IMAGE RESOURCES NL — Interim / Quarterly Report 2015

Oct 29, 2015

IMAGE RESOURCES NL

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Ground Floor, 23 Ventnor Ave West Perth WA 6005 PO Box 469 West Perth WA 6872 Telephone 08 9485 2410 www.imageres.com.au ABN 57 063 977 579

Quarterly Report – for the quarter ended 30 September 2015

Image Resources NL ABN 57 063 977 579 ASX Code IMA Contact Details Ground Floor, 23 Ventnor Avenue, West Perth WA 6005 T +61 8 9485 2410 E: admin@imageres.com.au W: imageres.com.au Issued Capital Shares – Quoted 200,400,129 Options – Unquoted 2,695,000 (various terms) Cash at end of quarter $1,860,000 Board & Management John Jones (NED Chairman) Peter Thomas (Non-Executive Director) George Sakalidis (Exploration Director) Collis Thorp (Chief Executive Officer) Jeff Williams (Non-Executive Director) Aaron Chong Veoy Soo (Non-Executive Director)

Corporate During the quarter the principal work was directed towards the completion of the legal agreements formalising the Memorandum of Understanding (MoU), which was announced on 30 April 2015, in preparation for a forthcoming general meeting for Shareholders to opine on the proposed transaction with Murray Zircon (MZ) and Guangdong Orient Zirconic Ind Sci & Tech Co Limited (OZC). At the time of writing this report Due Diligence for both Image and Murray Zircon has been completed including the Mindarie Plant Inspection. All legal documentation is substantially complete and principally awaiting confirmation of approvals from Chinese Regulatory Agencies. As a component of this transaction an Independent Experts Report is required to accompany the recommendation to Shareholders for the general meeting and this report is currently being prepared. FIRB FIRB (Foreign Investment Review Board) approval has been received for the proposed transaction as contemplated in the MoU. Under the transaction approved by FIRB Murray Zircon is to acquire an interest in Image and a security interest on the Boonanarring tenements (M70/1194 and M70/1311). This is a very important step for the company leading to the commencement of production at Boonanarring. Collis Thorp the Chief Executive Officer said that this together with the progress on legal documentation clears the way forward for this transaction to be prepared for submission to shareholders. Placement Image Resources received applications for 23.25 million Image Shares at $0.08 each, totalling $1.86 million. Applications were received from a number of sophisticated and institutional investors (refer to ASX release on 3rdSeptember). There was a previous issue taken up in July by some of the Directors at $0.08 a share raising an additional $162,400 The funds raised strengthened Image’s financial position and provide additional working capital allowing the Company to complete the legal documentation and approvals in relation to the transaction contemplated in the MoU between Image, Murray Zircon and its parent, Guangdong Orient Zirconic Ind Sci & Tech., Ltd. Image will also be continuing exploration work and some technical studies, mainly at Boonanarring. Research & Development Lodgement of Research & Development claim amount of $135,000 with receipt of funds expected before the end of the calendar year.

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Exploration activities

Boonanarring West

Recent interpretation of drilling and ground magnetic surveys has highlighted 9km of NNW targets between 400m and 800m west of the Boonanarring Deposit (Fig.2) some of which are within a new tenement called Boonanarring West (E70/4689). Botanical surveys and a programme of work (POW) for 70 AC holes are being prepared as part of a drilling programme in early January. Infill ground magnetics is also being planned to help with the siting of extra holes and help understand areas closer to the scarp where some surface laterite obscures and/or complicates the mineral sand signatures. The close proximity of these new targets to the Boonanarring deposit augers well for the potential to add significant extra mine life.

Boonanarring South

In addition 74 AC holes for both infill and extension drilling over a 6.4km distance is being planned directly south of the 9.5km long Boonanarring Deposit (Fig.2).The infill drilling is designed to look for higher grades in the vicinity of some drill intersections including 5m@7.2% HM from 39m in hole GG1019 Easting 389983mE Northing 6542860mN and 11m@4.5% HM from 31m in hole GG977 Easting 389452mE Northing 6544040mN. The extension drilling is within new areas where sparse historical drilling has been completed along the scarp, where laterite noise is common. A POW has already been approved for this work. All the drilling costs for the planned 144 hole AC programme have been pre-paid by a placement to a major WA drilling company. This drilling agreement is now expiring on 31[st] December 2016 with 10,976m available for future drilling programmes.

The drilling programmes at Boonanrring West and Boonanarring South are designed to assist Image to build a 10 year mine life for the Boonanarring Deposit.

