IMAGE RESOURCES NL

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ABN: 57 063 977 579

ANNUAL REPORT FINANCIAL YEAR ENDED 30 JUNE 2009

CONTENTS
Corporate Directory	3
Review of Operations	4
Directors’ Report	14
Auditor’s Independence Declaration	21
Corporate Governance Statement	22
Income Statement	27
Balance Sheet	28
Statement of Changes in Equity	29
Cash Flow Statement	30
Notes to and forming part of the Financial Statements	31
Directors’ Declaration	50
Independent Auditor’s Report	51
Tenement Schedule	53
Other Information	54

CORPORATE DIRECTORY

DIRECTORS

PETER THOMAS Non-Executive Chairman

GEORGE SAKALIDIS Managing Director

ROGER THOMSON Executive Director

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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

COMPANY SECRETARY

Rudolf Tieleman

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

FOR SHAREHOLDER INFORMATION CONTACT

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

Smyth & Thomas 10 Walker Avenue, West Perth WA 6005

BANKERS

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)

COMPANY CODE IMA (Fully paid shares)

ISSUED CAPITAL

85,099,354 fully paid ordinary shares

1,214,604 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

2,500,000 options exercisable at $1.50 cents by 19 November 2011

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

2,200,000 options exercisable at $2.12 cents by 20 November 2012

REVIEW OF OPERATIONS

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REVIEW OF OPERATIONS

Image Resources is a diversified mineral explorer with a major landholding and an expanding mineral sands resource base in the North Perth Basin of Western Australia.

During the year Image continued to focus on its mineral sands projects in the North Perth and Eucla Basins, following its exploration success in both of these regions.

In addition Image retains interests in a diverse package of gold and nickel tenements through joint ventures with Emu Nickel NL, Meteoric Resources NL, Magnetic Resources NL, Catalpa Resources Ltd and Sipa Resources Ltd. The locations of Image’s main projects are shown in Figure 1.

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Figure 1 Project Locations

REVIEW OF OPERATIONS

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NORTH PERTH BASIN MINERAL SANDS

Scoping Study

During the year Image completed a scoping study on its identified indicated and inferred resources which contain 6.4 million tonnes of heavy minerals, as shown in Tables 1 and 2.

The object of the study was to assess the potential economics of the development and commercialisation of these initial resources and in particular to examine the possible:

mining scenarios for a stand alone operation producing concentrate which could then be toll processed by existing underutilised dry separation plants in the region,
value of the resources to existing producers with established but underutilised infrastructure and depleting reserves in this mature mineral sands province.

The scoping study had several positive outcomes summarised as follows:

Image has several options for the commercialisation of its existing North Perth Basin resources: stand alone dry mining; stand alone dredging; and larger scale dredging/dry mining by a third party (“incremental case”).
The incremental case dredging (2,000tph) and dry mining (800tph) combination gives a best case (US60c exchange rate) Net Present Value (10% discount, before tax) of $180M (Internal Rate of Return 294%) with potential to increase this NPV to $298M if a Synthetic Rutile ilmenite premium is applied for ilmenite suitable for processing to synthetic rutile (SR ilmenite).
Stand alone dredging (800tph and viable on part only of the resources) gives a best case NPV of $87M (IRR 105%), of which Image’s share is $68M plus any participation by Image in the NPV (up to $160M with SR ilmenite premium) to a third party mining the balance of the resources.
The presence of SR ilmenite has the potential to add significantly to the NPV of both stand alone and incremental cases, illustrating the need to determine the distribution of SR ilmenite throughout the project.
The resources identified to date resulted from the drilling of 20% of Image’s targets. The value of resources that may be identified in the remaining 80% of targets has the potential to be substantially greater by leveraging sunken capital in the region and/or economies of scale.

The scoping study highlighted the value adding potential of SR ilmenite and test work to determine the SR ilmenite content of the identified resources has commenced.

Following the positive results of the scoping study Image has signed memoranda of understanding (MOU) with two Western Australian heavy mineral producers, a Chinese producer and the Chinese Fibonacci Group. The MOU’s provide for the release of composite samples and resource models from Image’s North Perth Basin project to enable the producers to further assess these resources with a view to their possible commercialisation. In addition, Image has commenced discussions for MOU’s with other interested parties

REVIEW OF OPERATIONS

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Figure 2
North Perth Basin Project
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REVIEW OF OPERATIONS

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Table1 North Perth Basin Resource Summary

North Perth Basin Resource Summary	North Perth Basin Resource Summary	North Perth Basin Resource Summary	North Perth Basin Resource Summary	North Perth Basin Resource Summary

	ShallowIndicatedResources- 2.5%HMCut off
Resource	Tonnes	% HM	HM Tonnes	Overburden Ratio
Atlas	1,900,000	4.7	90,000	1.3
Telesto	1,900,000	5.8	110,000	0.6
Helene	11,500,000	4.5	520,000	2.2
Hyperion	3,700,000	7.8	290,000	1.5
Sub- Total	19,000,000	5.3	1,010,000
	Shallow Inferred Resources-2.5% HM Cut off
Atlas	9,700,000	5.8	560,000	1.3
Total Dry	28,700,000	5.5	1,570,000
	Dredge Indicated Resources - 1%HMCut off
Titan	21,200,000	1.8	380,000	1.2
	Dredge Inferred Resources-1% HM Cut off
Bidaminna	44,600,000	3.0	1,350,000	1.5
Titan	115,400,000	1.9	2,210,000	1.0
Calypso	51,500,000	1.7	850,000	1.2
Sub- Total	211,500,000	2.1	4,410,000
Total Dredge	232,700,000	2.1	4,790,000
Grand Total	261,400,000	2.4	6,360,000

Table 2 North Perth Basin Mineral Assemblage

North Perth Basin Mineral Assemblage	North Perth Basin Mineral Assemblage	North Perth Basin Mineral Assemblage	North Perth Basin Mineral Assemblage	North Perth Basin Mineral Assemblage	North Perth Basin Mineral Assemblage	North Perth Basin Mineral Assemblage

	Shallow Indicated Resources-2.5% HM Cut off
Resource	Ilmenite t	Leucoxene/ Rutile t	Zircon t	Monazite t	Garnet + Staurolite t	Other t
Atlas	63,000	10,000	8,000	300	5,000	11,000
Telesto	71,800	800	6,000	10,000	2,500	15,100
Helene	391,000	19,000	55,000	1,500	7,800	53,000
Hyperion	155,200	18,000	21,000	800	67,000	28,600
Sub- Total	681,000	47,800	90,000	12,600	82,300	107,700
	ShallowInferred Resources - 2.5%HMCut off
Atlas	346,000	61,000	46,000	1,900	33,000	70,000
Total Shallow	1,027,000	108,800	136,000	14,500	115,300	177,700
	DredgeIndicatedResources- 1%HMCut off
Titan	273,000	12,000	36,000	7,400	28,000	17,200
	Dredge Inferred Resources - 1%HMCut off
Bidaminna	1,113,000	110,000	73,000	1,400	19,000	17,200
Titan	1,626,000	67,000	210,000	44,000	160,000	103,000
Calypso	598,000	44,000	90,000	16,000	70,000	31,000
Sub- Total	3,337,000	221,000	373,000	61,400	249,000	151,200
Total Dredge	3,610,000	233,000	409,000	68,800	277,000	168,400
Grand Total	4,637,000	341,800	545,000	83,300	392,300	346,100

REVIEW OF OPERATIONS

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Exploration

As part of its commitment to grow and develop its mineral sands resource base, Image has maintained its position as the largest mineral sand tenement holder in the North Perth Basin, with over 2,000sq km of 100%-owned tenements plus a further 80sq km of tenements in the Cooljarloo JV (Image 70%).

Cooljarloo (Image 70%)

A major aircore drilling programme (848 holes, 9,699 m) was carried out over the Atlas deposit during the year to infill drill the resource and test extensions. The drilling resulted in a significant upgrade in both the size and grade of the Atlas resource which is expected to markedly increase the net present value of the project. Atlas is now 7km long and up to 400m wide and is one of the better shallow, high-grade resources identified in the North Perth Basin project to date. Cross sections of some of the high grade sections at Atlas are shown in Figure 3.

The highlights of the Atlas resource upgrade are:

Change in resource category of heavy minerals and mineralisation to indicated from a mix of inferred and indicated.
Over 95% increase in tonnes of zircon from 54,000 tonnes to 102,000 tonnes.
40% Increase in heavy mineral tonnes from 650,000 to 910,000 tonnes.
11% increase in grade from 5.8% to 6.2%HM.

The updated Atlas resource is summarised in Tables 3 and 4.

Table 3

Resource Estimate Heavy Minerals and Mineralisation

Category	HM Cut Off	Tonnes	HM %	Slimes %	t HM
		August 09
Indicated	2.5	14,600,000	6.2	15.6	910,000
		May 08
Indicated	2.5	1,900,000	4.7	13.5	90,000
Inferred	2.5	9,700,000	5.8	13.8	560,000
Ind + Inf	2.5	11,600,000	5.6	13.7	650,000

Table 4

Resource Estimate Heavy Mineral Suite

Category	Ilmenite	Leucoxene + Rutile	Zircon	Other
		August 09
Inferred	555,000	66,000	102,000	186,000
Inferred	61.0%	7.3%	11.2%	20.4%
		May 08
Inferred	409,000	71,000	54,000	129,000
Inferred	62.9%	10.9%	8.3%	19.8%

REVIEW OF OPERATIONS

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Test work on the Atlas mineral suite is continuing.

Cooljarloo Extension (Image right to earn 70%)

Image entered into a joint venture with Matilda Minerals Ltd on an exploration licence application adjoining Image’s Cooljarloo joint venture tenements. The Matilda tenement is situated along strike from parts of Image’s Calypso deposits and is considered to have potential for extensions to this thick, channel-style mineralisation.

