IMX Resources : December Quarterly Report and Appendix 5B

31 January 2017

Report for the Quarter ended 31 December 2016 Highlights Kishugu and Naujombo Gold Prospects

• RAB drilling program at Naujombo and Kishugu:

  • Confirmed gold anomalism over 9.5km of strike at Naujombo and 5.5km of strike at Kishugu

  • Indicated that both Naujombo and Kishugu are large gold systems

  • Identified priority drill targets for follow up in 2017

• Soil sampling identified new anomaly at Kishugu

  Ntaka Hill Nickel Project

• Work on review of open pit, high-grade, low capex development options under way

  Corporate

• Closing cash balance of $1.1 million

• Significant reduction in administrative and corporate costs

EXPLORATION and DEVELOPMENT Naujombo and Kishugu Gold Prospects

RAB drilling program

During the Quarter, the Company released the results of a RAB drilling program that comprised 136 holes for 3,398m, of which approximately 1,200m was carried out at Kishugu and the balance at Naujombo.

Key objectives of the drilling program were to identify gold mineralisation in the bedrock and understand the subsurface geology that is potentially hosting the mineralization. The RAB programs leveraged off the soil sampling and IP programs carried out during the September Quarter, which strongly indicated that the interpreted surface gold anomalies are large-scale exploration targets.

The drilling program intersected anomalous gold in the bedrock on each line drilled across the surface soil anomalies at both Kishugu and Naujombo. This represents anomalous bedrock across 9.5 kilometres of strike at Naujombo (Figure 1) and 5.5 kilometres of strike at Kishugu (Figure 2). The results indicate that

Naujombo and Kishugu are very large gold systems which have the capacity to host significant mineralisation (ASX announcement 12 October 2016).1

Figure 1. Naujombo gold anomalism and drill collar locations

Figure 2. Kishugu gold anomalism and drill collar locations

While a significant amount of data has been collected to date, the sheer scale of both Naujombo (9.5km) and Kishugu (5.5km) that was confirmed by the RAB drilling has to be acknowledged. In addition, the Company has limited geological and structural control over both anomalies. While the RAB drilling showed extensive gold within bedrock, the lines were widely spaced and together with the large size of the two anomalies, defining specific follow-up drilling targets is complex.

1 Since announcing these exploration results on 12 October 2016, Indiana confirms that it is not aware of any new information or data that materially affects the information included in that announcement.

Follow up field work

As a result, the immediate priority for follow up work is to improve geological and structural control over both Naujombo and Kishugu, which can be best achieved through soil sampling, field mapping and increasing the data set of aerial and ground based geophysics. The acquisition of such datasets is expected to enhance the Company's ability to define a targeted drilling program to commence in the June Quarter of 2017.

The Company received a substantial amount of data from the RAB drilling program, which has been used to inform follow up field programs. During the December Quarter, the Company continued a number of large scale soil sampling programs and field mapping exercises at Naujombo and Kishugu.

Naujombo soil sampling identifies new anomaly

Over 1,100 soil samples on a 400m by 200m spacing were collected at Naujombo.

The Company carried out soil sampling to the south-east of Naujombo to continue to test stream sediment anomalies for both gold and nickel sulphide mineralization. This has identified a new anomaly, Kipepere West (Figure 3). The area was targeted based on known elevated gold assays from previous work, with the anomaly identified through elevated chrome, nickel and copper portable XRF readings.

Owing to the high chrome readings, the Kipepere West anomaly is currently speculated as being ultramafic in nature. This represents both a potential gold and / or Ni-Cu sulphide target as demonstrated by elevated copper values. Follow up work will be carried out in 2017.

Figure 3. Kipepere West anomaly showing areas of elevated copper for further follow up

Naujombo Field Surveys

Extensive surface field mapping was completed at Naujombo during the Quarter. Mapping utilised existing tracks and covered over 105km of traverse within the Naujombo Prospect area. Moderate amounts of outcrop were encountered along drainage channels, including a significant amount of alluvial workings within one of the creek systems that crossed the Naujombo anomalous area (with 2km of alluvial workings being recorded) (Figure 4).

The presence of such alluvial workings suggests that gold may be found in quantities sufficient to support such workings, however the area immediately upstream of the workings does not have any outcrop or hard rock workings, indicating that the main mineralisation has yet to be identified.

Naujombo geophysical analysis

Following the conclusion of the wet season, which typically occurs in April, the Company plans to recommence Induced Polarisation survey work as part of a detailed infill geophysics program.

Figure 4. Extensive alluvial workings within a creek system at Naujombo

Kishugu soil sampling

During the Quarter, 334 samples were collected at Kishugu, which were subject to portable XRF analysis. The sampling program was designed to infill gaps in the data, increase resolution of the geochemical anomalism and define the edges of the anomaly to the north and east of the existing target (Figure 5).

The results of the soil sampling at Kishugu identified large coherent arsenic anomalism to the north-east of existing drilling. When combined with gradient array induced polarization ('GAIP') results, this feature appears to represent the northern limit of the anomaly and identifies a new target area for follow up in 2017. Kishugu now consists of two high arsenic / gold in soil anomalies on the ends of the GAIP chargeability feature, as well as a large central chargeability/arsenic/gold anomaly. These three areas represent attractive drill targets that have demonstrated bedrock gold anomalism, but have not yet been fully tested.