IMAGE RESOURCES NL — Investor Presentation 2019

Oct 28, 2019

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Australia’s newest mineral sands miner Rapidly growing mid-tier prospect

Boonanarring Mineral Sands Project

IMARC 2019 Melbourne, VIC 29-31 Oct 2019

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Disclaimer and Forward Looking Statements

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This presentation/document has been prepared by the management of Image Resources NL ("Image”, “IMA“, or “the Company”). The information presented includes an indicative outlook of the business activities of Image for the calendar year (CY) 2019 and is provided to aid investors and potential investors with assessing the value of the Company. Some of the information provided may be based on past performance, however, this information should not be considered a reliable indicator of future performance. The information presented supersedes all previously presented information of its kind unless otherwise noted. This information is based in part on Image’s interpretation of trends in commodity prices, financial markets, economic and macro-economic factors and consequently is subject to variation.

Certain statements in this presentation/document, and in subsequent oral statements made by and on behalf of Image, constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws. Such statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements of the Company, the Boonanarring Project or the industry, to be materially different from any forecast results, performance or achievements expressed or implied by such forward-looking statements or information. Such statements can be identified by the use of words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict” and other similar terminology, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. These statements reflect the Company’s current expectations regarding future events, performance and results as of the date of this presentation/document.

Statements in this presentation/documents that constitute forward-looking statements or information include, but are not limited to statements regarding production statistics, revenue, operating costs and EBITDA. Forward-looking information and statements may also include commodity price assumptions, projected capital and operating costs, metal or mineral recoveries, mine life, production rates and other assumptions used in the 2017 Bankable Feasibility Study (“2017BFS”). Readers are cautioned that actual results may vary from those presented. Certain of the factors and assumptions used to develop the forward-looking information, as well as the risks that could cause the actual results to differ materially, are contained in the 2017BFS and subsequent BFS updates, lodged with the ASX and disclosed on the Company’s website at www.imageres.com.au.

Accessing the information contained in this presentation implies an acknowledgement that you have read and understood the above disclaimer and qualifications regarding forward-looking statements.

Information regarding the calculation of ore reserves and mineral resources in this presentation (if any), and the consents provided by the respective Competent Persons is presented at the end of this presentation. For additional information and details on the content of this presentation, please refer to the ASX releases on the Company’s website.

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Boonanarring Mineral Sands Project

Very strong asset fundamentals

Ø Excellent location;

• 80km north of Perth in Western Australia in infrastructure-rich North Perth Basin

• home to majors Iluka and Tronox

• Ø Exceptional deposit;

• Very high ore grade 7.2%HM

• Zircon-rich 22.7% of HM

• Coarse grained minerals D50 ~180 microns

• • High metallurgical recoveries 98% of zircon

• • 92% TiO2 Market ready products

• Ø 100%-owned

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Boonanarring Mineral Sands Project

Simple, low-risk business model

• Ø Straight-forward open-cut dry mining;

• Contract mining by one of the best-known, experienced and well-equipped operators in Australia (Piacentini & Son)

• Ø Simple gravity separation circuit to produce heavy mineral concentrate (HMC)

• Ø HMC is sold directly in bulk under life-of-mine off-take contracts out of Bunbury, WA

• Ø Life-of-Mine off-take agreements

• 100% of production; market-based pricing

• Ø Each shipment (nominally 20Kt) is secured by letter of credit prior to ship loading

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• Ø No mineral separation plant Ø No marketing requirements

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Boonanarring Mineral Sands Project

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Stellar project delivery

Ø Project constructed on-time & on-budget

• Rapid build; 8 months construction and commissioning

• Very low capital costs; $52M

• Ø Long-term average HMC production achieved in 2nd month of operation (Jan 2019)

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Simplified Boonanarring Project Construction Schedule - (high level)
2018 2019
WCP & Equipment Relocation
Project Construction
Pre-Stripping
Ore Mining
Plant Commissioning
Production
8 Months
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
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• Ø Profitable Q1; Cashflow Positive in Q2

• Ø Performance Exceeded Expectations 1H 2019

• HMC production138% of budget

• Operating costs 76% of budget

• Operating margin 125% of budget

• EBITDA 127% of budget (actual $29.5M)

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• Provisional NPAT 157% of budget

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Boonanarring Mineral Sands Project

