IMAGE RESOURCES NL — Interim / Quarterly Report 2007

Jan 30, 2008

QUARTERLY REPORT For the Quarter Ended 31 December 2007

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HIGHLIGHTS

• Drilling of Target 2 at Cooljarloo North confirms high grades within 2 main strands over a combined strike length of 9 km.

• Cumulative magnetic target lengths at Cooljarloo and Cooljarloo North increased to 120km with preliminary resource estimations in progress on 38km of mineralised strands.

• A new large magnetic target, interpreted to be channel style mineralisation, some 18km in length averaging 500m in width identified at Bidaminna. The target is parallel to the Bidaminna Inferred Resource (44Mt @ 3% HM) which is 6km long and 400m wide, indicating scope to significantly increase the resource.

• Image’s North Perth basin tenement holdings increased to 2047 square kilometres.

• Three tenements at granted Serpentine Lakes in the Eucla Basin, paving the way for heritage clearances, ground magnetic surveys and exploration drilling. Orientation surveys indicate adjacent mineralised strands may extend into the tenements for some 28km, providing a major exploration target.

• Depth extensions of nickel sulphides confirmed in the first hole of the current drilling programme at Emu Lake and a strong off-hole conductor identified.

• Early encouragement from airborne geophysical surveys at the Kambalda West nickel project.

• The Emu Nickel IPO is currently open and, subject to market conditions, is aimed at listing on ASX at the end of February 2008.

COOLJARLOO NORTH (Image 100%)

During the quarter 932 samples were processed from Target 2, with the laboratory results summarised in Figure 1 and Table 1. 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 minesite and several other prospects and mines in the region. Preliminary estimations indicate that this prospect is likely to be economic and as such Image’s 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 first quarter of calendar 2008.

Table 1 Target 2 Drill Intersections

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Interval x Grade m%	Grade % HM
	MGA East	MGA North
CN799	331631	6635873	10	20	10	106.3	10.6
CN813	331933	6635353	9	19	10	99.3	9.9
	including		10	16	6	79.3	13.2
CN805	331715	6635689	14	20	6	96.1	16.0
	including		16	19	3	93.6	22.0
CN795	331523	6636041	2	12	10	92.1	9.2
	including		9	12	3	63.2	21.1
CN885	332453	6634498	18	28	10	87.8	8.8
CN291	330830	6637203	10	20	10	87.3	8.7
	including		12	18	6	76.8	12.8
CN794	331506	6636030	4	12	8	83.0	10.4
	including		7	12	5	71.2	14.2
CN419	332400	6634599	20	30	10	79.7	8.0
	including		22	26	4	53.6	13.4
CN715	331145	6636599	12	22	10	70.4	7.0
	including		14	18	4	52.5	13.1
CN800	331648	6635884	10	17	7	68.9	9.8
CN426	332248	6634397	20	26	6	67.6	11.3
CN798	331615	6635862	8	16	8	66.9	8.4
CN924	332595	6633875	14	24	10	66.5	6.6
CN384	331863	6635400	14	22	8	66.2	8.3
CN788	331321	6636387	9	17	8	64.9	8.1
CN833	331196	6636544	10	17	7	64.4	9.2
CN701	330812	6637201	12	18	6	62.1	10.3
CN796	331556	6636063	2	11	9	61.3	6.8
CN889	332134	6634530	20	28	8	59.4	7.4
CN899	332561	6634313	20	28	8	58.7	7.3
CN820	330794	6637237	11	18	7	58.7	8.4
	including		15	18	3	43.8	14.6
CN882	331908	6634860	20	24	4	57.8	14.5

