IMAGE RESOURCES NL — Interim / Quarterly Report 2007

Mar 13, 2008

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ABN 57 063 977 579

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HALF-YEAR FINANCIAL REPORT

31 DECEMBER 2007

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• Page 1 -

IMAGE RESOURCES NL

ABN 57 063 977 579

CONTENTS

HALF-YEAR FINANCIAL REPORT

	Page No.
Directors’ Report	3
Auditor’s Independence Declaration	23
Condensed Income Statement	24
Condensed Balance Sheet	25
Condensed Statement of Changes in Equity	26
Condensed Statement of Cashflows	27
Notes to and forming part of the Financial Statements	28
Directors' Declaration	32
Independent Review Report	33

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IMAGE RESOURCES NL

DIRECTORS’ REPORT

Your directors submit the financial report of the company for the half-year ended 31 December 2007.

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 George Sakalidis, Mr Roger Thomson

REVIEW OF OPERATIONS

The loss for the half-year ended 31 December 2007 was $3,677,621 (2006 – $1,482,991). This includes an amount of $1,958,000 (2006 - $435,600) which has been expensed as a share-based payment (see note 2) The net loss excluding this share-based payment amounts to $1,719,621 (2006 - $1,047,391). The company’s activities during the six month period are summarised as follows:

Cooljarloo North (Image 100%)

During the period 1205 samples were processed from Target 1, now called Hyperion, with the laboratory results summarised in Figure 1 and Table 1. The drilling confirmed the continuity of shallow high-grade mineralisation over a 4.5km length. The Hyperion strand averages 40m-60m in width, ranging up to 120m wide with an average thickness of 5m and overburden of 4m. Resource estimation of the Hyperion strand is underway, based on a drill hole density of 20m x 100m and is expected to be completed in March 2008.

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Figure 1 Cooljarloo North

• Page 3 -

IMAGE RESOURCES NL

DIRECTORS’ REPORT

Table 1

Cooljarloo North Hyperion (Target 1)

Hole No	Collar Coordinates	Collar Coordinates	From m	To m	Interval m	Grade % HM
	North	East
CN525	6631292	329581	8	12	4	27.5
	including		9	12	3	35.3
CN544	6630902	329720	3	11	8	24.6
	including		4	10	6	31.9
CN517	6631900	329421	3	9	6	19.4
		including	6	9	3	36.9
CN594	6632700	329180	9	15	6	18.6
CN520	6631500	329550	4	11	7	18.6
	including		5	10	5	24.4
CN505	6632100	329340	4	12	8	16.9
CN538	6631102	329670	2	11	9	16.1
CN514	6631700	329495	1	15	14	15.8
		including	5	10	5	38.1
CN510	6631899	329399	4	9	5	13.2
	including		6	8	2	27.9
CN591	6632500	329245	7	13	6	12.5
CN612	6633300	329020	2	10	8	12.0
	including		5	10	5	16.2
CN611	6633300	329000	2	12	10	11.4
CN613	6633300	329040	2	12	10	10.7
CN614	6633300	329060	2	9	7	9.9
CN542	6630900	329730	7	14	7	9.8
CN623	6633500	328915	9	12	3	9.6
CN595	6632700	329200	11	14	3	8.3
CN513	6631700	329475	3	13	10	8.0
CN519	6631500	329530	8	12	4	7.6
CN079	6631197	329635	16	22	6	6.9
CN149	6632600	329218	12	14	2	6.9
CN615	6633300	329080	1	9	8	6.8
CN144	6632446	329270	12	14	2	6.6
CN518	6631900	329440	3	9	6	6.4
CN060	6631399	329572	22	26	4	6.4
CN504	6632093	329321	12	13	1	6.2
CN185	6633999	328859	2	10	8	6.1
CN602	6633100	329060	3	15	12	5.8
CN543	6630900	329750	8	9	1	5.7
CN509	6631900	329379	7	8	1	5.6
CN060	6631399	329572	26	27	1	5.5
CN166	6633199	329154	2	6	4	5.5
CN022	6632201	329348	8	9	1	5.4
CN506	6632101	329360	3	10	7	5.2
CN548	6630700	329775	5	8	3	5.1
CN183	6634002	328790	4	10	6	5.1
CN173	6633600	328887	8	12	4	5.0

• Page 4 -

IMAGE RESOURCES NL

DIRECTORS’ REPORT

Table 1 (cont’d)

Hole No	Collar Coordinates	Collar Coordinates	From m	To m	Interval m	Grade % HM
	North	East
CN165	6633200	329129	2	8	6	4.9
CN015	6632202	329140	6	10	4	4.8
CN599	6632901	329141	12	13	1	4.6
CN597	6632900	329100	7	13	6	4.5
CN186	6634194	328761	4	14	10	4.1
CN151	6632598	329257	8	12	4	4.1
CN168	6633401	328931	4	14	10	4.1
CN598	6632902	329120	6	12	6	4.0
CN603	6633100	329080	3	11	8	4.0
CN500	6632301	329284	8	11	3	3.9
CN507	6632100	329380	3	8	5	3.7
CN549	6630700	329798	3	6	3	3.4
CN174	6633599	328929	4	10	6	3.4
CN501	6632299	329299	6	10	4	3.4
CN535	6631101	329719	6	8	2	3.4
CN082	6631198	329705	2	4	2	3.4
CN606	6633100	329040	4	11	7	3.4
CN616	6633300	329100	2	8	6	3.3
CN158	6633002	329057	8	12	4	3.3
CN040	6631808	329465	18	26	8	3.2
CN557	6631102	329697	4	6	2	3.2
CN589	6632500	329226	10	12	2	3.0
CN177	6633800	328817	2	12	8	3.0
CN607	6633096	329019	5	14	9	2.9
CN609	6633198	329001	5	9	4	2.7
CN521	6631500	329570	4	5	1	2.7
CN160	6633006	329105	8	12	4	2.6
CN159	6633002	329078	6	14	8	2.5
CN043	6631804	329567	34	38	4	2.3
CN610	6633200	329021	3	11	8	2.3
CN526	6631300	329570	11	12	1	2.3
CN625	6633500	328960	10	11	1	2.3
CN604	6633098	329103	3	6	3	2.3
CN050	6631599	329502	14	16	2	2.0

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

A 151-hole, 3,393m aircore drilling programme was completed at Target 2 infilling the drill spacing to 100m x 20m over a 4km strike length on each of two strandlines, with visual estimates confirming the continuity of shallow mineralisation. Laboratory results from drilling completed at Target 2 in May are summarised in Table 2, confirming or improving the visual grade estimates previously reported.

