Image Resources NL (ASX:IMA) Signed Memorandum Of Understanding With Diatreme Resources Limited (ASX:DRX) Over Zircon Rich Heavy Mineral Deposits

Image Resources NL (ASX:IMA) (PINK:IMREF) and Diatreme Resources Limited (ASX:DRX) are pleased to announce that a Memorandum of Understanding ("MOU") has been signed in respect of the "Cyclone Extended" and "Cyclone" heavy mineral deposits in Western Australia (the "Assets").

The parties have each indicated their agreement to cooperate with each other with the aim of entering into a joint venture agreement, or similar arrangement, in respect of the two deposits which abut each other over a common mineral tenement boundary. Diatreme recently announced a MOU with BaoTi (SHA:600456) who are the biggest end user of zircon in China.

The purpose of the transaction is to advance the Assets to feasibility and, if warranted, to production with the aim of adding substantial value for both Diatreme and Image.

Such cooperation may include collective negotiations with third parties who may wish to enter into an agreement or arrangement to invest in or purchase the Assets.

This action, seeking to combine the individual deposits into a single project, is expected to significantly enhance the possibility of future mining operations - the combined value of the resources is likely to be worth much than the sum of the parts. The combined contiguous Cyclone deposit is of global significance containing 2.4 mT of Zircon and 1mT of Rutile and Leucoxene (0.75% HM cut-off). This is because the world's annual production of Zircon is only 1.3 mT. The prices of Zircon are at record highs US$1000/tonne and market conditions are expected to become even more favourable with the current producers being unable to meet expected market demand for Zircon and Rutile.

Also Image has increased its strategic land holding in the WA part of the Eucla Basin to 1620km covering both the Barton and Oldea shorelines with the targeted shorelines covering greater than 70km of strike length.

Diatreme also has significant landholdings in this district and is currently conducting prefeasibility studies over the Cyclone Deposit. Diatreme is engaged in a recalculation of the Cyclone Deposit resource, expected to be released before the end of September 2010. Cyclone represents one of the largest undeveloped deposits of zircon in the world.

Diatreme and Image recently cooperated with each other by way of a technical "data swap" exercise. This assisted Image in the release of its maiden resource estimate over Cyclone Extended. Image is now planning further work over their section of the combined resource in the near future.

Given the remote location of the project, scale will be a significant factor in delivering an economic outcome. Accordingly, Image is highly encouraged by the substantial increase in critical mass delivered by the combination of the existing IMA and DRX resources and the 2010 target area which covers four times the area of the known Cyclone-Cyclone Extended Resources.

For the complete Image Resources announcement including maps, please refer to the following link:

http://www.abnnewswire.net/media/en/docs/63765-ASX-IMA-506195.pdf

About Image Resources NL

Image Resources NL (ASX:IMA) is a mineral sands focused mining company operating an open-cut mine and ore processing facility at its 100%-owned, high-grade, zircon-rich Boonanarring Project, located 80km north of Perth in the infrastructure rich North Perth Basin.

Boonanarring is arguably one of the highest grade, zircon-rich mineral sands projects in Australia. Construction and project commissioning were completed on-time and on-budget in 2018. Production commenced in December 2018 and HMC production ramped-up to exceed name-plate capacity in only the second month of operation. The Company achieved profitability in Q1 2019 and was cashflow positive in Q2 2019 and is now at steady state production.

 

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