2

Table 1 continued

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Interval x Grade m%	Grade % HM
	MGA East	MGA North
CN878 CN735	331799 331817	6635028 6635001	12 12	20 22	8 10	57.6 54.9	7.2 5.5
CN802	331598	6635851	12	18	6	54.4	9.1
	including		15	18	3	41.8	13.9
CN893	332268	6634379	20	26	6	54.1	9.0
CN806	331749	6635711	14	19	5	53.3	10.7
CN920	332545	6633843	16	24	8	50.9	6.4
	including		20	22	2	26.2	13.1
CN892	332235	6634357	14	24	10	48.5	4.9
CN391	331882	6635200	14	22	8	48.4	6.1
CN801	331665	6635895	10	19	9	48.0	5.3
CN364	331689	6635803	14	18	4	47.3	11.8
	including		16	18	2	38.1	19.0
CN416	332279	6634601	24	34	10	46.9	4.7
CN887	332100	6634508	18	28	10	46.7	4.7
CN400	332031	6635000	22	34	12	45.4	3.8
CN894	332469	6634032	16	26	10	45.4	4.5
CN388	331660	6635200	12	18	6	44.7	7.5
CN432	332071	6634201	10	22	12	43.3	3.6
CN329	331329	6636400	8	16	8	43.3	5.4
CN328	331300	6636401	12	18	6	42.8	7.1
CN397	331800	6635002	12	22	10	42.7	4.3
CN407	331956	6634799	22	26	4	42.0	10.5
	including		24	26	2	32.0	16.0
CN726	331632	6635800	12	18	6	41.7	7.0
	including		16	18	2	26.5	13.3
CN408	332120	6634800	24	32	8	41.7	5.2
CN943	331363	6635937	2	12	10	41.4	4.1
CN919	332561	6633854	16	26	10	40.9	4.1
CN906	332587	6634109	10	24	14	40.9	2.9
CN864	331128	6636023	6	12	6	40.8	6.8
CN895	332452	6634021	16	24	8	40.6	5.1
CN869	331279	6635644	6	14	8	40.2	5.0
CN925	332612	6633886	14	20	6	40.0	6.7
CN710	331010	6636798	12	18	6	39.8	6.6
CN739	332023	6635196	18	24	6	39.8	6.6
CN901	332620	6634130	16	24	8	39.6	5.0
CN722	331505	6636000	10	14	4	39.3	9.8
CN809	331807	6635510	13	18	5	39.2	7.8
CN406	331930	6634800	20	26	6	38.8	6.5
CN414	332080	6634597	20	28	8	37.8	4.7
CN867	331229	6635850	6	14	8	37.7	4.7
CN923	332578	6633865	16	24	8	37.5	4.7

3

Table 1 continued

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Interval x Grade m%	Grade % HM
	MGA East	MGA North
CN380	331511	6635402	14	18	4	37.2	9.3
CN738	331901	6635200	14	22	8	36.8	4.6
CN730	331761	6635399	12	20	8	36.2	4.5
CN905	332603	6634119	16	28	12	36.1	3.0
CN325	331087	6636401	10	18	8	35.9	4.5
CN425	332220	6634399	18	26	8	35.7	4.5
CN935	332050	6634237	12	20	8	35.2	4.4
CN818	330718	6637426	9	16	7	35.1	5.0
CN723	331470	6635809	6	14	8	35.0	4.4
CN817	330701	6637415	9	17	8	34.7	4.3
CN834	331213	6636555	10	16	6	34.7	5.8
CN341	331049	6636001	6	10	4	34.0	8.5
CN940	331464	6635764	6	14	8	33.7	4.2
CN915	332830	6634028	16	22	6	33.5	5.6
CN412	331994	6634598	16	24	8	33.3	4.2
CN891	332218	6634346	14	22	8	33.1	4.1
CN931	332419	6634000	14	22	8	32.2	4.0
CN377	331391	6635407	8	12	4	31.9	8.0
CN888	332067	6634486	16	24	8	31.8	4.0
CN355	331256	6635801	8	16	8	31.4	3.9
CN821	330827	6637258	11	17	6	31.4	5.2
CN332	330789	6636201	10	16	6	31.2	5.2
CN832	331179	6636533	10	16	6	31.0	5.2
CN881	331874	6634838	16	24	8	29.9	3.7
CN944	331397	6635959	2	10	8	29.7	3.7
CN790	331271	6636354	13	18	5	29.3	5.9
CN334	331018	6636202	14	18	4	29.2	7.3
CN851	330894	6636348	14	19	5	29.0	5.8
CN316	331181	6636598	12	18	6	29.0	4.8
CN395	331720	6635001	10	18	8	29.0	3.6
CN387	331620	6635200	8	16	8	28.1	3.5
CN413	332039	6634598	20	26	6	28.1	4.7
CN314	330972	6636596	10	16	6	28.0	4.7
CN433	332288	6634199	14	20	6	28.0	4.7
CN921	332528	6633832	16	22	6	27.9	4.6
CN734	331683	6634997	10	18	8	27.5	3.4
CN945	331330	6635915	2	10	8	27.4	3.4
CN404	331869	6634798	16	24	8	27.3	3.4
CN928	332322	6633817	14	20	6	26.8	4.5
CN368	331399	6635599	12	16	4	26.5	6.6
CN855	330852	6636082	6	10	4	25.4	6.3
CN900	332578	6634324	20	26	6	25.3	4.2
CN874	331547	6635341	12	18	6	25.3	4.2

