IMAGE RESOURCES NL — Proxy Solicitation & Information Statement 2006

Sep 5, 2006

2^nd Floor, 35 Outram St West Perth WA 6005 PO Box 644 West Perth WA 6872 Telephone 08 9485 2410 Facsimile 08 9485 2840 info@imageres.com.au www.imageres.com.au

ABN 57 063 977 579

6 September 2006

Australian Stock Exchange Limited CAPS Office

Dear Sir/Madam

RE: NOTICE OF GENERAL MEETING

Please be advised that the attached Notice of General Meeting calling for a meeting to be held 5 October 2006 has been despatched to shareholders today.

Yours faithfully

Rudolf Tieleman Encl:

IMAGE RESOURCES NL

(ABN 57 063 977 579)

NOTICE OF GENERAL MEETING

incorporating Explanatory Notes and Proxy Form

to be held on

5 October 2006 at 10:00am (WST)

at

Level 2, 35 Outram Street, West Perth, Western Australia

This is an important document and should be read in its entirety. If you are in doubt as to the course you should follow, consult your financial or other professional adviser.

NOTICE OF GENERAL MEETING

NOTICE IS HEREBY GIVEN for a general meeting of Image Resources NL (Image or Company) to be held at Level 2, 35 Outram Street, West Perth, Western Australia on 5 October 2006 at 10:00am (WST) (Meeting).

The Explanatory Notes and Proxy Form accompanying this notice of Meeting (Notice of Meeting) are hereby incorporated in, and comprise part of, this Notice of Meeting.

Agenda

That shareholders consider and, if thought fit, pass the following resolutions (with or without modification) as ordinary resolutions.

$\ddagger$ . Float of Magnetic Resources NL

That, on substantially the same terms as set out in the Explanatory Notes:

• aì a bonus issue of fully paid ordinary shares and contributing shares (Bonus Securities) (on a pro rata 1:9 and 1:6 basis respectively) in its (presently) wholly owned subsidiary, Magnetic Resources NL (Magnetic), to shareholders of the Company;
• bì the issue of fully paid ordinary shares, contributing shares and options to acquire ordinary shares in Magnetic; and
• c) all other matters necessary to give effect to the float of Magnetic (including, amongst other matters, a joint venture agreement between Image and Magnetic);

be and is approved.

$\overline{2}$ . Issue of Magnetic Securities to Directors

That the issue of 6 million contributing shares (20 cents unpaid) in Magnetic to the directors of the Company (or their respective nominees) on substantially the same terms as set out in the Explanatory Notes be and is approved.

By order of the Board of Directors

Roger M Thomson Managing Director

DATED this 5th day of September 2006

EXPLANATORY NOTES

Background

Image incorporated Magnetic Resources NL (ACN121 370 232) (Magnetic) as its wholly owned subsidiary for the purpose of farming out to Magnetic the tenements detailed in the schedule to this Explanatory Memorandum and to assist Magnetic seek a listing on ASX. This is intended to:

• unlock value for the benefit of Image shareholders; Ă
• to reduce Image's expenditure commitments on certain non core tenements (the Projects):
• to ensure a dedicated exploration focus (by Magnetic) on the those tenements;
• allow Image to maintain its focus on its core heavy mineral projects, generating new projects, and pursuing JV projects.

The farm-out will be subject to Magnetic being admitted to the official list of ASX.

The following sets out the proposed material key steps involved in this process (collectively referred to as the Float):

• To split the existing 1 fully paid ordinary share in Magnetic to 6,000,000 ordinary fully paid shares; $a)$
• b) Magnetic undertaking a pro rata bonus issue of one fully paid ordinary share in Magnetic (Ordinary Shares) for each 9 fully paid ordinary shares in Image and one partly paid contributing share in Magnetic (Contributing Shares) for each 6 fully paid ordinary shares in Image to Image shareholders;
• c) Magnetic issuing 6,000,000 Contributing Shares to the directors of Magnetic (or their nominees) and 500,000 Contributing Shares to consultants;
• d) Magnetic issuing up to 5,500,000 options exercisable at 25 cents per option on or before the expiry of 30 months from the date of listing to stock brokers and other supporters as an incentive for them to support Magnetic;
• Image entering into a conditional joint venture agreement (JV Agreement) to farm-out its interests in the $e)$ Projects to Magnetic;
• Magnetic undertaking an initial public offering (IPO) of Ordinary Shares at 20 cents each seeking to raise, in f) aggregate, between \$2.5 million and \$5 million to develop the Projects and meet its commitments under the JV Agreement; and
• Magnetic applying for admission to the official list of ASX (no guarantee is given that admission will be g) granted).