• Page 5 -

IMAGE RESOURCES NL

DIRECTORS’ REPORT

Table 2 Cooljarloo North Target 2

Hole No	Collar Coordinates	Collar Coordinates	From m	To m	Interval m	Grade % HM
	North	East
CN485	6635999	331533	10	16	6	17.0
CN473	6635399	331880	12	20	8	13.2
CN490	6636795	331067	10	14	4	11.5
CN426	6634396	332248	22	26	4	11.2
CN492	6636902	331000	10	18	8	10.5
	including		10	16	6	13.0
CN494	6636902	330960	10	20	10	9.2
CN487	6635998	331584	8	16	8	8.9
CN756	6634598	332102	22	30	8	8.8
CN466	6633795	332679	16	22	6	7.4
	including		18	20	2	12.9
CN436	6634200	332393	18	26	8	7.4
CN771	6633793	332661	14	28	14	6.3
CN486	6635998	331564	8	14	6	6.3
CN769	6634196	332670	12	18	6	5.9
CN434	6634201	332332	14	22	8	5.9
CN476	6635599	331374	12	16	4	5.8
	including		12	14	2	9.3
CN440	6634200	332649	12	22	10	5.7
CN753	6634799	332257	34	36	2	5.6
CN480	6635801	331671	12	18	6	5.6
CN495	6636902	330941	12	22	10	5.6
CN482	6635999	331064	6	10	4	5.6
CN438	6634201	332561	12	26	14	5.3
CN491	6636902	331019	10	14	4	5.2
CN493	6636902	330979	10	18	8	5.1
CN762	6634395	332233	20	26	6	4.8
CN483	6635997	331139	6	12	6	4.8
CN488	6635998	331605	8	12	4	4.8
CN433	6634198	332288	14	20	6	4.7
CN767	6634399	332544	22	24	2	4.5
CN469	6633796	332558	16	22	6	4.5
CN467	6633796	332639	16	30	14	4.5
CN481	6635800	331176	8	12	4	4.4
CN759	6634597	332381	24	32	8	4.2
CN771	6633793	332661	28	29	1	4.1
CN475	6635600	331281	8	24	16	4.0
CN485	6635999	331533	10	16	6	17.0
CN450	6634000	332480	16	24	8	3.8
CN468	6633795	332598	16	24	8	3.8
CN453	6634001	332700	12	22	10	3.7
CN441	6634198	332689	12	24	12	3.7
CN749	6634797	331885	16	26	10	3.6
CN748	6634794	331851	16	24	8	3.4

• Page 6 -

IMAGE RESOURCES NL

DIRECTORS’ REPORT

Table 2 (cont’d)

Hole No	Collar Coordinates	Collar Coordinates	From m	To m	Interval m	Grade % HM
	North	East
CN455	6634000	332849	14	22	8	3.4
CN452	6634002	332659	12	22	10	3.2
CN459	6633794	332998	12	16	4	3.1
CN454	6634000	332740	12	26	14	3.0
CN768	6634198	332625	18	28	10	2.7
CN463	6633800	332850	16	24	8	2.5
CN462	6633799	332889	8	20	12	2.21

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

Initial drilling on Target 7 in the SW part of the tenement has returned encouraging results as summarised in Table 3 warranting further drilling. Further interpretation of ground magnetics has indicated a further six targets, adding another 12km to the cumulative length of magnetic targets bringing the total length of magnetic targets to be drilled to more than 20km.

Table 3 Cooljarloo North Target 7

Hole No	Collar Coordinates	Collar Coordinates	From m	To m	Interval m	Grade % HM
	North	East
CN564	6630199	329053	7	13	6	7.1
CN562	6630199	329090	5	12	7	6.8
CN563	6630197	329072	5	12	7	6.2
CN565	6630201	329120	6	13	7	5.4
CN552	6630600	329410	5	7	2	4.5
CN568	6630204	329212	3	8	5	4.0
CN567	6630204	329189	4	9	5	3.9
CN566	6630199	329170	3	11	8	3.7
CN570	6630200	329252	3	9	6	3.6
CN569	6630204	329231	2	9	7	2.9

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

During the period 932 samples were processed from Target 2, with the laboratory results summarised in Figure 2 and Table 4. This prospect is comprised of two separate strandlines that are continuous over a strike length of over 4 km. A third dissected strandline is also evident between the two main strands. The strandlines are preserved against the Gingin Scarp, in the same geological position as Iluka’s operating Gingin mine site and several other prospects and mines in the region. Preliminary estimations indicate that this prospect is likely to be economic and as such Image ranks this project alongside the high grade Hyperion deposit on the same tenement. Drilling has confirmed the continuity of high-grade mineralisation over a 4.5km length on each of the two major strands comprising the target. Further drilling is planned during the next six month period.

• Page 7 -

IMAGE RESOURCES NL

DIRECTORS’ REPORT

Figure 2 Cooljarloo North Significant Drilling Results

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• Page 8 -

IMAGE RESOURCES NL

DIRECTORS’ REPORT

Table 4

Target 2 Drill Intersections

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Grade % HM
	MGA East	MGA North
CN799	331631	6635873	10	20	10	10.6
CN813	331933	6635353	9	19	10	9.9
	including		10	16	6	13.2
CN805	331715	6635689	14	20	6	16.0
	including		16	19	3	22.0
CN795	331523	6636041	2	12	10	9.2
	including		9	12	3	21.1
CN885	332453	6634498	18	28	10	8.8
CN291	330830	6637203	10	20	10	8.7
	including		12	18	6	12.8
CN794	331506	6636030	4	12	8	10.4
	including		7	12	5	14.2
CN419	332400	6634599	20	30	10	8.0
	including		22	26	4	13.4
CN715	331145	6636599	12	22	10	7.0
	including		14	18	4	13.1
CN800	331648	6635884	10	17	7	9.8
CN426	332248	6634397	20	26	6	11.3
CN798	331615	6635862	8	16	8	8.4
CN924	332595	6633875	14	24	10	6.6
CN384	331863	6635400	14	22	8	8.3
CN788	331321	6636387	9	17	8	8.1
CN833	331196	6636544	10	17	7	9.2
CN701	330812	6637201	12	18	6	10.3
CN796	331556	6636063	2	11	9	6.8
CN889	332134	6634530	20	28	8	7.4
CN899	332561	6634313	20	28	8	7.3
CN820	330794	6637237	11	18	7	8.4
	including		15	18	3	14.6
CN882	331908	6634860	20	24	4	14.5
CN878	331799	6635028	12	20	8	7.2
CN735	331817	6635001	12	22	10	5.5
CN802	331598	6635851	12	18	6	9.1
	including		15	18	3	13.9
CN893	332268	6634379	20	26	6	9.0
CN806	331749	6635711	14	19	5	10.7
CN920	332545	6633843	16	24	8	6.4
	including		20	22	2	13.1
CN892	332235	6634357	14	24	10	4.9
CN391	331882	6635200	14	22	8	6.1
CN801	331665	6635895	10	19	9	5.3

