IMAGE RESOURCES NL — Interim / Quarterly Report 2018

Jul 31, 2018

QUARTERLY ACTIVITIES REPORT – for quarter ended 30 June 2018

==> picture [215 x 35] intentionally omitted <==

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: info@imageres.com.au W: imageres.com.au

Issued Capital

Shares – Quoted 952,743,446 As at 30 June 2018

Board Members

Robert Besley (Non-Executive Chairman) Patrick Mutz (Managing Director) Peter Thomas (Non-Executive Director) George Sakalidis (Executive Director) Chaodian Chen (Non-Executive Director) Eddy Wu (Non-Executive Director) Aaron Chong Veoy Soo (Non-Executive Director) Huang Cheng Li (Non-Executive Director)

HIGHLIGHTS

• Ø Image satisfies all conditions precedent for funds drawdown under Loan Note Subscription Agreement on 10 May and receives single tranche USD equivalent of AU$50 million (less fees) for Boonanarring project on 25 May 2018;

• Ø Company fully funded for development of Boonanarring mineral sands project through to positive cashflow, including corporate overhead and exploration;

• Ø Boonanarring project construction advancing on budget and largely on schedule with overall project development approximately 50% complete at end of June 2018 and on-track for commissioning in 4[th] QTR 2018;

• Ø Benchmark zircon price for pricing Image Heavy Mineral Concentrate product increased 12% on 1 April 2018 to US$1,455 per tonne; and

• Ø Image BFS financial metrics revised with updated commodity prices and FX to AU$235 million NPV(8%), 135% IRR and 13-month payback period.

Boonanarring Project Debt Funding and Advancing Construction

The Company’s primary focus during the quarter was finalising project capital debt funding and advancing project construction at its 100%-owned, high-grade, zircon-rich Boonanarring mineral sands project located 80km north of Perth in WA. First production is scheduled to occur in the 4[th] Quarter 2018.

Satisfaction of Conditions Precedent to Drawdown of Debt Funds

On 10 May 2018, BNY Mellon, Agent under the Loan Note Subscription Agreement (“LNSA”) for Pala Investments Limited (“Pala”) and Castlelake IV, L.P. and CL V Investment Solutions LLC which are entities controlled by Castlelake L.P. (collectively, “Castlelake”) as the Loan Note Holders, notified Image the Company had satisfied all conditions precedent to drawdown of the LNSA debt funds. Image issued a drawdown request on 10 May and the full amount of the loan notes (USD equivalent to AU$50 million, less fees) was received in a single tranche on 25 May 2018.

Receipt of debt funds, along with the AU$25 million (before costs) equity funding completed in March, provide Image with full capital funding required for the development of the Boonanarring Project, as well as sufficient funds for corporate overhead and exploration expenditures to positive Boonanarring Project cashflow scheduled for 1[st] QTR 2019.

Advancing Construction at Boonanarring Project

During the reporting period, construction activities at the Boonanarring Project were ramped up in accordance with the fast-track project development schedule. Image’s wet concentration plant (WCP) and associated equipment located in South Australia was relocated to Boonanarring. Site civil construction and concrete works for the processing plant were completed at Boonanarring and reassembly of the WCP was well advanced by the end of the reporting period.

Topsoil and overburden removal for the initial box cut for open-cut mining operations was also well advanced by the end of June. Mining contractor Piacentini and Son mobilised to Boonanarring in late April and continued to ramp up with additional mining equipment and personnel, including maintenance services, throughout May and June.

Other project construction and related activities include completion of the site entry road; installation of temporary administration offices; establishment of an off-site temporary construction camp; procurement of additional select equipment to enhance process effectiveness; and installation of an environmental dust and noise monitoring station.

Page 1 of 20

==> picture [215 x 35] intentionally omitted <==

Rising Zircon Prices

Zircon prices continued to rise during the quarter. On 1 April 2018, Iluka Resources increased its Zircon Reference Price by 14% to US$1,410 per tonne. Similarly, the benchmark zircon price to be used to price Image’s Heavy Mineral Concentrate product, ( Zircon Benchmark Price ) being the Iluka premium grade zircon reference price as quoted in China, increased by 12% to US$1,455 per tonne.