Gingin (Image 100%)

Geophysical surveys on this 95sq km tenement near Iluka’s Gingin mine have identified at least 45km of new targets, one of which is more than 8.6km in length and 50m in width. Image has increased the cumulative length of identified geophysical targets in the North Perth Basin to 290km. This number is expected to grow as ground surveys are progressively carried out on the remaining 60% of Image’s tenements which have not yet been surveyed.

First pass aircore drilling (128 holes, 4,692m) completed over geophysical targets at Gingin intersected mineralisation on the Gingin Scarp on three lines over a 1.3km strike, some 12km south of Iluka’s Gingin mine. Follow up drilling is being planned, upon completion of the necessary permitting.

Chandala (Image right to earn 80%)

Image has agreed terms for a joint venture with Derby Mines Pty Ltd on a 107sq km exploration licence at Chandala, south of Gingin. The tenement is strategically situated on the Gingin Scarp between Iluka’s Gingin mine and the Bullsbrook HM deposit. The joint venture tenement is believed to host potentially economic mineralisation at the Muchea HM deposit where historic exploration outlined a mineralised zone reported to contain 2.25 million tonnes at 8.5%HM. Image has yet to verify this estimate but is most encouraged by the potential of the area. Significantly, the tenement is very close to Tiwest’s dry separation plant and synthetic rutile plant at Chandala.

Regans Ford South (Image right to earn 75%)

Image has agreed terms for a joint venture with Kingsreef Pty Ltd on an 85sq km exploration licence south of Regan’s Ford. The tenement is situated on the Gingin scarp about 15km north of the Chandala JV tenement. Significantly, the Regan’s Ford South tenement covers the strike extension of high-grade mineralisation identified by Westralian Sands (now Iluka Resources) in 1998 where a best drill intersection of 3m at 12%HM from 21m was reported.

REVIEW OF OPERATIONS

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Figure 3 Atlas Resource – Cross Sections

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REVIEW OF OPERATIONS

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EUCLA BASIN MINERAL SANDS (Image 100%)

Image holds strategically located tenements in the Eucla Basin, one of the world’s most exciting zircon exploration provinces, where Iluka has commenced construction of its new Jacinth HM mine and Diatreme Resources announced a new discovery at Cyclone (inferred resource containing 1.8 million tonnes of contained HM, including 740,000 tonnes of zircon). The Image tenements comprise a 100% interest in 1,589sq km of exploration licences in the basin including 466sq km adjacent to the Cyclone discovery - see Figure 4.

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Figure 4 Serpentine Lakes Tenements Showing Drillholes, Elevation Model and Interpreted Mineralisation Outlines and Strandlines

During the year Image carried out a major aircore drilling programme at Serpentine Lakes (210 holes, 8,497m) to test strike extensions of the zircon–rich Cyclone resource and several other targets within a broad 28km x 9km area of prospectivity.

The drilling gave most encouraging results, with four areas of mineralisation identified, three extending south from Diatreme’s Cyclone discovery and a new zone about 25km to the east near the South Australian border. Three of the four zones are shown in Figure 5.

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REVIEW OF OPERATIONS

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Figure 5
Serpentine Lakes Project - Cross Sections
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REVIEW OF OPERATIONS

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The three areas south of Cyclone are (from west to east) 700m, 300m and 600m wide and are interpreted to extend for at least 2.5km, 1.6km and 2.0km along strike respectively. The tenement to the south has not been explored and potential remains for extensions or repetitions of the mineralisation in this area. The fourth (eastern) area comprises two zones some 200m wide and open along strike.

Mineralisation is present in two geological zones; the main zone is interpreted to be a typical shoreline style with low slime (4% within the mineralisation), well sorted sands and HM grades up to 13%. The low slime content is important as it indicates potential for low cost mining with good recoveries. The second zone is slightly deeper and interpreted to be a near-shore environment within silt and fine sand with an average slime content of about 8% and with HM grades up to 4%.

Diatreme recently reported (DRX ASX release 10 March 2009) that the mineral assemblage of the Cyclone mineralisation, which extends 2.5km into the Image tenements, comprises:

Mineral	% Mass	% Mass Range
Zircon	33	18-42
Rutile	12	5-24
Leucoxene	27	14-43
Altered Ilmenite	17	4-30
Others	11	n/a

A further 10,000m drill programme is planned and when complete Image will undertake its own mineralogical assessment, and there is every expectation that the high value Cyclone assemblage will extend on to the Image tenements.

The information in this report is based on information compiled or reviewed by Scott Carruthers BSc,MSc who is a member of the Australasian Institute of Mining and Metallurgy. Scott Carruthers is an employee of Image Resources NL. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Scott Carruthers consents to the inclusion of this information in the form and context in which it appears in this report.

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DIRECTORS' REPORT

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Your directors present their report on the Company for the year ended 30 June 2009.

DIRECTORS

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

Peter Thomas George Sakalidis Roger Thomson

PRINCIPAL ACTIVITIES

The principal activity of the Company during the year was the exploration for heavy minerals and the evaluation thereof for determining mineral resources in the North Perth and Eucla Basins in Western Australia.

RESULTS FROM OPERATIONS

During the year the Company recorded an operating loss of $2,711,745 (2008: $3,686,804).

The foregoing figure includes $169,250 (2008: $1,958,000) in respect of “share based payments”. This is not a cash outlay. It is brought to book by virtue of a requirement at law. Net of this figure, the operating loss was $2,542,495 (2008: $1,728,804).

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 3.38 cents (2008: 4.70 cents). Diluted Loss per share in respect of the year ended 30 June 2009 is 3.25 cents (2008: 4.49 cents).

FINANCIAL POSITION

The Company’s cash position as at 30 June 2009 was $6,417,934, a slight reduction from the 2008 cash balance which was $6,431,257. The cash position is adequate to fund committed exploration expenditure.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

Significant changes in the state of affairs of the Company during the financial period were the placement of 5,455,108 shares at an issue price of $0.55.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL PERIOD

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

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 and South Australia which are subject to environmental regulations under both Commonwealth and State legislation in relation to those exploration activities.

The Company has no 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.

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DIRECTORS' REPORT

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INFORMATION ON DIRECTORS AND COMPANY SECRETARIES

Peter Thomas

Chairman

Mr Thomas, a commercial solicitor and specialist in the resource sector, is and has been a director of various listed companies. He is non-executive chairman of ASX listed Image Resources NL (since 19 April 2002), Magnetic Resources NL (since that company was incorporated on 23 August 2006), Meteoric Resources NL (since that company was incorporated on 13 February 2004) and Emu Nickel NL (since that company was incorporated 29 August 2007). He was non-executive chairman of Sandfire Resources NL from June 2003 to December 2006 and non-executive director of GoldLink IncomePlus Limited from 4 April 2008 to 18 June 2008.

Mr Thomas has a relevant interest in 1,100,306 ordinary fully paid shares, 400,000 unquoted options exercisable at $0.37 each by 21 November 2010, 600,000 unquoted options exercisable at $1.80 each by 16 November 2011 and 650,000 unquoted options exercisable at $2.12 each by 20 November 2012.

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. 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 that company was incorporated on 23 August 2006), Emu Nickel NL (since that company was incorporated 29 August 2007) and executive director of Meteoric Resources NL (since that company was incorporated on 13 February 2004). He is also non-executive chairman of unlisted Imperium Resources Limited (appointed 23 June 2008)

Mr Sakalidis has a relevant interest in 1,193,242 ordinary fully paid shares, 659,164 unquoted options exercisable at $0.39 each by 26 November 2009, 800,000 unquoted options exercisable at $0.37 each by 21 November 2010, 950,000 unquoted options exercisable at $1.80 each by 16 November 2011, 800,000 unquoted options exercisable at $2.12 each by 20 November 2012 and 2,000,000 unquoted options exercisable at $1.50 each by 19 November 2011.

Roger Thomson

Executive Director

Mr Thomson is a geologist with more than 35 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. He is managing director of ASX listed Meteoric Resources NL (since the company was incorporated on 13 February 2004), executive director of both Magnetic Resources NL (since that company was incorporated on 23 August 2006) and Emu Nickel NL (since that company was incorporated 29 August 2007). He was a non-executive director of Mariana Resources Limited from 20 February 2006 to 28 November 2008.

Mr Thomson has a direct interest in 1,731,386 ordinary fully paid shares, 555,440 unquoted options exercisable at $0.39 each by 26 November 2009, 800,000 unquoted options exercisable at $0.37 each by 21 November 2010, 950,000 unquoted options exercisable at $1.80 each by 16 November 2011 and 750,000 unquoted options exercisable at $2.12 each by 20 November 2012.

Rudolf Tieleman – Appointed 22 June 2009

Company Secretary

Mr Tieleman is an accountant with over 20 years experience in public practice. He has extensive knowledge in matters relating to the operation and administration of listed mining companies in Australia.

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DIRECTORS' REPORT

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Robert Lewis – Resigned 22 June 2009

Company Secretary

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

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

Non audit services provided by the auditor during the year ended 30 June 2009 in respect of option valuation services amounted to $925 (2008 - $7,437).

MEETINGS OF DIRECTORS

During the financial period ended 30 June 2009, there were 14 meetings of directors, all of which were attended by all the directors.

REMUNERATION REPORT

Names and positions held of key management personnel in office at any time during the financial year are:

EMUNERATION REPORT mes and positions held of key management personnel in office	at any time during the financial year are:
Key Management Person	Position
Peter S Thomas	Non-Executive Chairman
George Sakalidis	ManagingDirector
Roger M Thomson	Executive Director
Rudolf Tieleman(Appointed 22.6.2009)	CompanySecretary
Robert Lewis(Resigned 22.6.2009)	CompanySecretary

The Company’s policy for determining the nature and amount of emoluments of key management personnel is set out below:

Key Management Personnel Remuneration and Incentive Policies

The Remuneration Committee (“ committee ”) makes decisions with respect to appropriate and competitive remuneration and incentive policies (including basis for paying and the quantum of any bonuses), for key management personnel and others as considered appropriate to be singled out for special attention, which:

motivates them to contribute to the growth and success of the Company within an appropriate control framework; and
aligns the interests of key leadership with the interests of the Company’s shareholders;
are paid within the any limits imposed by the Constitution and make recommendations to the Board with respect to the need for increases to any such amount at the Company’s annual general meeting;
in the case of directors, only permits participation in equity-based remuneration schemes after appropriate disclosure to, due consideration by and with the approval of the Company’s shareholders;

The committee is to ensure that recommendations are made to the Board with respect to the above.

