Image Resources NL : 13 January - Update for Boonanarring Project Tonnage Doubles

13 January 2017

TONNAGE DOUBLES IN MINERAL RESOURCE UPDATE FOR BOONANARRING PROJECT _ Image Resources NL (ASX: IMA) ("Image" or "the Company") is pleased to announcea doubling of the total tonnes of mineral resources for its 100%-ownedBoonanarring Minerals Sand Project located 120 km north of Perth in theNorth Perth Basin.

As part of the bankable feasibility study being conducted for the Company's high-grade Boonanarring and Atlas mineral sand projects, Optiro Pty Ltd (Optiro) has completed an update of the Mineral Resource estimate for Boonanarring in accordance with the guidelines of the JORC Code (2012). When compared to the Mineral Resource estimate for Boonanarring prepared for Image for its 2013 feasibility study, the total tonnes of Mineral Resources have increased by 103% from 21.5 million to 43.7 million tonnes, albeit at lower HM grade and mineral assemblage as detailed below.

A summary of the Mineral Resource estimate by Optiro for the Boonanarring deposit as at January 2017, reported at a cut-off grade of 2.0% total heavy minerals (HM), is presented in Table 1. The Mineral Resource summary from 2013, reported at a cut-off grade of 2.5% HM is shown in Table 2.

Table 1. 2017 Boonanarring Mineral Resource Summary at 2.0% HM cut-off grade

Classification	Million tonnes	HM %	Slimes %	Oversize %	% of total heavy mineral
					Zircon	Rutile	Leucoxene	Ilmenite
Strandline Mineralisation
Measured	7.8	8.2	14	6.6	20.1	2.2	1.9	47.3
Indicated	19.5	6.0	17	8.0	21.6	2.4	1.8	50.2
Inferred	6.3	5.2	18	6.8	15.3	3.9	3.2	59.5
Sub-total	33.5	6.3	17	7.5	20.2	2.6	2.0	50.8
Overlying Mineralisation
Indicated	6.6	3.2	21	10.7	5.7	2.8	3.2	46.1
Inferred	3.6	3.3	25	12.5	2.7	2.3	4.0	25.5
Sub-total	10.2	3.2	23	11.4	4.6	2.6	3.5	38.5
Total
Measured	7.8	8.2	14	6.6	20.1	2.2	1.9	47.3
Indicated	26.1	5.3	18	8.7	19.2	2.5	2.0	49.6
Inferred	9.9	4.5	21	8.9	11.9	3.5	3.5	50.3
Total	43.7	5.6	18	8.4	18.1	2.6	2.2	49.1

Table 2. 2013 Boonanarring Mineral Resource Summary at 2.5% HM cut-off grade

Classification	Million tonnes	HM %	Slimes %	Oversize %	% of total heavy mineral
					Zircon	Rutile	Leucoxene	Ilmenite
Measured	3.0	7.8	10	-	17	3.0	1.0	49
Indicated	14.3	9.0	17	-	22	3.0	6.0	49
Inferred	4.2	6.5	17	-	18	7.0	8.0	51
Total	21.5	8.3	16	-	20.7	3.6	5.7	49.3

The principal reasons for the substantial increase in Mineral Resource tonnes reported in 2017 are:

• An expanded area of mineralisation as a result of drilling completed since 2013;
• Delineation of a substantially contiguous layer of lower grade mineralisation overlying the high-grade mineralised strands (Overlying Mineralisation), previously thought to be discontinuous and sub-economic; and
• Application of a lower cut-off grade (2.0% HM versus 2.5% in 2013).

Drilling since 2013 on the southern end of the deposit has extended the strike-length of Boonanarring Strandline Mineralisation from 11.2 km to 13.2 km and added approximately 5 million tonnes of Mineral Resources. In general, this additional mineralisation is significantly lower HM grade (~3.5% HM) and lower in overall mineral assemblage value (~8.5% zircon) than the previously reported main strandline mineralisation. However, this mineralisation is somewhat shallower (lower strip ratio) and therefore carries lower mining costs.

