IMAGE RESOURCES NL — Interim / Quarterly Report 2014

Apr 29, 2014

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QUARTERLY REPORT - for the Quarter Ended 31 March 2014

______________

Image Resources NL ABN 57 063 977 579

ASX Code: IMA

Suite 4a, 5 Mumford Place Balcatta WA 6021

T +61 8 9485 2410 F +61 8 9240 7845

www.imageres.com.au PO Box 1075 Balcatta WA 6914

Issued Capital : Shares - Quoted:

140,156,193 fully paid ordinary shares

Options - Unquoted: 8.8 Million total

Cash at end of quarter : $1.963

Directors:

Jon O’Callaghan

Chairman & Managing Director

KEY POINTS

• Potential resource extension to the north of Boonanarring indicated by ground magnetic surveys could extend mine life and delay the cost of relocating to Atlas

• Drilling planned for the June quarter at Chandala, Bidaminna and Regan’s Ford

• Test work has demonstrated that the Boonanarring Zircon product can be readily cleaned to produce premium grade, commanding higher prices

• Recent analysts’ reports are indicating a strengthening in the Zircon market over the next 18 months

• As the Company moves towards completing the updated feasibility study, its focus turns to fleshing out its technical and corporate team as well as expanding its exploration efforts

• Jon O’Callaghan appointed Chairman and interim Managing Director, bringing additional corporate, commercial and financial skills to the Company

George Sakalidis Executive Director – Exploration

Peter Davies

Project Manager Peter Thomas Non-executive Director

NORTH PERTH BASIN

• Ongoing refinement work confirms potential upside at the Boonanarring and Atlas projects through capital cost reductions in the wet processing plant, establishment of a low cost dry mill and zircon cleaning circuit

• The Company continues to receive encouraging feedback on samples of final product quality of Ilmenite, Rutile and Zircon that have been sent to prospective customers

• Various project environmental and permitting applications are proceeding as expected

• Introductory discussions with potential project financiers and off-take partners are ongoing

Work planned for the June Quarter

• Activities to be carried out may include:

• Review and update of the Boonanarring resource model

• Further process testwork to progress the low cost dry mill concept

• Continuation of capital cost reduction initiatives

• Review of open pit designs and scheduling

• Progression of product logistics studies

• Project optimisation studies

• Further discussions with landowners regarding mining access

• Work will continue on various environmental and permitting approvals

DIVESTMENT OF NON-CORE ASSETS

• During the quarter, Image continued to rationalise non-core assets, including surrender or reduction in area of some tenements

• Ground magnetic surveys were carried out to enable Image to identify drill targets with high potential or to further reduce tenement holding costs by dropping areas demonstrated to have limited prospectivity

For more information visit www.imageres.com.au

Please direct enquiries to:

Jon O’Callaghan Managing Director Mob +61 412 772 206

George Sakalidis Executive Director - Exploration Phone +61 8 9485 2410 Mob +61 411 640 337

2

COMPETENT PERSON’S STATEMENT – EXPLORATION RESULTS

The information in this report that relates to exploration results 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 were compiled, George Sakalidis was a director of Image Resources NL. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. George Sakalidis consents to the inclusion of this information in the form and context in which it appears in this report.

COMPETENT PERSON’S STATEMENT – TECHNICALSTUDIES

The information in this report that relates to technical studies is based on information compiled by Peter Davies BSc Eng (Hons) ARSM, C.Eng. MIMMM, MAICD, FAusIMM, FRSA, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Peter Davies is Managing Director/Project Manager of Image Resources NL. Peter Davies has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Peter Davies consents to the inclusion of this information in the form and context in which it appears in this report.