4

Table 1 continued

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Interval x Grade m%	Grade % HM
	MGA East	MGA North
CN396	331760	6635002	12	18	6	25.3	4.2
CN787	331305	6636376	13	17	4	25.1	6.3
CN948	330953	6636625	10	16	6	25.0	4.2
CN390	331839	6635200	12	18	6	24.7	4.1
CN381	331699	6635403	12	18	6	24.7	4.1
CN908	332554	6634087	18	24	6	24.7	4.1
CN910	332746	6633973	20	26	6	24.7	4.1
CN827	331087	6636712	14	17	3	24.3	8.1
CN399	331999	6635000	20	28	8	24.2	3.0
CN338	331400	6636198	10	14	4	24.1	6.0
CN829	331120	6636733	11	16	5	24.1	4.8
CN367	331300	6635600	8	12	4	24.0	6.0
CN330	331357	6636400	12	16	4	23.8	6.0
CN854	331011	6636424	12	18	6	23.5	3.9
CN351	331547	6635998	6	14	8	23.3	2.9
CN911	332763	6633984	10	20	10	23.0	2.3
CN786	331288	6636365	12	17	5	22.7	4.5
CN896	332486	6634043	20	24	4	22.6	5.6
CN378	331429	6635403	8	14	6	22.4	3.7
CN423	332132	6634399	14	22	8	22.3	2.8
CN860	331120	6636256	10	16	6	22.0	3.7
CN323	331018	6636398	12	18	6	21.8	3.6
CN853	331028	6636435	12	18	6	21.4	3.6
CN702	330847	6637202	14	18	4	21.0	5.3
CN366	331260	6635603	8	14	6	21.0	3.5
CN294	330949	6637199	14	20	6	21.0	3.5
CN393	332000	6635200	20	26	6	20.8	3.5
CN386	331581	6635201	10	14	4	20.5	5.1
CN873	331531	6635331	12	18	6	20.2	3.4
CN852	330912	6636358	14	18	4	20.0	5.0
CN863	331095	6636002	4	10	6	19.8	3.3
CN875	331480	6635298	12	16	4	19.7	4.9
CN711	331032	6636800	10	14	4	19.6	4.9
CN343	331119	6635999	6	12	6	19.5	3.3
CN435	332362	6634201	18	24	6	19.3	3.2
CN717	330891	6636400	14	18	4	19.2	4.8
CN347	331349	6636000	4	8	4	18.9	4.7
CN868	331330	6635677	8	14	6	18.8	3.1
CN913	332796	6634006	8	14	6	18.6	3.1
CN933	332150	6634063	14	20	6	18.5	3.1
CN339	331429	6636200	10	14	4	18.5	4.6
CN394	332041	6635201	10	14	4	18.3	4.6
CN826	331070	6636701	13	17	4	18.3	4.6

5

Table 1 continued

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Interval x Grade m%	Grade % HM
	MGA East	MGA North
CN429	332507	6634399	20	26	6	18.2	3.0
CN311	330751	6636600	12	16	4	18.1	4.5
CN812	331900	6635332	16	20	4	17.3	4.3
CN333	330930	6636202	12	16	4	17.2	4.3
CN922	332511	6633821	16	22	6	17.2	2.9
CN706	330928	6637001	16	20	4	17.2	4.3
CN317	331219	6636600	12	16	4	17.0	4.2
CN354	331191	6635800	8	14	6	16.8	2.8
CN907	332570	6634098	18	24	6	16.5	2.8
CN362	331611	6635801	16	20	4	16.1	4.0
CN847	330760	6636261	12	16	4	16.1	4.0
CN939	331455	6635281	12	16	4	15.9	4.0
CN797	331490	6636020	8	12	4	15.8	4.0
CN308	331082	6636797	10	14	4	15.1	3.8
CN422	332102	6634399	16	22	6	15.1	2.5
CN719	331387	6636202	12	16	4	15.0	3.7
CN337	331179	6636199	12	16	4	14.3	3.6
CN709	330987	6636799	16	20	4	14.1	3.5
CN884	332436	6634488	24	30	6	14.0	2.3
CN859	331003	6636180	14	18	4	13.8	3.4
CN421	331932	6634399	14	18	4	13.8	3.4
CN767	332544	6634399	20	24	4	13.5	3.4
CN862	330944	6635903	10	14	4	13.5	3.4
CN810	331824	6635521	12	16	4	13.3	3.3
CN877	331749	6634995	16	20	4	13.0	3.3
CN320	330829	6636401	14	18	4	12.9	3.2
CN301	330947	6637000	16	18	2	12.9	6.4
CN349	331490	6636001	10	14	4	12.8	3.2
CN310	330713	6636603	14	18	4	12.6	3.2
CN358	331411	6635800	6	10	4	12.5	3.1
CN936	332033	6634226	16	20	4	12.2	3.0
CN816	330668	6637394	13	17	4	12.0	3.0
CN835	331229	6636566	14	17	3	11.6	3.9

