IMAGE RESOURCES NL — Interim / Quarterly Report 2006

Jan 30, 2006

HIGHLIGHTS

• Continued encouragement from Bidaminna in the North Perth Basin where ground magnetic surveys have increased the strike length of potentially high-grade heavy mineral strands to 36km. The main interpreted strands are 18km in length, average 200m in width and contain higher amplitude ground magnetic anomalies. Within this zone the Callisto and Ganymede strands merge and form the central high amplitude target strands which are 2.5km long and up to 900m wide. Drilling is scheduled to commence in February after signing of access agreements and is expected to define a new heavy mineral resource in this area.
• A joint venture at Cooljarloo in the North Perth Basin on a project with a resource of 80Mt at 3% HM (2.4Mt of concentrate). Ground magnetic surveys have commenced and are designed to delineate further high-grade strands and map the existing zircon-enriched strands in more detail prior to drilling. Drilling is expected to upgrade the existing resource.
• Diamond drilling of an EM conductor prospective for nickel sulphides near Flying Fox at Forrestania is anticipated to commence in February.
• RAB drilling of three nickel sulphide targets at Jilbadgie, south of Southern Cross, is expected to start in the March quarter.

BIDAMINNA (Image 100%)

As previously announced (ASX releases 6 December 2005 and 16 December 2005). continued analysis of the new 152 line-km of ground magnetic data shows a proliferation of higher magnetic amplitude mineral strand targets in the northern section of EL70/2825 at Bidaminna South situated 30km NN of Gingin in the North Perth Basin.

In this area. 9km of high-amplitude magnetic anomalies (>2.5 nano Teslas) occur at the intersection of the interpreted Ganymede and Callisto strands. The zone where these strands merge is termed the central high-grade target zone which is some 2.5km long and up to 800m wide. This area is interpreted to comprise multiple stacked strands and is the focus of Image's proposed initial drilling programme and is considered to be the likely centre of any possible future mining/dredging operation (see attached target map).

A further 18km of linear magnetic anomalies ranging from 1.5 to 2.5nT in amplitude and about 200m in width have been identified which may represent extensions to the interpreted high-grade strands. An additional 9km of strands up to 100m in width and with magnetic amplitudes of 1.0 to 1.5nT have also been interpreted and which appear parallel with and unconnected to the defined 27km of higher amplitude targets.

The westernmost (youngest) strand, Amalthea, is a sizeable 4.4km-long target zone which remains open to the south. This interpreted strand represents a potential zircon target as it may represent a reworking and upgrading of the older Ganymede and Callisto strands to the east. Further detailed ground magnetic surveys (50 linekm) are planned to define the extent of the Amalthea strand and determine if the Callisto and Io strands are linked.

An extensive 280-hole, 14,000m aircore drilling programme (subject to access agreements) is planned on 40m x 400m spacings which is anticipated to confirm the resource potential of the five interpreted strands outlined so far. Two access agreements have been signed to date and Mines Department approval for drilling is anticipated to be imminent. The drilling, scheduled in February, will provide data on the heavy mineral content and mineral assemblages (i.e. zircon, rutile, leucoxene and ilmenite) of the targeted strands. It is expected that this data will be used to define a heavy mineral resources for the first time in the Bidaminna south area.

Bidaminna South

COOLJARLOO (Image earning up to 70%)

As reported on 21 November 2005, Image has reached agreement with Metal Sands Pty Ltd to earn a majority interest in exploration licence application E70/2636 at Cooljarloo in the North Perth Basin, a region which produces 20-25% of the world's zircon. This 77sq km tenement is strategically situated between Tiwest's Cooliarloo and Jurien mineral sand operations and is 80km south of Iluka's world-class Eneabba operation, in an area of well established infrastructure - see location map.

Previous exploration by Geopeko and RGC Exploration discovered several paleostrandlines with significant heavy mineral (HM) concentrations and reported Inferred Resources on three strands with identified resources totalling in excess of 80Mt containing 2.4Mt of HM concentrate as summarised below.

Deposit	Resource Tonnes	Grade (%)	НM Tonnes	Ilmenite Tonnes	Rutile Tonnes	Leucoxene Tonnes	Zircon Tonnes
28,000	850.000	8.6	73.000	25,000	8.000	6.700	9.800
Mid-level	49.000.000	2.3	127.000	531,000	96.000	60.500	91.000
35 AHD	30.860.000	4.0	1.234.000	na	na	na	na
Total	80.710.000	3.0	2.434.000

na: information not available

The 28,000 strand is particularly encouraging, exhibiting high grades of 8.6% HM with a 24% combined zircon and rutile content. This grade and mineral assemblage compares very favourably with other zircon-rich HM deposits elsewhere in Australia. Image has commenced a 140 line-km ground magnetic mapping survey which is a technique developed by Image to identify the high-grade portions of the known strands. Image plans to focus on the high-grade strands and on the valuable zircon and rutile-rich assemblages and also explore for additional strands where no previous drilling has been carried out. Drilling is expected to upgrade the existing 80Mt resource.