Tronox Limited also increased the sales price for its premium grade zircon by 13% to US$1,645 per tonne effective 1 July 2018.

The Company anticipates the Zircon Benchmark Price will rise again early in 4[th] QTR 2018, prior to the start of production at Boonanarring.

BFS Update

On 28 June 2018, the Company announced further enhanced project economics for the Boonanarring/Atlas Project based on an update of the project Bankable Feasibility Study (BFS). The BFS was updated to reflect significantly higher zircon spot market prices and higher zircon and other mineral sands commodity price forecasts published during the reporting period by TZ Mineral International Pty Ltd (TZMI). The USD:AUD foreign exchange rate was also set to a flat rate of USD0.75. Enhanced project economics included pre-tax NPV(8%) of AU$235M; IRR of 125% and payback period of 13 months.

Exploration

A 100kg bulk sample of drill cuttings from the mineralised zone at the Bidaminna deposit is being prepared for wet and dry heavy mineral separation testing and preliminary Leucoxene product quality determination.

Drilling of 68 AC holes totalling over 2 kilometres was completed during the quarter predominately over the Regans Ford South area.

Discussions are continuing with two landowners to allow drilling of the northernmost 2.6km of the Boonanarring Deposit’s Northern Extension.

Drilling results confirmed the southern 4.1km extension for the Boonanarring deposit and the equivalent strand to the Boonanarring West mineralisation. As a result, the newer Boonanarring West mineralisation target area has been enlarged to 4.2km in length and planned drilling.

A significant drill programme is planned in the September 2018 Quarter to follow up numerous promising targets over a number of projects.

The Company continued to control its exploration expenditures largely in accordance with minimum expenditure limits to conserve cash for the development of the Boonanarring Project.

Corporate

The Image Board appointed Mr Huang Cheng Li as a Non-Executive Director effective 4 April 2018 as the nominated representative of Vestpro International of Hong Kong following Vestpro’s participation in the March 2018 $25M equity raising and achieving a position on the share register of greater than 10% (post-equity raising).

The Quarterly Activities and Cashflow Reports for the period ending 31 March 2018 were filed on 30 April 2018.

The Annual General Meeting of Shareholders was held 21 May 2018 with all six (6) resolutions put before shareholders approved by a show of hands and supported by proxy votes.

Page 2 of 20

==> picture [215 x 35] intentionally omitted <==

ACTIVITIES REPORT

Boonanarring Project Development

The Company made substantial progress during this reporting period, fast-tracking the development of its 100%owned, high-grade, zircon-rich Boonanarring mineral sands project located 80km north of Perth in the North Perth Basin in WA. The project is now fully funded to positive cash flow, including corporate overhead and exploration, and construction is considered 50% complete as at the end of June 2018. Construction is advancing on budget and largely on schedule with commissioning and first production on-track for 4[th] QTR 2018.

Receipt of Debt Funding

On 10 May 2018, the Company was notified it had satisfied all conditions precedent to drawdown of debt funding under the Loan Note Subscription Agreement (“LNSA”). Notice was received from BNY Mellon, the Agent under the LNSA for Pala Investments Limited (“Pala”) and Castlelake IV, L.P. and CL V Investment Solutions LLC which are entities controlled by Castlelake L.P. (collectively, “Castlelake”) as the Loan Note Holders.

Following receipt of the notice from BNY, Image immediately issued a drawdown request on 10 May 2018 for the full amount of the loan notes. On 25 May 2018 Image received the USD equivalent to AU$50 million (less fees) in a single tranche.

Receipt of the debt funds completed the capital funding requirements for the development of the Boonanarring Project. And, along with the AU$25 million (before costs) equity funding completed in March 2018, the Company is now fully funded, including sufficient funds for corporate overhead and exploration expenditures, to Boonanarring Project positive cashflow scheduled for 1[st] QTR 2019.

Boonanarring Project Construction

During the quarter construction crews completed the dismantling of the wet concentration plant (WCP) in South Australia and relocation of the WCP components and a vast majority of the associated plant and equipment, to the Boonanarring mine site.

At Boonanarring, construction activities were ramped up during the quarter and by the end of June, site civil and concrete works for the WCP were complete and general site civil works were 70% complete. Re-assembly of the WCP commenced in early June and is advancing on schedule. In addition, the deconstruction of a used slimes thickener located off-site was completed and was delivered and partially re-assembled at Boonanarring in early July. See Photo 1.

