Ann: Exploration Update, page-13

Going over this update in more depth I have found a few things that might be of note.

Final HMC shipment for CY2020 completed 24 December resulting in record Quarterly sales of 110kt HMC and total calendar year sales of 310kt and achievement of sales guidance.

The poorly drawn arrow indicates what the Dec-20 quarter is in for

The company mentions that it has also broken its all time production record in the December quarter, so it must be higher than 84kt, which indicates that there would be a large amount in reserves and inventory on hand. On a YTD basis, production is tracking with expectations and CY2020 production guidance of 300-330kt HMC is unchanged with higher grades anticipated for Q4 as higher grade ore is mined in Block A.
Off-take partner Natfort has already provided HMC purchase requests for Q1 2021 for the full quantity of forecast production for the Quarter and expressions of interest from others, including outside of China, continue to be received and evaluated. A January shipment is already scheduled.

The company generated A$31.4m of operating cash flow for the quarter, up over 300% from A$10.2m in the prior quarter. At 30 September Image had a net cash position of A$22.4m, with a cash balance of A$50.2m and outstanding loan notes of A$27.8m.

Extending the mine life:

While the Company believes sufficient drilling and assaying, including composite analysis for mineralogy, have been conducted to finalise Mineral Resources estimates, further drilling and assaying will be completed if and as required to enable the conversion of the Exploration Targets to Mineral Resources estimates. In any case, Mineral Resources estimates are expected to be completed in Q1 2021.

Drilling in proximity to the Boonanarring plant in the Project MORE. Drill results indicate potential extension of the deposit to south, north and west
Also indicates adding 2 more years of Ore Reserves by end of Q1 2021 through JORC establishment.

The Solar Farm:

Renewable solar power providing 25% of Boonanarring electrical requirements. Reducing overheads and adding to the companies green potentials. Energy from the solar farm automatically feeds into the Boonanarring supply lines whenever it is available and displaces grid electricity. The supply of solar and/or grid-based electricity to Boonanarring based on processing equipment demand, is seamless to Image.

Increasing Zircon prices:

With the Iron Ore prices increasing significantly after large trade feuds with China, there may be some implication on the trading of Zircon to the largest demanding region. This will likely drive the Zircon prices higher in the near future given the lack of supply and tightening trade deals. In the mining presentation there was further mention of China having large forward contracts with Image Resources as they are in consistent need of the minerals.

In Summary

- Production of 300-330kt in FY2021 also, with decreased operating expenses.
- Extra exploring in the Perth region for a goal of 15-18million tonnes of minerals across three prospects.
- Great management team with large skin in the game in combination with heavy experience in taking mineral sands companies from minnows upwards.
- Well cash backed with $50mill+ and heavily likely early debt payment has been made to reduce the ridiculous interest rate they were paying.
- In the longer term, have Atlas developed and constructed for next dry mining operation post Boonanarring.
- Evaluate value-add operations for more HMC
- Quoted per Company "Advance consideration of inaugural dividend payment"
- Q1 2021 new Ore Reserves to extend the mine life, with more work on the way.
- First renewable power was received in September, so the full Dec 2020 quarter will indicate the reduction in electricity expenses.