Non-Executive Directors

The committee is to ensure that non-executive directors are not provided with retirement benefits other than statutory superannuation entitlements.
To the extent that the Company adopts a remuneration structure for its non-executive directors other than in the form of cash and superannuation, the committee shall document its reasons for the purpose of disclosure to stakeholders.
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DIRECTORS' REPORT

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Incentive Plans and Benefits Programs

The committee is to:

review and make recommendations concerning long-term incentive compensation plans, including the use of equity-based plans. Except as otherwise delegated by the Board, the committee will act on behalf of the Board to administer equity-based and employee benefit plans, and as such will discharge any responsibilities under those plans, including making and authorising grants, in accordance with the terms of those plans;
ensure that, where practicable, incentive plans are designed around appropriate and realistic performance targets that measure relative performance and provide remuneration when they are achieved; and
continually review and, if necessary, improve any existing benefit programs established for employees.

Retirement and Superannuation Payments

Prescribed benefits were provided by the Company to all directors by way of superannuation contributions to externally managed complying superannuation funds during the year. These benefits were paid as superannuation contributions to at least satisfy the requirements of the Superannuation Contribution Guarantee Act and in satisfaction of any salary sacrifice requests. All contributions were made to accumulation type funds selected by the director and accordingly actuarial assessments were not required.

Constitutional Provisions as to Directors Fees

The Constitution contains the following provisions in respect of directors’ fee.

87. REMUNERATION OF MANAGING DIRECTORS AND EXECUTIVE DIRECTORS

87.1. Subject to the provisions of any contract between the Company and a Managing Director or an Executive Director the remuneration of a Managing Director or an Executive Director is fixed from time to time by the Directors and may be by way of fixed salary or participation in profits of the Company or of any other company in which the Company is interested or by any or all of those modes but may not be by way of commission on or percentage of operating revenue of the Company.
87.2. Unless otherwise determined by the Company in general meeting this remuneration may be in addition to any remuneration which he or she receives as a Director.

88. PAYMENT OF FEES

88.1. The Directors may be paid out of the funds of the Company as remuneration for their ordinary services as Directors such sum as has been or may from time to time be determined by the Company in general meeting. Pending determination in general meeting the amount shall be $250,000 per annum.
88.2. The remuneration must be by a fixed sum and not by a commission on or percentage of operating revenue of the Company or (except in the case of a Managing Director or Executive Director) its profits.
88.3. The sum so fixed must be divided among the Directors in such proportion and manner as they agree from time to time or, in default of agreement, equally.
88.4. The remuneration of each Director for his or her ordinary services is deemed to accrue from day to day and is apportionable accordingly.

90. PAYMENT FOR EXTRA SERVICES

90.1. Any Director who being willing is called upon to perform extra services or to make any special exertions or to undertake any executive or other work for the Company beyond his or her ordinary duties or to go or reside abroad or otherwise away from home for any of the purposes of the Company may, subject to the Law, be remunerated either by a fixed sum or a salary as determined by the Directors and this remuneration shall be in addition to his or her share in the remuneration provided by rule 88 unless otherwise agreed.
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DIRECTORS' REPORT

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Key Management Personnel Remuneration

Key Management Personnel Remuneration	Key Management Personnel Remuneration	Key Management Personnel Remuneration	Key Management Personnel Remuneration	Key Management Personnel Remuneration	Key Management Personnel Remuneration

	Year ended 30 June 2009
Key Management Person	Cash Directors Fees and Contractual Payments	Post Employment Superannuation	Total Cash and Cash Equivalent Benefits	Non-cash Benefits Equity Options (1)	Total
Peter Thomas Non-Executive Chairman	$36,697	$3,303	$40,000	-	$40,000
George Sakalidis Executive Managing Director	$123,525	-	$123,525	$169,250	$292,775
Roger Thomson Executive Director	$62,505	-	$62,505	-	$62,505
Rudolf Tieleman Company Secretary (Period from appointment being 22.6.2009)	$9,071	-	$9,071	-	$9,071
Robert Lewis Company Secretary (Period to resignation being 22.6.2009)	$7,777	-	$7,777	-	$7,777
Total	$239,575	$3,303	$242,878	$169,250	$412,128

Note (1) Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 19 November 2008. These options have been valued in accordance with International Financial Reporting Standards which specifies that an option-pricing model be applied to employees’ or directors’ stock options to estimate their fair value as at their grant date. The independent valuer used the Binomial Options Pricing Model.

Year ended 30 June 2008

Note (1)Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 19 November 2008. These options have been valued in accordance with International Financial Reporting Standards which specifies that an option-pricing model be applied to employees’ or directors’ stock options to estimate their fair value as at their grant date. The independent valuer used the Binomial Options Pricing Model.	Note (1)Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 19 November 2008. These options have been valued in accordance with International Financial Reporting Standards which specifies that an option-pricing model be applied to employees’ or directors’ stock options to estimate their fair value as at their grant date. The independent valuer used the Binomial Options Pricing Model.	Note (1)Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 19 November 2008. These options have been valued in accordance with International Financial Reporting Standards which specifies that an option-pricing model be applied to employees’ or directors’ stock options to estimate their fair value as at their grant date. The independent valuer used the Binomial Options Pricing Model.	Note (1)Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 19 November 2008. These options have been valued in accordance with International Financial Reporting Standards which specifies that an option-pricing model be applied to employees’ or directors’ stock options to estimate their fair value as at their grant date. The independent valuer used the Binomial Options Pricing Model.	Note (1)Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 19 November 2008. These options have been valued in accordance with International Financial Reporting Standards which specifies that an option-pricing model be applied to employees’ or directors’ stock options to estimate their fair value as at their grant date. The independent valuer used the Binomial Options Pricing Model.	Note (1)Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 19 November 2008. These options have been valued in accordance with International Financial Reporting Standards which specifies that an option-pricing model be applied to employees’ or directors’ stock options to estimate their fair value as at their grant date. The independent valuer used the Binomial Options Pricing Model.
Year ended 30 June 2008
Key Management Person	Cash Directors Fees and Contractual Payments	Post Employment Superannuation	Total Cash and Cash Equivalent Benefits	Non-cash Benefits Equity Options (1)	Total
Peter Thomas Non-Executive Chairman	$36,697	$3,303	$40,000	$578,500	$618,500
George Sakalidis Executive Managing Director	$123,444	$11,110	$134,554	$712,000	$846,554
Roger Thomson Executive Director	$80,222	$7,220	$87,442	$667,500	$754,942
Robert Lewis Company Secretary	$6,510	-	$6,510	-	$6,510
Total	$246,873	$21,633	$268,506	$1,958,000	$2,226,506

Note (2) Equity remuneration represents share options granted during the year as approved at the general meeting of shareholders held 20 November 2007. These options have been valued in accordance with International Financial Reporting Standards which specifies that an option-pricing model be applied to employees’ or directors’ stock options to estimate their fair value as at their grant date. The independent valuer used a HullWhite trinomial lattice model based on the same underlying option pricing theory as the Black-Scholes model but extended to take into account the impact of events which occur during the term of the option.

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DIRECTORS' REPORT

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Key Management Personnel Remuneration (Continued..)

Consultant Agreements

Two separate (but similar) agreements have been executed between the Company and nominated associated entities of Messrs Sakalidis and Thomson.

These are effective as from 1 July 2008 and major provisions of the agreements are set out as follows:

	Term of agreements	Base rate	Review periods	Increase
Leeman Pty Ltd (G Sakalidis)	Annually from 1 July2008	$135.00 per hour	Annually on 1 July	Discretionary by Board
Regor Consulting Pty Ltd (RM Thomson)	Annually from 1 July 2008	$135.00 per hour	Annually on 1 July

Guaranteed Rate Increases

There are no guaranteed rate increases fixed in the key management personnel’s contracts.

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 26.11.2009 Exercisable at $0.39	Expiring 21.11.2010 Exercisable at $0.37	Expiring 16.11.2011 Exercisable at $1.80	Expiring 19.11.2011 Exercisable at $1.50	Expiring 20.11.2012 Exercisable at $2.12
Peter Thomas	1,100,306	-	400,000	600,000	-	650,000
George Sakalidis	1,193,242	659,164	800,000	950,000	2,000,000	800,000
Roger Thomson	1,731,386	555,440	800,000	950,000	-	750,000

SHARE OPTIONS GRANTED TO DIRECTORS AND OFFICERS

During the financial year, shareholders at the Annual General Meeting held on 19.11.2008 approved the grant of 2,500,000 options to Mr G Sakalidis (Managing Director) for no consideration. These options over unissued ordinary shares are exercisable at $1.50 each, on or before 19.11.2011.

No options have been issued since the end of the financial year.

EMPLOYEES

Aside from directors (all of whom are, for tax purposes, treated as employees), the Company had five noncasual employees at 30 June 2009 (2008: five).

CORPORATE STRUCTURE

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

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DIRECTORS' REPORT

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ACCESS TO INDEPENDENT ADVICE

Each director has the right, so long as he is acting reasonably in the interests of the Company and in the discharge of his duties as a director, to seek independent professional advice and recover the reasonable costs thereof from the Company.

The advice shall only be sought after consultation about the matter with the chairman (where it is reasonable that the chairman be consulted) or, if it is the chairman that wishes to seek the advice or it is unreasonable that he be consulted, another director (if that be reasonable).

The advice is to be made immediately available to all board members other than to a director against whom privilege is claimed.

