which are listed on Australian Securities Exchange Limited (ASX).

Buy-Back Plans

The Company does not have any current on-market buy-back plans.

Voting Rights

The voting rights attaching to ordinary shares are governed by the Constitution. On a show of hands every person present who is a Member or representative of a member shall have one vote and on a poll, every member present in person or by proxy or by attorney or duly authorised representative shall have one vote for each share held. None of the options have any voting rights.

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