• Page 9 -

IMAGE RESOURCES NL

DIRECTORS’ REPORT

Table 4 Cont’d

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Grade % HM
	MGA East	MGA North
CN364	331689	6635803	14	18	4	11.8
	including		16	18	2	19.0
CN416	332279	6634601	24	34	10	4.7
CN887	332100	6634508	18	28	10	4.7
CN400	332031	6635000	22	34	12	3.8
CN894	332469	6634032	16	26	10	4.5
CN388	331660	6635200	12	18	6	7.5
CN432	332071	6634201	10	22	12	3.6
CN329	331329	6636400	8	16	8	5.4
CN328	331300	6636401	12	18	6	7.1
CN397	331800	6635002	12	22	10	4.3
CN407	331956	6634799	22	26	4	10.5
	including		24	26	2	16.0
CN726	331632	6635800	12	18	6	7.0
	including		16	18	2	13.3
CN408	332120	6634800	24	32	8	5.2
CN943	331363	6635937	2	12	10	4.1
CN919	332561	6633854	16	26	10	4.1
CN906	332587	6634109	10	24	14	2.9
CN864	331128	6636023	6	12	6	6.8
CN895	332452	6634021	16	24	8	5.1
CN869	331279	6635644	6	14	8	5.0
CN925	332612	6633886	14	20	6	6.7
CN710	331010	6636798	12	18	6	6.6
CN739	332023	6635196	18	24	6	6.6
CN901	332620	6634130	16	24	8	5.0
CN722	331505	6636000	10	14	4	9.8
CN809	331807	6635510	13	18	5	7.8
CN406	331930	6634800	20	26	6	6.5
CN414	332080	6634597	20	28	8	4.7
CN867	331229	6635850	6	14	8	4.7
CN923	332578	6633865	16	24	8	4.7
CN380	331511	6635402	14	18	4	9.3
CN738	331901	6635200	14	22	8	4.6
CN730	331761	6635399	12	20	8	4.5
CN905	332603	6634119	16	28	12	3.0
CN325	331087	6636401	10	18	8	4.5
CN425	332220	6634399	18	26	8	4.5
CN935	332050	6634237	12	20	8	4.4
CN818	330718	6637426	9	16	7	5.0
CN723	331470	6635809	6	14	8	4.4
CN817	330701	6637415	9	17	8	4.3
CN834	331213	6636555	10	16	6	5.8

• Page 10 -

IMAGE RESOURCES NL

DIRECTORS’ REPORT

Table 4 Cont’d

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Grade % HM
	MGA East	MGA North
CN341	331049	6636001	6	10	4	8.5
CN940	331464	6635764	6	14	8	4.2
CN915	332830	6634028	16	22	6	5.6
CN412	331994	6634598	16	24	8	4.2
CN891	332218	6634346	14	22	8	4.1
CN931	332419	6634000	14	22	8	4.0
CN377	331391	6635407	8	12	4	8.0
CN888	332067	6634486	16	24	8	4.0
CN355	331256	6635801	8	16	8	3.9
CN821	330827	6637258	11	17	6	5.2
CN332	330789	6636201	10	16	6	5.2
CN832	331179	6636533	10	16	6	5.2
CN881	331874	6634838	16	24	8	3.7
CN944	331397	6635959	2	10	8	3.7
CN790	331271	6636354	13	18	5	5.9
CN334	331018	6636202	14	18	4	7.3
CN851	330894	6636348	14	19	5	5.8
CN316	331181	6636598	12	18	6	4.8
CN395	331720	6635001	10	18	8	3.6
CN387	331620	6635200	8	16	8	3.5
CN413	332039	6634598	20	26	6	4.7
CN314	330972	6636596	10	16	6	4.7
CN433	332288	6634199	14	20	6	4.7
CN921	332528	6633832	16	22	6	4.6
CN734	331683	6634997	10	18	8	3.4
CN945	331330	6635915	2	10	8	3.4
CN404	331869	6634798	16	24	8	3.4
CN928	332322	6633817	14	20	6	4.5
CN368	331399	6635599	12	16	4	6.6
CN855	330852	6636082	6	10	4	6.3
CN900	332578	6634324	20	26	6	4.2
CN874	331547	6635341	12	18	6	4.2
CN396	331760	6635002	12	18	6	4.2
CN787	331305	6636376	13	17	4	6.3
CN948	330953	6636625	10	16	6	4.2
CN390	331839	6635200	12	18	6	4.1
CN381	331699	6635403	12	18	6	4.1
CN908	332554	6634087	18	24	6	4.1
CN910	332746	6633973	20	26	6	4.1
CN827	331087	6636712	14	17	3	8.1
CN399	331999	6635000	20	28	8	3.0
CN338	331400	6636198	10	14	4	6.0
CN829	331120	6636733	11	16	5	4.8

• Page 11 -

IMAGE RESOURCES NL

DIRECTORS’ REPORT

Table 4 Cont’d

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Grade % HM
	MGA East	MGA North
CN367	331300	6635600	8	12	4	6.0
CN330	331357	6636400	12	16	4	6.0
CN854	331011	6636424	12	18	6	3.9
CN351	331547	6635998	6	14	8	2.9
CN911	332763	6633984	10	20	10	2.3
CN786	331288	6636365	12	17	5	4.5
CN896	332486	6634043	20	24	4	5.6
CN378	331429	6635403	8	14	6	3.7
CN423	332132	6634399	14	22	8	2.8
CN860	331120	6636256	10	16	6	3.7
CN323	331018	6636398	12	18	6	3.6
CN853	331028	6636435	12	18	6	3.6
CN702	330847	6637202	14	18	4	5.3
CN366	331260	6635603	8	14	6	3.5
CN294	330949	6637199	14	20	6	3.5
CN393	332000	6635200	20	26	6	3.5
CN386	331581	6635201	10	14	4	5.1
CN873	331531	6635331	12	18	6	3.4
CN852	330912	6636358	14	18	4	5.0
CN863	331095	6636002	4	10	6	3.3
CN875	331480	6635298	12	16	4	4.9
CN711	331032	6636800	10	14	4	4.9
CN343	331119	6635999	6	12	6	3.3
CN435	332362	6634201	18	24	6	3.2
CN717	330891	6636400	14	18	4	4.8
CN347	331349	6636000	4	8	4	4.7
CN868	331330	6635677	8	14	6	3.1
CN913	332796	6634006	8	14	6	3.1
CN933	332150	6634063	14	20	6	3.1
CN339	331429	6636200	10	14	4	4.6
CN394	332041	6635201	10	14	4	4.6
CN826	331070	6636701	13	17	4	4.6
CN429	332507	6634399	20	26	6	3.0
CN311	330751	6636600	12	16	4	4.5
CN812	331900	6635332	16	20	4	4.3
CN333	330930	6636202	12	16	4	4.3
CN922	332511	6633821	16	22	6	2.9
CN706	330928	6637001	16	20	4	4.3
CN317	331219	6636600	12	16	4	4.2
CN354	331191	6635800	8	14	6	2.8
CN907	332570	6634098	18	24	6	2.8
CN362	331611	6635801	16	20	4	4.0
CN847	330760	6636261	12	16	4	4.0

