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Image in gold exploration project push

ARMED with what it believes is the second largest aeromagnetic database in Australia, second only to that held by Rio Tinto, the directors of Image Resources NL feel they have secured some of the best gold and base tenements in Australia. And they are selling it to the public.

Image Resources is seeking $4 million through an initial public float of the company, which has been operating since 1994.

Sponsored by stockbroking firm Hogan & Partners, the decision to move into exploration projects of its own marks a significant shift in focus of the company, which comes from a technical desk approach to now getting geologists out in the field.

Until now it has provided the data for other companies. In 2000 Image incorporated Magnetic Minerals Limited though a $4.5 million float to take advantage of mineral sand deposits near Dongara.

Image maintains a 6.3 per cent stake in Magnetic. The WA Silver Swan nickel deposit and the Three Rivers gold deposit are other feathers in the cap of Image Resources.

However, Magnetic director and Image Resources executive director George Sakalidis said the company was now hoping to capitalise on its knowledge in the wake of a strengthening gold price.

Image has identified eight projects, which it believes hold strong promise for gold and base metal discoveries with either defined drill targets or at an early stage of exploration.

Mr Sakalidis told WA Business News it was these tenements, and not the strength of the database, that would provide significant upside for investors.

But the value the company has attributed to the database cannot be ignored. The company has valued the database at $2.5 million on total assets of $4.1 million, while the value of its mineral tenements is valued at $1.4 million in the company’s prospectus.

The company holds an additional $439,000 in cash and shares, which will be boosted to $4.2 million following a successful capital raising and after IPO raising costs of $261,000.

In the east Pilbara, Image will be focusing its attention of the Mt Elsie project, where it has entered into four farm-in agreements with Mines and Resources Australia Pty Ltd. MRA already has spent more than $1 million in exploration work.

Image also has a 90 per cent interest – rising to 100 per cent following the completion of a bankable feasibility study – in the Warrawoonda project near Marble Bar that sits on the Klondyke shear zone. Drilling in the region has confirmed individual results of seven metres at one gram per tonne and 13 metres at 1.4 grams per tonne.

Also in the stable of tenements, the Jilbadgie project near Southern Cross is seen as a priority for exploration work by Image.

The company has set itself an ambitious exploration program. It has budgeted $1.24 million to be spent annually for the next two years.

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