INDEMNIFICATION AND 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) 1,214,604 exercisable at $0.39 per option on or before 26 November 2009;
(b) 2,000,000 exercisable at $0.37 per option on or before 21 November 2010;
(c) 2,500,000 exercisable at $1.80 per option on or before 16 November 2011;
(d) 2,500,000 exercisable at $1.50 per option on or before 19 November 2011;
(e) 1,000,000 employee options exercisable at $2.38 per option on or before 26 March 2012;
(f) 2,200,000 exercisable at $2.12 per option on or before 20 November 2012.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

AUDITOR’S INDEPENDENCE DECLARATION

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out in this annual report.

Signed in accordance with a resolution of the directors

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G SAKALIDIS

Managing Director Perth 25 September 2009

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AUDITOR’S INDEPENDENCE DECLARATION

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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 2009, 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; nor
(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

SOMES and COOKE

K. C. Somes

25 September 2009 1304 Hay Street West Perth WA 6005

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CORPORATE GOVERNANCE STATEMENT

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Preamble

This statement is provided in compliance with the recommendations ( Recommendations ) in the ASX Corporate Governance Council’s second edition (August 2007 as revised in June 2008) of the Corporate Governance Principles and Recommendations.

Reference is to be made to this Statement or the Directors’ Report for the information required by the Recommendations to appear in an Annual Report.

Except to the extent indicated in the “if not, why not” exception report appearing below, the Company has resolved that for so long as it is admitted to the official lists of the ASX it shall abide by the ASX Recommendations.

Due to the exigencies and vagaries of commercial life and changing circumstances, there will, no doubt, be occasions when, especially because of the size of the Company and the composition of its Board, that it can be expected to depart from the policies and charters which it has adopted. These policies have been adopted on the basis that, in the circumstances of the Company, they reflect what is considered to reflect a reasonable aspiration. It is not expected that they will be slavishly adhered to. Their object is to focus attention upon the issues they address and provoke thought about and awareness of those issues and the pitfalls that one could otherwise fall into inadvertently. The important thing is to develop a culture conducive only to good and appropriate conduct and practices.

Honesty and integrity must be the overriding and guiding principle in all things - substance must prevail over form and lip service. The Company intends that adherence to these policies be a condition of each contract of employment or service.

The Board encourages all key management personnel, other employees, contractors and other stakeholders to monitor compliance with this Corporate Governance manual and periodically, by liaising with the Board, management and staff; especially in relation to observable departures from the intent of hereof and with and any ideas or suggestions for improvement. Suggestions for improvements or amendments can be made at any time by providing a written note to the chairman.

If not why not exception report

Except to the extent stated below, during the financial year ended 30 June 2009, the Company complied with each of The Recommendations are set out below; any exceptions are stated in italics following an “If not, why not”: heading.

1. LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Companies should establish and disclose the respective roles and responsibilities of board and management.

1.1. Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions.
1.2. Companies should disclose the process for evaluating the performance of senior executives.
1.3. Companies should provide the information indicated in the Guide to reporting on Principle 1 .

2. STRUCTURE THE BOARD TO ADD VALUE

Companies should have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties.

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CORPORATE GOVERNANCE STATEMENT

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2.1. A majority of the board should be independent directors.

“If not, why not”:

The Company has a three person board. Two of the directors (namely, Messrs G Sakalidis and RM Thomson) serve as executives and are not considered to be independent directors. As to the other director (namely, PS Thomas), see the “If not, why not” response to Recommendation 2.2.

The Company has a small close knit team which has a positive interactive working history.

Given all the circumstances attendant upon the Company including its objectives, the nature and extent of its actual and proposed operations, its capital base and other resources, the costs associated with a board comprised of more than the minimum number and the need for a board comprised of persons with a blend of traits, skills, experience, expertise, entrepreneurialism, innovation, tenacity, vision and dedication in order to enliven the prospects of creating value for shareholders, this recommendation is thought by the board to be inappropriate.

2.2. The chair should be an independent director.

“If not, why not”:

The chair, namely Mr PS Thomas, holds securities in the Company (directors are encouraged to own the same), provides legal services to it and contributes to the development of its corporate strategy and promotion.

The chair considers himself to be an independent director as he is neither part of nor expected to be a part of the day to day management team. The chair regards himself as being free of any relationship that could materially interfere with his independent exercise of judgement and ability to act in an entirely disinterested manner in all things.

The remaining directors consider Mr Thomas to be an independent director for the same reasons. Go to the Company’s website to view a copy of its formal policies for further details regarding independence.

2.3. The roles of the chair and chief executive officer (or equivalent) should not be exercised by the same individual.

2.4. The board should establish a Nomination Committee.

“If not, why not”:

The Company has a small board which does not perceive that any gains are to be derived through the operation of a formal committee structure. The board will deal with nomination issues on an ad hoc unstructured basis.

2.5. Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.

“If not, why not”:

No formal performance evaluation has been conducted because of the size of the Company and the fact that the directors (of which there are only three) work as a close knit team and each is cognisant of what the others are doing and constantly encouraging the others to secure better outcome for shareholders.

2.6.

Companies should provide the information indicated in the Guide to Reporting on Principle 2.

3. PROMOTE ETHICAL AND RESPONSIBLE DECISION- MAKING

Companies should actively promote ethical and responsible decision-making.

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CORPORATE GOVERNANCE STATEMENT

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3.1. Companies should establish a Code of Conduct and disclose the code or a summary of the code as to the:
3.1.1. practices necessary to maintain confidence in the Company’s integrity;
3.1.2. practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders;
3.1.3. responsibility and accountability of individuals for reporting and investigating reports of unethical practices.
3.2. Companies should establish a policy concerning trading in Company securities by directors, senior executives and employees and disclose the policy or a summary of that policy.
3.3. Companies should provide the information indicated in the Guide to reporting on Principle 3.

4. SAFEGUARD INTEGRITY IN FINANCIAL REPORTING

Companies should have a structure to independently verify and safeguard the integrity of their financial reporting.

4.1. The board should establish an audit committee.
4.2. The audit committee should be structured so that it:
4.2.1. consists only of non-executive directors;
4.2.2. consists of a majority of independent directors;
4.2.3. is chaired by an independent chair, who is not chair of the board;
4.2.4. has at least three members.
4.3. The audit committee should have a formal charter.
4.4. Companies should provide the information indicated in Guide to reporting on Principle 4.

“If not, why not”:

The Company has a policy regarding the formation, composition, role, powers and responsibilities of an audit committee although it has not yet established such a committee.

The Company is small, has a small board with a tight management structure, relies on equity capital for funding and in all the circumstances of the Company the board does not perceive that any gains are to be derived through the operation of a formal committee structure.

5. MAKE TIMELY AND BALANCED DISCLOSURE

Companies should promote timely and balanced disclosure of all material matters concerning the Company.

5.1. Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.
5.2. Companies should provide the information indicated in the Guide to reporting on Principle 5.
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CORPORATE GOVERNANCE STATEMENT

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6. RESPECT THE RIGHTS OF SHAREHOLDERS

Companies should respect the rights of shareholders and facilitate the effective exercise of those rights.

6.1. Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.
6.2. Companies should provide the information indicated in the Guide to reporting on Principle 6.

7. RECOGNISE AND MANAGE RISK

Companies should establish a sound system of risk oversight and management and internal control.

7.1. Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.
7.2. The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.
7.3. The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.
7.4. Companies should provide the information indicated in the Guide to reporting on Principle 7.

“If not, why not”:

Management has not reported to the board as to the effectiveness of the Company’s management of its material business risks as the board has not required this of it.

Whilst the board recognises the benefit of the discipline of documenting such matters, the board has deployed its scarce resources to other endeavours in priority to the preparation of a written report on the matter of risk given the Company has strict procedures in place and the board has two executive directors so they are well versed in the day to day affairs of the Company and know what measures are in place.

8. REMUNERATE FAIRLY AND RESPONSIBLY

Companies should ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to performance is clear.

8.1. The board should establish a Remuneration Committee.
8.2. Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives.
8.3. Companies should provide the information indicated in the Guide to reporting on Principle 8.

“If not, why not”:

The Company has a policy regarding the formation, composition, role, and responsibilities of a remuneration committee although it has not yet established such a committee as, since listing on ASX, no matter has arisen for a remuneration committee to consider .

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CORPORATE GOVERNANCE STATEMENT

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ADDITIONAL INFORMATION

The following information is required by the Recommendations to appear in this Statement.

The board has agreed on the following guidelines for assessing the materiality of matters:

1. MATERIALITY – QUANTITATIVE

1.1. Balance Sheet items:

Balance sheet items are material if they have a value of more than 5% of pro-forma net assets.

1.2. Profit And Loss items:

Profit and loss items are material if they will have an impact on the current year operating result of 10% or more.

2. MATERIALITY – QUALITATIVE

Items are also material if:

2.1. they are of a character that enlivens the obligation to disclose under either ASX Listing Rule 3.1 or the continuous disclosure obligations arising in terms of the Corporations Act;
2.2. they impact on the reputation of the Company;
2.3. they involve a breach of legislation;
2.4. they are outside the ordinary course of business;
2.5. they could affect the Company’s rights to its assets;
2.6. if accumulated they would trigger the quantitative tests;
2.7. they involve a contingent liability that would have a probable effect of 5% or more on balance sheet or profit and loss items; or
2.8. they will have an effect on operations which is likely to result in an increase or decrease in net income or dividend distribution of more than 10%.

3. MATERIAL CONTRACTS

Contracts will be considered material if:

3.1. they are outside the ordinary course of business;
3.2. they contain exceptionally onerous provisions in the opinion of the Board;
3.3. they impact on income or distribution in excess of the quantitative tests;
3.4. there is a likelihood that either party will default, and the default may trigger any of the quantitative tests;
3.5. they are essential to the activities of the Company and cannot be replaced, or cannot be replaced without an increase in cost of such a quantum, triggering any of the quantitative tests;
3.6. they contain or trigger change of control provisions;
3.7. they are between or for the benefit of related parties; or
3.8. they otherwise trigger the quantitative tests.
26 -

INCOME STATEMENT For the year ended 30 June 2009

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Notes Revenue from ordinary activities 2 Revenue/(loss) from non-ordinary activities Depreciation and amortisation expense 10 Exploration costs written-off 11 Share based payments 21 Other expenses 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	2009 ($) 533,761 - (42,888) (2,182,147) (169,250) (851,221) (2,711,745) - (2,711,745) (2,711,745) (3.38) (3.25)	2008 ($) 1,005,113 - (35,401) (1,650,605) (1,958,000) (1,047,911)
		(3,686,804) -
		(3,686,804)
		(3,686,804)
		(4.70)
		(4.49)

The accompanying notes form part of these financial statements.