As at the date of this Notice of Meeting, the record date for determining entitlements to the proposed bonus issues to Image shareholders is intended to be after lodgement of the IPO prospectus and immediately prior to the issue of Ordinary Shares pursuant to the IPO. When the record date has been determined, it will be announced to ASX.

Fractional entitlements to Ordinary Shares and Contributing Shares will be rounded down to the nearest whole number. Image shareholders are entitled to decline to accept the issue to them of Ordinary Shares and Contributing Shares (so that they are not compelled to acquire those securities) by advising the Company in writing on or before the record date or such other date as the directors determine and advise to ASX. The written communication may be effected electronically, must be unambiguous and properly executed by the relevant holder(s) of the Image shares which will carry the bonus entitlement.

Capital Structure

The proposed capital structure of Magnetic on Float, allowing for rounding and assuming the exercise for all 25 August 2006 Image options (IMAO), no other options being exercised, and the IPO of \$5 million, is as follows:

Ordinary Shares	Number
Image	6.000.000
Bonus to Image shareholders on a 1:9 basis	8.200,000
IPO.	25,000,000
Total Ordinary Shares	39,200,000
Contributing Shares
Bonus to Image shareholders on a 1:6 basis	12,300,000
Directors & Consultants	6,500,000
Total Contributing Shares	18,800.000
Unlisted Options
Stock brokers and supporters of the $IPO - up$ to	5.500.000
Total Unlisted Options – up to	5,500,000

If Magnetic raises less than \$5 million pursuant to the IPO, the number of Ordinary Shares issued pursuant to the IPO will decrease by up to 12.5 million.

The above table assumes that only and all the 25 August 2006 25 cent options have been exercised. As at the date of this Notice of Meeting, apart from the 25 Aug 2006 options, Image has 6,885,000 options on issue with exercise prices between 25 cents and 39 cents each. Holders of any options in Image must exercise those options before the record date if they are to participate in the bonus issues by virtue of their option holdings.

It is anticipated that, except for those securities issued to related parties, promoters of or consultants to Magnetic or Image (or associates of these related parties or promoters), the bonus Ordinary Shares and bonus Contributing Shares to be issued to Image shareholders will not be subjected to any ASX restrictions on transfer (i.e., escrow). All of the Contributing Shares issued to directors pursuant to the authority conferred by resolution 2 (if passed) and all of the Contributing Shares and Options issued to consultants, stockbrokers and supporters pursuant to resolution 1 are likely to be escrowed for a period of 24 months following Magnetic's admission (if applicable) to the official list of ASX.

The terms of the Contributing Shares will be as set out in the section of these Explanatory Notes entitled Terms of Contributing Shares. Application for quotation of the Contributing Shares will not be made within 24 months after Magnetic is listed.

Projects:

Under the terms of the proposed joint venture, Magnetic is to acquire a large portfolio of mineral tenements situated in the Yilgarn Craton of Western Australia (see Schedule of Tenements). The package comprises 63 exploration licences totalling about 6,670 square kilometres in area, of which at least 27 are now granted. The tenements were acquired mainly on the basis of geophysical interpretation of newly released aeromagnetic and radiometric data covering the southern part of the Yilgarn Craton. Most of the tenements cover poorly exposed rocks and consequently were neglected by the early prospectors. The main mineral commodities sought are gold and nickel although some of the areas are prospective for uranium.

Even though there are a large number of projects involved covering a wide geographic area, there is little recorded exploration data available for the tenements. The cumulative strike length of interpreted, under-explored greenstone belt on the tenements totals some 330km, making these attractive targets for both gold and nickel. The project areas are grouped on the basis of their geological setting.

South West Terrane

The South West Terrane occupies the southwest part of the Yilgarn Craton. This Terrane contains supracrustal rocks that have been subjected to multiple phases of deformation and igneous intrusion. A number of domains have been recognised but not formally defined. The Terrane contains a number of mineral deposits the largest of which is the Boddingtom/Wandoo gold deposit that has produced 4Moz of gold with a further 10Moz of gold in reserves. Targets include interpreted shear zones and ultramafic rocks considered to be prospective for gold and nickel respectively.