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Table 4 Cont’d

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Grade % HM
	MGA East	MGA North
CN939	331455	6635281	12	16	4	4.0
CN797	331490	6636020	8	12	4	4.0
CN308	331082	6636797	10	14	4	3.8
CN422	332102	6634399	16	22	6	2.5
CN719	331387	6636202	12	16	4	3.7
CN337	331179	6636199	12	16	4	3.6
CN709	330987	6636799	16	20	4	3.5
CN884	332436	6634488	24	30	6	2.3
CN859	331003	6636180	14	18	4	3.4
CN421	331932	6634399	14	18	4	3.4
CN767	332544	6634399	20	24	4	3.4
CN862	330944	6635903	10	14	4	3.4
CN810	331824	6635521	12	16	4	3.3
CN877	331749	6634995	16	20	4	3.3
CN320	330829	6636401	14	18	4	3.2
CN301	330947	6637000	16	18	2	6.4
CN349	331490	6636001	10	14	4	3.2
CN310	330713	6636603	14	18	4	3.2
CN358	331411	6635800	6	10	4	3.1
CN936	332033	6634226	16	20	4	3.0
CN816	330668	6637394	13	17	4	3.0
CN835	331229	6636566	14	17	3	3.9

1m or 2m samples, HM grade determined by TBE heavy liquid separation

22 further samples from Hyperion were processed during the period. These significant results are summarised in Table 5.

Table 5 Drilling Results – Hyperion

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Grade % HM
	MGA East	MGA North
CN143	329248	6632447	8	14	6	15.7
	Including		8	12	4	22.0
CN184	328819	6634000	2	10	8	4.4

1m or 2m samples, HM grade determined by TBE heavy liquid separation

Image has applied for a single graticule exploration licence, E70/3328, which extends the strike length of Target 2 held by Image by about 500 metres.

In December, 27 holes were drilled at Hyperion to better define the mineralisation. The total number of holes on this prospect is now 306, and these drill holes will add valuable information for the resource estimate. A further 13 holes were drilled on other magnetic targets, two of which intersected significant heavy minerals, see Table 6. These encouraging results provide targets for further drilling.

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Table 6

Drilling Results – Other Targets (visual estimates)

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Estimated % HM
	MGA East	MGA North
CN987	330160.1	6635202	22	28	6	7.7
CN989	330500.6	6635197	12	18	6	13.3

Further laboratory results available from drilling on Target 7 (in the SW part of the tenement), and are summarised in Table 7. Infill drilling of this prospect is planned for the next period.

Table 7 Drilling Results - Target 7

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Grade % HM
	MGA East	MGA North
CN684	328990	6630199	11	18	7	6.7
CN681	329148	6630201	3	11	8	4.6
CN697	329236	6630026	5	10	5	5.6
CN687	329011	6630200	10	15	5	5.4
	including		13	14	1	10.2
CN695	329216	6630025	6	11	5	4.9
	including		9	10	1	8.6
CN667	328947	6630816	9	14	5	4.3
CN693	328976	6630013	10	15	5	4.1
CN668	328963	6630818	8	12	4	4.9
CN669	328987	6630801	8	13	5	3.8
CN685	328971	6630201	9	14	5	3.8
CN666	328925	6630803	9	13	4	4.5
CN659	328910	6631199	15	18	3	6.0
CN696	329196	6630020	8	12	4	4.4
CN660	328948	6631199	14	17	3	5.9
CN680	329216	6630397	3	7	4	4.3
CN692	328956	6630023	10	15	5	3.4
CN694	328939	6630035	10	15	5	3.1
CN698	329380	6630024	6	10	4	3.6
CN678	329170	6630401	4	8	4	3.6
CN670	329006	6630802	8	12	4	3.6
CN664	328885	6630799	7	10	3	4.1
CN679	329191	6630398	3	7	4	3.1
CN671	329025	6630792	8	11	3	3.9

1m or 2m samples, HM grade determined by TBE heavy liquid separation

Cooljarloo (Image 70%)

Concentrates from 27 composite samples have been generated by wet tabling and are currently being processed by heavy liquid separation, high intensity magnetic separation, electrostatic separation and by XRF analysis of the resulting fractions. The results of this test work will better define the markets for which these products are suited and provide firmer estimates of product pricing.

An additional 300 samples from the channel mineralisation are being processed to better define boundaries for the purposes of resource estimation. A botanical survey was completed over an

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DIRECTORS’ REPORT

area of Vacant Crown Land encompassing part of the 35AHD strand as part of the environmental permitting process to provide drilling access to this area

75 holes were drilled for 1029m to infill the 35 AHD strand. Another 75 holes for 1254m targeted untested magnetic anomalies. No assays are yet complete for this drilling. Table 8 summarises the drilling over the magnetic anomalies and Table 9 the infill drilling over the 35AHD prospect.