27 -

BALANCE SHEET As at 30 June 2009 Notes Current Assets Cash assets 7 Receivables 8 Other assets 9 Non-Current Assets Plant and equipment 10 Mineral interests 11 Other financial assets 12 TOTAL ASSETS Current Liabilities Payables 13 NET ASSETS Equity Contributed equity 14 Reserves Accumulated (losses) TOTAL EQUITY	2009 ($) 6,417,934 343,269 21,937 6,783,140 83,189 - 1,362,449 1,445,638 8,228,778 228,766 8,000,012 22,625,273 3,728,391 (18,353,652) 8,000,012	2008 ($) 6,431,257 230,776 43,044
		6,705,077
		102,349 - 958,467
		1,060,816
		7,765,893
		345,895

		7,419,998
		19,801,026 3,260,879 (15,641,907)
		7,419,998

The accompanying notes form part of these financial statements.

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STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2009

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Balance at 1.7.2007 Shares issued during the period Share based payments Changes in fair value of available for sale assets (Loss) for period Balance at 30.6.2008 Balance at 1.7.2008 Shares issued during the period Share issue costs Share based payments Changes in fair value of available-for-sale assets (Loss) for period Balance at 30.6.2009	Share Capital ($) Available for Sale Financial Assets Reserve ($) Employee Benefit Reserve ($) Accumulated Losses ($) Total ($)
	14,671,747 785,971 1,194,009 (11,955,103) 4,696,624
	5,129,279 5,129,279
	1,958,000 1,958,000
	(677,101) (677,101)
	(3,686,804) (3,686,804)
	19,801,026 108,870 3,152,009 (15,641,907) 7,419,998

	19,801,026 108,870 3,152,009 (15,641,907) 7,419,998
	3,000,309 3,000,309
	(176,062) (176,062)
	169,250 169,250
	298,262 298,262
	(2,711,745) (2,711,745)
	22,625,273 407,132 3,321,259 (18,353,652) 8,000,012

The accompanying notes form part of these financial statements.

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CASH FLOW STATEMENT For the Year Ended 30 June 2009

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Notes CASH FLOWS FROM OPERATING ACTIVITIES Cash payments to suppliers and contractors Interest received Dividends received Net cash (used in) operating activities 15 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 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	2009 ($) (886,914) 357,923 3,016 (525,975) (26,628) 2,900 (2,155,536) (26,611) - (105,720) - (2,311,595) 3,000,309 (176,062) 2,824,247 (13,323) 6,431,257 6,417,934	2008 ($) (392,824) 446,614 5,329
		59,119
		(38,059) - (1,729,470) (53,097) 281,962 (583,111) 2,800
		(2,118,975)
		4,979,279 -
		4,979,279
		2,919,423 3,511,834
		6,431,257

The accompanying notes form part of these financial statements.

30 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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This financial report includes the financial statements and notes of the Company.

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 summary of the material accounting policies adopted by the Company in the preparation of the financial report.

Basis of Preparation

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated.

Reporting Basis and Conventions

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

Going Concern

The directors have prepared the financial statements of the Company on a going concern basis. In arriving at this position, the directors have considered the following pertinent matters:

(a) cash on hand at the date of this report is approximately $5,895,787;
(b) current cash resources are considered adequate to fund the entity’s immediate operating and exploration activities.

In the directors’ opinion, the Company is able to continue as a going concern and therefore realise its assets and extinguish its liabilities in the normal course of business at the amounts stated in the financial report.

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 current liability for 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.

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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(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.

(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. Receivables 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 income tax expense for the year comprises current income tax expense and deferred tax expense.

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities and assets are therefore measured at the amounts expected to be paid to or recovered from the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses, if any in fact are brought to account.

Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. 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 assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of setoff exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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(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 original maturities of three months or less.

(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.

(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 and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipment are measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Depreciation

The depreciable amount of all plant and equipment is depreciated on a straight-line basis over the asset’s useful life to the Company commencing from the time the asset is held ready for use.

The depreciation rates used for the class of plant and equipment depreciable assets range between 20% and 100%.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

(k) Financial Instruments

Recognition and Initial Measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified “at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss immediately.

Classification and Subsequent Measurement

Finance instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as:

the amount at which the financial asset or financial liability is measured at initial recognition;

less principal repayments;

plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method ; and

less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.

The Company does not designate any interests in joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial instruments.

Financial assets at fair value through profit or loss

Financial assets are classified at “fair value through profit or loss” when they are either held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Company’s intention to hold these investments to maturity. They are subsequently measured at amortised cost.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. Such assets are subsequently measured at fair value with increases in carrying value being initially credited to a financial assets reserve; subsequent decreases are offset first against the balance for the asset carried in that financial assets reserve and any balance of write-downs being included as an expense in the income statement.

Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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Fair Value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

Impairment

At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the income statement.

Financial Guarantees

Where material, financial guarantees issued, which require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due, are recognised as a financial liability at fair value on initial recognition.

The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118.

The fair value of financial guarantee contracts has been assessed using a probability weighted discounted cash flow approach. The probability has been based on:

the likelihood of the guaranteed party defaulting in a year period;
the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and
the maximum loss exposed if the guaranteed party were to default.

De-recognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

(l) Provisions

Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

(m) Leases

Lease payments for operating leases (where substantially all the risks and benefits remain with the lessor) are charged as an expense in the periods in which they are incurred.

Lease incentives under operating leases, if any, are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

(n) Interest in Joint Ventures

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.

(o) 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.

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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(p) Share-based Payments and Value Attribution to Equity Remuneration/Benefits

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 value (determined in accordance with the fair value basis of accounting) is recognised as an employee benefit expense with a corresponding increase in equity. The 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 either a Hull-White trinomial lattice model (based on the same underlying option pricing theory as the Black-Scholes model but extended to take into account the impact of events which occur during the term of the option) or the Binomial Options Pricing Model. Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital.

Where this Annual Report ascribes a value to non-cash (equity) remuneration, that attribution complies with the mandatory requirement of the Corporations Act that such attribution must be made on a basis that accords with the International Financial Reporting Standards. That requirement does not allow the board to ascribe a value arrived at on another basis where the board is of the view that the fair market value of the relevant equity is not thereby reflected. Accordingly, all figures, reports, declarations, valuations, notes and other statements appearing in this Annual Report which pertain to or are directly or indirectly impacted by any such value attribution must be construed in the context that such value attribution does not necessarily reflect the board's view of the fair market value of the relevant equity remuneration.

The board’s declaration that the financial report and notes appearing in the Annual Report are in accordance with the Corporations Act 2001 and:

(a) comply with Accounting Standards and the Corporations Act 2001; and
(b) give a true and fair view of the financial position as at 30 June 2009 and performance for the year ended on that date of the Company’

is made on the basis that if one complies with all relevant standards and the law, then it follows that the declaration is correct even though the board does not consider the value ascribed to equity remuneration reflects fair market value.

(q) 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 available 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 - Taxation

Balances disclosed in the financial statements and the notes thereto related to taxation are based on best estimates by directors. These estimates take into account both the financial performance and position of the Company as they pertain to current income tax legislation and the directors understanding thereof. No adjustment has been made for pending or future taxation legislation. The current tax position represents the directors’ best estimate pending an assessment being received from the Australian Taxation Office.

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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Key Judgment – Environmental Issues

Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted environmental legislation and the directors understanding thereof. At the current stage of the Company’s development and its current environmental impact, the directors believe such treatment is reasonable and appropriate.

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.

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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New Accounting Standards for Application in Future Periods

The AASB has issued new, revised and amended standards and interpretations that have mandatory application dates for future reporting periods. The Company has decided against early adoption of these standards. A discussion of those future requirements and their impact on the Company follows:

AASB 3: Business Combinations, AASB 127: Consolidated and Separate Financial Statements, AASB 2008-3: Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127 [AASBs 1,2,4,5,7,101,107, 112, 114, 116, 121, 128, 131, 132, 133, 134, 136, 137, 138 & 139 and Interpretations 9 & 107] (applicable for annual reporting periods commencing from 1 July 2009) and AASB 2008-7: Amendments to Australian Accounting Standards – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate [AASB 1, AASB 118, AASB 121, AASB 127 & AASB 136] (applicable for annual reporting periods commencing from 1 January 2009). These standards are applicable prospectively and so will only affect relevant transactions and consolidations occurring from the date of application. In this regard, its impact on the Company will be unable to be determined. The following changes to accounting requirements are included:
acquisition costs incurred in a business combination will no longer be recognised in goodwill but will be expensed unless the cost relates to issuing debt or equity securities;
contingent consideration will be measured at fair value at the acquisition date and may only be provisionally accounted for during a period of 12 months after acquisition;
a gain or loss of control will require the previous ownership interests to be remeasured to their fair value;
there shall be no gain or loss from transactions affecting a parent’s ownership interest of a subsidiary with all transactions required to be accounted for through equity (this will not represent a change to the Company’s policy);
dividends declared out of pre-acquisition profits will not be deducted from the cost of an investment but will be recognised as income;
impairment of investments in subsidiaries, joint ventures and associates shall be considered when a dividend is paid by the respective investee; and
where there is, in substance, no change to Company interests, parent entities inserted above existing groups shall measure the cost of its investments at the carrying amount of its share of the equity items shown in the balance sheet of the original parent at the date of reorganisation.