Youanmi Terrane

The Youanmi Terrane includes the Southern Cross and the Murchison Domains which were previously referred to as "Granite-Greenstone Terranes". This Terrane is highly mineralised with several deposits having produced in excess of 1Moz of gold. Targets comprise interpreted ultramafic rocks prospective for nickel and several radiometric anomalies prospective for uranium.

Kalgoorlie Terrane

The Kalgoorlie Terrane is one of three terranes comprising the Eastern Goldfields Superterrane. This Terrane includes the Norseman, Boorara and Wiluna Domains and is probably the most highly mineralised domain in Western Australia with numerous deposits having production in excess of 1Moz of gold. Targets include the Binti Bore project where geochemical sampling has identified a number of nickel-copper and gold anomalies. Geophysical surveys over these anomalous areas have identified three discrete EM conductors including one particularly strong conductor coinciding with a magnetic anomaly.

All of the project areas have identified targets, with a vigorous programme of geochemical sampling, geophysics and drilling planned in the first year, subject to a successful listing on ASX.

^<sup># The information on geology and mineralisation accurately reflects the information compiled by Mr Roger Thomson BSc, MAusIMM, MAIG, who is a competent person (as defined by the Australasian Code of Reporting of Identified Mineral Resources and Ore Reserves) with relevant experience in relation to such mineralisation.

Please note that there are no defined mineral resources or ore reserves at any of the above Projects and Magnetic Resources NL has not yet commenced any drilling at any of the above projects. Any references made to mineralisation, other mineral deposits or mining production are merely used to give shareholders an indication of the size and types of mineralisation for which Magnetic will be exploring and are not necessarily indicative of the type or size of mineral resources which might be present at the relevant Project and the reference.

Summary of JV Agreement

Under the proposed farm-in arrangement and subject to listing on ASX and obtaining all necessary approvals, Magnetic will:

• pay Image \$150,000 towards partial reimbursement of past expenditure;
• be obligated to spend a minimum of \$800,000 in the first year and at all times maintain the joint ventured tenements in good standing::
• spend a minimum of \$2 million within two years of listing on any or all of the Projects to earn an 80% interest $\bullet$ in the tenements
• have the right to increase its interest to 100% by spending in aggregate \$3 million over 3 years and converting Image's interest to a 1% gross royalty.
• Magnetic may hand individual tenements back to Image without Magnetic loosing the right to earn an interest in the remaining tenements;

Director's Interests

Messrs Peter Thomas, Roger Thomson and George Sakalidis are directors of Image and are also directors of Magnetic. If resolutions 1 to 2 are passed and the Float proceeds as proposed, the directors will obtain benefits such as: (a) the issue of Contributing Shares to Magnetic office holders for no cash consideration; and (b) any remuneration they may receive for acting as a director of or providing services to Magnetic (director fees are presently proposed to be \$35,000 per annum each but may be subject to change). Based on their shareholding in Image as at the date of this Notice of Meeting (and assuming that shareholding changes to the extent that they each exercise all IMAO options in which they presently have an interest), the number of Ordinary Shares and Contributing Shares in which each Magnetic director will have a relevant interest if the Float proceeds is set out below.

	Magnetic Ordinary Shares	Magnetic Contributing Shares
	Bonus Issue	Bonus Issue	Issue to Directors
Peter Thomas	34,667	52,000	2,000,000
Roger Thomson	101,779	152,669	2,000,000
George Sakalidis	639,802	959,703	2,000,000

The above table assumes that two million Contributing Shares will be acquired by each director (or nominee) as part of the proposed issue of 6 million Contributing Shares.

All of the Ordinary Shares and Contributing Shares issued to the directors pursuant to the bonus issue will be received by the directors in their capacity as members of Image on the same terms as all other Image shareholders, with the exception that the bonus shares received by directors are likely to be escrowed for a period of 24 months following Magnetic's admission (if applicable) to the official list of ASX. All of the Contributing Shares issued to directors are likely to be escrowed for the same period. Further information on these matters are set out in the Background and Additional Information on Resolution 2 sections of these Explanatory Notes.