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

6

Figure 1 Cooljarloo North Significant Drilling Results

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7

22 samples from Hyperion were processed during the quarter. The significant results are summarised in Table 2.

Table 2 – Drilling Results Hyperion

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Interval x Grade m%	Grade % HM
	MGA East	MGA North
CN143	329248	6632447	8	14	6	94.0	15.7
	Including		8	12	4	88.0	22.0
CN184	328819	6634000	2	10	8	35.1	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 3. These encouraging results provide targets for further drilling.

Table 3 – 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 are now available from drilling on Target 7 (in the SW part of the tenement), and are summarised in Table 4. Infill drilling of this prospect is planned for the March quarter.

Table 4 - Drilling Results Target 7

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Interval x Grade m%	Grade % HM
	MGA East	MGA North
CN684	328990	6630199	11	18	7	46.9	6.7
CN681	329148	6630201	3	11	8	36.5	4.6
CN697	329236	6630026	5	10	5	27.9	5.6
CN687	329011	6630200	10	15	5	27.0	5.4
	including		13	14	1	10.2	10.2
CN695	329216	6630025	6	11	5	24.7	4.9
	including		9	10	1	8.6	8.6
CN667	328947	6630816	9	14	5	21.6	4.3
CN693	328976	6630013	10	15	5	20.6	4.1
CN668	328963	6630818	8	12	4	19.7	4.9
CN669	328987	6630801	8	13	5	19.1	3.8
CN685	328971	6630201	9	14	5	19.0	3.8
CN666	328925	6630803	9	13	4	18.1	4.5
CN659	328910	6631199	15	18	3	17.9	6.0

8

Table 4 continued

Hole ID	Collar Co-ordinates	Collar Co-ordinates	From m	To m	Interval m	Interval x Grade m%	Grade % HM
	MGA East	MGA North
CN696	329196	6630020	8	12	4	17.7	4.4
CN660	328948	6631199	14	17	3	17.7	5.9
CN680	329216	6630397	3	7	4	17.3	4.3
CN692	328956	6630023	10	15	5	16.9	3.4
CN694	328939	6630035	10	15	5	15.6	3.1
CN698	329380	6630024	6	10	4	14.5	3.6
CN678	329170	6630401	4	8	4	14.5	3.6
CN670	329006	6630802	8	12	4	14.2	3.6
CN664	328885	6630799	7	10	3	12.4	4.1
CN679	329191	6630398	3	7	4	12.3	3.1
CN671	329025	6630792	8	11	3	11.8	3.9

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

NEW PERTH BASIN TENEMENTS (Image 100%)

Four new tenements have been applied for as shown in Figure 2. 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.

Figure 2

Tenement Holdings

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9

COOLJARLOO (Image 70%)

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 5 summarises the drilling over the magnetic anomalies and Table 6 the infill drilling over the 35AHD prospect.

Table 5 – 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

10

Table 6 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

As previously reported, 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 testwork will better define the markets for which these products are suited and provide firmer estimates of product pricing.

Table 7 summarises the results of further laboratory processing of channel intersections that were drilled in previous quarters.

	Table 7 Drilling Results– Channels	Table 7 Drilling Results– Channels	Table 7 Drilling Results– Channels	Table 7 Drilling Results– Channels	Table 7 Drilling Results– Channels
Hole ID	Collar Co-ordinates		From m	To m	Interval m	Interval x Grade m%	Grade % HM
	MGA East	MGA North
921	341010	6620930	12	76	64	84.3	1.3
897	340990	6619812	16	52	36	67.4	1.9
896	340950	6619816	16	50	34	52.1	1.5

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

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

11

BIDAMINNA (Image 100%)

Following reprocessing of geophysical data and reinterpretation of drilling results over the Bidaminna resource, Image has outlined a very large channel/strand target at Bidaminna which is 18km long and averages 500m in width with sections up to 1km in width (see Figure 3). This target is much larger than the channels drilled to date at Cooljarloo.