Table 8

Drilling Results – Magnetic Targets (visual estimates)

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Estimated % HM
	MGA East	MGA North
1297	332520	6623000	7	10	3	4.8
1298	332530	6623000	8	10	2	4.5
1299	332540	6623000	8	11	3	5.7
1300	332550	6623000	9	10	1	3.0
1301	332560	6623000	10	11	1	2.5
1302	332570	6623000	8	10	2	6.0
1303	332580	6623000	8	11	3	5.0
1304	332590	6623000	7	11	4	3.6
1305	332600	6623000	8	9	1	2.5
1306	332600	6623000	6	8	2	5.5
1307	332620	6623000	11	12	1	2.5
1308	332510	6623001	8	10	2	3.4
1310	332550	6623200	6	7	1	3.0
1311	332560	6623200	5	7	2	3.0
1312	332570	6623200	6	8	2	2.5
1313	332580	6623200	10	12	2	2.5
1315	332540	6623300	8	10	2	3.0
1316	332560	6623300	8	10	2	3.0
1317	332580	6623300	8	12	4	2.8
1318	332600	6623300	6	8	2	3.5
1319	332510	6623450	6	8	2	3.0
1320	332540	6623450	6	8	2	3.0
1323	332500	6623600	6	8	2	3.5
1327	332500	6623700	6	8	2	3.5
1328	332510	6623700	6	10	4	3.0
1340	332520	6622800	8	10	2	3.0
1341	332530	6622800	8	10	2	4.0
1342	332540	6622800	8	10	2	4.0
1343	332600	6622800	6	10	4	5.5
1344	332580	6622800	6	10	4	3.3
1345	332620	6622800	8	10	2	3.5
1346	332612	6622801	8	10	2	4.0
1350	332540	6622600	8	10	2	3.0
1352	332600	6622600	6	8	2	3.0
1353	332480	6622400	6	8	2	5.0
1377	332500	6621600	6	8	2	2.8

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Table 9 Drilling Results - 35 AHD (visual estimates)

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Estimated % HM
	MGA East	MGA North
1384	332236	6621882	2	4	2	20.0
1382	332230	6621800	4	6	2	15.0
1385	332223	6621880	4	6	2	10.0
1282	332030	6621800	2	7	5	9.6
1276	332220	6621700	7	10	3	7.7
1383	332035	6621885	4	6	2	6.0
1388	332198	6621885	2	4	2	6.0
1269	332290	6621600	4	6	2	5.0
1387	332211	6621885	4	5	1	5.0
1274	332080	6621700	5	7	2	4.5
1283	332012	6621801	6	7	1	4.0
1329	332240	6623600	8	10	2	3.5
1373	332000	6621700	4	6	2	3.5
1270	332080	6621600	6	8	2	3.2
1265	332280	6621300	14	15	1	3.0
1273	332060	6621700	5	7	2	3.0
1281	332280	6621800	4	5	1	3.0
1386	332245	6621888	4	5	1	3.0
1268	332290	6621400	10	11	1	2.5
1287	332260	6622000	7	8	1	2.5

Table 10 summarises the results of further laboratory processing of channel intersections that were drilled in previous period.

Table 10 Drilling Results – Channels

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Grade % HM
	MGA East	MGA North
921	341010	6620930	12	76	64	1.3
897	340990	6619812	16	52	36	1.9
896	340950	6619816	16	50	34	1.5

1m or 2m samples, HM determination by TBE heavy liquid separation

The magnetic data for Cooljarloo has been reviewed and a further 42km of targets have been identified. Drilling of these extensive targets in 2008 is currently being planned.

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IMAGE RESOURCES NL
DIRECTORS’ REPORT
Figure 3
Tenement Holdings
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DIRECTORS’ REPORT

Other North Perth Basin Projects (Image 100%)

638km of first-pass ground magnetic surveys were conducted on several of Image’s tenements as summarised in Table 11.

Table 11 Ground Magnetic Surveys

Project	Tenement Number	Line km	% Complete
Quinns Hill	E70/3100	142	33
Wannamal	E70/3093	98	21
Bootine	E70/3192	246	42
CatabyWest	E70/3068	152	80
Total		638

Four new tenements have been applied for as shown in Figure 3. These bring Image’s land holdings to 2047sq km. Several of these tenements have aeromagnetic targets identified by a recent survey and highlight their prospectivity. Image is now preparing ground magnetic programmes similar to those carried out over its existing tenements. These surveys will prioritise targets for follow up drilling when the new tenements are granted.

Serpentine Lakes, Eucla Basin (Image 100%)

Diatreme Resources has reported further drilling results from its zircon-rich Cyclone discovery in the Eucla Basin, indicating that two or possibly three mineralised strands extend southeast into Image’s Serpentine Lakes tenement. The Cyclone mineralisation is reported to range from 4m to 35m in thickness with zircon-rich zones up to 40% of the heavy mineral content, and low slime content of 3%. These favourable attributes augur well for Image’s Serpentine Lakes project where the paleoshoreline hosting this mineralisation is interpreted to broaden and extend into the Image tenement for some 28km.

Image has reached agreement with Diatreme Resources to conduct a collaborative programme of ground magnetic and radiometric surveys over part of the Cyclone discovery. The surveys will determine whether these techniques will be effective in detecting the mineralisation on Image’s tenement, and if so, map the extent of the mineralisation on the boundary to facilitate planning of ground magnetic surveys and drilling within the Image tenement. If successful, the results will allow Image to focus its exploration programme on potentially high-grade targets identified by the geophysical surveys.

An access and compensation agreement was signed with the native title holders of the land within the project area with subsequent grant of the tenements. A programme of work application has been submitted to DOIR outlining a magnetometer survey and air core drilling. Heritage surveys are expected to commence in March or April 2008.

During the period, 80 line-km orientation ground magnetic and radiometric surveys were completed over Diatreme Resources’ Cyclone heavy mineral discovery on its adjoining tenement. This revealed a correlation of high amplitude linear NW trending ground magnetic targets with the higher grade mineralisation intersected by Diatreme in at least 6 separate targets (see Figure 4). This supports the interpretation that 3 palaeo coastlines pass into the Image tenements. A prospective zone some 28km long and up to 9km wide based on interpretation of elevation models, geology and magnetic trends has been identified for future exploration.

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DIRECTORS’ REPORT

Figure 4

Serpentine Lakes Project Area Showing Magnetic Trends, DRX drill holes and Interpreted Area of Prospectivity

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DIRECTORS’ REPORT

Emu Lake (Image 33⅓% with that interest having been farmed out to Emu Nickel NL in February 2008)

During the period the minority party in the Emu Lake joint venture agreed to sell its 10% interest to the remaining joint venturers, increasing Image’s interest to 33⅓%. Under the revised terms of the joint venture Image’s interest will be free carried until Jubilee Mines NL subsidiary Sir Samuel Mines NL sole funds a further $3.25 million at the rate of at least $1 million per year or, failing that, withdraws. The consideration for the sale was $750,000 with Image’s share of $250,000 paid as $100,000 cash plus the balance in Image shares, plus an increase in the Vendor’s royalty to 1.75%. Under the new terms of the joint venture, Image may assign its interest in the Emu Lake project to a subsidiary within the next 12 months for the purpose of an ASX listing.