COMPETENT PERSON’S STATEMENT – PROJECT EVALUATION

The information in this report that relates to project evaluation and financial analysis is based on information compiled by Mr Ray Cary, BSc., who is a Fellow of the Australasian Institute of Mining and Metallurgy and a Fellow of the Australian Institute of Geoscientists. Ray Cary is the Director and Principal of Northwind Resources Pty Ltd, a Perth, Western Australia based minerals industry consultancy. Ray Cary has sufficient experience in the technical and economic evaluation of minerals development projects and mining operations which is relevant 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. Ray Cary consents to the inclusion of this information in the form and context in which it appears in this report.

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.

3

Tenement Schedule in accordance with ASX Listing Rule 5.3.3

Tenements held at the end of the Quarter	Tenements held at the end of the Quarter	Tenements held at the end of the Quarter	Tenements held at the end of the Quarter
Location	Tenement	Nature of Interest	Project	Equity (%) held at start of Quarter	Equity (%) held at end of Quarter
WA	E28/1895	Granted	KING(ERAYINIA JV)	16.1% diluting	16.1% diluting
WA	E28/2071	Granted	TALC LAKE(ERAYNIA JV)	16.1% diluting	16.1% diluting
WA	E69/2034	Granted	SERPENTINE LAKES	100%	100%
WA	E70/2636	Granted	COOLJARLOO	100%	100%
WA	E70/2742	Granted	CHANDALA(DerbyMines JV)	Earned 80%	Earned 80%
WA	E70/2825	Granted	BIDAMINNA STH	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	E70/3086	Granted	GABY'S PEAK	100%	100%
WA	E70/3100	Granted	QUINNS HILL	100%	100%
WA	E70/3192	Granted	BOOTINE	100%	100%
WA	E70/3292	Granted	COOLJARLOO(Matilda Minerals JV)	Earning70%	Earning70%
WA	E70/3298	Granted	BIDAMINNA -PARK	90%	90%
WA	E70/3328	Granted	VERNE HILL(COOLJARLOO)	100%	100%
WA	E70/3411	Granted	REGANS FORD	100%	100%
WA	E70/3418	Granted	BELL	100%	100%
WA	E70/3494	Granted	BRYALANA	100%	100%
WA	E70/3720	Granted	BLUE LAKE	100%	100%
WA	E70/3892	Granted	CHAPMAN HILL	100%	100%
WA	E70/3966	Granted	REGANS FORD WEST	100%	100%
WA	E70/3997	Granted	MUNBINIA	100%	100%
WA	E70/4077	Granted	DARLING RANGE	100%	100%
WA	E70/4129	Granted	MULLERING SOUTH	100%	100%
WA	E70/4130	Granted	MULLERING NORTH	100%	100%
WA	E70/4244	Granted	WOOLKA	100%	100%
WA	E70/4245	Granted	WINOOKA	100%	100%
WA	E70/4549	Granted	HARRIS BRIDGE	100%	100%
WA	M70/0448	Granted	GINGIN SOUTH	100%	100%
WA	M70/1192	Granted	RED GULLY	100%	100%
WA	M70/1193	Granted	GINGIN NORTH	100%	100%
WA	M70/1194	Granted	BOONANARRING	100%	100%
WA	P70/1516	Granted	COOLJARLOO	100%	100%
WA	P70/1540	Granted	CADDA SPRINGS	100%	100%
WA	M70/1311	Granted	BOONANARRING	100%	100%
WA	G70/0250	Granted	BOONANARRING	100%	100%
WA	R70/0051	Granted	COOLJARLOO NORTH	100%	100%
WA	M70/1305	Application	ATLAS	100%pending grant	100%pending grant
WA	P70/1520	Application	COOLJARLOO	100%pending grant	100%pending grant
WA	R69/0001	Application	SERPENTINE LAKES	100%pending grant	100%pending grant
WA	E70/4572	Application	YARDARINO	100%pending grant	100%pending grant
WA	E70/4583	Application	TUTUNUP	-	100%pending grant
MiningTenements acquired duringthe Quarter
WA	E70/4583	Application	TUTUNUP	-	100% pending grant
MiningTenements disposed duringthe Quarter
WA	E70/2892	Converted	CADDA SPRINGS	100%	-
WA	E28/2241	Surrendered	WOODLINE	100%	-
WA	E28/2242	Surrendered	WOODLINE	100%	-
SA	2004/0921	Withdrawn	SA-OOLDEN RANGE	100% pending grant	-

