IMAGE RESOURCES NL — Capital/Financing Update 2017

Jan 23, 2017

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24 January 2017

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SUCCESSFUL COMPLETION OF RIGHTS ISSUE NOTIFICATION OF SHORTFALL

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Image Resources NL (ASX: IMA) (Image or the Company) is pleased to advise that the Company’s fully underwritten, non-renounceable rights issue closes with accepted shareholders’ entitlements and additional share applications by shareholders accounting for approximately 84% of total shares on offer .

Image launched the entitlements offer to issue up to 158,129,891 new shares on the basis of 5 new shares for every 12 shares held on the record date at an issue price of $0.04 per new share ( Entitlements Offer ) to raise approximately $6.2 million before costs. The Entitlements Offer closed on 19 January 2017.

The Company received and accepted applications for eligible shareholder entitlements (excluding entitlements for Murray Zircon Pty Ltd ( Murray Zircon )) to subscribe for 53,223,906 new shares, totalling approximately $2,128,956. In addition, the Company received and accepted applications for additional shares ( Top-up Shares ) from eligible shareholders for 14,335,311 new shares, totalling $573,412. Murray Zircon took up its full entitlement, via a sub-underwriting commitment of 65,293,143 new shares, totalling approximately $2,611,726. In total, the Company accepted applications for shareholder entitlements and Top-up Shares for 132,852,360 new shares, totalling approximately $5,314,094 or approximately 84% of the total shares on offer.

Murray Zircon opted to appoint its two shareholders, Orient Zirconic Resources (Australia) Pty Ltd ( OZR ) and XQ (HK) Enterprises Limited ( XQ ) as sub-underwriters for 100% of Murray Zircon’s entitlement, in proportion to OZR’s and XQ’s ownership percentage in Murray Zircon. This was done in accordance with Murray Zircon’s rights under the Share Consideration Deed between the Company and Murray Zircon dated 8 June 2016 ( Share Consideration Deed ).

As shown in the Table 1 below, due to the high demand for new shares in applications for existing shareholder entitlements and Top-up Shares, the result was a fully underwritten shortfall of only 25,277,531 new shares, totalling $1,011,101. This shortfall will be placed by the underwriter (and shareholder), Million Up Limited ( Underwriter ) and will be taken up by the Underwriter and sub-underwriters.

Image Resources NL ABN 57 063 977 579

Ground Floor, 23 Ventnor Ave West Perth WA 6005 | PO Box 469 West Perth WA 6872

T: 08 9485 2410 | F: 08 9486 8312 www.imageres.com.au

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Table 1. Summary of Rights Issue Results

		% oftotal 100.00 33.66 9.06 41.29 84.01 15.99 7.11
Total number of new shares offered and underwritten:	158,129,891	100.00
Entitlements accepted:	53,223,906	33.66
Top-up Share applications accepted:	14,335,311	9.06
Sub-underwriting commitments accepted in relation the entitlement of Murray Zircon (in accordance with the Share Consideration Deed):	65,293,143	41.29
Sub-total new shares entitlements and Top-Up _Shares applications accepted: _	132,852,360	84.01
Shortfall shares to be taken up by Underwriter and sub-underwriters:	25,277,531	15.99
Sub-underwritercommitmentsforShortfallshares:	11,250,000	7.11

The Chairman, Mr Bob Besley, stated that “the high percentage of shares taken up as shareholder entitlements and top-up shares is a testament to the strong support of our shareholders and their confidence in the suitability of the Boonanarring project for development”.

Mr Besley and the Directors wish to thank all shareholders for their continued support of the Company and advise that Entitlements Offer shares, including shortfall shares, are expected to be issued on 27 January 2017.

In addition to Murray Zircon’s entitlement being taken up by its two shareholders, OZR and XQ, as outlined above, Murray Zircon has advised the Company that it will be seeking to distribute its currently held shares in Image, received as part of the completion of the Asset Sale and Purchase Agreement ( ASPA ) on 8 June 2016 ( Completion Shares ), to its shareholders in proportion to their ownership position in Murray Zircon. This distribution, if completed, will be done in accordance with Murray Zircon’s rights under the Share Consideration Deed and is planned to occur in February-March 2017. Regardless of whether these shares are distributed to its shareholders or remain with Murray Zircon, all of the Completion Shares must remain escrowed for the duration of a restriction period ending on the earlier of two years following the ASPA completion date or the Company reaching a ‘decision to mine’.

Image Resources NL ABN 57 063 977 579 Ground Floor, 23 Ventnor Ave West Perth WA 6005 | PO Box 469 West Perth WA 6872 T: 08 9485 2410 | F: 08 9486 8312 www.imageres.com.au

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As disclosed in the Entitlements Offer documents, the Company intends to use the funds raised for the following purposes:

• the costs of the Entitlements Offer;

• complete updating the bankable feasibility study for the development of the Boonanarring and Atlas projects;

• purchase land critical to the initial development of Boonanarring;

• undertake additional exploration activities; and

• for working capital purposes.

For further information, please contact:

Patrick Mutz Managing Director +61 8 9485 2410 info@imageres.com.au www.imageres.com.au

Image Resources NL ABN 57 063 977 579 Ground Floor, 23 Ventnor Ave West Perth WA 6005 | PO Box 469 West Perth WA 6872 T: 08 9485 2410 | F: 08 9486 8312 www.imageres.com.au

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