Photo 1: Wet Concentration Plant Construction Progress – 25 July 2018

==> picture [420 x 213] intentionally omitted <==

Page 3 of 20

==> picture [215 x 35] intentionally omitted <==

Procurement of remaining select equipment aimed at enhancing the process effectiveness was completed and deliveries remain on schedule. Construction of a new ore feed hopper for the mine is on track and scheduled to be delivered in August.

Mining contractor Piacentini and Son continued the process of mobilising equipment and personnel during the quarter and is now making excellent progress on topsoil and overburden removal. Overall the initial box cut for open-cut mining operations was well advanced by the end of June with actual production rates from the truck and excavator fleet significantly above budgeted production rates. First ore is expected to be exposed late in September 2018.

Heavy rains in June have resulted in the loss of six days in the overall schedule principally due to impacts on the reassembly of the WCP and overall site civil works. It is uncertain if this lost time will result in a delay to the overall project schedule, however at this time commissioning of the WCP remains on schedule.

The current project development schedule provides for wet commissioning of the WCP and ancillary equipment required for the Boonanarring Project in October 2018 and first production before the end of the 4[th] Quarter 2018.

Rising Zircon Prices

Zircon prices continued to rise during the quarter. On 1 April 2018, Iluka Resources increased its Zircon Reference Price by 14% to US$1,410 per tonne. Similarly, the benchmark zircon price to be used to price Image’s Heavy Mineral Concentrate product (Zircon Benchmark Price), being the Iluka premium grade zircon reference price as quoted in China increased by 12% to US$1,455 per tonne.

Tronox Limited also increased the sales price for its premium grade zircon by 13% to US$1,645 per tonne effective 1 July 2018. This latest price increase follows on the heels of Tronox increasing the zircon price by 10% on 1 January 2018.

Zircon represents over 70% of total projected revenue for the Boonanarring project and the current bench mark spot price for zircon to be used to determine the price of Boonanarring HMC product is now over 25% higher than when the bankable feasibility study results were published on 30 May 2017.

A shortfall of zircon in the short to medium term is emerging. Global supply of zircon is forecast to decline by around 20% over the next few years driven by mine closures and declining grades with the supply gap needing to be filled from existing inventories and new projects. Image will be in a prime position to benefit from the recent zircon price rises and developing supply shortfall by transitioning to a significant zircon producer in 2018-19.

The Company anticipates a further rise in the Zircon Benchmark Price early in 4[th] QTR 2018, prior to the start of production at Boonanarring.

BFS Update

On 28 June 2018, the Company announced further enhanced project economics for the Boonanarring/Atlas Project based on an update of the Bankable Feasibility Study (BFS). The BFS was updated to reflect significantly higher zircon spot market prices and higher zircon and other mineral sand commodity price forecasts published during the reporting period by TZ Mineral International Pty Ltd (TZMI). In addition, the USD:AUD foreign exchange rate was set to a flat rate of USD0.75.

Enhanced project economics include:

• Project Pre-Tax NPV(8%) of AU$235M; up from A$197M in Nov 2017;

• Project Pre-Tax IRR of 125%; up from 104%; and

• Payback period of 13 months; down from 16 months.

The overall pre-tax NPV of the Boonanarring/Atlas Project has now increased 74% from the original publication of the BFS on 30 May 2017 indicating an pre-tax NPV(8%) of AU$135M.

Corporate

Following participation in the $25M equity raising to achieve a position on the share register of greater than 10% postequity raising, Vestpro International of Hong Kong nominated Mr Huang Cheng Li as its nominated representative, and the Image Board appointed Mr Li as a Non-Executive Director effective 4 April 2018.

The Quarterly Activities and Cashflow Reports for the period ending 31 March 2018 were filed on 30 April 2018.

Page 4 of 20

==> picture [215 x 35] intentionally omitted <==

The Annual General Meeting of Shareholders was held on 21 May 2018 with all six (6) resolutions put before shareholders approved by a show of hands and supported by proxy votes.

EXPLORATION HIGHLIGHTS

• Ø Drilling of 68 AC holes totalling 2075m was completed predominately over the Regans Ford South area in the June Quarter.

