IMAGE RESOURCES NL — Interim / Quarterly Report 2003

Mar 12, 2003

AUSTRALIAN STOCK EXCHANGE IMA000006

Australian Stock Exchange Limited CAPS Office

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

Transmitted by fax to: Number of pages to be transmitted:

1900 999 279 15

Dear Sir/Madam,

RE: HALF YEAR REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

Please find attached ASX release as required to be lodged in respect of the half year report to 31 December 2002.

Yours faithfully COMPANY SECRETARY

Rudolf Tieleman 13 March 2003 Encl:

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IMAGE RESOURCES NL

ABN 063 977 579

HALF-YEAR REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

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CONTENTS

HALF-YEAR REPORT

Page No.

Directors' Report	3
Financial Statements	8.
Declaration by Directors	13
Independent Review Report	14

ABN 57 063 977 579

DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

Your directors submit the financial report of the company for the half-year ended 31 December 2002.

DIRECTORS

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

Mr Peter Thomas Mr Roger Thomson Mr George Sakalidis

INFORMATION ON DIRECTORS

Mr Peter Thomas (Chairman)

Mr Thomas is a practicing Solicitor with twenty years national and international experience in the resource sector (both oil and minerals) specialising in the provision of general contractual and corporate advice to both miners and explorers. He has been responsible for the structuring, restructuring and reconstruction of a number of companies and has been a director of a number of listed companies.

Mr Roger Thomson (Managing Director)

Mr Thomson is a geologist with more than thirty years experience in mineral exploration, mining geology and management in Australia, Africa, South America and SE Asia. Mr Thomson has held the positions of General Manager Exploration with Delta Gold Ltd and Sons of Gwalia Ltd.

Mr George Sakalidis (Exploration Director)

Mr Sakalidis is an exploration geophysicist with more than 19 years experience in gold, diamond, base metal and mineral sands exploration. He was the founding director of successful mineral sands explorer Magnetic Minerals Limited.

PRINCIPAL ACTIVITIES

The principal activities of the Company during the half-year were the exploration of mineral tenements in Western Australia and the Northern Territory.

REVIEW OF OPERATIONS

The loss for the half-year ended 31 December 2002 was \$495,377 (2001 - $N/A$ ).

The company's activities during the six month period and since listing on the ASX on 4 July 2002 are summarised as follows:

Mt Elsie JV's (MEJV1-4)

Detailed geological mapping of the Mt Elsie vein system was completed followed by a programme of systematic rock sampling of the veins to identify the most prospective targets for drill testing. A geochemical soil sampling programme was carried out to extend the existing geochemical surveys over the area of interest. In all, 499 rock samples and 683 soil samples were collected.

A rotary airblast (RAB) drilling programme (82 holes totaling 4936m) was completed over the most prospective of the mineralised veins. This programme involved extensive earthworks to gain access to some sites. In addition water boring (2 holes, 75m) was carried out for a camp water supply.

ABN 57 063 977 579

DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

Mt Elsie JV's (MEJV1-4) (Continued)

Significant results from the RAB drilling are summarised as follows:

Hole No.		Coordinates	Azimuth	From	To	Interval	Grade	Prospect
ERB	N	E		m	m	М	g/t Au
298	7282	50851	090	37	40	3	7.8	L
300	7275	50905	090	11	12	$\mathbf{1}$	14.1	L
303	7321	50833	090	38	40	$\overline{2}$	2.8	L
311	7345	50877	090	47	51	4	1.4	L
314	7406	50783	090	44	46	$\overline{2}$	2.4	L
321	7389	50843	360	2	4	$\overline{2}$	2.5	L
322	7342	50794	157	1	3	$\overline{2}$	3.4	L
327	7106	51075	090	27	30	3	1.7	$\mathsf{C}$
331	7215	51137	090	10	15	5	2.2	C
336	7284	51223	090	$\overline{2}$	3	1	9.9	$\mathsf{C}$
349	8428	50508	315	12	20	8	3.7	T4
including				12	15	3	7.2	Т4
350	8429	50515	340	20	23	3	2.2	T4
352	8465	50536	300	$\overline{2}$	19	17	3.7	T4
including				$\overline{\bf{4}}$	10	6	7.3	T4
355	8547	50536	270	20	21	$\mathbf{1}$	4.3	T4
				34	36	$\overline{2}$	2.8	T4
358	8576	50534	270	13	16	3	1.9	T4
365	8688	50326	090	8	17	9	2.0	T3
				50	61	11	$1.5\,$	T 3

Holes inclined at 60⁰, 1m samples, uncut, L: Lapelerie prospect, C: Camp prospect

The drilling results are currently being assessed and interpreted.

