Image Resources NL (IMA.ASX) 2025 Annual Financial Report and Review of Operations
Image Resources NL (ASX:IMA) (FRA:I5R) review of operations for CY2025 saw the completion of construction, project commissioning and start of mining and processing operations at the Company's Atlas mineral sands project located 170km north of Perth in the North Perth Basin. Operations at Atlas commenced after an 18-month revenue gap following the completion of mining operations at Boonanarring in the latter part of CY2023 with final revenue from operations from the sale of Boonanarring heavy mineral concentrate ("HMC") received in November 2023.
Image's operational strategy, as outlined in its 2017 Bankable Feasibility Study, was for the self-funded development of the Atlas project following the completion of mining and processing at Boonanarring. While Atlas construction and commissioning were self-funded, the 18-month delay in receipt of final permitting for Atlas required the Company to secure a US$20 million Prepayment Facility with its HMC offtake partners in Q4 2024 for working capital.
Atlas Construction commenced in August 2024 and advanced rapidly with the completion of the Atlas accommodation camp (Nambung Village) and dismantling of the Boonanarring wet concentration plant for transport to Atlas in September.
In November 2024 the Atlas construction site was affected by a major bushfire that burned on all sides of the construction area resulting in limited losses of physical equipment consisting of some slurry pipelines and related equipment. The fire also caused delays in the construction timeline of 3-4 weeks.
Despite the setbacks to the construction schedule construction and commissioning of all critical components of the processing plant and associated infrastructure were completed in Q1 2025 resulting in a declaration of operational status at Atlas from 1 April 2025. Ore processing ramped up quickly in April allowing for the first shipment of a nominal 10k tonnes of HMC
in April 2025. Name-plate capacity was achieved in June with sufficient HMC production to facilitate the completion of two additional shipments of HMC totalling a nominal 25k tonnes in June 2025. This resulted in the June quarter (the first operating quarter for Atlas) being operationally cashflow positive.
The June quarter was not without its challenges, as the innovative CT1 spirals incorporated into the wet concentrate plant ("WCP") design for Atlas, proved to be problematic due to the accumulation of root fibres in the pinch points within the spirals, resulting in substantial loss of heavy mineral recovery and spiral blockages. A backup plan was quickly implemented and the CT1 spirals were removed and replaced with conventional MG12 spirals in early May, with minimal downtime.
Other operational challenges included unusually high winter rainfalls impacting Atlas mining operations and causing delays at the Geraldton port from frequent storm surge events. In addition, mineral sands commodity prices started to weaken in late June and continued to weaken through the second half CY2025.
Despite the setbacks and challenges, your Company closed out CY2025 by beating guidance for C1 cash costs (A$334/t HMC produced versus A$340-400 guidance), and beating All-In Sustaining Cash Costs ("AISC") (A$396/t HMC produced versus A$410-470 guidance) and only narrowly missing original guidance on HMC tonnes produced (174.5k DMT versus 175-195k guidance), whereas HMC tonnes shipped was within the guidance range (154.4k DMT versus 150-170 guidance). HMC production was missed as a consequence of higher HM ore grades not being encountered until later in the year than forecast.
Working Capital Funding
Funding for working capital requirements for Atlas was secured in late CY2024 on more favourable terms than conventional debt through Image's long-standing HMC offtake partner Shantou Natfort Zirconium and Titanium Co., Ltd ("Natfort") in China through an Offtake Prepayment Facility for US$20 million.
Drawdown of an initial US$5 million from the Natfort Prepayment Facility occurred in late December 2024, and the balance of US$5 million from Natfort plus US$10 million from a second Prepayment Facility with Billion Sunny were received in January 2025. These facilities had an initial one-year term from drawdown.
A relatively weak mineral sands market has negatively impacted Image's HMC product demand and pricing. The Company is working closely with its offtake partners for the timely delivery of HMC and repayment of debt under the Prepayment Facilities with final repayment of the debt due at the end of 2026, subject to commodity market pricing.