• Ø Ongoing discussions are continuing with two landowners, seeking access agreements to allow drilling of the northernmost 2.6km of the Boonanarring Deposit’s Northern Extension.

• Ø Extensive drilling of 52 AC holes totalling 1537m has confirmed the southern 4.1km extension for the Boonanarring deposit, the Piggery Strand and the equivalent strand to the Boonanarring West mineralisation.

• Ø The newer Boonanarring West mineralisation target area has been enlarged to 4.2km in length and a large programme of 48 holes is planned in the September Quarter.

• Ø At Bidaminna, a 100kg bulk sample of drill cuttings from the mineralised zone across two lines of drill holes across the deposit, is being prepared for wet and dry heavy mineral separation testing and preliminary Leucoxene product quality determination.

• Ø At Erayinia, a 6 RC hole programme totalling 720m is starting in early August, testing for the northern extensions of the wide and extensive King Gold mineralisation.

• Ø Overall, a large drill programme is planned in the September 2018 Quarter comprising 212 holes totalling 8,215m to follow up numerous promising targets over a number of projects.

Boonanarring North Extension

The Company is in discussions with two landowners regarding access agreements for delineation drilling over the 2.6km northernmost section of the extension of the high-grade Boonanarring deposit announced on 13 March 2017. If access agreements are secured, 80 drill holes for 3840m on a 200m x 40m drill grid are likely required to convert the mineralisation in this area to an Indicated Mineral Resources Category (Fig. 1).

The Boonanarring high-grade northern extension area has been confirmed from previous roadside drilling and includes very high zircon grades ranging from 16.4% to 22.2% of the HM content, which includes outstanding Heavy Mineral high-grade intersections of 8m @ 23.8% HM in drill hole IX00245, 8m @ 21.1% HM in IX00244 and 8m @ 16.3% HM in IX00250 (ASX release 26/06/2017). In addition, the northernmost part of the extension area has a lower strip ratio of around 3.2:1 as compared to a higher strip ratio for the currently planned Boonanarring mine area. This extension area is deemed to be within economic pumping distance of the planned location of the Boonanarring wet concentration plant.

Boonanarring West

Reinterpretation of the drilling and more extensive ground magnetics shows that the Boonanarring West target area has been enlarged to 4200m x 300m and is only 600m west of the Boonanarring mine which is under construction (Fig. 2). This has potential positive ramifications for the mine life of the Boonanarring deposit. The 13 holes drilled this quarter have so far shown that the mineralisation is 1km in length with visually estimated medium-grade drill intersections. A further 44 holes are planned in the September Quarter mainly on the southern part of the Boonanarring West mineralisation extension. The mineralisation intersected is open to the south and is at a lower RL of 50–55 ASL compared to 65–70 ASL for the Boonanarring deposit (Fig. 3).

Page 5 of 20

==> picture [215 x 35] intentionally omitted <==

==> picture [438 x 622] intentionally omitted <==

Figure 1. Boonanarring North Extension Target area showing proposed drilling which is subject to access.

Page 6 of 20

==> picture [215 x 35] intentionally omitted <==

==> picture [410 x 577] intentionally omitted <==

Figure 2. Boonanarring West Target Area showing drilling in the June Quarter and proposed holes in the September Quarter.

Boonanarring South

Previous drilling and magnetic interpretation show the Boonanarring Mineral Resources as potentially continuing southwards up to 4.1km (Fig. 3). A recent large drill programme of 46 AC holes totalling 1,384m was completed with field estimates being encouraging and lab results are pending. This drilling has further validated this interpretation, which extends the Boonanarring deposit, the Piggery strand and the new Boonanarring West mineralisation within the 4.1km gap area. Further drill programmes are currently being planned to facilitate Mineral Resources estimates.

Page 7 of 20

==> picture [215 x 35] intentionally omitted <==

==> picture [410 x 581] intentionally omitted <==

Figure 3. Boonanarring South Extension showing the potential link up with eastern strand forming part of the Boonanarring Deposit and the western strand that correlates with the Boonanarring West Target Area.