4

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining 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

	Name of entity IMAGE RESOURCES NL ABN Quarter ended (“current quarter”) 57 063 977 579 31/3/2014 Consolidated statement of cash flows	Name of entity IMAGE RESOURCES NL ABN Quarter ended (“current quarter”) 57 063 977 579 31/3/2014 Consolidated statement of cash flows	Name of entity IMAGE RESOURCES NL ABN Quarter ended (“current quarter”) 57 063 977 579 31/3/2014 Consolidated statement of cash flows	Name of entity IMAGE RESOURCES NL ABN Quarter ended (“current quarter”) 57 063 977 579 31/3/2014 Consolidated statement of cash flows
	IMAGE RESOURCES NL
	ABN 57 063 977 579 Consolidated statement of cash flows
			31/3/2014
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid/R&D refund received (net) 1.7 Other (provide details if material) Net operating cash flows		Current quarter $A’000		Year to date (9.months) $A’000
		- (410) (274) 27 -		63 (1,658) (813) 72 999
		(657)		(1,337)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) – bond security deposits Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		(2) - -		(9) (46) 179
		(2)		124
		(659)		(1,213)

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(659)	(1,213)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) – share issue expenses Net financing cash flows	- -	- -
	-	-
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	(659) 2,622 -	(1,213) 3,176 -
	1,963	1,963

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		132
1.25	Explanation necessaryfor an understandingof the transactions

Non-cash financing and investing activities

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements – bankguarantees	Amount available $A’000	Amount used $A’000
	-	-
	68	68

• See chapter 19 for defined terms.

Appendix 5B Page 2

17/12/2010

Appendix 5B Mining exploration entity quarterly report

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	362
	-
	-
	276
Total	638

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	335	363
	1,628	2,259
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	1,963	2,622

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference and location	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
	Refer Quarterly Report
	Refer Quarterly Report

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 3

Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (seenote 3)	Amount paid up per security (seenote 3)
7.1 Preference+securities (description) 7.2 Changes during quarter:	N/A
(a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions 7.3 +Ordinary securities Fully paid 7.4 Changes during quarter:
	140,156,193	140,156,193
(a)Increases through issues	-	-
(b) Decreases through returns of capital,buy-backs
7.5 +Convertible debt securities (description) 7.6 Changes during quarter:	N/A
(a)Increases through issues
(b) Decreases through securities matured,converted
7.7 Options (description and conversion factor) Over fully paid shares Over fully paid shares Over fully paid shares Over fully paid shares Over fully paid shares Over fully paid shares 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter			Exercise price	Expiry date
	2,345,000	Notquoted	$1.1162	18/12/2014
	95,000	Notquoted	$0.6995	21/12/2015
	2,600,000	Notquoted	$0.3908	27/12/2016
	1,250,000	Notquoted	$0.50	1/6/2015
	1,250,000	Notquoted	$0.70	1/6/2016
	1,250,000	Notquoted	$1.00	1/6/2016
	N/A
	N/A
	N/A
7.11 Debentures (totals only)	N/A
7.12 Unsecured notes(totals only)	N/A

• See chapter 19 for defined terms.

Appendix 5B Page 4

17/12/2010

Appendix 5B Mining exploration entity quarterly report

Compliance statement

1. This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

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

Sign here: ..................... ....................................... Date: 30 April 2014 Print name: Dennis Wilkins (Company Secretary)

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 wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2. The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3. Issued and quoted securities

The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

1. The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

2. Accounting Standards

3. ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

== == == == ==

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 5