The Emu Lake nickel project is situated 70 km north east of Kalgoorlie and about 30km east of the high-grade Silver Swan nickel mine. Drilling has identified significant nickel sulphide mineralisation over a strike length of more than 300m on an ultramafic contact and open at depth. To date, ten high-grade drill intersections have been made at grades of between 3% -10% Ni with best intersections of 2m @ 6.2% Ni, 1.8% Cu and 2.2g/t PGE (platinum group elements) from 336.0m and 2m @ 2.0% Ni, 1.0% Cu and 4.2g/t PGE from 343.5m in drill hole ELD15. The revised terms of the joint venture are anticipated to result in a reinvigorated drilling programme to test for depth extensions to the high-grade contact mineralisation typical of komatiite-hosted nickel deposits.

Jubilee Mines has commenced diamond drilling at the Binti Gossan Zone, targeting the depth extensions of previously intersected high grade nickel sulphide mineralisation on an ultramafic contact. During the period, three diamond drill holes were completed with preliminary assays (nickel only, no copper or PGE results yet) available from the first hole (ELD27) as shown in Figure 5. ELD27 intersected a narrow (0.1m) massive nickel sulphide stringer close to the contact overlain by a significant zone of disseminated nickel sulphides. Preliminary assay results are shown in Table 12. The ultramafic contact is overturned, hence the stratigraphically higher disseminated mineralisation is intersected below the massive contact mineralisation.

Table 12 Preliminary Drilling Results – Binti Gossan Zone

Hole ID	Collar Co-ordinates(local)	Collar Co-ordinates(local)	From m	To m	Interval m	Grade % Ni
	E	N
ELD27	50440	48500	480.89	482.52	1.63	1.60
	including		481.65	482.52	0.87	2.41
			485.90	488.40	2.50	1.11
ELD28	50300	48450	na
ELD29*	50441	48500	na

Holes drilled on azimuth 270°, dip -60° unless otherwise shown *dip -66.5°

na; assays not yet available

The intersections in ELD27 confirm the extension of both massive and disseminated nickel sulphide mineralisation on or close to the ultramafic contact intersected the ultramafic contact approximately 300m below surface with minor sulphides evident in the ultramafic. Drill hole ELD29 intersected the ultramafic contact at approximately 500m below surface with disseminated sulphides evident over a 0.85m interval close to the contact.

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DIRECTORS’ REPORT

Figure 5 Binti Gossan Zone Longitudinal Section

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Down-hole electromagnetic (DHEM) surveys identified off-hole conductors in all three drill holes. ELD29 was targeted at a strong off-hole conductor identified in ELD27 and appears to have just missed the conductor. It is anticipated that these conductor targets will be drilled in the ongoing drilling programme. Image is encouraged by the confirmation of massive nickel sulphides and an EM conductor some 250m down plunge of the high grade intercepts (2m at 6.20% Ni, 1.78% Cu and 2m at 2.63% Ni, 1.05% Cu) in previous drill hole ELD15 in addition to other untested EM conductors identified in the recent drilling.

Woongaring (Image 100% with that interest having been farmed out to Emu Nickel NL in February 2008)

A 125-hole, 4,269m aircore drilling programme was completed over several nickel and gold targets in the Woongaring greenstone belt. The drilling intersected sequences of sediments, mafic and ultramafic rocks and banded iron formation frequently intruded by granitic rocks. Receipt of assay results is in progress together with assessment of the results.

Kambalda West (Image 100%, diluting to 30% with that interest having been farmed out to Emu Nickel NL in February 2008)

A Versatile Time Domain Electromagnetic (VTEM) survey totalling 1,266 line-km was completed over several target areas within the joint venture tenements late in the quarter. VTEM is an airborne electromagnetic technique with demonstrated ability to detect highly conductive rock bodies such as massive sulphides at depths of several hundred metres. Several conductor anomalies were identified by the survey. Significantly, some of these VTEM anomalies are now known to be coincident with aeromagnetic anomalies which may reflect the presence of ultramafic rocks with potential to host nickel sulphides. Field verification of the anomalies has been delayed by extensive bushfires in the region.

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DIRECTORS’ REPORT

Woodline (Image 100%, diluting)

The Woodline joint venture is comprised of two exploration licences situated on the regional Tropicana-Beachcomber structural trend, a current focus of gold exploration activity following the significant Tropicana gold discovery. Sipa Resources and Newmont have outlined three gold anomalous areas within the northern exploration licence (E28/1400) as follows:

The Zeno prospect comprises a 7km N-S zone of weakly anomalous gold in historical drilling within which intersections of 2m at 5.3g/t Au from 50m and 2m at 1.2g/t Au from 42m have been reported. The Sapho prospect is a 3km x 1km calcrete anomaly (peak values 60ppb Au) associated with silicified, pyritic basalts in an area of no previous drilling. The Epicuris prospect is a 2km x 1km multi-element calcrete anomaly (peak values 33ppb Au and 800ppm As) associated with brecciated and pyritic metasediments.

Within the southern exploration licence (E28/1496) sampling has identified several gold in calcrete results up to 29ppb Au associated with a magnetic anomaly in an area of thin Tertiary cover. Scout RAB drilling (7 holes) of an EM anomaly has been completed but with results yet to be received. Sipa/Newmont are planning follow-up drilling at the Zeno, Sapho and E28/1496 prospects in the new year together with further geochemical sampling at the Epicuris prospect. Sipa Resources recently announced a significant gold intercept of 29m at 2.1g/t Au from 12m in RAB/aircore drilling at its Socrates prospect 2km to the east of E28/1496, adding to the prospectivity of this area.

INDEPENDENCE DECLARATION BY AUDITOR

The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 is set out on page 23 for the half-year ended 31 December 2007.

This report has been signed in accordance with a resolution of directors.

For and on behalf of the Directors

G SAKALIDIS

Managing Director 13th March 2008

• Page 22 -

IMAGE RESOURCES NL

AUDITOR INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF IMAGE RESOURCES NL

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Auditor’s Independence Declaration to the Directors of Image Resources NL

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Image Resources NL.

As audit partner for the review of the financial statements Image Resources NL for the period ended 31 December 2007, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• (ii) any applicable code of professional conduct in relation to the review.