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Unexpected positives

• Ø Heavy mineral (HM) ore grade 43% higher than forecast in 1H 2019

• High grade core identified in eastern strand not appropriately delineated by 20m drill spacings

• Eastern strand redrilled on 5m spacings

• Upgraded Ore Reserve due Q4 2019

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• Ø Zircon content in HM 12% higher than budget in 1H 2019

• Ø Portion of zircon in deposit found to be premium grade; currently all zircon sold as standard grade

• Ø Discovery of zone of ultra-high-grade ore

• Up to 95%HM and 71% zircon in the HM

• Considered direct shipping ore (DSO) or HMC

• 2,700 tonnes mined to date at average 78%HM

Ø All being evaluated in updated financial model in Q4

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Corporate Snapshot

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Diverse and Experienced Board and Management

ASX Code: IMA Share Price: A$0.27 12-Month Price Range: A$0.10-0.30 Shares on Issue: 964m Market Cap: A$262m Cash on hand: A$35.8m Debt: A$69m Enterprise Value: A$295m* Top 20 Shareholders: 70%

Board of Directors

Bob Besley – Independent Chairman Patrick Mutz – Managing Director Chaodian Chen - Non-Executive Director Aaron Chong Veoy Soo – Non-Executive Dir George Sakalidis – Executive Director Peter Thomas – Non-Executive Director Fei (Eddy) Wu – Non-Executive Director Huangcheng Li – Non-Executive Director

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Key Management

Patrick Mutz – CEO

John McEvoy – Chief Financial Officer Todd Colton – Chief Operating Officer George Sakalidis – Exploration Director

• - as at 22 Oct 2019

• * - as at 30 Sep 2019 (includes term deposits and excludes $12.2M payment for HMC shipment #9 received in October)

• * * - as at 30 Sep 2019

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Ore Reserves

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q HIGH-QUALITY ORE RESERVES

Ø JORC Code (2012) Compliant Ø High HM, VHM and very high zircon at Boonanarring

High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)	High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)	High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)	High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)	High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)	High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)	High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)	High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)	High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)	High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)	High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)	High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)
Project/Deposit	Category	Volume	Tonnes	% HM	**% Slimes **	HM Tonnes	VHM	**Ilmenite **	Leucoxene	Rutile	Zircon
							(%)	(%)	(%)	(%)	(%)
Boonanarring1	Proved	5,008,000	9,344,000	8.6	14.3	803,771	76.081	48.9	1.8	2.2	23.2
Boonanarring1	Probable	5,565,000	10,514,000	5.9	17.6	622,429	78.653	52.3	1.8	2.7	21.9
Total Boonanarring		10,573,000	19,858,000	7.2	16.1	1,426,200	77.203	50.4	1.8	2.4	22.7
Atlas1	Probable	5,000,000	9,477,000	8.1	15.5	767,637	73.3	50.7	4.5	7.5	10.6
Total Atlas		5,000,000	9,477,000	8.1	15.5	767,637	73.3	50.7	4.5	7.5	10.6
Total Ore Reserves		15,573,000	29,335,000	7.5	15.9	2,193,837	75.8	50.5	2.7	4.2	18.4

1. COMPLIANCE STATEMENT - Boonanarring/Atlas Ore Reserves

The Ore Reserves statement 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 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.

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Product Assemblage and Revenue Contributions

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Notes: VHM assemblage and
commodity prices are estimates based
on actual operational results and 2Q
2019 commodity price assumptions.
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Market Guidance and Forecast

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Market Guidance

• Ø CY 2019 Guidance

• Initial, Feb 2019 EBITDA $40-50M

• Updated, July 2019 EBITDA $55-65M

• Ø CY 2020 BFS Forecast, EBITDA $90-100M

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• Ø Financial model to be updated based on new Ore Reserve estimate in Q4

• Ore grade and zircon content expected to increase significantly and anticipated to translate directly to bottom-line

• Ore Reserves tonnes expected to increase with optimised cut-off grade, updated commodity prices and lower operating costs

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Boonanarring – CY2019 Guidance

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2019 Guidance & 2020 Forecast1,2,4	Units	June 2019 YTD Actual	2019 Guidance	2020 Forecast
HMC3 Produced	DMT 000s	138	240-260	280-300
HMC3 Sold	DMT 000s	116	230-250	280-300
Revenue	A$M	67	130-145	180-200
Revenue/DMT Sold	A$/DMT HMC	579	568-592	600-650
Project Operating Costs	A$M	38	75-85	85-95
Project Opex./DMT Sold	A$/DMT HMC	325	320-350	310-330
Project EBITDA	A$M	29.5	55-65	90-100