The Company will need to determine whether to maintain its present accounting policy of calculating goodwill acquired based on the parent entity’s share of net assets acquired or change its policy so goodwill recognised also reflects that of the non-controlling interest.

AASB 8: Operating Segments and AASB 2007-3: Amendments to Australian Accounting Standards arising from AASB 8 [AASB 5, AASB 6, AASB 102, AASB 107, AASB 119, AASB 127, AASB 134, AASB 136, AASB 1023 & AASB 1038] (applicable for annual reporting periods commencing from 1 January 2009). AASB 8 replaces AASB 114 and requires identification of operating segments on the basis of internal reports that are regularly reviewed by the Company’s Board for the purposes of decision making. While the impact of this standard cannot be assessed at this stage, there is the potential for more segments to be identified. Given the lower economic levels at which segments may be defined, and the fact that cash generating units cannot be bigger than operating segments, impairment calculations may be affected. Management does not presently believe impairment will result.
AASB 101: Presentation of Financial Statements, AASB 2007-8: Amendments to Australian Accounting Standards arising from AASB 101, and AASB 2007-10: Further Amendments to Australian Accounting Standards arising from AASB 101 (all applicable to annual reporting periods commencing from 1 January 2009). The revised AASB 101 and amendments supersede the previous AASB 101 and redefines the composition of financial statements including the inclusion of a statement of comprehensive income. There will be no measurement or recognition impact on the Company. If an entity has made a prior period adjustment or reclassification, a third balance sheet as at the beginning of the comparative period will be required.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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AASB 123: Borrowing Costs and AASB 2007-6: Amendments to Australian Accounting Standards arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 and Interpretations 1 & 12] (applicable for annual reporting periods commencing from 1 January 2009). The revised AASB 123 has removed the option to expense all borrowing costs and will therefore require the capitalisation of all borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset. Management has determined that there will be no effect on the Company as a policy of capitalising qualifying borrowing costs has been maintained by the Company.
AASB 2008-1: Amendments to Australian Accounting Standard – Share-based Payments: Vesting Conditions and Cancellations [AASB 2] (applicable for annual reporting periods commencing from 1 January 2009). This amendment to AASB 2 clarifies that vesting conditions consist of service and performance conditions only. Other elements of a share-based payment transaction should therefore be considered for the purposes of determining fair value. Cancellations are also required to be treated in the same manner whether cancelled by the entity or by another party.
AASB 2008-2: Amendments to Australian Accounting Standards – Puttable Financial Instruments and Obligations Arising on Liquidation [AASB 7, AASB 101, AASB 132 & AASB 139 & Interpretation 2] (applicable for annual reporting periods commencing from 1 January 2009). These amendments introduce an exception to the definition of a financial liability to classify as equity instruments certain puttable financial instruments and certain other financial instruments that impose an obligation to deliver a pro-rata share of net assets only upon liquidation.
AASB 2008-5: Amendments to Australian Accounting Standards arising from the Annual Improvements Project (July 2008) (AASB 2008-5) and AASB 2008-6: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project (July 2008) (AASB 2008-6) detail numerous non-urgent but necessary changes to accounting standards arising from the IASB’s annual improvements project. No changes are expected to materially affect the Company.
AASB 2008-8: Amendments to Australian Accounting Standards – Eligible Hedged Items [AASB 139] (applicable for annual reporting periods commencing from 1 July 2009). This amendment clarifies how the principles that determine whether a hedged risk or portion of cash flows is eligible for designation as a hedged item should be applied in particular situations and is not expected to materially affect the Company.
AASB 2008-13: Amendments to Australian Accounting Standards arising from AASB Interpretation 17 – Distributions of Non-cash Assets to Owners [AASB 5 & AASB 110] (applicable for annual reporting periods commencing from 1 July 2009). This amendment requires that non-current assets held for distribution to owners to be measured at the lower of carrying value and fair value less costs to distribute.
AASB Interpretation 15: Agreements for the Construction of Real Estate (applicable for annual reporting periods commencing from 1 January 2009). Under the interpretation, agreements for the construction of real estate shall be accounted for in accordance with AASB 111 where the agreement meets the definition of ‘construction contract’ per AASB 111 and when the significant risks and rewards of ownership of the work in progress transfer to the buyer continuously as construction progresses. Where the recognition requirements in relation to construction are satisfied but the agreement does not meet the definition of ‘construction contract’, revenue is to be accounted for in accordance with AASB 118. Management does not believe that this will represent a change of policy to the Company.
AASB Interpretation 16: Hedges of a Net Investment in a Foreign Operation (applicable for annual reporting periods commencing from 1 October 2008). Interpretation 16 applies to entities that hedge foreign currency risk arising from net investments in foreign operations and that want to adopt hedge accounting. The interpretation provides clarifying guidance on several issues in accounting for the hedge of a net investment in a foreign operation and is not expected to impact the Company.
AASB Interpretation 17: Distributions of Non-cash Assets to Owners (applicable for annual reporting periods commencing from 1 July 2009). This guidance applies prospectively only and clarifies that non-cash dividends payable should be measured at the fair value of the net assets to be distributed where the difference between the fair value and carrying value of the assets is recognised in profit or loss.

The Company does not anticipate early adoption of any of the above reporting requirements and does not expect these requirements to have any material effect on the Company’s financial statements.

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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NOTE 2 OPERATING LOSS Operating loss before income tax includes: Revenue from ordinary activities Interest received – other persons Dividends received – other corporations Listing support fee (net of costs) Research and development grant (net of costs) Other revenues Total Revenue Expenses Occupancy costs Filing and ASX Fees Corporate and management Other expenses from ordinary activities NOTE 3 INCOME TAX The components of tax expense comprise: Current tax Deferred tax The amount of income tax provided for in the financial 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 Prima facie tax benefit attributable to loss from ordinary activities before income tax at 30% (2008: 30%) Tax effect of Non-allowable items - Share based payments - Other Deferred tax benefit on tax losses not brought to account Income tax attributable to the Company	2009 ($) 357,923 3,016 - 60,622 112,200 533,761 (74,050) (64,277) (209,463) (503,431) (851,221) 2009 ($) - - - 2,711,745 813,523 (50,775) (6,209) (756,539) -	2008 ($) 446,614 5,329 333,516 87,647 132,007
		1,005,113
		(70,691) (56,215) (256,412) (664,593)
		(1,047,911)
		2008 ($) - -
		-
		3,686,804
		1,106,041 (587,400) (21,803) (496,838)
		-

Unbooked deferred tax benefits

The Company has accumulated tax losses of $12, 055,941 (2008: $9,225,397).

The potential deferred tax benefit of these losses $3,616,782 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.
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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NOTE 4 KEY MANAGEMENT PERSONNEL REMUNERATION AND HOLDINGS

Key management personnel remuneration, compensation, option and share movements and holdings have been included in the Remuneration Report section of the Directors Report.

Information on related party and entity transactions are disclosed in Note 22

Options held by Key Management Personnel

The number of options over ordinary shares in the Company held during the financial year by key management personnel and/or their statutorily related entities are set out below:

30 June 2009:

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 the year
Peter S Thomas	1,650,000		-	-	1,650,000	1,650,000
George Sakalidis	3,209,164	2,500,000	-	(500,000)	5,209,164	5,209,164
Roger M Thomson	3,055,440		-	-	3,055,440	3,055,440

These were the only options granted, vested or sold in which any of the key management personnel had an interest (directly or indirectly) during that year.

30 June 2008:

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 the year
Peter S Thomas	1,800,000	650,000	(800,000)	-	1,650,000	1,650,000
George Sakalidis	3,135,000	800,000	(725,836)	-	3,209,164	3,209,164
Roger M Thomson	3,350,000	750,000	(1,044,560)	-	3,055,440	3,055,440

These were the only options granted, vested or sold in which any of the key management personnel had an interest (directly or indirectly) during that year.

Shares held by Key Management Personnel

The number of shares in the Company held during the financial year by key management personnel and/or their related entities are set out below:

30 June 2009:

Name	Balance at the start of the year	Shares movements	Balance at the end of the year
Peter S Thomas	958,640	141,666	1,100,306
George Sakalidis	678,734	470,008	1,148,742
Roger M Thomson	1,731,386	-	1,731,386
Rudolf Tieleman (Appointed 22.6.2009)	396,754	-	396,754

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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30 June 2008:

Name	Balance at the start of the year	Shares movements	Shares movements	Balance at the end of the year
Peter S Thomas	619,000	339,640		958,640
George Sakalidis	6,360,220	(5,681,486)		678,734
Roger M Thomson	1,176,015		555,371	1,731,386
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 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			2009 ($) 21,500 925
			22,425

The Company had 11,414,604 (2008: 8,914,604) options over fully paid ordinary shares on issue at balance date. Options are considered to be potential ordinary shares. Only those options which were considered “inthe-money” were considered to be dilutive. These options have been included in the determination of diluted earnings per share (2008 figures have been adjusted to reflect the change in calculation.)

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	2009 ($) 587,624 5,830,310 6,417,934	2008 ($) 420,659 6,010,598
		6,431,257

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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NOTE 8 CURRENT RECEIVABLES Other receivables 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 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 NOTE 12 OTHER FINANCIAL ASSETS Non-Current Available-for-sale financial assets Listed Investments at fair value Shares in listed corporations NOTE 13 CURRENT PAYABLES Trade creditors and accruals	2009 ($) 343,269 2009 ($) 21,937 2009 ($) 266,199 (183,010) 83,189 102,349 26,628 (2,900) (42,888) 83,189 2009 ($) - 2,182,147 - (2,182,147) - 2009 ($) 1,362,449 1,362,449 1,362,449 2009 ($) 228,766	2008 ($) 230,776
		2008 ($) 43,044
		2008 ($) 242,471 (140,122)
		102,349
		99,691 38,059 - (35,401)
		102,349
		2008 ($) - 1,650,605 - (1,650,605)
		-
		2008 ($) 958,467
		958,467

		958,467
		2008 ($) 345,895

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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2009	2009	2008
No. 79,644,246 5,455,108	$ 19,801,026 3,000,309 (176,062)	No. $ 74,697,978 14,671,747 300,000 75,000 1,785,000 597,975 75,872 150,000 2,000,000 4,000,000 785,396 306,304
85,099,354	22,625,273	79,644,246 19,801,026
1,214,604 2,000,000 2,500,000 2,500,000 1,000,000 2,200,000 11,414,604	22,625,273	19,801,026 1,214,604 2,000,000 2,500,000 - 1,000,000 2,200,000 8,914,604

During the year, 2,500,000 options were granted to a director as approved at the Company's annual general meeting held on 19 November 2008.