Bidaminna Project

Extensive interpretation of historical drilling, Image drilling and ground magnetics has shown that the lower mineralised zone is much more extensive than previously thought. The Bidaminna Resource 44Mt@3% HM is 5.3km long and ranges from 100 to 300m in width (Fig. 4). Seven composites have been sent for analysis of the Zircon, Rutile, Ilmenite and Leucoxene contents across 3 sections through the Bidaminna Deposit.

The current interpretation shows the Exploration Target is 11.2km in length and ranges from 600 to 1300m in width. The Exploration Target (not including the Bidaminna Resource) is estimated to contain between 100-110Mt with potential to contain 3.0Mt to 5.8Mt of contained HM (based on a range of 3 or 4% HM).

The Bidaminna Resource and Exploration Target are amenable to large volume dredge mining as it has very low slime content around 3.6%. As a result of this very encouraging interpretation Image has picked up a new tenement called Mimegarra (E 70/4779) totalling 56 sq. km. The total North Perth Basin tenements now total 1200 sq. km (Fig. 3).

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Figure 1 Drilling programmes completed and planned on Image Resources Gingin to Red Gully region in the North Perth Basin

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Figure 2 Boonanarring West and Boonanarring southern extension planned drilling

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Figure 3 Bidaminna Project with new Mimegarra Tenement

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Figure 4 Bidaminna Resource and Exploration Target

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Project	# Holes likely	Metres likely
Boonanarring South	74	2,960
Gingin	35	700
Quinns Hill	20	960
Boonanarring	70	2,520
Woolka Dredge	40	1,200
Total	239	8,340

Table 1 Drilling Summary

For more information visit imageres.com.au

Please direct enquiries to:

George Sakalidis Collis Thorp Exploration Director Chief Executive Officer M: +61 411 640 337 M: +61 413 705 075 E: george@imageres.com.au E:cthorp@imageres.com.au

COMPETENT PERSON’S STATEMENT – EXPLORATION RESULTS AND MINERAL RESOURCES AND RESERVES

Information in this report that relates to Exploration Results, Mineral Resources is based on information compiled by George Sakalidis BSc (Hons) who is a member of the Australasian Institute of Mining and Metallurgy. At the time that the Exploration Results, Mineral Resources and Mineral Reserves were compiled, George Sakalidis was a director of Image Resources NL. He 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 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. George Sakalidis consents to the inclusion of this information in the form and context in which it appears in this report.

COMPETENT PERSON’S STATEMENT – RESOURCE ESTIMATES

The information in this report that relates to mineral resources and is based on information compiled by Lynn Widenbar BSc, MSc, DIC MAIG, MAusIMM employed by Widenbar & Associates who is a consultant to the Company. Lynn Widenbar 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 2012 edition of the ‘Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Lynn Widenbar consents to the inclusion of this information in the form and context in which it appears in.

FORWARD LOOKING STATEMENTS

Certain statements made during or in connection with this communication, including, without limitation, those concerning the economic outlook for the mining industry, expectations regarding prices, exploration or development costs and other operating results, growth prospects and the outlook of Image’s operations contain or comprise certain forward looking statements regarding Image’s operations, economic performance and financial condition. Although Image believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct.

Accordingly, results could differ materially from those set out in the forward looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes that could result from future acquisitions of new exploration properties, the risks and hazards inherent in the mining business (including industrial accidents, environmental hazards or geologically related conditions), changes in the regulatory environment and other government actions, risks inherent in the ownership, exploration and operation of or investment in mining properties, fluctuations in prices and exchange rates and business and operations risks management, as well as generally those additional factors set forth in our periodic filings with ASX. Image undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today’s date or to reflect the occurrence of unanticipated events.

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Tenement Schedule in accordance with ASX Listing Rule 5.3.3 Tenements held at the end of the Quarter

