Image Resources NL advised that results of a feasibility study (FS) being conducted by IHC Robbins on the Company's 100%-owned Bidaminna mineral sands project are progressing positively, however a final report has been delayed into first half of 2023. Bidaminna is being evaluated as a standalone greenfield mineral sands project utilising low-cost dredge mining with a floating wet concentration plant to produce heavy mineral concentrate (HMC). The Bidaminna deposit has estimated Mineral Resources of 102 million tonnes at 2.2% total heavy minerals (HM) (refer Table 1 below).

The HM contains 93% valuable heavy minerals including 36% leucoxene, 48% ilmenite, 5% zircon and 4% rutile. The deposit contains very low slimes (3.3%) and very low oversize (2.2%), with the mineralisation being below the water table and amenable to dredge mining technology. Whilst no red flags have been identified in the FS work to-date, labour shortages (real and COVID related) within the ranks of Image's contractors and consultants have seen the target date for delivery of FS results extended into 2023.

In addition to the cumulative delays with data collection and engineering analysis from labour shortages, an optimisation step has been added to the FS to evaluate the initial findings that utilising a two-dredge mining approach can positively impact operating costs as well as the potential future use or resale value of the equipment, which may further improve overall project economics. In CY2023 Image will also be conducting a separate feasibility study on the value-adding aspects of down-stream processing to separate the Company's future HMC production through a mineral separation plant (MSP) into final products of zircon, zircon concentrate, ilmenite, rutile, leucoxene and monazite for sale into domestic and international markets. The marketing and sale of individual products into multiple markets would greatly decrease the Company's current geographical risks of selling only HMC product into a single geographical jurisdiction.

Separating HMC and selling individual products also lowers product shipping costs by eliminating the costs of transporting moisture and non-valuable components contained in the HMC. It would also provide likely and potential by-product credits for monazite and other heavy mineral by- products. Any decision to action the construction of a mineral separation plant will be contingent on positive MSP feasibility results, as well as positive feasibility results for the Bidaminna project as a longer-term source of HMC supply for separation.

Consequently, potential MSP construction and operation may likely align with the potential construction and operation of a mining centre at Bidaminna. Studies are also planned for CY2023 to evaluate the production of synthetic rutile (SR) from the conversion of ilmenite and potentially leucoxene proposed to be produced from the Bidaminna deposit. Testing will also be conducted on ilmenite proposed to be produced from the Company's newly acquired, and potentially much longer term McCalls project.

Such SR production testing and studies will involve the use of hydrogen (instead of coal) to reduce the iron component of the ilmenite/leucoxene in a fluidised bed reactor. The goal of testing will be to demonstrate near-zero greenhouse gas emissions from the high-temperature iron reduction process step, and the production of green SR for international markets. Preliminary evaluation of the ilmenite from both Bidaminna and McCalls, based on the TiO2 grades and overall ilmenite qualities, indicates both ilmenites are suitable as SR feedstock, with the combination of ilmenite from the two deposits to potentially provide multi-decade, consistent, supply of high-quality SR feedstock.