IMAGE RESOURCES NL — Capital/Financing Update 2006

Dec 20, 2006

IMAGE RESOURCES NL

2^nd Floor, 35 Outram St West Perth WA 6005 PO Box 644 West Perth WA 6872 Telephone 08 9485 2410 Facsimile 08 9485 2840 info@imageres.com.au www.imageres.com.au

ABN 57 063 977 579

DRAMATIC INCREASE IN HM TARGETS FROM 15KM TO 95KM AT COOLJARLOO

Ongoing interpretation of ground magnetics together with the results of recent and historical drilling has identified a number of highly prospective potential HM channels and strands within the Cooliarloo project. The number of channels has dramatically increased from 4, totalling 7km in length, to 20 channels, totalling 50km in length. The number of interpreted potentially high-grade strand lines has increased from the two previously reported resources (the 35AHD and 28000 strands) totalling 8km in length to 16 zones totalling 45km, a total of some 95km of target strike length (see attached map).

The 95km strike length of high priority targets and previously reported thick channel intersections are considered to be very significant and place Image in the forefront of potential mineral sand exploration discoveries made in the North Perth Basin in recent times

To date, drilling by Image has been carried out over a 3.7km length of the 35AHD and 28000 shallow high-grade resource strands, and a 7km length over the channel targets in the south-eastern part of the Cooljarloo project. This represents only about 10% of the extensive targets outlined to date. A major 15,000m aircore drilling programme is scheduled to start in early January aimed at drill testing the bulk of the remaining targets, subject to completion of exploration access agreements. The programme will utilise a larger drilling rig with the capacity to drill to 100m depth into the channels, where previous drilling ended in mineralisation.

The strand target zones are made up of multiple individual shallow strand targets and have been separated into various groups with high average magnetic amplitudes above 2.5nT, which at the 35AHD and 28000 resource strands has equated to shallow high-grade mineralisation. Limited historical drilling of some of these target strands has confirmed the presence of shallow high-grade HM mineralisation. It is significant to note that the 25000 and Middle strand resources on the adjacent Tiwest mining area appear to extend into the Cooljarloo project area. A number of lower amplitude targets have also been identified but not shown on the attached map although some of these will be tested in the upcoming programme.

The 16 new channel targets total an additional 43km, 9 of which have stronger average magnetic amplitudes than the channels drilled to date and range from 1.5 times to 2 times the average amplitude previously drilled. Several of the channels shown on the attached

ASX Release 21 December 2006

ASX code: IMA

map have deep historical drill intersections confirming the current interpretation and augering well for the forthcoming drilling campaign.

The North Perth Basin is a very active and well serviced heavy mineral mining region which supplies approximately 25% of the world's zircon, with the West Australian mineral sands industry producing revenues of about A\$900 million a year, nearly nine times greater than other operations elsewhere in Australia. Image holds strategically located heavy mineral projects at Cooliarloo, Cooliarloo North, Bidaminna and Gingin within this active region where Iluka, Kumba (now Exxaro), Tiwest, Bemax and Doral are currently operating and where four new proposed mine sites at Dongara. Cataby, Wagerup and Waroona are scheduled to start in the next few vears.

For more information on the company visit www.imageres.com.au

Please direct enquiries to: Roger Thomson Managing Director Phone (08) 9485 2410 Mob 0419 969 183

George Sakalidis Executive Director - Exploration Phone (08) 9485 2410 Mob 0411 640 337

The information in this report is based on information compiled by George Sakalidis BSc (Hons), who is a member of the Australasian Institute of Mining and Metallurgy. George Sakalidis is an employee of Image Resources NL. George Sakalidis 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'. George Sakalidis consents to the inclusion of this information in the form and context in which it appears in this report.

Cooljarloo Project - Ground Magnetic Interpreted Strandlines