IMAGE RESOURCES NL — Interim / Quarterly Report 2007

Apr 29, 2007

OUARTERLY REPORT

For the Quarter Ended 31 March 2007

HIGHLIGHTS

• A new channel, a new high-grade shallow strand and new resource extensions identified by drilling at the Cooljarloo heavy mineral project in the North Perth Basin, further enhancing this advanced project.
• Image completed its earn-in of a 70% interest in Cooljarloo. $\bullet$
• A high-grade strand extended and enhanced by laboratory results at Cooljarloo North (Image 100%).
• Significant exploration upside at Cooljarloo and Cooljarloo North, with at least 45km of high amplitude magnetic targets yet to be tested plus 30km of channel targets at Cooljarloo.
• A senior staff appointment made to fast track the evaluation and potential development of the Cooljarloo, Cooljarloo North, Bidaminna and Gingin heavy mineral projects.
• Encouraging early results from the Woodline joint venture on the Tropicana trend.
• Exploration for nickel sulphides commenced on Image's land package south west of Kambalda.
• The successful launch of Magnetic Resources NL, raising \$5M, with benefits for Image and its shareholders.

COOLJARLOO (Image 70%)

Following the grant of an exploration licence (E70/2898) within the southern part of the Cooljarloo project, a programme of reconnaissance drilling was carried out within Vacant Crown Land along existing access lines in order to test several targets generated by previous drilling to the north within adjacent tenement E70/2636 and from targets generated by detailed cesium vapour ground magnetic mapping surveys.

The drilling achieved four significant results even though only limited drilling lines were completed, firstly a new channel has been identified which is estimated to be more than 1.1km in length and up to 74m in thickness and is interpreted to be the southern extension of channel B (ASX release 30 November 2006). Secondly, a new near surface high-grade strand which is interpreted to be more than 2.8km in length was discovered with a best intersection of 6m @ 21.7% heavy mineral (HM) from 2m depth. Thirdly, the Middle Strand resource, which was previously thought to occur south of E70/2898. extends into the Cooliarloo project area for 1.1km with results of up to 6m @ 11.8% HM from 14m. This may link to the 28000 Strand shallow, high-grade resource which is currently some 3km in length. Fourthly, confirmatory high-grade intersections occur within the 35 AHD Strand resource in the western part of E70/2898 with grades up to 2m @ 50.0%HM from 10m (see Figure 1). The highlights of the recent programme are summarised in Table 1.

Collar Coordinates		Hole	From	Τо	Interval	HM Grade
Northing	Easting				(m)	(%)
	Channel Mineralisation
17605	41325	993	16	66	50	2.7
17620	41352	994	16	90	74	1.7
17569	41278	991	16	38	22	2.3
18460	14285	1115	14	$\overline{70}$	56	1.7
18265	41285	984	58	76	18	3.8
18066	41332	988	16	34	18	1.7
17968	41340	990	$\overline{18}$	42	$\overline{24}$	$\overline{1.9}$
	New High-Grade Strand
18251	39638	1060	10	26	16	10.6
		Including	2	8	6	21.7
18227	39624	1059	$\overline{0}$	8	$\overline{\mathbf{8}}$	12.8
		Including	$\overline{4}$	8	4	22.5
18214	39617	1149	$\overline{0}$	$\overline{\mathbf{8}}$	$\overline{\mathbf{8}}$	7.7
18460	39280	1071	0	18	18	2.6
	Middle Strand Extension
17348	39675	1145	8	14	6	11.8
17346	39660	1017	8	12	4	6.8
17650	39322	1040	6	8	$\overline{2}$	20.0
17636	39315	1147	$\overline{6}$	8	$\overline{2}$	12.0
35 AHD Strand
17464	31520	1226	10	12	$\overline{2}$	50.0
17464	31540	1225	8	12	4	12.5
17464	31560	1224	8	10	$\overline{2}$	15.0
17464	31500	1227	12	14	$\overline{2}$	10.0

	Table 1
Cooljarioo Preliminary Aircore Drilling Results

HM grades are visual estimates pending receipt of laboratory results.