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.

At a general meeting every shareholder present in person or by proxy, representative or attorney has: a) on a show of hands, one vote; and b) on a poll, one vote for each fully paid share held and in respect of a partly paid share, a fraction of a vote equivalent to the proportion which the amount paid up bears to the total issue price.

Reserves At the beginning of reporting period Movement in employee benefit reserve Movement in fair value of available-for-sale assets Total Reserves	2009 ($) 3,260,879 169,250 298,262 3,728,391	2008 ($) 1,979,980 1,958,000 (677,101)
		3,260,879

44 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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NOTE 15 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 Cash flow from operations	2009 ($) (2,711,745) 42,888 2,182,147 169,250 (112,493) 21,107 (117,129) (525,975)	2008 ($) (3,686,804) 35,401 1,650,605 1,958,000 (88,919) (16,104) 206,940
		59,119

NOTE 16 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 requirement on granted tenements (in which the Company has an interest) for the next twelve months amounts to $1,031,120. Of this amount, $140,000 is expected to be met by JV participants as a result of various joint ventures entered into.

The Company has leased office premises in Outram Street West Perth. The lease expires 30 September 2009 and the commitment for the period then ended amounts to $20,451. Since the end of the financial year, the Company has leased office premises at Ord Street West Perth for a period of 4years. The commitment for the year ended 30 June 2010 amounts to $129,685. A substantial proportion of this commitment will be shared between other listed mineral exploration companies which will utilise a proportion of the leased area.

NOTE 17 SEGMENTS

The Company operates predominantly in one business, this being the continued exploration for and consequential resource evaluation of tenements with a focus on heavy minerals. Geographically, the Company's activities are conducted in the North Perth and Eucla Basins in Western Australia.

NOTE 18 JOINT VENTURES

The Company is or has been party to a number of unincorporated exploration joint ventures. Some of those joint ventures involve the Company “farming into” (earning) or “farming out” (divesting) interests in tenements. The following is a list of unincorporated exploration joint ventures under which the Company has earned or is earning an interest:

Name of Project Interest Metal Sands JV 70% Chandala JV Earning 60% Reagan’s Ford South JV Earning 75%	Carrying Amount - Image has earned its interest - Image is earning its interest - Image is earning its interest -

45 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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NOTE 19 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 20 EVENTS SUBSEQUENT TO REPORTING DATE

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 21 SHARE BASED PAYMENTS

On 19 November 2008, 2,500,000 share options were granted to a director to take up ordinary shares at an exercise price of $1.50 each. The options are exercisable on or before 19 November 2011. The options are not listed, hold no voting or dividend rights, are transferable and vest immediately upon issue. Included under employee benefits expense in the income statement is $169,250 which relates to this equity-settled share-based payment transaction (2008: $1,958,000).

NOTE 22 RELATED PARTY & RELATED ENTITY TRANSACTIONS

Transactions with directors, director-related parties and related entities other than those disclosed elsewhere are as follows:

Smyth & Thomas, a legal firm of which Mr Peter S Thomas is the principal, provided legal services to the Company during the financial period on terms and conditions which were more favourable to the Company than is extended to the firm’s clients generally. The firm was paid $19,980 (Net of GST) for these legal services.

Leeman Pty Ltd, a George Sakalidis related company, was paid $15,300 in respect of the hire of specialised equipment made available to the Company.

Total amounts owing to directors and/or director-related parties at 30 June 2009 amounted to $31,795 (2008: $156,678).

Image has entered into Serviced Office Agreements with Meteoric Resources NL, Magnetic Resources NL and Emu Nickel NL whereby Image has agreed to provide various administrative services on a monthly basis to those companies commencing from the date each company was listed on the ASX.

Image has also entered into Joint Venture Agreements with Meteoric Resources NL, Magnetic Resources NL and Emu Nickel NL whereby Image has agreed to farm out interests in various of its tenements.

NOTE 23 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 heritage issues 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.

46 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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NOTE 24 FINANCIAL INSTRUMENTS DISCLOSURE

(a) Financial Risk Management Policies

The Company’s financial instruments consist of deposits with banks, receivables, available-for-sale financial assets and payables.

Risk management policies are approved and reviewed by the board. The use of hedging derivative instruments is not contemplated at this stage of the Company’s development.

Specific Financial Risk Exposure and Management

The main risks the Company is exposed to through its financial instruments, are interest rate and liquidity risks.

Interest Rate Risk

Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporting date whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments.

Liquidity Risk

The Company manages liquidity risk by monitoring forecast cash flows, cash reserves, liquid investments, receivables and payables.

Capital Risk

The Company’s objectives when managing capital are to safeguard their ability to continue as a going concern so that they may continue to provide returns for shareholders and benefits for other stakeholders.

Due to the nature of the Company’s activities being mineral exploration, the Company does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Company’s capital risk management is the current working capital position against the requirements of the Company to meet exploration programmes and corporate overheads. The Company’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raising as required.

The working capital position of the Company at 30 June 2009 and 30 June 2008 was as follows:

Cash and cash equivalents Trade and other receivables Trade and other payables Working capital position	2009 ($) 6,417,934 343,269 (228,766) 6,532,437	2008 ($) 6,431,257 230,776 (345,895)
		6,316,138

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 impairment of those assets, as disclosed in the balance sheet and notes to the financial statements.

There is no material amounts of collateral held as security at balance date.

47 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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The credit risk for counterparties included in trade and other receivables at balance date is detailed below.

elow.
Receivables Trade receivables Share broker receivable GST and tax refundable	2009 ($) 118,877 - 224,392 343,269	2008 ($) 65,482 46,718 118,576
		230,776

(b) Financial Instruments

The Company holds no derivative instruments, forward exchange contracts and interest rate swaps.

Financial Instrument composition and maturity analysis

The table below reflects the undiscounted contractual settlement terms for financial instruments.

2009 Weighted Average Effective Interest Rate % Financial Assets: Cash and cash equivalents Other receivables Available-for-sale financial assets Total Financial Assets 3.88% Financial Liabilities: Payables	Floating Interest Rate ($) Non Interest Bearing ($) Total ($) 6,817,734 200 6,817,934 - 343,269 343,269 - 1,362,449 1,362,449
	6,817,734 1,705,918 8,523,652
	- 228,766 228,766
	2009 $

Trade and other payables are expected to be paid as follows:

Trade and other payables are expected to be paid as follows:	2009 $
Less than 6 months	228,766
	228,766

48 -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2009

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2008 Weighted Average Effective Interest Rate % Financial Assets: Cash and cash equivalents Other receivables Available-for-sale financial assets Total Financial Assets 7.91% Financial Liabilities: Payables	Floating Interest Rate ($) Non Interest Bearing ($) Total ($) 6,430,501 756 6,431,257 230,776 230,776 958,467 958,467
	6,430,501 1,189,999 7,620,500
	- 345,895 345,895

(c) Net Fair Values

Fair value estimation

The fair values of financial assets and liabilities are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arms’ length transaction.

Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions may have a material impact on the amounts estimated. Where possible, valuation information used to calculate fair value is extracted from the market, with more reliable information available from markets that are actively traded. In this regard, fair values for listed securities are obtained from quoted bid prices

(d) Sensitivity Analysis – Interest rate risk

The Company has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. The sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in this risk.

As at balance date, the effect on loss and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:

ariables	remaining constant would be as follows:
		2009
		($)
Change	in loss – increase/(decrease):
-	Increase in interest rate by 2%	(136,355)
-	Decrease in interest rate by 2%	136,355
Change	in equity – increase/(decrease):
-	Increase in interest rate by 2%	136,355
-	Decrease in interest rate by 2%	(135,355)

49 -

DIRECTORS’ DECLARATION

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The directors of the Company declare that:

the accompanying financial report and notes are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards and the Corporations Act 2001; and
(b) give a true and fair view of the financial position as at 30 June 2009 and performance for the year ended on that date of the Company.
the Chief Financial Officer has declared pursuant to section 295A(2) of the Corporations Act 2001 that:
(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;
(b) the financial statements and the notes for the financial year comply with Accounting Standards; and
(c) the financial statements and notes for the financial year give a true and fair view;
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:

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George Sakalidis MANAGING DIRECTOR

PERTH

Dated this 25th day of September 2009

50 -

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMAGE RESOURCES NL

INDEPENDENT AUDITOR’S REPORT

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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 2009, 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 the Company 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 Corporations Act 2001. This responsibility includes establishing 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 ensures that the financial report, comprising the financial statement and notes, complies with International Financial Reporting Standards.

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.

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 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.

51 -

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMAGE RESOURCES NL

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 .

Auditors Opinion

In our opinion the financial report of Image Resources NL is in accordance with the Corporations Act 2001 , including:

a) giving a true and fair view of Image Resources NL’s financial position as at 30 June 2009 and of its performance for the year ended on that date ; and
b) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 16 to 19 of the Directors’ Report for the year ended 30 June 2009. The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditors Opinion

In our opinion, the Remuneration Report of Image Resources NL for the year ended 30 June 2009, complies with section 300A Corporations Act 2001.

