IMAGE RESOURCES NL — Capital/Financing Update 2010

Aug 12, 2010

ASX Release 13 August 2010

ASX code: IMA

2nd Floor, 16 Ord Street 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

90% INCREASE IN EUCLA BASIN TENURE

_________________________________________________________________________________________

HIGHLIGHTS

• Image has acquired 775km[2] of tenements covering highly prospective palaeo coastline near its Cyclone Extended deposit and Diatreme Resources’ (ASX:DRX) Cyclone deposit.

• Targets include both shoreline and dunal deposits with a total 70km strike length to be tested.

As part of its ongoing heavy mineral exploration in the Eucla Basin, Image Resources has applied for three tenements covering 775km[2] approximately 80km west of its Serpentine Lakes tenements and adjacent to its Wanna South and Forrest Lakes tenements, as shown in the attached map. This acquisition brings Image’s tenement holdings in this part of the Eucla Basin to 1,623km[2] .

The applications cover two separate shoreline features identified from digital elevation modelling. The northernmost feature consists of approximately 40km of palaeo coastline forming a curved south westerly facing bay on the Late Eocene-age Barton Shoreline and is covered by two exploration licences termed Victoria, totalling 420km[2] in area. The Barton Shoreline hosts the Cyclone and Cyclone Extended mineral sand deposits further to the east.

Image has recently announced a global resource estimate for Cyclone and Cyclone Extended of 625Mt containing 8.79 million tonnes of HM, including 2.4 million tonnes of zircon and 990,000 tonnes of rutile at a 0.75% HM cut off (IMA ASX release 23 July 2010). Of this resource, Image holds an estimated 148Mt containing 2.17 million tonnes of HM, including 445,000 tonnes of zircon and 188,000 tonnes of rutile. The remainder is owned by Diatreme Resources, which recently announced the signing of an MOU with Chinese firm BaoTi to progress the development of the Cyclone deposit. Image is encouraged by this announcement and is targeting its exploration on a repetition of the Cyclone deposit, which is approximately 10km in length and is formed in a southwest facing bay similar to that at the Victoria project.

The second shoreline feature is covered by a single tenement (Forrest West) of 355km[2] adjacent to Image’s existing Forrest Lakes project. The Forrest West tenement covers a section of the Ooldea Shoreline down drift from a large palaeo drainage and estuary. The target area consists of lunette dunes formed on the eastern edge of the estuary and a potential headland to the east (down drift) of the drainage. The prospective area extends over a strike length of 30km. The target mineralisation in this area is either a typical strand type deposit along the shoreline or an analogue of the Notrab deposit held by Dominion Mining which is in a lunette environment and situated 50km north of Iluka’s

Jacinth-Ambrosia deposits. Iluka’s Jacinth-Ambrosia deposits are situated on the Ooldea Shoreline in the South Australian part of the Eucla Basin.

Recent discoveries by the Red Metal-Bemax joint venture continue to highlight the potential of the Eucla Basin for the discovery of further world class heavy mineral deposits. Image views this central part of the Eucla Basin as presenting an exciting opportunity to replicate the successes further east in South Australia, with the Cyclone discovery potentially indicating a second high value heavy mineral province in the Eucla Basin. On completion of permitting Image plans to carry out aircore drilling with the aim of augmenting its existing discovery in this prospective region.

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

Please direct enquiries to: George Sakalidis Roger Thomson Managing Director Executive Director Phone (08) 9485 2410 Phone (08) 9485 2410 Mob 0411 640 337 Mob 0419 969 183

The information in this report that relates to exploration results is based on information compiled or reviewed by Paul Leandri BAppSc, who is a Member of the Australasian Institute of Mining and Metallurgy. Paul Liandri is a full time employee of Image Resources NL. Paul Leandri 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 of Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Paul Leandri consents to the inclusion of this information in the form and context in which it appears in this report.

2

==> picture [452 x 654] intentionally omitted <==

Image Resources’ Heavy Mineral Exploration Tenements, Eucla Basin, WA

3