Mt Hays

Geochemical soil sampling programmes (total 800 samples) were completed over gold-anomalous areas identified from previous prospecting and sampling. Several gold-arsenic anomalies were outlined, the largest of which is more than 1,000m in length with peak values of 1727ppb and 1417ppb gold compared to background values of less than 10ppb gold. This gold anomaly is situated within a broader arsenic zone some 3km in length.

Geological mapping of the main gold anomaly revealed a zone of quartz veining and associated stringer zones exposed intermittently over a 600m strike length. A RAB drilling programme (11 holes totaling 833m) over this zone intersected quartz veining in weathered metasediments, results are summarised as follows:

Hole No.		Coordinates	Azimith	Dip	From	To	Interval	Grade
					m	m	m	g/t Au
MHDRB1	6874	62008	155	60	56	60		0.3
MHDRB2	6850	61900	135	60	34	38		2.6
MHDRB6	6793	61535	151	75	30	34		0.7
MHDRB6	6793 -- $\sim$	61535	151	75	46	50		1.3

4m samples, 0.3 g/t cut-off

ABN 57 063 977 579

DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

Corunna Downs

Geological mapping and sampling (85 rock samples) of gold-anomalous porphyry intrusions was carried out. Results did not warrant follow-up drilling. A geochemical soil sampling programme (295 soil samples) was completed over an area of known gold anomalism outlined in a previous survey. A limited RAB drilling programme (5 holes, 230m) tested the anomalous zone however no significant gold mineralisation was encountered (best intercept 4m at 0.14g/t Au)

Warrawoona

A geochemical soil sampling programme (603 soil samples) was carried out to infill known areas of gold anomalism and to test areas where no previous sampling had been undertaken. The surveys confirmed a linear gold anomaly zone some 3km in length, Rock sampling from this zone (23 rock samples) returned various gold values of 3.7g/t, 9.4g/t, 2.8g/t, 0.6g/t, 0.7g/t and 0.3g/t.

Bullfinch

JV partner MPI completed RAB drilling programme (30 holes, 1025m) to test previously outlined auger geochemical gold anomalies. Two of four lines of RAB drilling were ineffective because of thick lake clays. Of the two remaining lines, one south of Withers Find encountered a 5m composite value of 0.15g/t Au in weathered granite. MPI subsequently withdrew from the JV.

Lake Percy

A high resolution aeromagnetic survey (1386 line km) was carried out over the tenement to assess the extent of ultramafic rocks with potential to host nickel sulphide mineralisation similar to that occurring at Emily Ann and Maggie Hays some 30km along strike. A ground magnetic survey (102 line km) was completed over the northern target area identified from the airborne survey. Field inspection confirmed anomalous nickel and copper values (1945pm Ni, 217ppm Cu) from a drill sample over the southern aeromagnetic target. Interpretation of results is continuing.

Peak Hill JV

Curara: Laboratory assessment of bulk loam samples from four aeromagnetic targets concluded that no significant microdiamonds or diamond indicator minerals are present. A geochemical vacuum drilling programme (177m, 52 samples) over two aeromagnetic targets was negative and the tenement was subsequently excluded from the Peak Hill JV.

Doolgunna: A geochemical vacuum drilling programme (456m, 266 samples) was completed over an area of anomalous geochemistry identified from previous surveys. An arsenic anomaly 1.2km in length with weakly anomalous coincident gold values has been outlined.

Jilbadgie

Auger geochemical surveys (911 samples) were carried out over aeromagnetic targets and gold anomalous areas detected in previous surveys. Results are being interpreted.

Poondarie

A field inspection and subsequent reinterpretation of the data from this project resulted in a downgrade in potential and the subsequent surrender of this tenement.