Resolution 1

Additional Information for Resolution 1

This resolution is put to members for the purpose of informing shareholders and obtaining their approval generally, including for the purpose of satisfying, to the extent applicable, if at all. ASX listing rule 11.4 (disposal of a major asset), and section 256B of the Corporations Act (reduction in share capital).

If the Bonus Issue proceeds, the net assets of the Company will thereby be reduced by less than \$1, being the book value of the Company's investment in Magnetic. The directors are satisfied that the Bonus Issue will not materially prejudice Image's ability to pay creditors and is fair and reasonable to the Company's shareholders as a whole.

The contributing shares proposed to be issued to directors will only be issued if Resolution 2 is passed.

Tax Implications

The Bonus Issue will be effected for no consideration.

The market value of the Bonus Securities may be assessable to shareholders as a capital gain under the CGT value shifting provisions. On the basis that the net assets of Magnetic be \$1.00 in total (as is expected to be the case) at the time of the Bonus Issue, the market value of the Bonus Securities will be negligible and hence the total value of the shift will not exceed the threshold required to invoke the operation of the statutory taxing provisions.

Based on this analysis, the Company considers that the cost base of the Bonus Securities will be negligible and the Company does not generally expect there to be any material income tax consequences to an Image shareholder as a result of the bonus issues until the relevant Bonus Securities are disposed of by the recipient shareholder or are otherwise dealt with in a manner that would trigger a CGT event or other event relevant for income tax purposes.

Notwithstanding the above general statements, shareholders should be aware that the income tax laws that apply can be complex and are subject to differing interpretations. Further, the position may also depend on the circumstances applicable to each shareholder. Shareholders should seek their own advice in relation to the tax consequences of the bonus issues.

Directors' Recommendation

Image's directors recommend that shareholders vote in favour of this resolution. They believe that the Float will yield the following benefits for Image shareholders:

• the Bonus Securities will enable shareholders to retain an exposure to the Projects and share in any upside $\bullet$ thereof;
• shareholders will hold shares in two companies, each with a specific focus in the resources sector, instead of one - thus diversifying and spreading risk;
• ۰ new working capital will be raised to develop the Projects without diluting the shareholder's interest in Image's presently recognised core projects;

• it will promote active exploration on the Projects whilst freeing up Image's resources to focus on its core business:

• it will "unlock" the value in the Projects which your directors believe is not reflected in Image's market ٠ capitalisation;

• Magnetic will focus on exploiting the Projects;
• potential investors will be able to invest directly in the entity holding the tenement portfolio of greatest interest to them:
• Image's appeal as a possible mineral sands take-over target may be enhanced as a bidder will not have to $\ddot{\bullet}$ pay for assets in which it has no interest (equally shareholders, in the event of a take-over, will not have "given away" the Projects).

Voting Exclusion Statement

The Company will disregard any votes cast on this resolution by Magnetic (note that Magnetic is not presently and is not intended to become a shareholder of Image) or any of its directors and any of their associates. However, the Company need not disregard a vote if it is cast by a person as proxy for another person who is entitled to vote in accordance with the directions on the proxy form or if it is cast by a person chairing the meeting, as proxy for a person who is entitled to vote in accordance with the direction on the proxy form to vote as the proxy decides.

Resolution 2

Additional Information on Resolution 2

Resolution 2 is put to shareholders to approve the issue of 2 million Contributing Shares for no cash consideration to each of the Directors (or their respective nominees). The primary purpose of the proposed issue of the Contributing Shares to the Directors is not to raise capital but to provide an incentive to the Directors for services they intend to provide to Magnetic. Given this purpose, the Company does not believe that there are any significant opportunity costs of benefits foregone by the issue of the Contributing Shares. The Contributing Shares will not become fully paid Ordinary Shares unless the relevant holder pays 20 cents. The Directors will receive the same class of Contributing Shares as those being issued pursuant to the proposed Bonus Issue.

The costs of the issue of the Contributing Shares to the Directors (other than Contributing Shares issued to them in common with all shareholders on a bonus basis), is the dilution of Image's and Image's shareholder's interests in Magnetic and the opportunity cost is the funds that could have been raised had the Contributing Shares been issued for monetary consideration.

The Directors consider that the issue of securities for which resolution 2 seeks approval may compensate them for the disadvantage they suffer (unlike other Image shareholders) as a consequence of escrow restrictions to which they will be subject.