Delineation of the Overlying Mineralisation has added approximately 10 million tonnes of Mineral Resources at a 2.0% HM cut-off. As shown in the Table 1, this mineralisation is significantly lower HM grade and lower overall mineral assemblage value. It is unclear what quantity, if any, of this material will translate to ore reserves. However, given its relatively shallower depth compared to the high-grade Strandline Mineralisation, mining costs for this material will be lower.

The Overlying Mineralisation layer is potentially positively significant to the overall economics of the project in that any ore mined and processed from this overlying layer serves to reduce the overall mining strip ratio. In addition, the availability of additional tonnes Minerals Resources from the Overlying Mineralisation, and from lowering the cut-off grade, can potentially allow the ore processing rate to be increased without the sacrifice of mine life. This could lead to improved project economics by operating at a higher economy-of-scale without additional capital cost, by simply utilising the available capacity of the recently acquired wet concentration plant and associated equipment.

It is important to note that while the expanded Mineral Resource estimate by Optiro is reported as substantially higher tonnes than the 2013 Mineral Resource estimate, it remains to be determined what quantity of these additional tonnes of mineralisation will translate to economic reserves. In addition, further economic modelling must be completed to determine if portions of the lower grade Overlying Mineralisation will be economic to process in the shorter term, given current lower mineral sand commodity prices, or whether this lower grade material will need to be stockpiled for later processing under higher commodity prices.

The 2017 Mineral Resource estimate will be incorporated in updated mine design, modelling and scheduling for use in economic modelling of the project as part of the bankable feasibility study currently scheduled to be completed by the end of March 2017. A full copy of the summary report of the Mineral Resource estimate by Optiro is attached.

For further information, please contact: Patrick Mutz

Managing Director

[phone]

[e-mail]

COMPLIANCE STATEMENT

The information in this report that relates to the estimation of Mineral Resources 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.

Level 1, 16 Ord Street West Perth WA 6005

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11 January 2017

Our Ref: J2018

Patrick Mutz Managing Director 23 Ventnor Ave West Perth

W.A. 6005

Dear Sir,

BOONANARRING MINERAL RESOURCE ESTIMATE - JANUARY 2017

Optiro has prepared an updated Mineral Resource estimate for the Boonanarring deposit. The Boonanarring Heavy Minerals Sands deposit is located in the North Perth Basin, Western Australia, approximately 120 km north of Perth.

Mineral Resource Summary

Image Resources NL (Image) prepared a Feasibility Study to assess the viability of mining and processing mineral sands from its Boonanarring deposit using a Mineral Resource estimate prepared in 2013. Optiro's updated Mineral Resource, for January 2017, incorporates results from an additional 211 drill holes (for a total 8,300 m) drilled by Image between 2014 and 2016 and an additional 48 composite samples that were analysed to determine the heavy mineral (HM) assemblage components. The 2017 Mineral Resource has been defined from drilling undertaken by Iluka (the previous owners of the project) from 1998 to 2007 and by Image from 2011 to 2016 and comprises data from 1,513 vertical, reverse circulation (aircore) drill holes for a total of 62,499.5 m. The drill hole spacing is generally 20 m to 40 m across strike on section lines spaced at 100 m or 200 m along strike. Some areas have been drilled at a wider spacing of up to 80 m by 400 m.

The Boonanarring mineralisation is hosted by the Pleistocene Yoganup Formation. The Yoganup Formation is a buried pro-graded shoreline deposit, with dunes, beach ridge and deltaic facies. This formation lies unconformably over the Lower Cretaceous Leederville Formation and is overlain by the Quaternary Bassendean Sand. The basement to the main standline mineralisation is identified by the increased slimes content of the Leederville Formation. Some lower grade mineralisation that overlies the standlines may have been concentrated in an aeolian setting.

The heavy minerals within the Yoganup Formation have been concentrated in two main strandlines that are continuous over a north-south strike length of 13.2 km and have a combined across strike width of up to 500 m. The main strandline mineralisation extends from 14 m to 58 m depth and the overlying mineralisation extends from surface to a depth of 39 m. Mineralisation has been identified in the Leederville Formation, below the main strandlines, that extends from a depth of 20 m to 61 m. An