Business Strategy
In contrast to Image's Chapter 1 simple business model of operating Boonanarring and then Atlas as one mine at a time, producing a single product (HMC) and marketing the HMC to a single geographical jurisdiction (China), the Company is advancing studies on its other 100%-owned mineral sands projects under its Chapter 2 ambitions which involve multiple mines operating simultaneously, producing multiple products including potentially synthetic rutile, and marketing into multiple geographic jurisdictions.
The Company published a positive Pre-Feasibility Study (PFS) on its Yandanooka project on 19 April 2024, and due to the positive results, work on a Bankable Feasibility Study (BFS) was started. However, due to cash conservation measures adopted to ensure Atlas construction could be self-funded, the BFS was put on hold. However, discussions and negotiations with the landholder to secure access for mining continued and are ongoing.
The intermediate strategy is to investigate extensions to mining at Atlas and Atlas North, or at Image's Hyperion project located in the vicinity of Atlas for processing via the current Atlas wet concentration plant.
In addition, Image is also advancing a PFS on its Durack deposit with a goal of finalising this study at the end of Q1 CY2026.
The strategic objective is for mining to commence at Yandanooka or Durack in sync with the completion of mining and processing at Atlas. The Yandanooka and Durack projects are located on actively cultivated private farmland and therefore permitting timelines were anticipated to be shorter than any of Image's other projects due to lower environmental and heritage sensitivities. However, access for mining must first be secured through compensation agreements which remain in negotiations.
Looking Forward
The Atlas project was operationally cash flow positive from its first full quarter of operations (Q2 CY2025). In addition, HMC production increased quarter-on-quarter for the balance of the year, with record production of 73k DMT in the December quarter. This strong operating performance allowed the delivery of record HMC shipments of 75k DMT in Q4 and to close the year with 20k DMT HMC in stock, providing a solid base for CY2026 HMC sales.
Based on Atlas operational and sales performance in CY2025, the Company is confident in achieving the following market guidance for CY2026: HMC Production: 170-190k DMT; HMC Sales: 180-200k DMT; C1 Cash Costs/t HMC Produced: A$300-360; and AISC/t HMC Produced: A$370-430.
While the Company's operational focus will be squarely on Atlas for CY2026, efforts will be directed at advancing Image's other mineral sands projects including desktop studies related to dry mining at Durack and Yandanooka as well as longer term and larger scale, potential dredge mining operations at McCalls, Mindarra Springs and Bidaminna.
In addition, in January 2026, the Company announced a maiden Mineral Resource Estimate ("MRE") of 2.1mt @2.1gpt Au containing 139,000 ounces of gold at its Erayinia King gold project. Given the very buoyant gold price, the Company initiated a strategic review in CY2026 to identify and assess options to unlock value for shareholders from Erayinia King and Image's overall gold tenements with additional drilling and metallurgical testing planned.
2025 in Review
Operations
Following receipt of all relevant Atlas approvals in August 2024 and relocation of mining and processing equipment from Boonanarring, Atlas site construction activity accelerated rapidly and was funded from cash reserves. Mining at Atlas commenced in September 2024.
Despite the challenges of a major bush fire late in CY2024 impacting construction and challenges with the innovative CT1 spirals, first HMC production was achieved on 19 February 2025, operating status was declared from 1 April 2025 and first shipment of HMC followed later in the same month.
In CY2025 the Company produced 174,000 DMT HMC, just below the lower end of guidance, from just over 2 million tonnes of ore processed. CY2025 sales were 154,000 DMT. CY2025 C1 costs were A$334/DMT produced and AISC were $394/DMT produced, both below the lower end of guidance.
Mineral Sands Commodity Prices and FX
The Company's HMC pricing model for Atlas is based on the underlying content of zircon (as % ZrO2+HfO2) and titanium dioxide (as % TiO2) in the HMC and benchmark market prices for the various products (zircon, rutile, and ilmenite) at appropriate quality specifications. The majority of the value of Boonanarring HMC (circa 80%) was derived from the zircon content, whilst the value of Atlas HMC is relatively evenly split between zircon and titanium. Benchmark prices are denominated in USD.
Market pricing for mineral sands commodities (zircon, ilmenite and rutile) declined in CY2025 compared to CY2024.
- Zircon: The average benchmark price for CY2025 was approximately US$1,800 per tonne (CY2024: US$2,050).