Under the terms of the agreement Image may earn a 51% interest by sole funding expenditure of \$500,000 within four years of the grant date of the tenement and may elect to earn up to a 70% interest by expenditure of an additional \$300,000 over a total of six years. Image must spend a minimum of \$70,000 before the right of withdrawal.

Bidaminna, Cooljarloo Location Map

EMU LAKE (Image 30%, Jubilee 60%, Skryne 10%)

As previously reported, Jubilee Mines completed two broad step-out diamond drill holes at the Gossan Zone, both holes intersecting massive and massive-stringer nickel sulphides on the interpreted basal ultramatic contact (0.10m at 10.9% Ni from 346.6m in ELD-25 and 0.11m at 1.94% Ni from 414.1m in ELd-26). These results are considered to be significant as they occur on the main mineralised contact and substantially expand the area of high-grade sulphide mineralisation. It is anticipated that the joint venture will follow-up these encouraging results with further drilling in the first half of calendar 2006, together with testing of two coincident Ni-Cu geochemical targets outlined south of the Gossan Zone.

TROJAN JV (Image 100%, Troy earning 60%)

Rain-delayed fixed loop ground EM surveys and reconnaissance geochemical sampling of additional aeromagnetic targets on the 700sq km Woongaring project has been further delaved by more rain events. Geochemical sampling did commence during the quarter but was suspended due to wet weather causing access problems. It is anticipated that both the EM and geochemical surveys (the EM to test nickel sulphide targets and the geochemistry to test both nickel and gold targets) will be completed during the March quarter.

FORRESTANIA (Image 100%)

Following a delay in sourcing a suitable rig, drilling of the IR4 EM target near Western Area's Flying Fox nickel deposit is scheduled to start in February. The IR4 conductor lies on the possible folded strike extension of the Flying Fox ultramafic unit about 10km NW of Flying Fox. The conductor is interpreted to occur at a depth of 350m below surface with a strike extent of 800m, a depth extent of 150m and appears to be close to an ultramafic contact. The EM anomaly is consistent with a massive sulphide response and will require a 400m diamond drill hole for the initial test.

BRONCO PLAINS and NEPEAN EAST (Image 100%)

Image has entered into preliminary discussions for a possible joint venture with an active WA-based mining company on these two projects situated 140km east of Kalgoorlie and 10km ESE of the Nepean nickel mine (near Coolgardie) respectively. Image has identified several gold-anomalous areas up to 10 times background following preliminary geochemical sampling at Bronco Plains. At Nepean East, Image has outlined two areas of coincident anomalous Ni-Cu values over a cumulative strike length of 3.5km on a possible extension of the prospective Nepean Partnering with well funded, aggressive explorers remains an ultramafic unit. important part of Image's exploration strategy.

SOUTH YILGARN (Image 100%)

Reconnaissance geochemical sampling programmes are in progress on several target areas within Image's extensive ground holdings in the Coolgardie-Merredin-Ravensthorpe region. Numerous targets for both nickel sulphides and gold have been identified and sampling is anticipated to continue through much of calendar 2006.

WINDARRA NORTH (Image 100%)

Following a review of exploration results to date. Western Areas has withdrawn from this joint venture.

JILBADGIE (Image 35%, Westonia Mines 65%)

Westonia Mines is planning to RAB drill three nickel sulphide targets identified on this project 25km south of Southern Cross. The targets comprise nickel and multielement anomalies with coincident moderate-strength EM conductors. Drilling is scheduled to commence in the March quarter.

MT ELSIE

Following a review of exploration results to date. Image has withdrawn from this gold project in the eastern Pilbara.

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

Please direct enquiries to:

Roder Thomson Managing Director Phone (08) 9485 2836 Mobile 0419 969 183 Email roger@meteoric.com.au

George Sakalidis Executive Director - Exploration Phone (08) 9485 2836 Mobile 0411 640 337 Email george@meteoric.com.au

The information in this report that relates to exploration results is based on information compiled by Roger Thomson BSc, ARSM, MAuslMM, who is a Member of the Australian Institute of Geoscientists. Roger Thomson is an employee of Meteoric Resources NL. Roger Thomson 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'. Roger Thomson consents to the inclusion of this information in the form and context in which it appears in this report.

MINING EXPLORATION ENTITY QUARTERLY REPORT

Name of entity:

Image Resources NL

ABN: 57 063 977 579 Quarter ended ("current quarter")

31/12/2005

Consolidated statement of cash flows

		Current quarter	Year to date
Cash flows related to operating activities		\$AUD'000	(6 months)
			\$AUD'000
1.1	Receipts from product sales and related debtors	22	55
1.2	Payments for: (a) exploration and evaluation (b) development (c) production (d) administration	(211) (44)	(542) (271)
1.3	Dividends received
1.4	Interest and other items of a similar nature received	42	73
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (provide details if material)
	Net Operating Cash Flows	(191)	(685)
1.8	Cash flows related to investing activities Payment for purchases of: (a) prospects (b) equity investments	(17) (95)	(106) (107)
1.9	(c) other fixed assets Proceeds from sale of: (a) prospects	(4)	(4)
	(b) equity investments (c) other fixed assets
1.10	Loans to other entities
1.11 1.12	Loans repaid by other entities Other (provide details if material)	27	45
	Net investing cash flows	(53)	(172)
1.13	Total operating and investing cash flows (carried forward)	(244)	(857)