Page 8 of 20

==> picture [216 x 35] intentionally omitted <==

Bidaminna Mineral Resources and Northern Extension

The Bidaminna Project is unusual as the heavy mineral assemblage is dominated by the higher-value Leucoxene, rather than Ilmenite. The pricing of Leucoxene varies compared to the other mineral sands products but is typically 3 to 4 times the value of Ilmenite. The Leucoxene content in the current Mineral Resources (JORC 2004) area varies from 28% Leucoxene in the HM in the southernmost part of the Mineral Resources area, up to 69% in the northernmost part of the Mineral Resources area.

No drilling was carried out this quarter, yet a bulk sample of approximately 100kg of drill cuttings from the mineralised section of the deposit is being composited for wet and dry mineral separation testing and for a preliminary determination of the quality of potential Leucoxene products. The bulk sample is being composited from two lines of drilling located just north of the Bidaminna Mineral Resources area. Additional drill programmes would likely be delayed into 2019 as environmental surveys (botanical, banksia, dieback and heritage), which are seasonal in nature, are required prior to any drilling. These surveys will be planned to be completed in October–November 2018.

==> picture [359 x 508] intentionally omitted <==

Figure 6. Bidaminna Deposit and potential northern extension showing holes drilled in March Quarter

==> picture [215 x 35] intentionally omitted <==

Table 1 - Drilling Completed in Quarter ending 30 June 2018

Tenement	Project	# Holes	Metres drilled	# Assays
M70/1311	Boonanarring	4	122	41
E70/4689	Boonanarring West	3	74	38
E70/3041	Regans Ford South	52	1537	607
E70/3411	Regans Ford	9	342	102
Total		68	2075	788

Table 2 - Drilling programme proposed Sept 2018 quarter:

Tenement	Project	# Holes	Metres
E28/1895	Erayinia	26	1040
E70/3032	Gingin	20	600
E70/3100	Quinns Hill	40	1920
E70/3298	Bidaminna Park	5	250
E70/3494	Bryalana	8	260
E70/3720	Blue Lake	14	670
E70/3892	Chapman Hill	15	585
E70/3997	Munbinia	40	1440
E70/4244	Woolka	20	900
E70/4631	Munbinia West	18	320
E70/4656	Winooka North	6	230
	Total:	212	8215

Page 10 of 20

==> picture [215 x 35] intentionally omitted <==

COMPETENT PERSON’S STATEMENTS – EXPLORATION RESULTS, MINERAL RESOURCES AND ORE RESERVES

Information in this report that relates to Exploration Results, Mineral Resources and Ore Reserves (other than Boonanarring and Atlas Mineral Resources and Ore Reserves) 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 Ore 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.

The information in this report that relates to the estimation of Mineral Resources for the Boonanarring and Atlas Projects is based on information compiled by Mrs Christine Standing, who is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM) and the Australian Institute of Geoscientists (AIG). Mrs Standing is a full-time employee of Optiro Pty Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she 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’. Mrs Standing consents to the inclusion in this report of the matters based on her information in the form and context in which it appears.

The information in this report that relates to the estimation of Ore Reserves for the Boonanarring and Atlas Projects has been compiled in accordance with the guidelines of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code – 2012 Edition). The Ore Reserves have been compiled by Jarrod Pye, Mining Engineer and previously a full-time employee of Image Resources, under the direction of Andrew Law of Optiro, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Law has sufficient experience in Ore Reserves estimation relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore Reserves”. Mr Law consents to the inclusion in the report of the matters compiled by him in the form and context in which it appears."

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.

Attachments:

Table 3. Tenement Schedule in accordance with ASX Listing Rule 5.3.3 Table 4. Mineral Resources and Ore Reserves as at 3 August 2017

