IMAGE RESOURCES NL — Capital/Financing Update 2013

Nov 3, 2013

ASX Release 4 November 2013

==> picture [297 x 49] intentionally omitted <==

ASX Code: IMA 4 November 2013

Suite 4a, 5 Mumford Place Balcatta WA 6021 PO Box 644 West Perth WA 6872 Telephone 08 9485 2410 Facsimile 08 9240 7845 www.imageres.com.au

ABN 57 063 977 579

UPDATED STUDY FURTHER ENHANCES NORTH PERTH BASIN MINERAL SANDS PROJECT

• Low capex of $35-45M plus $25M of pre-strip, owner’s costs and working capital

• Project pay back of less than 16 months. Pre tax IRR 82-97% (see note 1)

• 180,000 tpa of product in each of the first two years of operation with approximately 75% of revenue from high value zircon and rutile

• Off take and project finance discussions continuing

________________

Image Resources NL (ASX: IMA ) has carried out a cost benefit analysis for an enhanced mineral processing route at its high-grade North Perth Basin ( NPB ) mineral sands project cutting the payback period on the $60 to $70 million project to less than 16 months.

The introduction of a low cost dry mill and zircon cleaning circuit to the scope of the project also significantly lifts the projected internal rate of return ( IRR ) to over 80% and will make the operation fully independent right through to production of finished products.

Image is actively progressing off take and bank finance discussion with a view to commencing a 6 to 8 month construction phase in mid-2014 with first zircon and ilmenite sales scheduled for early 2015(all timing subject to finance and environment approvals).

Image Resources managing director Mr Peter Davies said today; “The Boonanarring deposit, just an hour out of Perth, is unique and has one of the highest in-ground value mineral sands contents in the world at 8.3% Heavy Minerals ( HM ). Of this 8.3% HM, approximately 80% is valuable saleable minerals and nearly 30% by tonnes (75% by value) high priced zircon and rutile content.”

“It is this very high value per tonne of ore that sets the project apart from most other deposits in the world and drives the project’s very attractive economics. Coupled with the comparatively low financing requirement, this project is ideal as Image’s first commercial venture”.

“The total process plant and related infrastructure cost is a moderate $35M to $45M, with an additional $13M in pre-production owner’s costs and working capital, and $12M in prestrip and mining related activities which we will contract out.”

ASX Release 4 November 2013

“Importantly, while the maximum funding requirement is still only between $60M and $70M, within 16 months after the start of production all this funding would have been repaid. This is due to the very high ore grades mined in the early years and the resulting high front end cash flow. Zircon and rutile prices per tonne are roughly six times those of ilmenite, even allowing for the good quality of the Boonanarring ilmenites.”

The updated economic analysis is based on the same JORC Resources, mining schedules and product price assumptions used in the Base Case Feasibility Study released on 16 July 2013. The indicative modest additional costs for the dry mill and zircon cleaning circuit have been largely offset by other projected savings but need to be re-estimated when detailed engineering is undertaken prior to commencement of construction.

Some of the updated input assumptions, such as the product transport costs, are based on quotations and are the same order of accuracy as the Base Case Feasibility Study. However, some of the revised input assumptions are only order of magnitude (e.g. the low cost dry mill capital cost), some are only approximate first pass estimates (e.g. the potential reduction in the wet plant construction costs) and some are based on the best judgement of the project team members, which need to be supported by further verification testwork (including use of the latest model of wet spirals, improved recoveries and zircon cleaning/attritioning efficiency).

“The project economics are robust even if product prices fall well below current levels, which is not expected. At zircon prices of US$1,000 per tonne (compared to current prices of over US$1,300 per tonne) the project would still have a pre tax IRR of over 40%,” said Mr Davies.

“It is the following suite of ideal conditions which generates such robust margins:

• very high grade orebody, amongst the highest in the world at 8.3% HM

• conventional processing of orebodies with known processing characteristics

• close to Perth with key infrastructure (power, roads, water bore and port facilities) already in place

• moderate capital costs and very low capex intensity per tonne of product

• a quick and modular plant build

• experienced workforce living locally

“We believe as we move into 2014 that the project’s unique attributes will come closer into view. Image has $2.8M cash at bank (including receivables). We are therefore in no hurry or immediate need of additional equity capital. With a projected project pre-tax NPV of around $240M compared with a current IMA market capitalisation of ~$16M we believe the project will be very attractive to financiers, potential partners and ultimately IMA shareholders.”

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

ASX Release 4 November 2013

Please direct enquiries to: Peter Davies George Sakalidis Managing Director Executive Director - Exploration Phone +61 8 9485 2410 Phone +61 8 9485 2410 Mob +61 409 296 676 Mob +61 411 640 337

COMPETENT PERSON’S STATEMENT – TECHNICALSTUDIES

The information in this presentation that relates to technical studies is based on information compiled by Peter Davies BSc Eng (Hons) ARSM, C.Eng. MIMMM, MAICD, FAusIMM, FRSA, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Peter Davies is Managing Director/Project Manager of Image Resources NL. Peter Davies 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’. Peter Davies consents to the inclusion of this information in the form and context in which it appears in this report.

FORWARD LOOKING STATEMENTS

Certain statements made during or in connection with this communication, including, without limitation, those concerning the economic outlook for the mining industry, expectations regarding prices, exploration or development costs and other operating results, growth prospects and the outlook of Image’s operations contain or comprise certain forward looking statements regarding Image’s operations, economic performance and financial condition. Although Image believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct.

Accordingly, results could differ materially from those set out in the forward looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes that could result from future acquisitions of new exploration properties, the risks and hazards inherent in the mining business (including industrial accidents, environmental hazards or geologically related conditions), changes in the regulatory environment and other government actions, risks inherent in the ownership, exploration and operation of or investment in mining properties, fluctuations in prices and exchange rates and business and operations risks management, as well as generally those additional factors set forth in our periodic filings with ASX. Image undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today’s date or to reflect the occurrence of unanticipated events.

Note 1: Post Tax IRR is expected to be in the range 72% to 87%