Preliminary cross sections (based on visual estimates) are shown in Figures 2, 3 and 4. At this stage 10.8km of near surface high-grade strands have been identified by drilling at Cooljarloo with at least a further 45km of high amplitude magnetic targets remaining to be tested. Some 9km of channel targets have been defined by drilling to date and more than 30km of channel targets remain untested.

All the grades announced from Cooliarloo in this report reflect visual estimates from panning in the field which give a good guide for the HM grade prior to receiving laboratory results. Laboratory results will be announced when they become available.

During the quarter Image completed its \$800,000 earn-in from Metal Sands, entitling it to a 70% interest in the Cooljarloo project. The project is anticipated to proceed as a participating joint venture with both joint venture parties contributing pro-rata.

Figure 1 Channel Area Ground Magnetic Interpreted Strandlines with Drilling Results

Figure 2 Cooljarloo Drill Sections - Channel 'B' Extension

Figure 3 Cooljarloo Drill Sections - New High Grade Strand

Figure 4 Cooljarloo Drill Sections - Middle Strand Extension

COOLJARLOO NORTH (Image 100%)

The high-grade core of the shallow heavy mineral strand recently discovered at Cooliarloo North (Target 1, ASX release 7 February 2007) has now been drilled and extended from 2km to at least 2.5km in length within a strand which is 4.2km long and 100m wide (see Figure 5). The high-grade core of this strand is on average 40-80m in width and often between 4-8m in thickness at shallow depths of 2-6m from surface with mineralised overburden (see Figures 6-8). The laboratory grades as shown in Table 2 are exceptionally high and are between 5 to 10 times the average grades being mined at the nearby world-class Tiwest Cooljarloo Dry Mining Operations which average from 4 to 5%HM. The laboratory results have been compared to the previously reported visual estimates (ASX release 7 February 2007) and have proved to be even higher in tenor. Following these encouraging results the drill line spacing at Target 1 is being closed from 200m to 100m.

Target 2 has been drilled in the past (ASX release 24 October 2006) and the current programme is designed to test higher amplitude magnetic targets similar to Target 1 (which have converted to very high-grade results). The historical drilling is considered not to have adequately tested these higher amplitude targets, with drilling continuing on this potentially high-grade strand

Image's conversion of magnetic targets to new high-grade strands indicates the number and length of new discoveries is expected to increase at Cooljarloo North with a further 8km of magnetic targets remaining to be tested. Further laboratory results are now expected for Targets 2, 3 and 4.