SOMES and COOKE

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K. C. Somes Partner 1304 Hay Street West Perth WA 6005

Date: 14 March 2008

• Page 23 -

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CONDENSED INCOME STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

Notes Revenue from ordinary activities Depreciation expense Exploration and tenement expenses written off Other expenses from ordinary activities Share based payments 2 Loss from ordinary activities before income tax expense Income tax expense relating to ordinary activities Loss from ordinary activities after related income tax expense Loss from ordinary activities after related income tax expense attributable to members of Image Resources NL Basic loss per share (cents per share) Diluted loss per share (cents per share) The accompanying notes form part of these financial statements.	Half Year Ended 31 Dec 2007 ($) 235,176 (16,659) (1,226,867) (711,271) (1,958,000) (3,677,621) - (3,677,621) (3,677,621) (4.7642) (4.7642)	Half Year Ended 31 Dec 2006 ($) 156,166 (10,413) (832,203) (360,941) (435,600)
		(1,482,991) -
		(1,482,991)
		(1,482,991)
		(2.0019) (2.0019)

• Page 24 -

IMAGE RESOURCES NL

CONDENSED BALANCE SHEET AS AT 31 DECEMBER 2007

Notes Current Assets Cash assets Receivables Prepayments Total Current Assets Non-Current Assets Plant and equipment Other financial assets 3 Total Non-Current Assets TOTAL ASSETS Current Liabilities Payables Provisions Total Current Liabilities TOTAL LIABILITIES NET ASSETS Equity Contributed equity 4 Reserves Accumulated losses TOTAL EQUITY	31 Dec 2007 ($) 7,423,567 205,805 12,151 7,641,523 102,130 708,044 810,174 8,451,697 673,944 21,484 695,428 695,428 7,756,269 19,801,025 3,587,968 (15,632,724) 7,756,269	30 June 2007 ($) 3,511,834 141,858 26,940
		3,680,632
		99,691 1,055,256
		1,154,947
		4,835,579
		138,955 -
		138,955
		138,955
		4,696,624
		14,671,747 1,979,980 (11,955,103)
		4,696,624

The accompanying notes form part of these financial statements.

• Page 25 -

IMAGE RESOURCES NL

CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

	Share Capital ($)	Available for Sale Financial Assets Reserve Capital ($)	Employee Benefit Reserve ($)	Accum Losses ($)	Total ($)
Balance at 1.7.2006	11,163,498	1,051,493	294,600	(8,981,147)	3,528,444
Options exercised during the period at $0.25 each	3,336,474				3,336,474
Share basedpayments			435,600		435,600
Changes in fair value of available for sale assets		196,317			196,317
Loss forperiod				(1,482,991)	(1,482,991)
Balance at 31.12.2006	14,499,972	1,247,810	730,200	(10,464,138)	6,013,844
Balance at 1.7.2007	14,671,747	785,971	1,194,009	(11,955,103)	4,696,624
Shares issued duringtheperiod	4,150,000				4,150,000
Options exercised during the period at $0.25 each	75,000				75,000
Options exercised during the period at $0.335 each	597,975				597,975
Options exercised during the period at $0.39 each	306,303				306,303
Share basedpayments			1,958,000		1,958,000
Changes in fair value of available for sale assets		(350,012)			(350,012)
Loss forperiod				(3,677,621)	(3,677,621)
Balance at 31.12.2007	19,801,025	435,959	3,152,009	(15,632,724)	7,756,269

The accompanying notes form part of these financial statements.

• Page 26 -

IMAGE RESOURCES NL

CONDENSED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

CASH FLOWS FROM OPERATING ACTIVITIES GST refunds received Payments to suppliers and contractors Interest and dividends received Net cash provided by / (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of plant and equipment Payments for exploration and evaluation Proceeds on sale of tenements/recoupments Short term loans advanced Purchase of investments Purchase of new prospects Proceeds from sale of investments Net cash provided by / (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from new issues of shares Share issue expenses Net cash provided by financing activities Net (decrease) / increase in cash held Cash at the beginning of the financial period Cash at the end of the financial period	Half Year Ended 31 Dec 2007 ($) 154,750 (570,878) 178,777 (237,351) (19,098) (820,428) 90,067 (61,450) (2,800) (16,486) (830,195) 4,979,279 4,979,279 3,911,733 3,511,835 7,423,568	Half Year Ended 31 Dec 2006 ($) 69,585 (242,638) 122,934
		(50,119)
		(6,200) (808,415) - (77,985) (91,856) (75,566) 18,946
		(1,041,076)
		3,336,473 -
		3,336,473
		2,245,278 2,125,507
		4,370,784

NON-CASH FINANCING ACTIVITIES Share issue: Shares to the value of $150,000 were issued to finance the acquisition of tenements during the six months ended 31 December 2007.

The accompanying notes form part of these financial statements.

• Page 27 -

IMAGE RESOURCES NL

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

NOTE 1 BASIS OF PREPARATION

The half-year condensed financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standard AASB 134: Interim Financial Reporting, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.

It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2007 and any public announcements made by Image Resources NL during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001.

The accounting policies have been consistently applied and are consistent with those in the June 2007 financial report. The half-year report does not include full disclosures of the type normally included in an annual financial report.

Reporting Basis and Conventions

The half-year report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

NOTE 2 SHARE BASED PAYMENTS

Half Year Ended 31.12.2007 ($)

Options issued to directors pursuant to approval granted at the Company’s 2007 Annual General Meeting. Expensed fully at the independent valuation obtained (to satisfy the legal requirement that a value be placed on the Options and disclosed to shareholders using recognised valuation methodology) although the directors believe that the amount which could have been obtained upon a sale of the options at the date of their grant would have been significantly less. 1,958,000 1,958,000

NOTE 3 OTHER FINANCIAL ASSETS

NOTE 3 OTHER FINANCIAL ASSETS Available for sale assets Balance 1 July 2007 Purchases – at cost Sales at carrying value Increase/Decrease in fair value Balance 31 December 2007	Half Year Ended 31.12.2007 ($) 1,055,256 2,800 - (350,012)
	708,044

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IMAGE RESOURCES NL

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

NOTE 4 CONTRIBUTED EQUITY Ordinary Shares Balance 1 July 2007 Shares issued during the period Options exercised during the period Total Shares Issued at 31 December 2007 Listed Options exercisable at $0.25 Balance 1 July 2007 Options exercised Unlisted Options exercisable at $0.335 Balance 1 July 2007 Options exercised Unlisted Options exercisable at $0.39 Balance 1 July 2007 Options exercised Unlisted Options exercisable at $2.12 Balance 1 July 2007 Options granted to directors pursuant to shareholders’ resolution 20 November 2012 Other Unlisted Options Exercisable at $0.37on or before 26 November 2010 Exercisable at $1.80 on or before 16 November 2011 Exercisable at $2.38 on or before 26 March 2012 Total Options issued at 31 December 2007	Number 74,697,978 2,075,872 2,870,396 79,644,246 300,000 (300,000) - 1,785,000 (1,785,000) - 2,000,000 (785,396) 1,214,604 - 2,200,000 2,200,000 2,000,000 2,500,000 1,000,000 5,500,000 8,914,604
		$
		14,671,747 4,150,000 979,278
		19,801,025
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		-
		- -
		-
		- -
		-
		- -
		-
		- - -
		-
		-

NOTE 5 TENEMENT EXPENDITURES COMMITMENTS

The Company has entered into certain obligations to perform minimum exploration work on tenements held. These obligations vary from time to time in accordance with contracts signed. Tenement rentals and minimum expenditure obligations which may be varied or deferred on application, are expected to be met in the normal course of business. The minimum statutory expenditure requirements on the granted tenements for the next twelve months amounts to $689,160. Of this, $81,000 is expected to be met by JV participants as a result of various joint ventures entered into.