Notes:

1. To be read in conjunction with slide 2 - Disclaimer and Forward-Looking Statements.

2. Further details regarding YTD actuals can be found in the 30 June 2019 Quarterly Report announced 23 July 2019.

3. Heavy Mineral Concentrate product.

4. Non-IFRS Financial Information:

This document contains non-IFRS unaudited financial measures including Project operating costs and Project EBITDA. Image management considers these to be key financial performance indicators used to measure underlying operational performance. Project operating costs include costs incurred in producing HMC at the Boonanarring Project plus logistics costs but exclude corporate and exploration costs, depreciation/amortisation, financing costs and income tax. Project EBITDA is calculated as revenue from sale of HMC less Project Operating Costs.

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Target Production Rate

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Base Assumptions

• Ø Start mining at Boonanarring

• Ø Dry, open-cut mining

Ø Production rate - 500 dry tonnes per hour

• 3.7M dry tonnes per year

• Ø Conventional gravity separation using spirals

• Ø Product: Heavy Mineral Concentrate (HMC)

• Production rate: avg. approx. 240K tonnes/annum

• No further processing or separation by Image

• Trucked to Bunbury for bulk shipments to China

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Boonanarring HMC Production Stats

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Average annual production at Boonanarring: 5 Year Base Case

• Ø Avg. 240k tonnes HMC per annum containing:

• 60kt zircon (70kt/year in CY2020)

• 130kt ilmenite

• 6kt rutile

• 4kt leucoxene

• Ø 5+ years mine life with potential to add 3-4 years additional reserves

• Mineralisation already identified to north, south and new strand to west of current Ore Reserves

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Upside Potential

High likelihood of additional Ore Reserves at Boonanarring

• Ø Potential to extend mine life at Boonanarring with confirmed high-grade mineralisation in 5.6km northern extension area (NEA) (ASX announcements 13 March & 26 June 2017);

• Outstanding high-grade intersections:

  • 8m @ 23.8% heavy minerals (HM) in IX00245

  • 8m @ 21.1% HM in IX00244

  • 8m @ 16.3% HM in IX00250

• Importantly, HM is zircon-rich:

  • 21.5% zircon in HM in IX00245 & 247

  • 22.1% zircon in HM in IX00243 & 244

  • 16.4% zircon in HM in IX00242, 250, 251

• Ø Access to first section of NEA granted in July 2019 and drilling commenced early September

• Ø Scout drilling also confirmed mineralisation extensions to the south and west

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Boonanarring HMC Production

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• Ø HMC production exceeded target each Quarter

• Ø YTD basis production is 137% of budget

• Excess production equivalent to 2.8 months extra production at avg. 20Kt/month

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Boonanarring Ore Grade

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• Ø Actual ore grade exceeded target every quarter

• Ø YTD basis ore grade is 130% of forecast based on Ore Reserve

• Average actual ore grade 9.3%HM vs 7.1% weighted average forecast

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Boonanarring Ore Source and Grade Variance

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Ø Percentage of ore mined from Eastern strand has been decreasing as mine progresses to the south as Eastern strand pinches out Ø Ore grade variance indicates Eastern strand Ore Reserve has been understated and Western strand Ore Reserve is in line with actuals Ø In Q4 2019, mining will change direction to north and higher percentages of Eastern strand ore will be mined

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Project Types and Locations

Ø 1,000 km [2] tenements portfolio Ø 100% focus on mineral sands

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Atlas Ore Reserves
Probable: 9.5Mt @ 8.1% HM
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Ø Strandline projects (dry mining)

Ø Dredge mining prospects

Multiple opportunities for a second stand-alone mining project within the current 100%-owned tenement package.

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Boonanarring Ore Reserves
Proved: 9.3 Mt @ 8.6% HM
Probable: 10.5Mt @ 5.9% HM
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Bidaminna is high on priority list.

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Projects Pyramid – Strand Deposits

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Mineral Resources – Accessible by Dry Open-Cut Mining Projects ranked by combined zircon plus rutile (Z+R) contained in the HM

Tonnes and grades are for Mineral Resources; Boonanarring and Atlas per JORC Code (2012); All others historic per JORC Code (2004).