In the event of a call being made on the Contributing Shares, the market price of Ordinary Shares at the time of the call would normally determine whether or not the holder pays up the unpaid amount. The market price of the Ordinary Shares or the Contributing Shares is not readily ascertainable as they are not presently traded on a recognised stock exchange. The unpaid amount on the Contributing Shares is equal to the proposed issue price of Ordinary Shares under the proposed IPO.

At the time the Contributing Shares are expected to be issued (i.e., prior to Magnetic's proposed listing on ASX and prior to issuing any Ordinary Shares to parties other than Image), Image's holding in Magnetic will have a book value of \$1.00.

Therefore, there will be no realisable value from the Contributing Shares issued to the directors in the first 2 years following listing unless an amount is paid up on those Contributing Shares and Magnetic pays a dividend within that time (the directors are of the view that this is unlikely to occur) or unless Magnetic is taken over in that time. It is acknowledged, however, that the Contributing Shares do have a value in prospect. However, any formal prediction of their value at this time or at the time of issue is inherently unreliable.

Nevertheless, the directors have obtained an independent valuation of the Contributing Shares which results in a value range of between \$0,001 and \$0,002 per contributing share.

As far as the Company is aware, there are no adverse tax consequences to the Company as a result of the issue of the Bonus Securities.

Directors' Recommendations

All of the directors were available to consider the proposed resolution, but declined to make a recommendation about this resolution on the basis that they each have a material personal interest in the outcome of the resolution. Neither the directors nor the Company are aware of any information other than that that set out in these Explanatory Notes that is reasonably required by shareholders in order to decide whether or not it is in the Company's interests to pass this resolution.

Voting Exclusion Statement

The Company will disregard any votes cast on these resolutions by Messrs Thomas. Thomson and Sakalidis or any other person that may participate in, or obtain a benefit from (except a benefit solely in the capacity as a shareholder if the resolution is passed), the proposed issue of securities and any of their associates. However, the Company need not disregard a vote if it is cast by a person as proxy for another person who is entitled to vote in accordance with the directions on the proxy form or if it is cast by a person chairing the meeting, as proxy for a person who is entitled to vote in accordance with the direction on the proxy form to vote as the proxy decides.

Terms of Contributing Shares

Contributing Shares

Contributing Shares will rank pari passu with Ordinary Shares, except that:

• a) each Contributing Share:
• will be issued at no cost; i)
• ii) has an amount unpaid of 20 cents;
• iii) carries the right to participate in new issues of securities to holders of Ordinary Shares (except bonus issues) on the same basis as holders of Ordinary Shares;
• carries the right to participate in bonus issues of securities in the proportion which the amount paid ivì (not credited) bears to the total amounts paid and payable (excluding amounts credited); and
• carries the right to vote in the proportion which the amount paid (not credited) bears to the total V) amounts paid and payable (excluding amounts credited);
• b) Magnetic shall not make a call in respect of any amount unpaid on a Contributing Share unless the day on which the call will be payable is on or after 5 years from the date on which the Company is admitted to the official list of ASX:

• c) holders of Contributing Shares have no obligation to meet a call made by Magnetic, however, non-payment of a call will result in the forfeiture of the relevant Contributing Shares:

• d) except as called by Magnetic, holders of contributing shares may only pay up all or part of the amount remaining unpaid at any time with the leave of the board (which leave may be granted with or without reason) which may be granted with or without conditions and the board shall have no obligation to consider any application for leave;

• subject to d), if a holder of a Contributing Share tenders all or part of the amount remaining unpaid on the $e)$ Contributing Share other than in satisfaction of a call:
• i) the rights attaching to the Contributing Share will not change (including the amounts paid and unpaid); and
• ii) the amount tendered will be returned; and
• f) if there is a reorganisation of the issued capital of Magnetic (including, but not fimited to, a consolidation, subdivision, cancellation, reduction or return of capital):
• the number of Contributing Shares must be reorganised in the same proportion as all other classes ij of shares on issue; and
• ii) the reorganisation must not involve a cancellation or reduction of the total amount payable and unpaid by holders of Contributing Shares.