Location	Tenement	Nature of Interest	Project	Equity (%) held at start of Quarter	Equity (%) held at end of Quarter
WA	E28/1895	Granted	KING(ERAYINIA JV)	16.1% diluting	16.1% diluting
WA	E28/2071	Granted	TALC LAKE(ERAYNIA JV)	16.1% diluting	16.1% diluting
WA	E70/2636	Granted	COOLJARLOO	100%	100%
WA	E70/2844	Granted	BIDAMINNA NTH	100%	100%
WA	E70/2898	Granted	COOLJARLOO	100%	100%
WA	E70/3032	Granted	GINGIN	100%	100%
WA	E70/3041	Granted	REGANS FORD SOUTH	100%	100%
WA	E70/3100	Granted	QUINNS HILL	100%	100%
WA	E70/3192	Granted	BOOTINE	100%	100%
WA	E70/3298	Granted	BIDAMINNA -PARK	90%	90%
WA	E70/3411	Granted	REGANS FORD	100%	100%
WA	E70/3418	Granted	BELL	100%	100%
WA	E70/3494	Granted	BRYALANA	100%	100%
WA	E70/3720	Granted	BLUE LAKE	100%	100%
WA	E70/3892	Granted	CHAPMAN HILL	100%	100%
WA	E70/3966	Granted	REGANS FORD WEST	100%	100%
WA	E70/3997	Granted	MUNBINIA	100%	100%
WA	E70/4077	Granted	DARLING RANGE	100%	100%
WA	E70/4129	Granted	MULLERING SOUTH	100%	100%
WA	E70/4130	Granted	MULLERING NORTH	100%	100%
WA	E70/4244	Granted	WOOLKA	100%	100%
WA	E70/4245	Granted	WINOOKA	100%	100%
WA	M70/0448	Granted	GINGIN SOUTH	100%	100%
WA	M70/1192	Granted	RED GULLY	100%	100%
WA	M70/1193	Granted	GINGIN NORTH	100%	100%
WA	M70/1194	Granted	BOONANARRING	100%	100%
WA	P70/1516	Granted	COOLJARLOO	100%	100%
WA	M70/1311	Granted	BOONANARRING	100%	100%
WA	G70/0250	Granted	BOONANARRING	100%	100%
WA	R70/0051	Granted	COOLJARLOO NORTH	100%	100%
WA	R69/0001	Granted	SERPENTINE LAKES	100%	100%
WA	M70/1305	Application	ATLAS	100%pending grant	100%pending grant
WA	P70/1520	Application	COOLJARLOO	100%pending grant	100%pending grant
WA	E70/4631	Granted	MUNBINIA WEST	100%	100%
WA	E70/4656	Granted	WINOOKA NORTH	100%	100%
WA	E70/4663	Granted	BIBBY SPRINGS	100%	100%
WA	E70/4689	Granted	BOONANARRING	100%	100%
MiningTenements acquired during the Quarter
WA	E70/4779	Application	MIMEGARRA	100	100
Mining Tenements disposed during			the Quarter
WA	E70/2742	Granted	CHANDALA (DerbyMines JV)	Earned 80%	Earned 80%

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Table 1 – North Perth Basin Resources and Reserves

Reserve Summary
Project Area	Category	Volume	Tonnes	% HM	% SLIMES	HM Tonnes	VHM	Ilmenite	Leucoxene	Rutile	Zircon
							(%)	(%)	(%)	(%)	(%)
Boonanarring	Probable	7,160,000	14,420,000	8.3%	17.0%	1,190,000	80.3%	46.9%	5.5%	3.3%	24.5%
Atlas	Probable	4,760,000	9,600,000	8.1%	15.5%	780,000	74.1%	55.0%	1.0%	7.0%	11.0%
Total NPB Reserve		11,920,000	24,020,000	8.2%	16.4%	1,970,000	77.8%	50.1%	3.7%	4.8%	19.1%
Mining Inventory (incl Inferred)		13,330,000	26,880,000	8.0%	16.5%	2,135,000	78.3%	50.1%	4.2%	5.1%	19.0%