- Ilmenite: The average benchmark price in CY2025 was approximately US$295 per tonne (CY2024: US$310 per tonne).
- Rutile: The average benchmark price for 2025 was slightly above US$930 per tonne (CY2024: US$1,200).
Market Dynamics & Impact on HMC Pricing
Atlas HMC remains in demand with its relatively good processing characteristics and quality end products plus a small monazite credit encouraging offtakes to pay good rates compared to benchmarks. While the weaker commodities markets in CY2025 (driven by oversupply in China) resulted in offtake parties seeking some relief on sales volumes, the offtakers have expressed a desire for increased HMC shipments in Q1 2026.
Corporate
In respect of the CY2025 the Company reported a Net Loss of A$83 million (CY2024 Net Loss of A$9.4 million), including an exceptional item write down of mineral sands assets totalling A$53 million. The higher loss was a result of the commencement of operations at Atlas, combined with lower mineral sands prices impacting both operating margins and carrying values of assets associated with the Atlas mining operation.
In addition, the Company incurred a deferred tax asset write-off ($8 million).
The Company closed the year with A$7.7 million in Cash and HMC Prepayment Facility debt of A$16.7 million. The Company is reliant on ongoing HMC shipments from its Atlas operation to be able to meet creditor and debt obligations.
The Company entered into FX hedging contracts during CY2025 which provided some protection against a strengthening in the Australian dollar against the United States dollar. At 31 December 2025 Image had US$10 million of collars remaining with a put strike at 0.582 and Call Strike at 0.625 with maturities ranging from January 2026 to December 2026.
Growth and Sustainability
Growth Strategy
The Company's original operating strategy and plan outlined in its 2017 Bankable Feasibility Study ("BFS") was to mine and process all available Ore Reserves at Boonanarring and then self-fund the relocation of the mining fleet and processing equipment and support facilities to Atlas. Ore processing at Boonanarring ended in Q3 2023, however permitting for Atlas was significantly delayed and not finalised until August 2024, creating a much longer gap in production between Boonanarring and Atlas that extended beyond a minimal gap anticipated in the 2017 BFS. The original strategy of operating Boonanarring and Atlas in series and generating a single HMC product supplied to a single geographical jurisdiction is referred to as 'Chapter 1' strategy.
"Looking to a Bright Future"
The current growth and sustainability strategy under the banner of Chapter 2 expanded on the original strategy and incorporates the potential development of multiple mining/processing operations operating simultaneously, producing multiple products through a mineral separation facility and potentially upgrading ilmenite to SR and expanding to a global market, subject as always to regulatory approvals, land access agreements where required, positive bankable feasibilities, project funding and final investment decisions.
Beyond operations at Atlas, Image's Development Team continues to assess the Company's options to extend mining and production in the Atlas area through mining at Atlas North or nearby Hyperion, and to advance future development options beyond Atlas at the Company's 100%-owned deposits at Yandanooka, Durack, and other Eneabba projects, as well as at Bidaminna and further into the future, the McCalls project.
During Q4 CY2025, Image applied for a grant through the WA Investment Attraction Fund - New Energy Industries Round 2 regarding the Company's novel synthetic rutile (SR) production process currently under final patent application. If successful in securing grant funds, a demonstration SR plant is proposed to be constructed at the Boonanarring site in 2H CY2026.
In early January 2026 the Company announced a maiden Mineral Resources estimate of 2.1mt @ 2.1gpt Au containing 139k ounces of gold at our Erayinia King gold project. (ASX announcement dated 7 January 2026 'Erayinia Maiden MRE') The Company is now undertaking a strategic review to assess options to unlock value for shareholders from this asset given the current very buoyant gold market. Options being considered include divestiture or other commercial arrangements for all of Image's gold tenements, as well as options for the development of the Erayinia King project, including potentially by Image.
*To view the full Annual Report, please visit:
https://abnnewswire.net/lnk/21481IJ3
INVESTORS Patrick Mutz MANAGING DIRECTOR and CEO E. info@imageres.com.au MEDIA Marissa Taddeo SENIOR MEDIA ADVISER - SPOKE E. marissa@hellospoke.com.au
News Provided by ABN Newswire