ABN 57 063 977 579

DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

Jarbora Hill

A geochemical vacuum drilling programme (1108m, 352 samples) was carried out over aeromagnetic targets and areas of previously detected geochemical anomalism. The sampling defined three coincident goldarsenic anomalies over a cumulative strike length of 1.5km in an area of complex structure as interpreted from aeromagnetic data.

A scout RAB drilling programme (38 holes, 1780m) was completed over the gold-anomalous zones, returning intersections of 12m at 0.3g/t Au from 32m and 4m at 0.8g/t Au from 32m to end of hole. Results are being interpreted.

Wilthorpe

Geochemical vacuum drilling (462m, 266 samples) outlined gold-anomalous values over a 2km distance south of an area of known gold mineralisation defined from previous exploration. Results are being interpreted and further follow-up is planned.

Emu Lake

A 90% interest in this nickel and gold project was acquired during the period. A RAB drilling programme (58 holes, 2655m) was carried out over a 5km strike length of prospective ultramafic contact and identified several areas of anomalous nickel and copper values. These intercepts are being re-sampled in more detail to assess these anomalies.

A reverse circulation (RC) hole was drilled (191m) to test an off-hole anomaly detected following previous drilling in an area of known nickel mineralisation. The drillhole did not intersect significant nickel mineralisation and is interpreted to have intersected a felsic dyke in the target area which may have dislocated the target sulphide zone.

IMAGE RESOURCES NL ABN 57 063 977 579

DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

ABN 57 063 977 579

STATEMENT OF FINANCIAL PERFORMANCE FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

	Notes	31 Dec 2002 (4)	31 Dec 2001 $($ \$)
Revenue from ordinary activities	$\overline{2}$	57,726	N/A
Depreciation expense		(100, 394)	N/A
Exploration and tenement expenses written
off		(273,748)	N/A
Other expenses from ordinary activities		(178,961)	N/A
Loss from ordinary activities before income
tax expense		(495, 377)	N/A
Income tax expense			N/A
Loss from ordinary activities after related
income tax expense		(495, 377)	N/A
Basic loss per share (cents per share)		(1.0169)	N/A

The accompanying notes form part of these financial statements.

$\Delta \phi = 0.01$ and $\Delta \phi$

IMAGE RESOURCES NL

ABN 57 063 977 579

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2002

	31 Dec 2002 $($ \$)	30 Jun 2002
Current Assets		(5)
Cash assets	1,802,190	2,955,236
Receivables	32,389	25,817
Prepayments		7,327
Other financial assets	147,614	117,614
Total Current Assets	1,982,193	3,105,994
Non-Current Assets
Plant and equipment	69,427	6,002
Aeromagnetic database	2,333,337	2,426,667
Mineral interests	2,058,907	1,538,131
Total Non-Current Assets	4,461,671	3,970,800
TOTAL ASSETS	6,443,864	7,076,794
Current Liabilities
Payables	12,410	150,751
Provisions	789
Total Current Liabilities	13,199	150,751
TOTAL LIABILITIES	13,199	150,751
NET ASSETS	6,430,665	6,926,043
Equity
Contributed equity	8,056,261	8,056,261
Accumulated losses	1,625,596	1,130,218
TOTAL EQUITY	6,430,665	6,926,043

The accompanying notes form part of these financial statements.

$\Delta \phi = 0.000$

$\pmb{\ell}$

IMAGE RESOURCES NL

ABN 57 063 977 579

STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

	31 Dec 2002	31 Dec 2001
	(5)	$(5)$
CASH FLOWS FROM OPERATING ACTIVITIES
Cash payments to suppliers and contractors	(415, 669)	N/A
GST refunds received	99,911	N/A
Payments for exploration and evaluation	(749, 231)	N/A
Interest received	57,726	N/A
Net cash (used in) operating activities	(1,007,263)	N/A
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment	(70, 489)	N/A
Purchase of investments	(30,000)	N/A
Purchase of new prospects	(45, 294)	N/A
Net cash (used in) / provided by investing activities	(145, 783)	N/A
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from new issues of shares		N/A
Share issue expenses		N/A
Net cash provided by financing activities		N/A
Net (decrease) / increase in cash held	(1,153,046)	N/A
Cash at the beginning of the financial period	2,955,236	N/A
Cash at the end of the financial period	1,802,190	N/A

The accompanying notes form part of these financial statements.