Hole No	Collar Coordinates		From	To	Interval	HM Grade
	Northing	Easting	m	m	m	%
CN005	32400	29270	8	10	$\overline{2}$	12.4
CN006	32400	29290	6	10	$\overline{4}$	12.2
	includina		8	10	$\overline{2}$	19.2
CN019	32200	29300	$\overline{8}$	12 °	$\overline{\bf{4}}$	11.9
	including		$\overline{\mathbf{8}}$	10	$\overline{2}$	19.9
CN030	32000	29365	6	8	$\overline{2}$	7.7
CN031	32000	29385	$\overline{c}$	$\overline{12}$	$\overline{10}$	20.7
	including		4	10	6	29.3
CN038	31800	29430	4	8	4	14.7
	including		$\overline{6}$	$\overline{8}$	$\overline{2}$	25.1
CN039	31800	29450	$\overline{2}$	$\overline{\mathbf{8}}$	6	19.3
	including		4	$\overline{8}$	$\overline{\mathbf{4}}$	31.5
CN040	31800	29470	4	10	$\overline{6}$	31.7
	including		4	8	4	45.2
CN041	31800	29490	$\overline{2}$	4	$\overline{2}$	4.1
CN050	31600	29505	$\overline{8}$	10	$\overline{2}$	15.8
CN052	31600	29525	$\overline{0}$	12	$\overline{12}$	16.8
	including		6	10	4	37.6
	including		$\overline{6}$	8	$\overline{2}$	54.8
CN053	31600	29545	$\overline{6}$	10	4	4.2
CN059	31400	29555	10	$\overline{12}$	$\overline{2}$	4.8
CN060	31400	29575	4	$\overline{12}$	$\overline{8}$	26.8
	including		$\overline{6}$	10	$\overline{\bf{4}}$	43.2
CN061	31400	29595	$\overline{2}$	10	$\overline{\overline{\overline{8}}}$	16.6
	including		$\overline{\mathbf{8}}$	10	$\overline{2}$	29.9
CN078	31200	29613	8	10	$\overline{2}$	10.5
CN079	31200	29635	4	10	$\overline{6}$	41.7
	including		$\overline{6}$	10	$\overline{\mathbf{4}}$	52.1
CN080	31200	29655	$\overline{6}$	10 1	$\overline{\bf 4}$	18.6
CN096	31000	29710	$\overline{\mathbf{8}}$	10	$\overline{2}$	11.2
CN097	31000	29730	6	8	$\overline{2}$	3.1

Table 2 Cooljarioo North - Target 1 Aircore Drilling Results

	Collar Coordinates		From	Τo	Interval	HM Grade
Hole No	Northing	Easting	m	m	m	%
CN108	30800	29770	$\overline{2}$	$\overline{8}$	6	36.7
	including		4	$\overline{8}$	4	49.3
CN109	30800	29790	$\overline{0}$	$\overline{4}$	4	4.8
CN117	30600	29795	6	$\overline{8}$	$\overline{2}$	15.4
CN139	30975	29710	$\overline{6}$	10	4	12.6
	including		8	10	$\overline{2}$	20.7
CN140	31000	29725	8	10	$\overline{2}$	18.1
CN141	31400	29625	0	4	4	6.7
CN143	32445	29250	8	$\overline{12}$	$\overline{4}$	22.0
	including		$\overline{8}$	10	$\overline{2}$	35.0
CN144	32445	29270	8	10	$\overline{2}$	14.5
CN145	32445	29290	4	$\overline{8}$	4	13.1
CN146	32445	29310	4	8	4	11.1
CN149	32600	29200	10	$\overline{12}$	$\overline{2}$	6.3
CN149	32600	29220	8	12	4	24.5
CN154	32800	29145	8	14	6	7.2
CN155	32800	29165	10	14	4	10.1
CN156	32800	29185	10	12	$\overline{2}$	8.5
CN163	33200	29060	$\overline{2}$	6	4	3.8
CN164	33200	29080	$\overline{2}$	$\overline{6}$	4	4.4
CN167	33200	29040	$\overline{2}$	$\overline{8}$	$\overline{6}$	5.2
CN169	33400	28960	4	10	$\overline{6}$	4.6
CN170	33400	29010	4	10	$\overline{6}$	9.2
CN171	33400	29040	$\overline{2}$	$\overline{\mathbf{8}}$	$\overline{6}$	6.0
CN178	33800	28850	$\overline{2}$	$\overline{8}$	$\overline{6}$	6.7
CN179	33800	28870	$\overline{2}$	$\overline{\overline{\overline{8}}}$	$\overline{6}$	4.7
CN195	33800	29375	4	10	6	9.2
CN198	32600	29210	$\overline{2}$	4	$\overline{2}$	54.2
CN198	32600	29210	8	14	$\overline{6}$	23.5
	including One nonceled. EBA nonde dedengined by TDE homes the id nonneather		10	$\overline{12}$	$\overline{2}$	44.5

Table 2 (cont.)