SCHEDULE OF TENEMENTS

Granted tenements

Name	Tenement ID	Area sq km	Grant Date	Exp Comm	Rent	Rates	Comments
				S	\$	\$
Boorabbin	E15/882	184.57	30 Jan '06	56,700	6,390	3.834
Betsy Bore	E28/1510	64.24	21 Dec '05	20,000	2,231	1.339
Binti Bore	E31/680	204.40	18 Jul '05	63,000	7,099	4.259
Lake Percy South	E63/628	20.20	11 Mar '99	40,000	710	426
Sandalwood 6	E63/991	55.12	31 Jul '06	20,000	1927	1.156
Lackman Rock	E63/974	23.14	24 Feb '06	20,000	811	487
Norseman Road	E63/976	11.57	24 Feb '06	20,000	406	244
Taylor Rock	E63/977	133.46	9 Mar '06	46,000	4.665	2.799
Lake Tadpole	E63/979	2.88	9 Mar '06	10.000	244	146
Lake Tay	E63/981	17.31	9 Mar '06	20,000	609	365
Lake Tay	E63/985	8.65	9 Mar '06	20,000	304	182
Eclipse Lake	E70/2366	112.00	5 Mar '04	20,000	3,955	2.373
Mt Stuart	E70/2620	173.14	13 Jul '05	54,000	6.085	3.651
Hyden South	E70/2710	156.40	2 Feb '06	49,500	5,578	3.347
Hyden South	E70/2711	144.29	13 Mar '06	59,000	5,983	3.590
Hyden South	E70/2712	82.91	30 Mar '06	31,000	3,144	1.886
Scrivenor Rocks	E70/2791	78.30	29 Sept '05	24,300	2,738	1.643
Scrivenor Rocks	E70/2794	29.00	12 Oct '05	20,000	1.014	608
Gibb Rock	E70/2793	46.15	30 Mar '06	15,000	203	122
Hines Hill	E70/2847	62.18	1 Feb '06	20,000	2,231	1.339
Lake Brown	E70/2810	68.72	28 Dec '05	23,400	2,637	1.582
Dourdi Downs	E74/331	103.80	15 June '06	32,400	3.651	2.191
Dourdi Downs	E74/344	201.80	27 Oct '05	63,000	7.099	4.259
Three Star Lake	E74/347	11.52	30 Mar '06	20,000	406	244	Uranium
Ned's Corner	E74/360	75.26	28 Nov '05	24,300	2,738	1.643
Yerritup	E74/362	5.70	7 Dec '05	15,000	203	122	Uranium
Flying Fox	E77/1193	99.29	27 May '05	30,600	3,448	2.069
Sub Total Area		2,176.00

Total Commitments on Granted Tenements \$837,200 \$76,509 \$45,905

	Tenements applied for but not granted

Name	Tenement ID	Area sq km	Applic Date	Comments
Sandalwood 1	E63/940	202.47	30 April '04
26 Mile Rock	E63/992	75.70	14 Jul '05	Uranium
Boydells	E63/993	5.70	18 Jul '05	Uranium
Hyden North	E70/1239	203.70	6 Sept '05
Hyden North	E70/1240	200.50	6 Sept '05
Hyden North	E70/1242	200.20	6 Sept '05
Hyden North	E70/1243	202.90	6 Sept '05
Hyden South	E70/2703	202.00	2 Aug '04
Fitzgerald	E70/2700	134.40	2 Aug '04
Fitzgerald	E70/2701	160.40	2 Aug '04
Fitzgerald	E70/2702	154.60	2 Aug '04
Fitzgerald	E70/2829	154.50	18 Jul '05
Koonadgin	E70/2790	35.20	10 May '05
Nungarin	E70/2792	35.20	10 May '05
Tampia North	E70/2806	203.80	27 May '05
Tampia North	E70/2807	203.80	27 May '05
Tampia North	E70/2808	200.90	27 May '05
Hines Hill	E70/2812	82.00	2 June '05
Lake Pingamup	E70/2827	94.20	18 Jul '05
Rock Dam Hill	E70/2828	168.80	18 Jul '05
Dumbleyung	E70/2849	129.10	20 Sept '05
Mame 1	E70/2850	157.68	20 Sept '05
Marne 2	E70/3046	121.00	3 Aug '06
Marne 3	E70/2888	146.00	21 Oct '05
Dourdi Downs	E74/316	86.50	29 April '05
Three Star Lake	E74/361	63.40	18 Jul '05	Uranium