Page 11 of 20

==> picture [215 x 35] intentionally omitted <==

Table 3 – Tenement Schedule

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	ERAYINIA	100%	100%
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	E70/3494	Granted	BRYALANA	100%	100%
WA	E70/3720	Granted	BLUE LAKE	100%	100%
WA	E70/3892	Granted	CHAPMAN HILL	100%	100%
WA	E70/3997	Granted	MUNBINIA	100%	100%
WA	E70/4077	Granted	DARLING RANGE	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	M70/1194	Granted	BOONANARRING	100%	100%
WA	P70/1516	Granted	COOLJARLOO	100%	100%
WA	M70/1311	Granted	BOONANARRING NORTH	100%	100%
WA	G70/0250	Granted	BOONANARRING	100%	100%
WA	R70/0051	Granted	COOLJARLOO NORTH	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 WEST	100%	100%
WA	E70/4779	Granted	MIMEGARRA	100%	100%
WA	E70/4794	Granted	REGANS FORD NORTH	100%	100%
WA	E70/4795	Application	BIDAMINNA SOUTH	100% pending grant	100% pending grant
WA	E70/4919	Granted	ORANGE SPRINGS	100%	100%
WA	E70/4946	Granted	RED GULLY NORTH	100%	100%
WA	E70/4949	Granted	NAMMEGARRA	100% pending grant	100%
WA	E28/2742	Application	MADOONIA DOWNS	100% pending grant	100% pending grant
WA	E70/5186	Application	CHAPMAN HILL	-	100% pending grant
Mining Tenements acquired during the Quarter
WA	E70/5186	Application	CHAPMAN HILL	-	100% pending grant
Mining Tenements disposed during the Quarter
Nil

Page 12 of 20

==> picture [215 x 35] intentionally omitted <==

Table 4 – Mineral Resources and Ore Reserves as at 3 August 2017

==> picture [452 x 566] intentionally omitted <==

Page 13 of 20

==> picture [215 x 35] intentionally omitted <==

Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off	Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off	Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off	Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off	Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off	Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off	Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off	Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off	Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off	Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off	Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off	Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off
Project/Deposit	Category	Volume	Tonnes	**% HM **	**% Slimes **	HM Tonnes	**VHM **	**Ilmenit **	**Leucoxen **	**Rutile **	Zircon
							(%)	(%)	(%)	(%)	(%)
Titan3	Indicated	10,335,053	21,163,741	1.8	22.1	378,831	86.0	71.9	1.5	3.1	9.5
Titan3	Inferred	58,517,775	115,445,391	1.9	18.9	2,205,007	85.9	71.8	1.5	3.1	9.5
Total Titan	Total	68,852,828	136,609,132	1.9	19.4	2,583,838	85.9	71.8	1.5	3.1	9.5
Telesto3	Indicated	1,716,328	3,512,204	3.8	18.4	134,499	83.3	67.5	0.7	5.6	9.5
Calypso3	Inferred	27,113,647	51,457,008	1.7	13.7	854,186	85.6	68.1	1.6	5.1	10.8
Bidaminna3	Inferred	26,260,000	44,642,000	3.0	3.6	1,339,260	96.8	83.11	7.2	1.0	5.5
Total Dredge		**123,942,803 **	236,220,344	2.1	15.2	4,911,783	88.7	74.1	3.1	2.9	8.6

Page 14 of 20

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity
IMAGE RESOURCES NL
ABN			Quarter ended (“current quarter”)
57 063 977 579			30/06/2018
Consolidated statement of cash flows			Current quarter $A’000	Year to date ( 6 months) $A’000
1.	Cash flows from operating activities		-	7
1.1	Receipts from customers
1.2	Payments for		(319)	(711)
	(a) exploration & evaluation
	(b) development		-	-
	(c) production		-	-
	(d) staff costs		(547)	(987)
	(e) administration and corporate costs		(150)	(872)
1.3	Dividends received (see note 3)		-	-
1.4	Interest received		76	77
1.5	Interest and other costs of finance paid		(99)	(100)
1.6	Income taxes paid		-	-
1.7	Research and development refunds		-	-
1.8	Other (provide details if material)		-	-
1.9	Net cash from / (used in) operating activities		(1,039)	(2,586)