2m samples, HM grade determined by TBE heavy liquid separation

NORTH PERTH BASIN PROJECT (Image 100%)

Following its application for 1100sq km of exploration licences over paleo shoreline targets in Mesozoic sediments east of the Gingin scarp. Image has commenced reconnaissance ground magnetic surveys on the Cowalla tenement some 15m east of Cooljarloo. This area contains a prominent interpreted shoreline feature more than 40km in length with potential for concentration and exposure of channel-style mineral sands similar to Cooljarloo.

WOODLINE (Image 100%, diluting)

Joint venturer Sipa Resources has reached agreement for Newmont to earn a majority interest in Sipa's Woodline gold and base metals project part of which includes two Image tenements. Under the terms of the agreement, Newmont may earn a 51% interest in Image tenements E28/1400 and E28/1496 diluting Image and Sipa to a 30% and 19% interest respectively. The Woodline project is situated on the regional Tropican-Beachcomber structural trend, a current focus of extensive exploration activity for gold, particularly by AngloGold Ashanti following the Tropicana gold discovery.

Sipa has completed about 290 line kilometres of helicopter-borne electromagnetic surveys (Hoistem) on the Image tenements and based on preliminary interpretations a number of anomalies have been identified for follow up. In addition several gold-incalcrete geochemical anomalies have been identified which warrant RAB/aircore drilling.

Figure 5 Cooljarloo North Project

Figure 6 Cooljarloo North Project - Target 1 Stacked Sections, 30600N - 31600N

Figure 7 Cooljarloo North Project - Target 1, Stacked Sections, 31800N - 32445N

Figure 8 Cooljarloo North Project - Target 1, Stacked Sections, 32600N - 33400N

KAMBALDA WEST (Image 100% diluting)

Mincor Resources has commenced exploration for nickel sulphides on this package of ten granted exploration licences west and southwest of Kambalda. A 3600m RAB drilling programme is scheduled to commence in the next week, testing an 8km strike of interpreted ultramafic rocks south of the Nepean nickel mine.

EMU LAKE (Image 30%)

Jubilee Mines advised that planning of the next phase of deep diamond drilling has been completed to test for down-plunge and down-dip extensions of previously intersected high-grade nickel sulphide mineralisation at the Gossan Zone.

RESOURCE EVALUATION (Mineral Sands)

During the quarter Image appointed Scott Carruthers to the position of Development Manager with a focus on mineral sands. With over 20 years experience in mineral sands exploration and mining, Scott has worked for Iluka Resources, Doral Mineral Industries. Cable Sands and others in roles ranging from exploration and mine geologist, mine planner to exploration manager. Scott has extensive experience in exploration and development of mineral sand orebodies. He holds a BSc (Geology) from the University of Western Australia and an MSc (Mineral Economics) from Curtin University.

Scott will manage Image's heavy mineral development, including resource estimation and economic analysis, negotiation of land access agreements, mineral assemblage and product quality determination, environmental permitting and drilling programme planning and supervision

MAGNETIC RESOURCES NL

The Magnetic Resources initial public offering raised \$5 million, closed heavily oversubscribed by a further \$5.8 million and listed on ASX on 5 April 2007 (ASX:MAU).

Magnetic was incorporated to explore for gold, nickel and uranium resources on a large and diverse package of tenements in Western Australian identified and acquired by Image. Image retains 6 million shares in Magnetic representing 15% of the issued capital plus a 1% royalty interest in 6,700sq km of tenements. In addition 8.2 million Magnetic shares were distributed to Image shareholders.