Kevin Somes

Date: 25 September 2009

Somes and Cooke 1304 Hay Street West Perth WA 6005

52 -

TENEMENT SCHEDULE

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Tenement	Nature of Interest	Project	Equity (%)

2004/0921	Application	Oolden Range	100%
E28/1328	Granted	Junction Lake	100%
E28/1377	Granted	Bronco Plains	100%
E28/1400	Granted	Talc Lake	30% - farmed out
E28/1496	Granted	Junction Lake East	30% - farmed out
E28/1569	Granted	Bronco Plains	100%
E28/1656	Application	Ponton	100%
E28/1895	Application	Madoonia Downs	100%
E28/1926	Application	Junction Lake	100%
E37/0745	Granted	Scorpion Well	100% - farmed out
E39/1059	Granted	Mt Remarkable	100% - farmed out
E46/0709	Granted	Mt Hays	90%
E46/0747	Granted	Mt Hays	90%
E69/2033	Granted	Serpentine Lakes	100%
E69/2034	Granted	Serpentine Lakes	100%
E69/2035	Granted	Serpentine Lakes	100%
E69/2036	Application	Forrest Lakes	100%
E69/2434	Application	Wanna South	100%
P70/1502	Granted	Cooljarloo	70%
P70/1516	Granted	Cooljarloo	70%
P70/1540	Granted	Cadda Springs	100%
E70/2636	Granted	Cooljarloo	70%
E70/2742	Granted	Chandala	Earning60%
E70/2825	Granted	Lake Spade	100%
E70/2844	Granted	Bidaminna North	100%
E70/2845	Granted	Bidaminna North	100%
E70/2892	Granted	Cadda Springs	100%
E70/2898	Granted	Cooljarloo	70%
E70/3032	Granted	Lake Muckenburra	100%
E70/3033	Granted	McKinley	100%
E70/3041	Granted	Reagan’s Ford South	Earning75%
E70/3068	Granted	CatabyWest	100%
E70/3086	Granted	Black Boy	100%
E70/3093	Granted	Wannamal	100%
E70/3100	Application	Quinns Hill	100%
E70/3192	Granted	Bootine	100%
E70/3292	Application	Cooljarloo	100%
E70/3298	Granted	Bidaminna South	90%
E70/3328	Granted	Verne Hill	100%
E70/3339	Application	Jurien North	100%
E70/3359	Application	Nabaroo	100%
E70/3411	Granted	Regans Ford	100%
E70/3417	Application	Mogumbar	100%
E70/3418	Application	Bell	100%
E70/3421	Granted	Wayloo Hill	100%
E70/3494	Application	Bryalana	100%
E70/3551	Application	Paper Bark	100%
E70/3612	Application	Muchea	100%
P70/1520	Application	Cooljarloo	100%
P70/1521	Application	Cooljarloo	100%
E77/1132	Granted	Jilbadgie	40% - farmed out
E77/1491	Granted	Surprise Bore	100%
E77/1492	Granted	Barlee	100%

53 -

OTHER INFORMATION

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The following information was applicable as at 15 September 2009.

Share and Option holding

Category(Size of Holding) 1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over Total	Fully Paid Ordinary Shares Options 26.11.2009 Options 21.11.2010 Options 16.11.2011 Options 19.11.2011 Employee Options 26.3.2012 Options 20.11.2012 432 1,013 512 616 2 86 2 3 3 2 1 3
	2,659 2 3 3 4 1 3

The number of shareholdings held in less than marketable parcels is 190. There are no listed options.

Substantial shareholders:

The names of the substantial shareholders listed in the Company's register as at15 September 2009:

Shareholder Name Cairnglen Investments Pty Ltd Pontian Orico Plantations SDN BHD Frederick D L Ribton enty largest fully paid shareholders: Shareholder Name 1. Cairnglen Investments Pty Ltd 2. Pontian Orico Plantations SDN BHD 3. Frederick D L Ribton 4. Citicorp Nominees Pty Ltd 5. Wit Team Enterprises Ltd 6. Fortis Clearing Nominees Pty Ltd 7. JP Morgan Nominees Australia Ltd 8. Roger M Thomson 9. VC and JE Wheatley 10. Auto Management Pty Ltd 11. Gilpin Park Pty Ltd 12. DF and J Ribton 13. PW and MJ Taylor 14. Devomp Pty Ltd 15. Fortis Clearing Nominees Pty Ltd 16. Earle G McIntosh 17. ER and JF Terace 18. Top Nominees Pty Ltd 19. Nefco Nominees Pty Ltd 20. Fobira Pty Ltd Total	Number of Shares 7,283,640 6,539,728 6,494,295 Number of Shares 7,283,640 6,539,728 6,494,295 4,179,636 3,984,600 2,890,804 1,928,500 1,731,386 1,311,925 1,311,924 1,024,643 1,022,600 1,000,000 663,500 643,410 556,000 550,000 548,000 541,000 503,000 44,708,591	% of Issued Share Capital 8.56 7.68 7.63 % of Issued Share Capital 8.56 7.68 7.63 4.91 4.68 3.40 2.27 2.03 1.54 1.54 1.20 1.20 1.18 0.78 0.76 0.65 0.65 0.64 0.64 0.59
		52.53

Twenty largest fully paid shareholders:

54 -

OTHER INFORMATION

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All option-holders (being less than 20 holders) – all unquoted:

Optionholder Name 1. George Sakalidis 2. Roger M Thomson 3. Peter S Thomas 4. Newton Super Plan 5. BF Newton 6. JS Newton Total	Number of Options Expiring 26.11.2009 Number of Options Expiring 21.11.2010 Number of Options Expiring 16.11.2011 Number of Options Expiring 19.11.2011 Number of Options Expiring 20.11.2012 % Held 659,164 800,000 950,000 2,000,000 800,000 50.02 555,440 800,000 950,000 750,000 29.34 400,000 600,000 650,000 15.84 300,000 2.88 100,000 0.96 100,000 0.96
	1,214,604 2,000,000 2,500,000 2,500,000 2,200,000 100.00

Optionholder Name
1.
George Sakalidis
2.
Roger M Thomson
3.
Peter S Thomas
4.
Newton Super Plan
5.
BF Newton
6.
JS Newton
Total

Number of
Options
Expiring
26.11.2009
Number of
Options
Expiring
21.11.2010
Number of
Options
Expiring
16.11.2011
Number of
Options
Expiring
19.11.2011
Number of
Options
Expiring
20.11.2012
% Held
659,164
800,000
950,000
2,000,000
800,000
50.02
555,440
800,000
950,000
750,000
29.34
400,000
600,000
650,000
15.84
300,000
2.88
100,000
0.96
100,000
0.96

1,214,604
2,000,000
2,500,000
2,500,000
2,200,000
100.00

All employee option-holders (being less than 20 holders)

Unquoted Employee Options expiring 26 March 2012:

quoted 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 85,099,354 (2008: 79,644,246) fully paid ordinary shares on issue, all (2008: 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 fully paid ordinary share held and a fraction of a vote for each partly-paid contributing share held. The fraction must be equivalent to the proportion which any amount paid (not credited) is of the total amounts paid (if any) and payable (excluding amounts credited). Any amounts paid in advance of a call are ignored when calculating these fractional voting rights. None of the options have any voting rights.

55 -

AI assistant

IMAGE RESOURCES NL — Annual Report 2009

65117_rns_2009-09-28_be312d36-09a8-464f-b02d-96d7642532f8.pdf

CORPORATE DIRECTORY

DIRECTORS

FOR INFORMATION ON THE COMPANY CONTACT

SOLICITORS TO THE COMPANY

COMPANY SECRETARY

REGISTERED OFFICE

FOR SHAREHOLDER INFORMATION CONTACT

SHARE REGISTRY

BANKERS

AUDITORS

ISSUED CAPITAL

REVIEW OF OPERATIONS

Image Resources is a diversified mineral explorer with a major landholding and an expanding mineral sands resource base in the North Perth Basin of Western Australia.

REVIEW OF OPERATIONS

NORTH PERTH BASIN MINERAL SANDS

Scoping Study

REVIEW OF OPERATIONS

REVIEW OF OPERATIONS

Table1 North Perth Basin Resource Summary

Table 2 North Perth Basin Mineral Assemblage

REVIEW OF OPERATIONS

Exploration

Cooljarloo (Image 70%)

Resource Estimate Heavy Minerals and Mineralisation

Table 4

Resource Estimate Heavy Mineral Suite

REVIEW OF OPERATIONS

Cooljarloo Extension (Image right to earn 70%)

Gingin (Image 100%)

Chandala (Image right to earn 80%)

Regans Ford South (Image right to earn 75%)

REVIEW OF OPERATIONS

EUCLA BASIN MINERAL SANDS (Image 100%)

REVIEW OF OPERATIONS

REVIEW OF OPERATIONS

DIRECTORS' REPORT

DIRECTORS

PRINCIPAL ACTIVITIES

RESULTS FROM OPERATIONS

DIVIDENDS

REVIEW OF OPERATIONS

EARNINGS PER SHARE

FINANCIAL POSITION

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL PERIOD

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

ENVIRONMENTAL ISSUES

DIRECTORS' REPORT

INFORMATION ON DIRECTORS AND COMPANY SECRETARIES

Peter Thomas

Chairman

George Sakalidis

Managing Director

Roger Thomson

Executive Director

Rudolf Tieleman – Appointed 22 June 2009

Company Secretary

DIRECTORS' REPORT

Robert Lewis – Resigned 22 June 2009

AUDIT COMMITTEE

NON AUDIT SERVICES

MEETINGS OF DIRECTORS

REMUNERATION REPORT

Key Management Personnel Remuneration and Incentive Policies

Non-Executive Directors

DIRECTORS' REPORT

Incentive Plans and Benefits Programs

Retirement and Superannuation Payments

Constitutional Provisions as to Directors Fees

87. REMUNERATION OF MANAGING DIRECTORS AND EXECUTIVE DIRECTORS

90. PAYMENT FOR EXTRA SERVICES

Key Management Personnel Remuneration

Year ended 30 June 2008

DIRECTORS' REPORT

Key Management Personnel Remuneration (Continued..)

Consultant Agreements

Guaranteed Rate Increases

IMAGE RESOURCES NL Annual Report 2009