1.13	Total operating and investing cash flows (brought forward)	(244)	(857)
1.14 1.15 1.16 1.17	Cash flows related to financing activities Proceeds from issues of shares, options, etc. Proceeds from sale of forfeited shares Proceeds from borrowings Repayment of borrowings	40. ÷ $\overline{ }$	1,096
1.18 1.19	Dividends paid Other (provide details if material)	$\blacksquare$	(28)
	Net financing cash flows	40	1,068
	Net increase (decrease) in cash held	(204)	211
1.20 1.21	Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20	3,074	2,659
1.22	Cash at end of quarter	2,870	2,870

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current quarter \$AUD'000
1.23	Aggregate amount of payments to the parties included in item 1.2	(71)
1.24	Aggregate amount of loans to the parties included in item 1.10

• 1.25 Explanation necessary for an understanding of the transactions
• $N/A$

Non-cash financing and investing activities

• $2.1$ Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
• $N/A$
• $2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

N/A

Financing facilities available

		Amount available	Amount used
		\$AUD'000	\$AUD'000
3.1	Loan facilities
3.2	Credit standby arrangements	$\mathbf{m}$

Estimated cash outflows for next quarter

	Total	(300)
4.2	Development	$\mathbf{m}$
4.1	Exploration and evaluation	(300)
		\$AUD'000
	$-$ - $ -$

Reconciliation of cash

follows.	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as	Current quarter \$AUD'000	Previous quarter \$AUD'000
5.1	Cash on hand and at bank	428	666
5.2	Deposits at call
5.3	Bank overdraft
5.4	Other (provide details) – Short Term Deposit	2,442	2,408
	Total: cash at end of quarter (item 1.22)	2,870	3,074

Changes in interests in mining tenements

		Tenement	Nature of interest	Interest at	Interest at
		reference		beginning	end of
				of quarter	quarter
6.1	Interests in mining	E45/2685	Relinquished	100%	0%
	tenements	E63/842	Relinguished	100%	0%
	relinquished, reduced	E63/843	Relinguished	100%	0%
		E77/893	Relinquished	100%	0%
	or lapsed	M45/776	Withdrew from JV	61.43%	0%
		M45/777	Withdrew from JV	61.43%	0%
		M45/935 M46/280	Withdrew from JV Relinquished	100% 100%	0% 0%
		P45/2303	Withdrew from JV	61.43%	0%
		P45/2304	Withdrew from JV	61.43%	0%
		P45/2305	Withdrew from JV	61.43%	0%
6.2	Interests in mining	E70/2888	Application	0%	100%
	tenements acquired or	E70/2892	Application	0%	100%
	increased	M27/457	Application	0%	100%
		M27/458	Application	0%	100%
		M27/459	Application	0%	100%
		M27/460	Application	0%	100%
		M27/461	Application	0%	100%
		M27/462	Application	0%	100%
		M27/463 M27/464	Application	0% 0%	100% 100%
		P70/1490	Application Application	0%	100%
		E28/1510	Granted	100%	100%
		E74/344	Granted	100%	100%
		E70/2810	Granted	100%	100%
		E70/2794	Granted	100%	100%
		E74/360	Granted	100%	100%
		E74/362	Granted	100%	100%
		E39/998	Granted	100%	100%
		E77/1179 P39/4270	Granted Granted	100% 100%	100% 100%
		P39/4271	Granted	100%	100%
		P39/4323	Granted	100%	100%
		P45/2504	Granted	100%	100%

Issued and quoted securities at end of current quarter

		Total number	Number quoted	Issue price per security (cents)	Amount paid up per security (cents)
7.1	Preference securities	N/A
7.2	Issued during quarter	Nil
7.3	Ordinary securities	59,910,751	59,751,620
7.4	Issued during quarter	159,131		\$0.25	\$0.25
7.5	Convertible debt securities	N/A
7.6	Issued during quarter	Nil
7.7	Options			Exercise price	Expiry date
	Non-employee Options	14,040,727 1,850,000 2,000,000 2,000,000	Quoted Not Quoted Not Quoted Not Quoted	\$0.25 \$0.335 \$0.39 \$0.37	25.8.2006 27.11.2008 26.11.2009 21.11.2010
	Employee Options	1,035,000	Not Quoted	\$0.25	4.7.2005
7.8	Issued during quarter	Nil
7.9	Exercised during quarter	159,131	Unquoted	\$0.25	25.8.2006
7.10	Expired during quarter	Nil
7,11	Debentures	N/A
7.12	Unsecured notes	N/A

Compliance statement

• This statement has been prepared under accounting policies which comply with $\mathbf{1}$ accounting standards as defined in the Corporations Act or other standards acceptable to ASX.
• $\overline{2}$ This statement does give a true and fair view of the matters disclosed.

Rudolf Tieleman (Company Secretary) Date: 31 January 2006