For more information on the company visit www.imageres.com.au Please direct enquiries to:

Roger Thomson Managing Director Phone (08) 9485 2410 Mobile 0419 969 183 Email roger@imageres.com.au George Sakalidis Executive Director - Exploration Phone (08) 9485 2410 Mobile 0411 640 337 Email george@imageres.com.au

The information in this report that relates to exploration results is based on information compiled by Roger Thomson BSc, ARSM, MAusIMM, who is a Member of the Australian Institute of Geoscientists. Roger Thomson is an employee of Image 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:			Quarter ended ("current quarter")
	57 063 977 579		31/3/2007
	Consolidated statement of cash flows
		Current quarter	Year to date
	Cash flows related to operating activities	\$AUD'000	(9 months) \$AUD'000
1.1	Receipts from product sales and related debtors	46	116
1.2	Payments for: (a) exploration and evaluation (b) development (c) production	(453)	(1, 255)
	(d) administration	(202)	(452)
1.3 1.4	Dividends received Interest and other items of a similar nature received	69	174
1.5 1.6	Interest and other costs of finance paid Income taxes paid
1.7	Other (provide details if material)
	Net Operating Cash Flows	(540)	(1, 417)
1,8	Cash flows related to investing activities Payment for purchases of: (a) prospects	(18)	(93)
1.9	(b) equity investments (c) other fixed assets Proceeds from sale of: (a) prospects	(6)	(93) (12)
	(b) equity investments (c) other fixed assets	6	25
1.10 1.11 1.12	Loans to other entities Loans repaid by other entities Other (provide details if material)	(201)	(279)
	Net investing cash flows	(219)	(452)
1.13	Total operating and investing cash flows (carried forward)	(759)	(1,869)

1.13	Total operating and investing cash flows (brought forward)	(759)	(1,869)
1.14 1.15 1.16 1.17 1.18 1.19	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 Dividends paid Other (provide details if material)	171 $\blacksquare$ $\blacksquare$ $\blacksquare$	3.508
	Net financing cash flows	171	3,508
	Net increase (decrease) in cash held	(588)	1,639
1.20 1.21	Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20	4,352	2,125
1.22	Cash at end of quarter	3,764	3,764

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	(99)
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 \$AUD'000	Amount used \$AUD'000
3.1	Loan facilities	÷
3.2	Credit standby arrangements	$\mathbf{r}$

Estimated cash outflows for next quarter

• $4, 1$ Exploration and evaluation
• $4.2$ Development

Total

(350)
m
(350)
\$AUD'000

Reconciliation of cash

Total: cash at end of quarter (item 1.22)	3,764	4,353
5.4 Other (provide details) – Short Term Deposit	3,635	3,859
5.3 Bank overdraft
5.2 Deposits at call
5.1 Cash on hand and at bank	129	494
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 follows.	Current quarter \$AUD'000	Previous quarter \$AUD'000

Changes in interests in mining tenements

		Tenement reference	Nature of interest	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed	E77/1059	Relinquished	100%	$0\%$
6.2	Interests in mining	E70/3100	Application	0%	100%
	tenements acquired or increased	E77/1442	Application	0%	100%
		E38/1871	Granted	100%	100%
		E46/709	Granted	100%	100%
		E70/2701	Granted	100%	100%
		E70/2850	Granted	100%	100%
		E70/2888	Granted	100%	100%
		E77/1284	Granted	100%	100%

		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	74,677,978	74,677,978
7.4	Issued during quarter	600,000 45,000		\$0.25 \$0.335	\$0.25 \$0.335
7.5	Convertible debt securities	N/A
7.6	Issued during quarter	Nil
7.7	Options			Exercise price	Expiry date
	Non-employee Options	1,805,000 2,000,000 2,000,000 2,500,000	Not Quoted Not Quoted Not Quoted Not Quoted	\$0.335 \$0.39 \$0.37 \$1.80	27.11.2008 26.11.2009 21.11.2010 16.11.2011
	Employee Options	300,000	Not Quoted	\$0.25	4.7.2007
7.8	Issued during quarter	Nil
7.9	Exercised during quarter	600,000 45,000		\$0.25 \$0.335	4.7.2007 27.11.2008
7.10	Expired during quarter	Nil
7.11	Debentures	N/A
7.12	Unsecured notes	N/A

Issued and quoted securities at end of current quarter

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.

Roger Thomson Managing Director Date: 30 April 2007