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IMAGE RESOURCES NL

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

NOTE 6 SEGMENT INFORMATION

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, Northern Territory and South Australia.

NOTE 7 EVENTS SUBSEQUENT TO REPORTING DATE

Image sponsored Emu Nickel NL (“Emu Nickel”) by funding the costs associated with the preparation of an IPO Prospectus and the listing of Emu Nickel. Pursuant to the Listing Support Agreement, Image has been paid a fee equal to 6% of the funds raised under the Offer in consideration of Image’s assistance in raising funds and getting Emu Nickel admitted to the official lists of the ASX. This listing has occurred since the reporting date and Image is entitled to be paid a fee of $600,206. In addition, Image will be reimbursed selected direct costs incurred on account of Emu Nickel. The amount incurred to 31 December 2007 totals $61,450.

Subsequent to 31 December 2007, a conditional Joint Venture Agreement entered into between Image and Emu Nickel on 22 November 2007 was made effective by Emu Nickel being admitted to the ASX. Emu will be required to incur joint venture expenditures in order to earn an interest in a package of tenements.

Other than noted above, there have been no matters or circumstances that have arisen since 31 December 2007 that has significantly affected or may significantly affect:

• (a) the Company’s operations in future years; or

• (b) the results of those operations in future years; or

• (c) the Company’s state of affairs in future years.

NOTE 8 CONTINGENT LIABILITIES

Native Title

The Company’s activities in Australia are subject to the Native Title Act and its interpretation.

The Native Title Act legally recognises the title rights of indigenous Australians over areas where those rights have not been lawfully extinguished. State and Commonwealth native title legislation regulates the recognition, application and protection of native title. Native title may affect the status, renewal and conversion of existing tenements and the granting of new tenements. Indigenous land use agreements, including terms of compensation, heritage survey and protection agreements or other agreement types may need to be negotiated with affected parties.

The Native Title Act prescribes procedures applicable to the grant of tenements which apply even in the case of, for instance, a granted exploration licence being “converted” to, say, a mining lease. Compensation may become payable in respect of any impact which the grant of any tenements or other activities have on native title. A tenement holder may be liable for the payment of compensation for the affect of mining and exploration activities on any native title rights and interests that exist in the area covered by a tenement. Compensation may be payable in forms other than money, including the transfer of property and the provision of goods and services.

It is not currently possible to assess whether compensation will be payable by the Company to native title holders in relation to any of the tenements but such compensation could be significant.

There may be sites and objects of significance to indigenous Australians located on the land relating to the Company’s tenements. State and Commonwealth Aboriginal heritage legislation aims to preserve and protect these sites and objects from use in a manner inconsistent with Aboriginal tradition. The Company proposes carrying out ‘clearance surveys’ before conducting any exploration work that would disturb the surface of the land. The Company’s tenements may contain some such sites of significance, which would need to be avoided or cause delays. It is possible that areas containing mineralisation or an economic resource may also contain sacred

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IMAGE RESOURCES NL

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2007

sites, in which case they may remain unexploited. Access agreements will need to be negotiated with affected parties.

Native title, Aboriginal heritage or other indigenous matters are matters of substantial risk (giving rise to the threat that certain tenements may not be granted, access to certain tenements may be denied or delayed in addition to potentially significant cost exposure in respect of things such as negotiations, surveys, incentive payments and compensation to name but a few) as the legislative frame works provide torturous and frequently uncertain routes to the endeavour by both stakeholders (that is explorers/miners and indigenous peoples) to attain certainty.

It is not possible to quantify the financial or other impact native title and Aboriginal heritage will have upon the Company as, amongst other things, the processes involved with:

• (a) identifying all and only the indigenous peoples with a relevant interest;

• (b) registering an indigenous land use agreement;

• (c) obtaining access to land without infringing the provisions of the Aboriginal Heritage Act;

are open ended, can involve substantial delay and cost and there can be no certainty as to the outcome with it being possible for projects to be entirely frustrated.

This could be the case, for instance, even in circumstances where:

• (a) a native title party consents to the grant of an exploration licence and assists the exploration endeavour thereon (and the discovery of an otherwise economic deposit);

• (b) the Company, in order to exploit that discovery, applies for a mining lease (or other required approval, consent, authority etc.) but such grant, approval, consent or authority is not forthcoming by reason of an objection by the same or another native title party.

Freehold Access

The interests of holders of freehold land encroached by tenements are given special recognition by the Mining Act (WA). As a general proposition, a tenement holder must obtain the consent of the owner of freehold before conducting operations on the freehold land. There can be no assurance that the Company will secure rights to access those portions of the tenements encroaching freehold land either at all or for all purposes but, importantly, the grant of freehold extinguished native title so wherever the tenements encroach freehold the Company is in the position of not having to abide by the Native Title Act albeit aboriginal heritage matters will still be of concern.

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IMAGE RESOURCES NL

DIRECTORS' DECLARATION

The directors of the company declare that:

1. the accompanying financial statements and notes:

2. (a) comply with Accounting Standard AASB 134 : Interim Financial Reporting and the Corporations Regulations 2001; and

3. (b) give a true and fair view of the financial position of the company as at 31 December 2007 and its performance for the half-year ended on that date.

4. 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:

Signed at Perth: George Sakalidis Managing Director

Dated this 13[th] day of March 2008.

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Independent review report to the members of IMAGE RESOURCES NL Scope

We have reviewed the accompanying half-year financial report of Image Resources NL (the Company), which comprises the condensed balance sheet as at 31 December 2007, and the condensed income statement, condensed statement of changes in equity and condensed cash flow statement for the half-year ended on that date, a statement or description of accounting policies, other selected explanatory notes and the directors’ declaration.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the Company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes designing, implementing and, maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor‘s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor’ of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Company‘s financial position as at 31 December 2007 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of the Company, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

Liability Limited by a scheme approved under Professional Standards Legislation

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A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of the Company on 16 March 2007, would be in the same terms if provided to the directors as at the date of this auditor’s review report.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year 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 December 2007 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

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Somes & Cooke Chartered Accountants Kevin Clarence Somes Partner Perth

Date: 14 March 2008

Liability Limited by a scheme approved under Professional Standards Legislation

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