Image Resources NL

Tenements applied for but not granted

Name	Tenement ID	Area sq km	Applic Date	Comments
Peak Charles	E74/348	69.20	10 May '05
Lake Sharpe	E74/349	83.60	10 May '05
Lake Mends	E74/358	126.60	18 Jul '05
Lake Pyramid	E74/359	166.50	18 Jul '05
Bounty South	E77/1192	67.17	17 Oct '03
Joes Joint	E77/1285	172.30	10 May '05
No. 7 Tank	E77/1286	46.90	10 May '05
Dulagin Rock	E77/1287	38.20	10 May '05
Lake Eva	E77/1291	73.50	14 Jul '05	Uranium
Lake Seabrook	E77/1292	32.40	21 Jul '05	Uranium
Sub Total Area		4,501.02

Total Area

$6,677.02$

PROXY FORM

Shareholder's Name & Address

Please write your name(s) above
Number & Street/PO Box Number				City/Town	State	Post Code
Appointment of Proxy
resolutions validly put to the Meeting as the proxy sees fit.		I/We appoint as proxy to vote in accordance with the following directions (or if no directions have been given, as the proxy or Chairperson see fit) at the general meeting of the Company to be held at Level 2, 35 Outram Street, West Perth, Western Australia on 5 October 2006 at 10:00am (WST) (Meeting) (and at any adjournment thereof). This proxy empowers the person appointed as proxy to vote on any other
			0R.		the Chairperson of the Meeting
Name of person you are appointing (if not the Meeting Chairperson).		IF YOU DO NOT WISH TO DIRECT YOUR PROXY HOW TO VOTE. PLEASE PLACE A MARK IN THIS BOX *
		* The Chairman intends to vote undirected proxies in favour of all resolutions. By marking this box, you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of that interest. If you do not mark this box and you have not directed your proxy how to vote, the Chairman will not cast your vote on resolution 1.
				For	Against	Abstain 1
1 Float of Magnetic Resources NL
2.		Issue of Magnetic Securities to Directors
Appointing a Second Proxy (if applicable)		1 If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item.
	or	$\%$
The number of shares applicable to this proxy form		The percentage of your voting rights
Signature(s)
Shareholder 1		Shareholder 2			Shareholder 3
Director		Director/Secretary			Sole Director and Secretary
		Proxy Forms may be lodged with Image Resources NL either by facsimile on (08) 9485 2840, by mail to PO Box 644, West Perth WA 6872. To be valid, a Proxy Form must be received not less than 48 hours before the time appointed for the Meeting. For assistance in completing this form, please refer to the rear of this form.
		Contact Telephone Number
Company Seal (if required)				Area Code	Telephone Number

INSTRUCTIONS FOR COMPLETION OF THE PROXY FORM

Shareholder's Name & Address

This is the name and address of the shareholder as it appears on the Company's share register. For the purposes of the Meeting, shares will be taken to be held by those persons who are the registered holders thereof 48 hours before the time appointed for the commencement of the Meeting.

Appointment of Proxy

A shareholder entitled to attend and vote at the Meeting is entitled to appoint not more than two other persons (whether shareholders or not) as proxy or proxies to attend in the shareholder's place at the Meeting. The proxy has the same right as the shareholder to speak and vote at the Meeting. If you leave this section blank, the Chairperson of the Meeting will be your proxy to vote your shares even if you attend the Meeting (unless you revoke your proxy before the Meeting).

Vote on Resolutions

You may direct your proxy how to vote by placing a mark in one of the boxes opposite the resolution/s you wish to direct your proxy to vote on. If you do so, all your shares will be voted in accordance with your direction. You can split your vote on any resolution /s by inserting the number/s of shares you wish to vote in the appropriate box/es. Please ensure you clearly mark the box in black or blue ink by placing a mark or the number of shares you are voting.

Appointing a Second Proxy

If a shareholder appoints two proxies and the appointment does not specify the proportion or number of the shareholder's votes, each proxy may exercise half of the votes.

Contact Telephone Number

This will help us if there are any problems with your proxy form.

Signature(s)

Each shareholder must sign this form. If your shares are held in joint names, all shareholders must sign in the boxes. If you are signing as an Attorney, then the Power of Attorney must have been noted by the Company or be duly stamped and accompany this form. Only duly authorised officer/s can sign on behalf of a company. Please sign in the boxes provided which state the office held by the signatory.