ABN 57 063 977 579

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The half-year financial report does not include all notes of the type normally included within the annual report and they cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Company as the full financial report.

The half-yearly financial report is a general purpose financial report prepared in accordance with the requirements of Corporations Law, applicable Accounting Standards, including AASB 1029: Interim Financial Reporting and other mandatory professional reporting requirements. It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2002 and any public announcements made by Image Resources NL during the half-year in accordance with any continuous disclosure requirements arising under the Corporations Law.

(a) Basis of accounting

The half-yearly financial report has been prepared in accordance with the historic cost convention. For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.

(b) Changes in accounting policies

The accounting policies have been consistently applied by the Company and are consistent with those applied in the 30 June 2002 annual report.

NOTE 2 LOSS FROM ORDINARY ACTIVITIES	2002 (S)	2001 (5)
Profit from ordinary activities before income tax expense includes the following revenue which disclosure is relevant in explaining the financial performance of the Company:
Interest revenue	57,726	N/A
NOTE 3 NON CASH FINANCING AND INVESTING ACTIVITIES
During the period, there were no non-cash financing and investing activities which had a material effect on the company.
NOTE 4 EARNINGS PER SHARE
Adjusted weighted average number of ordinary shares used in calculating diluted earnings per share	48,716,257	N/A

NOTE 5 SEGMENTS

The Company operates only in one business, being the exploration for and development of minerals. Geographically, the company's activities are conducted mainly within Western Australia and the Northern Territory.

$\sim$

IMAGE RESOURCES NL

ABN 57 063 977 579

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

NOTE 6 EVENTS SUBSEQUENT TO BALANCE DATE

On 24 January 2003, Ticor Resources NL made an off-market takeover offer for all shares in Magnetic Minerals Limited ("Magnetic") at a price of \$0.55 per share. This offer was declared unconditional on 28 February 2003. Image Resources NL holds 2,287,229 shares in Magnetic which will result in a cash inflow of \$1,257,976.

NOTE 7 CONTINGENT LIABILITIES

Native Title

The Company has been notified of a number of native title claims under the Commonwealth Native Title Act 1993, covering areas in Western Australia.

Until further information is available and State legislation is finalised, the Company will not be in a position to assess the likely effect, if any, of any claim on the Company. However, the directors expect that existing exploration activities will not be materially affected by any claim or the claims in aggregate.

Ä,

.
Silahan

IMAGE RESOURCES NL ABN 57 063 977 579

DECLARATION BY DIRECTORS

The directors of the company declare that:

• 1. the accompanying financial statements and notes:
• (a) comply with Accounting Standard AASB 1029 : Interim Financial Reporting and the Corporations Regulations 2001; and
• (b) give a true and fair view of the financial position of the company as at 31 December 2002 and its performance for the half-year ended on that date.
• 1. 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:

Director Roger M'Thomson

Perth Dated this 12th day of March 2003.

Independent review report to the members of Image Resources NL

Scope

We have reviewed the financial report of Image Resources NL (the Company) for the half-year ended 31 December 2002 as set out on pages 8 to 13. The Company's directors are responsible for the financial report. We have performed an independent review of the financial report in order for the Company to lodge the financial report with the Australian Securities & Investment Commission. This review was performed in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report is not presented fairly in accordance with Accounting Standard AASB 1029: Interim Financial Reporting, other mandatory professional reporting requirements and the Corporations Act 2001 in Australia, so as to present a view which is consistent with our understanding of the Company's financial position, and performance as represented by the results of its operations and its cash flows.

Our review has been conducted in accordance with Australian Auditing Standards applicable to review engagements. The review is limited primarily to inquiries of company personnel and analytical procedures applied to the financial data. These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than that given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Statement

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the financial report of the company is not in accordance with:

• the Corporations Act 2001, including: $(a)$
• giving a true and fair view of the Company's financial position as at 31 $(i)$ December 2002 and of its performance for the half-year ended on that date; and
• complying with Accounting Standard AASB 1029: Interim Financial $(ii)$ Reporting and the Corporation Regulations 2001; and
• other mandatory professional reporting requirements. $(b)$

Sornes & Coroke

Somes & Cooke Chartered Accountants

J Cooke Partner Perth ¹. March 2002