+ See chapter 19 for defined terms

1 September 2016

Page 1

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

2.	Cash flows from investing activities	(10,355)	(12,015)
2.1	Payments to acquire:
	(a) property, plant and equipment
	(b) tenements (see item 10)	-	-
	(c) investments	-	-
	(d) other non-current assets	-	-
2.2	Proceeds from the disposal of:	2	2
	(a) property, plant and equipment
	(b) tenements (see item 10)	-	-
	(c) investments	15	15
	(d) other non-current assets	-	-
2.3	Cash flows from loans to other entities	-	-
2.4	Dividends received (see note 3)	-	-
2.5	Other (provide details if material) Term Deposits greater than 90 days	(10,176)	(10,176)
2.6	Net cash from / (used in) investing activities	(20,514)	(22,174)
3.	Cash flows from financing activities	-	25,000
3.1	Proceeds from issues of shares
3.2	Proceeds from issue of convertible notes	-	-
3.3	Proceeds from exercise of share options	-	-
3.4	Transaction costs related to issues of shares, convertible notes or options	(1,071)	(1,459)
3.5	Proceeds from borrowings	52,018	52,018
3.6	Repayment of borrowings	(11)	(47)
3.7	Transaction costs related to loans and borrowings	(7,902)	(7,902)
3.8	Dividends paid	-	-
3.9	Other (provide details if material)	-	-
3.10	Net cash from / (used in) financing activities	43,034	67,610

+ See chapter 19 for defined terms

1 September 2016

Page 2

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

4.	Net increase / (decrease) in cash and cash equivalents for the period	25,792	4,423
4.1	Cash and cash equivalents at beginning of period
4.2	Net cash from / (used in) operating activities (item 1.9 above)	(1,039)	(2,586)
4.3	Net cash from / (used in) investing activities (item 2.6 above)	(20,514)	(22,174)
4.4	Net cash from / (used in) financing activities (item 3.10 above)	43,034	67,610
4.5	Effect of movement in exchange rates on cash held	-	-
4.6	Cash and cash equivalents at end of period	47,273	47,273

5.	Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Current quarter $A’000	Previous quarter $A’000
5.1	Bank balances	10,764		25,778
5.2	Call deposits	36,509		14
5.3	Bank overdrafts	-		-
5.4	Other (provide details)	-		-
5.5	Cash and cash equivalents at end of quarter (should equal item 4.6 above)	47,273		25,792
6.	Payments to directors of the entity and their associates			Current quarter $A'000
6.1	Aggregate amount of payments to these parties included in item 1.2			168
6.2	Aggregate amount of cash flow from loans to these parties included in item 2.3			-
6.3	Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2

+ See chapter 19 for defined terms

1 September 2016

Page 3

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

7.	Payments to related entities of the entity and their associates	Current quarter $A'000
7.1	Aggregate amount of payments to these parties included in item 1.2	4
7.2	Aggregate amount of cash flow from loans to these parties included in item 2.3	-
7.3	Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

8.	Financing facilities available Add notes as necessary for an understanding of the position	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
8.1	Loan facilities	56,584	56,584
8.2	Credit standby arrangements	55	55
8.3	Other (please specify)	-	-
8.4	Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.
2 Loans are held as follows: • Murray Zircon Pty Ltd – A$4,000,000. Interest rate is 5% paid six monthly in arrears. • A senior secured debt facility with Pala Investments Limited (“Pala”), Castelake IV, L.P. and CL V Investment Solutions LLC - US$38,850,000 (A$52,584,224 at 30 June 2018). Interest rate is 14% for the first fifteen months following draw down and 13% thereafter for the balance of the loan. Interest for the first fifteen months is added to the loan amount and thereafter paid quarterly in arrears. Further details can be found in the announcement lodged with the ASX on 8 March 2018.

+ See chapter 19 for defined terms

1 September 2016

Page 4

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

9.	Estimated cash outflows for next quarter	Estimated cash outflows for next quarter			$A’000
9.1	Exploration and evaluation				500
9.2	Development				30,500
9.3	Production				-
9.4	Staff costs				600
9.5	Administration and corporate costs				200
9.6	Other – Project Insurances				200
9.7	Total estimated cash outflows				32,000
10.	Changes in tenements (items 2.1(b) and 2.2(b) above)	Tenement reference and location	Nature of interest		Interest at beginning of quarter	Interest at end of quarter
10.1	Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced	Refer Quarterly Report
10.2	Interests in mining tenements and petroleum tenements acquired or increased	Refer Quarterly Report

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

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

Sign here: . ”SIGNED ELECTRONICALLY” . Date: 31 July 2018 (Company secretary)

Print name: Dennis Wilkins

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources

+ See chapter 19 for defined terms

1 September 2016

Page 5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

• and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

• Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

+ See chapter 19 for defined terms

1 September 2016

Page 6