Boonanarring 43.8Mt; 5.6%HM; 20.7% Z+R Atlas 18.1Mt; 6.0%HM; 15.8% Z+R Red Gully 6.0Mt; 7.7% HM; 15.5% Z+R Regans Ford 9.9Mt; 9.6%HM; 14.3% Z+R Cooljarloo North 18.2Mt; 4.8%HM; 14.0% Z+R Gingin South 8.1Mt; 6.1%HM; 13.5% Z+R Gingin North 2.4Mt; 5.5%HM; 9.1% Z+R Total 106Mt; 6.1%HM; 17% Z+R

BFS assumes mining at Boonanarring followed by mining at Atlas. Other projects can be added or substituted after further drilling and studies.

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Projects Pyramid – Dredge Prospects

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Mineral Resources – Accessible by Dredge Mining Projects ranked by HM Grade and include combined zircon plus rutile (Z+R) contained in the HM

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Positive attributes
Tonnes-grades are for historic Mineral • 90+%VHM;
•
Resources per JORC Code (2004). <5% slimes;
Bidaminna
• 25-67% Leucoxene;
45Mt; 3.0%HM; • 100Mt exploration
6.5% Z+R
target.
Potential focus for
2 [nd] operating centre.
Titan-Telesto 140Mt; 1.9%HM; 12.8% Z+R
Calypso 51Mt; 1.7% HM; 15.9% Z+R
Total 236Mt; 2.1%HM; 11.5% Z+R
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Upside Potential

Potential Ore Reserves at other Image Projects

• Ø Potential to add to historic Mineral Resources and convert to Ore Reserves at other 100%-owned projects;

• Red Gully;

• Regans Ford;

• Gingin North;

• Gingin South; and

• Atlas; plus

• Bidaminna (dredge prospect)

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Potential Royalty from Tronox

Royalty agreement in place as of 2014

Ø Small cash payment in 2014

• Ø Sliding-scale royalty on production

Avg. HM Grade 2.5% 3.0% 3.5% 4.0%	Royalty 1.25% 2.50% 3.75% 5.00%

• Ø Indefinite production schedule

Ø Potential for future arrangements with Tronox or others based on large area of potential dredge mining mineralisation within Image’s tenements in the vicinity of Tronox’s historic dredge operations.

Tronox historic mining area Image-Tronox royalty area

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Solar Farm at Boonanarring

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Formal agreements with Sunrise Energy Group Pty Ltd to provide 2.3 MWAC solar farm to be:

• Ø Constructed and operated by Sunrise Energy;

• Ø Located on Image owned land adjacent to Boonanarring mine site; and

• Ø Providing up to 25% of total electricity requirements for mine and processing operations.

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Additional information regarding Heads of Agreement announced to ASX on 23 April 2018 .

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For further information

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Patrick Mutz Managing Director Image Resources NL info@imageres.com.au Office: +61 8 9485 2410

Ground Floor, 23 Ventnor Avenue West Perth, WA 6005 PO Box 469, West Perth, WA 6872 www.imageres.com.au

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Products and Applications

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Key products are zircon and titanium dioxide

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Ø Zircon sand is processed into zirconium compounds, intermediate products and zirconium metal for a variety of applications;

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Qualities
whitener
opacifier
heat resistant
abrasion resistant
metal bio-compatible
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• § Ceramics (tiles); 55% demand

• § Foundry Sands (castings); 14%

• § Refractories (furnace linings); 10%

• § Chemicals (gem stones, nuclear reactors); 14%

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• § Others; 7%

Speciality uses include fibre optics, glass, paints, catalysts, underarm deodorants, adhesives, cosmetics, paper, dental ceramics plus many research applications.

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Zirconium
Sponge
metal
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Source: Zirconium Industry Association www.zircon-association.org

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Products and Applications

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Key products are zircon and titanium dioxide

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Ø Titanium dioxide (TiO2) from rutile and ilmenite is processed into titanium based products and titanium metal for a variety of applications;

• § Ultra-white pigments (paint, paper, plastic); ~90% demand

• § Welding rods (flux coating);

• § Titanium metal (light, strong, corrosion-resistant, biocompatible);

• Used in aircraft, spacecraft, motor vehicles and medical implants;

Speciality uses include sunscreen, adhesives, inks, fabrics, ceramics, cosmetics, toothpaste, catalysts, and pharmaceuticals.

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