Figure 3

Bidaminna Project Area Showing Magnetic Anomalies and the Bidaminna Deposit

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12

The Bidaminna Inferred Resource (44Mt @ 3% HM), which was previously drilled out by Geopeko outlining a deposit some 6km in length and 400m in width, is situated just 1km to the west of the new target. This augers well for the new target zone which is three times the length and is 100m wider on average. In addition, the interpreted magnetic data for this new target is high in quality, with good line to line correlation. The average ground magnetic amplitude of the anomaly outlining the new target zone is 0.9nT which is similar to that at the Bidaminna resource.

Image holds tenements over 40% of the extent of the Bidaminna resource. It also has an additional 6km long target directly along strike and north of the resource. In total there are more than 30km of new targets which have been identified by this recent work outside Bidaminna resource.

The tenement is expected to be granted in February. Image is now planning to carry out heritage and botanical surveys followed up by a drilling programme over the 18km new target and the northern extension of the Bidaminna resource. The new target zone opens up the southern part of the North Perth Basin for the discovery of large, high volume channel deposits of the type identified by Image in the Cooljarloo area.

OTHER NORTH PERTH BASIN PROJECTS (Image 100%)

282km of first-pass ground magnetic surveys were conducted on several of Image’s tenements as summarised in Table 8.

	Table 8 Ground Magnetic Surveys	Table 8 Ground Magnetic Surveys
Project	Tenement Number	Line km	% Complete
Quinns Hill	E70/3100	0	33
Wannamal	E70/3093	61	21
Bootine	E70/3192	221	42
CatabyWest	E70/3068	0	80
Total		282

SERPENTINE LAKES, EUCLA BASIN (Image 100%)

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 quarter, 80 line-km orientation ground magnetic and radiometric surveys were completed over Diatreme Resources’ (ASX:DRX) 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.

13

Figure 4 Serpentine Lakes Project Area Showing Magnetic Trends, DRX drill holes and Interpreted Area of Prospectivity

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HEAVY MINERALS EXPLORATION PLANNED FOR EARLY 2008

• Infill drilling of 35AHD strand on Vacant Crown Land at Cooljarloo.

• Magnetic target drilling at Cooljarloo North.

• Botanical survey over E70/2844, 2845, 3359 and 3362 at Bidaminna.

• Cultural and heritage survey at Bidaminna

• Cultural survey over E69/2033, 2034 and 2035 at Serpentine Lakes – Eucla.

• Resource estimations – Cooljarloo and Cooljarloo North.

• Magnetometer surveys – all North Perth Basin tenements.

14

EMU LAKE (Image 33⅓%)

As foreshadowed in the September 2007 quarterly report, 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 quarter, 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 9. The ultramafic contact is overturned, hence the stratigraphically higher disseminated mineralisation is intersected below the massive contact mineralisation.

Table 9 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 some 450m below surface, open at depth and laterally. Drill hole ELD28 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.

Figure 5

Binti Gossan Zone Longitudinal Section

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15

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%)

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)

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 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.

CORPORATE

EMU NICKEL IPO

As previously reported (ASX release 1 November 2007), the ex-entitlement date for Image shareholders to participate in the bonus issue of shares in the proposed Emu Nickel IPO was 13 November 2007. A prospectus has been prepared and distributed for the raising of between $10 million and $20 million for the purpose of exploring a package of nickel properties in joint venture with Image. The properties include Emu Lake, Kambalda West, Woongaring and several other nickel projects. As a result of recent market changes the nominated closing date of the offer has been amended to 14 February 2008 with the aim of listing on ASX at the end of February.

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

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

The information in this report that relates to exploration results is based on information compiled or reviewed 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.

