Image Resources Reports 59K DMT HMC Production with Costs Within Guidance in Q2

Production and Cost Control Amid Weather Disruptions

Image Resources NL (ASX:IMA) reported a heavy mineral concentrate (HMC) production of 59,200 dry metric tonnes (DMT) for Q2 2026 at its Atlas Mineral Sands Project, down from 69,000 DMT in the previous quarter due to 11 days lost to rain. Sales of 58,747 DMT generated A$24.3 million in revenue, slightly below Q1’s A$26.7 million, but revenue per tonne rose 6.5% to A$414, reflecting improved concentrate quality.

Operating costs were pressured by rising diesel prices and increased shipping costs at quarter-end but remained within the company’s CY2026 guidance range. C1 cash costs stood at A$331/DMT, comfortably inside the A$300–A$360 guidance, while all-in sustaining costs (AISC) were A$424/DMT, also within the forecast A$370–A$430 range. Despite the rain interruptions, operational resilience was evident, with year-to-date production reaching 127,800 DMT, about 71% of the mid-point of full-year guidance.

Durack Project Advances with Cost Optimisation and Lease Application

The company’s development focus remains on the 100%-owned Durack Mineral Sands Project, located 280km north of Perth. Several optimisation initiatives during Q2, including updated resource modelling and metallurgical test work, have improved heavy mineral recovery and project economics ahead of the pre-feasibility study (PFS) expected in Q3 2026.

Negotiations for land access are progressing well, with a mining lease application submitted for the northern property. Notably, Image has identified pre-owned mining and processing equipment potentially suitable for Durack and Yandanooka projects, which could materially reduce capital expenditure. These negotiations are ongoing and would require shareholder approval due to related party ownership.

Erayinia King Gold Project Drilling Completed

Exploration at the Erayinia King Gold Project, situated in Western Australia’s Eastern Goldfields, saw a major drilling program completed in early July 2026. The campaign involved 37 infill reverse circulation holes, six deep RC holes, and diamond core drilling to gather metallurgical and geotechnical data. The goal is to upgrade the current Inferred Mineral Resource of 139,000 ounces and support a PFS targeted for early 2027. Assay results are anticipated by the end of Q3 2026.

Financial Position Supported by Debt Holiday and Prepayments

Image closed the quarter with A$12.9 million in cash and cash equivalents, bolstered by a US$2.75 million advance payment for a July shipment and a debt repayment holiday on its US$20 million prepayment facility, scheduled to continue through August 2026. This facility, secured by HMC deliveries, has an interest rate of 10% per annum and matures in December 2026.

Operating cash flow was positive at A$4.5 million for the quarter, despite exploration and evaluation expenditures of A$1.96 million. The company also announced the retirement of long-serving CFO John McEvoy, with interim CFO David Lim appointed as the search for a permanent replacement begins.

Innovation and Future Development Prospects

Beyond current operations, Image is advancing its synthetic rutile (SR) production process, which uses hydrogen instead of coal, reducing carbon emissions. This technology is under international patent review, with potential grant funding pending from the WA Investment Attraction Fund. A demonstration plant could be constructed at the Boonanarring site if funding is secured.

Other mineral sands projects, including Yandanooka and Bidaminna, remain in various stages of development, with land access negotiations and feasibility studies ongoing. These projects offer shorter development timelines due to lower environmental sensitivities on private land, but progress depends on securing mining leases and funding.