Reserve Summary	Reserve Summary	Reserve Summary	Reserve Summary	Reserve Summary	Reserve Summary	Reserve Summary
HM Tonnes Project Area Category Volume Tonnes % HM % SLIMES							VHM Ilmenite Leucoxene Rutile Zircon
							(%) (%) (%) (%) (%)
Boonanarring Probable 7,160,000 14,420,000 8.3% 17.0% 1,190,000 80.3% 46.9% 5.5% 3.3% 24.5% Atlas Probable 4,760,000 9,600,000 8.1% 15.5% 780,000 74.1% 55.0% 1.0% 7.0% 11.0%
Total NPB Reserve 11,920,000 24,020,000 8.2% 16.4% 1,970,000 77.8% 50.1% 3.7% 4.8% 19.1%
Mining Inventory (incl Inferred) 13,330,000 26,880,000 8.0% 16.5% 2,135,000 78.3% 50.1% 4.2% 5.1% 19.0%
High Grade Resources @ 2.5%	HM Cut-off
Resource	VHM Ilmenite Leucoxene Rutile Zircon (%) (%) (%) (%) (%) % SLIMES HM TONNES Resource Category BCM TONNES % HM
Atlas Atlas	Measured Indicated	4,810,000 520,000	9,700,000 1,080,000	8.5 3.2	15.3 19.2	820,000 34,000	76 74	52 53	5 8	8 7	11 6
Atlas Total		5,330,000	10,780,000	7.9	15.7	854,000	76	52	5	8	10
Boonanarring Boonanarring	Measured	1,680,000	3,000,000	7.8	10.1	230,000	70	49	1	3	17
	Indicated	7,000,000	14,300,000	9	17.2	1,270,000	80	49	6	3	22
Boonanarring	Inferred	2,100,000	4,200,000	6.5	17.4	270,000	83	51	8	7	18
Boonanarring Total		10,780,000	21,500,000	8.3	16.2	1,770,000	79	49	6	4	21
Gingin Nth	Indicated	680,000	1,320,000	5.7	15.7	80,000	75	57	9	3	5
Gingin Nth	Inferred	580,000	1,090,000	5.2	14	60,000	78	57	11	4	6
Gingin Nth Total		1,260,000	2,410,000	5.5	15	140,000	77	57	10	3	6
Gingin Sth	Measured	870,000	1,530,000	4.4	7.2	67,000	79	51	15	6	8
Gingin Sth	Indicated	3,240,000	5,820,000	6.5	7.1	380,000	91	68	10	5	8
Gingin Sth	Inferred	400,000	730,000	6.5	8.4	48,000	92	67	8	6	11
Gingin Sth Total		4,510,000	8,080,000	6.1	7.3	495,000	89	65	10	5	8
Helene	Indicated	5,600,000	11,500,000	4.6	18.6	520,000	84	70	1	3	11
Hyperion	Indicated	1,800,000	3,700,000	7.8	19.3	290,000	71	56	0	6	9
Cooljarloo Nth Total		7,400,000	15,200,000	5.3	18.7	810,000	79	64	0	4	9
Red Gully	Indicated	1,930,000	3,410,000	7.8	11.5	270,000	90	66	8	3	12
Red Gully	Inferred	1,455,000	2,570,000	7.5	10.7	190,000	90	66	8	3	12
Red Gully Total		3,385,000	5,980,000	7.7	11.2	460,000	90	66	8	3	12
Grand Total	32,665,000 63,950,000 7.1% 13.9% 4,529,000 80 57 6 5 13

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Dredge Resources at 1.0% HM cut-off
Project Area Resource Category Volume TONNES % HM	% Slime	HM TONNES VHM % Ilmenite % Leucoxene % Rutile % Zircon % Ilmenite Leucoxene Rutile Zircon VHM Tonnes
Titan Indicated 10,300,000 21,200,000 1.8 Titan Inferred 58,500,000 115,400,000 1.9	22.1 18.9	380,000 84.4 71.9 2.0 1.0 9.5 270,000 7,000 5,000 36,000 318,000 2,210,000 84.3 71.8 2.0 1.0 9.5 1,592,000 45,000 22,000 210,000 1,869,000
Titan Total 68,800,000 136,600,000 1.9	19.4	2,590,000 84.4 71.9 2.0 1.0 9.5 1,862,000 52,000 27,000 246,000 2,187,000
Telesto Indicated 1,700,000 3,500,000 3.8 Calypso Inferred 27,100,000 51,500,000 1.7 Sub Total Indicated 12,000,000 24,700,000 2.1	18.4 13.7 21.6	130,000 82.6 67.5 3.4 2.2 9.5 100,000 5,000 3,000 13,000 121,000 850,000 84.6 68.8 3.5 1.6 10.6 585,000 30,000 14,000 90,000 719,000 510,000 86.1 72.5 2.4 1.6 9.6 370,000 12,000 8,000 49,000 439,000
Sub Total Inferred 85,600,000 166,900,000 1.8	17.3	3,060,000 84.6 71.1 2.5 1.2 9.8 2,177,000 75,000 36,000 300,000 2,588,000
Cooljarloo Total 97,600,000 191,600,000 1.9	17.8	3,570,000 84.8 71.3 2.4 1.2 9.8 2,547,000 87,000 44,000 349,000 3,027,000
Bidaminna Inferred 26,300,000 44,600,000 3.0	3.6	1,350,000 96.0 82.4 7.2 1.0 5.4 1,113,000 97,000 13,000 73,000 1,296,000
Total Dredge 123,900,000 236,200,000 2.1	15.1	4,920,000 84.3 65.6 4.6 2.9 11.3 3,660,000 184,000 57,000 422,000 4,323,000

1 Refer to the 31 May 2013 release http://www.asx.com.au/asxpdf/20130531/pdf/42g6v9v0jxn3hg.pdf for full details of the Boonanarring Mineral Resource/Reserve Estimate for full details of the Boonanarring Mineral Resource/Reserve Estimate

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