16

MINING EXPLORATION ENTITY QUARTERLY REPORT

APPENDIX 5B

Name of entity:

Image Resources NL ABN: Quarter ended (“current quarter”) 57 063 977 579 31/12/2007 Consolidated statement of cash flows Cash flows related to operating activities Current quarter $AUD’000 Year to date (6 months) $AUD’000 1.1 Receipts from product sales and related debtors 84 150 1.2 Payments for: (a) exploration and evaluation (b) development (c) production (d) administration (187) (146) (722) (436) 1.3 Dividends received 1.4 Interest and other items of a similar nature received 128 179 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 (121) (829)	Image Resources NL ABN: Quarter ended (“current quarter”) 57 063 977 579 31/12/2007 Consolidated statement of cash flows Cash flows related to operating activities Current quarter $AUD’000 Year to date (6 months) $AUD’000 1.1 Receipts from product sales and related debtors 84 150 1.2 Payments for: (a) exploration and evaluation (b) development (c) production (d) administration (187) (146) (722) (436) 1.3 Dividends received 1.4 Interest and other items of a similar nature received 128 179 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 (121) (829)	Image Resources NL ABN: Quarter ended (“current quarter”) 57 063 977 579 31/12/2007 Consolidated statement of cash flows Cash flows related to operating activities Current quarter $AUD’000 Year to date (6 months) $AUD’000 1.1 Receipts from product sales and related debtors 84 150 1.2 Payments for: (a) exploration and evaluation (b) development (c) production (d) administration (187) (146) (722) (436) 1.3 Dividends received 1.4 Interest and other items of a similar nature received 128 179 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 (121) (829)	Image Resources NL ABN: Quarter ended (“current quarter”) 57 063 977 579 31/12/2007 Consolidated statement of cash flows Cash flows related to operating activities Current quarter $AUD’000 Year to date (6 months) $AUD’000 1.1 Receipts from product sales and related debtors 84 150 1.2 Payments for: (a) exploration and evaluation (b) development (c) production (d) administration (187) (146) (722) (436) 1.3 Dividends received 1.4 Interest and other items of a similar nature received 128 179 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 (121) (829)
		31/12/2007
	Current quarter $AUD’000		Year to date (6 months) $AUD’000
	84 (187) (146) 128		150 (722) (436) 179
	(121)		(829)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	(6) (19) (201)		(16) (3) (19) (201)
	(209)		(239)
	(330)		(1,068)

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1.13 Total operating and investing cash flows
(330) (1,068)
(brought forward)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, 904 4,979
etc.
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings
1.18 Dividends paid
1.19 Other (provide details if material)
Net financing cash flows 904 4,979
Net increase (decrease) in cash held 574 3,911
1.20 Cash at beginning of quarter/year to date 6,848 3,511
1.21 Exchange rate adjustments to item 1.20
1.22 Cash at end of quarter 7,422 7,422
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 (85)
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 - -
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Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development	$AUD’000
	350
	-
Total	350

Reconciliation of cash

Reconciliation of cash
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
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details) – Short Term Deposit	673	1,995
	6,749	4,853
Total: cash at end of quarter(item 1.22)	7,422	6,848

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest	Interest at beginning ofquarter	Interest at end of quarter
	M27/408 M27/409 M27/410 M27/462 M27/463 M27/464	Relinquished Relinquished Relinquished Relinquished Relinquished Relinquished	100% 100% 100% 100% 100% 100%	0% 0% 0% 0% 0% 0%
	E70/3328 E70/3339 E70/3359 E70/3362 E31/641 E31/642 E31/651 E31/656 M31/161	Application Application Application Application Granted Granted Granted Granted Granted	0% 0% 0% 0% 100% 100% 100% 100% 100%	100% 100% 100% 100% 100% 100% 100% 100% 100%

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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 7.2 Issued during quarter	N/A
	Nil
7.3 Ordinary securities 7.4 Issued during quarter	79,644,246	79,644,246
	2,570,396
7.5 Convertible debt securities 7.6 Issued during quarter	N/A
	Nil
7.7 Options Non-employee Options Employee Options 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	1,214,604 2,000,000 2,500,000 2,200,000 1,000,000	Not Quoted Not Quoted Not Quoted Not Quoted Not Quoted	Exercise price $0.39 $0.37 $1.80 $2.12 $2.38	Expiry date 26.11.2009 21.11.2010 16.11.2011 20.11.2012 26.3.2012
	2,200,000	Not Quoted	$2.12	20.11.2012
	1,785,000 785,396	Not Quoted Not Quoted	$0.335 $0.39	27.11.2008 26.11.2009
	Nil
7.11 Debentures	N/A
7.12 Unsecured notes	N/A

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX.

• 2 This statement does give a true and fair view of the matters disclosed.

George Sakalidis Managing Director Date: 31 January 2008

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