EASTERN RESOURCES LIMITED — AGM Information 2010

Nov 2, 2010

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EASTERN IRON LIMITED
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EXTRAORDINARY GENERAL
MEETING
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November 3, 2010
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ASX Code: EFE 26 March 2009

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Disclaimer
This release may include forward-looking statements. These forward-looking statements are based on
management’s expectations and beliefs concerning future events. Forward-looking statements are necessarily
subject to risks, uncertainties and other factors, many of which are outside the control of Eastern Iron Limited,
that could cause actual results to differ materially from such statements. Eastern Ion Limited makes no
undertaking to subsequently update or revise the forward-looking statements made in this release to reflect
events or circumstances after the date of this release.
The information relating to the terms “iron ore”, “exploration target”, direct shipping ore”, “beneficiation” and
“upgrade” should not be misunderstood or misconstrued as an estimate of Mineral Resources and Reserves as
defined by the JORC Code (2004) and therefore the terms have not been used in this context. It is uncertain if
further exploration or feasibility study will result in the determination of a Mineral Resource or Mining Reserve.
This overview of Eastern Iron does not purport to be all inclusive or to contain all information which its recipients
may require in order to make an informed assessment of the Company’s prospects. You should conduct your
own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and
completeness of the information, statements and opinions contained in this presentation and making any
investment decision.
The information contained herein is general in nature and does not constitute financial product advice. If
necessary, you should seek specific financial advice of your stockbroker prior to making any investment decision.
This presentation has been prepared without taking into account the investment objectives, financial situation or
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NSW IRON PROJECT

• Eastern Iron acquired an 80% interest in 15 project EL’s from PlatSearch NL in 2008

– Under JV with PlatSearch, Eastern Iron required to expend $2M by Nov 2011 and provide PlatSearch with a free carry to the completion of a bankable feasibility study and a decision to commence development.

• Exploration carried out by Eastern Iron up to Dec 2009 included:

– Acquired 2 additional EL’s (100% EFE) for a total of 17 project EL’s – 553 shallow drill holes totalling 8,494m at 26 individual prospect areas.

– Global resource estimate: 627Mt @ 10.3% Fe (above 5% total Fe cut off)

– Only 5-10% of originally identified 1,100km of iron bearing palaeo channel tested by drilling.

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•
In late 2009 the Company announced the results of a
concept development study:
–
Low capital cost dry mining operation with screening and magnetic
separation to 1.5Mtpa “direct shipping” iron product.
–
Metallurgical testwork indicated low recovery to product and poor
product specs ie low (< 50%) Fe and high contaminants (silica,
alkalais)
–
High transport costs, low recoveries, low value product combined to
render project uneconomic based on this study
–
Further metallurgical testwork required to improve recoveries and
increase the grade and value of the magnetic (iron concentrate)
product
•
As a result Eastern Iron announced its intention to seek a
JV partner for the project.
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ASX Code: EFE 26 March 2009

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•
Conditional Agreement announced in August 2010
•
JV between Eastern Iron and 3E Steel Pty Ltd (PlatSearch not a party
to the agreement) and covers 13 of the 17 project tenements.
•
3E to spend a minimum $600,000 in first year on agreed program of
bulk sampling and metallurgical testwork
•
3E can earn up to a 77.5% interest by sole funding expenditure to the
completion of a BFS into a mine development producing at least 2Mtpa
iron product.
•
At the completion of the BFS Eastern Iron may choose to fund its
interest or convert to a 2% royalty or $1.00/tonne, if spot price <
$100/tonne.
•
JV requires Eastern Iron and PlatSearch to restructure their interests in
the project tenements (Tenement Swap Agreement).
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Eastern – PlatSearch Tenement Swap
Agreement
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•
Project tenements split between 13 in the Eastern Iron – 3E JV
and 4 in an Eastern Iron – PlatSearch JV
•
Identified resource split between the 2 JV’s: 352Mt in Eastern
Iron – PlatSearch JV areas and 275Mt in Eastern Iron – 3E JV
areas.
•
PlatSearch gives up any interest (including 20% free-carried
interest) in 3E – Eastern Iron JV areas.
•
Eastern Iron – PlatSearch JV areas: PlatSearch (51%), Eastern
Iron (49%) – each party contributes its share of expenditure.
•
3E first year expenditure program includes the Eastern Iron –
Platsearch tenements and provides a first right of refusal for 3E
to purchase any product from these areas.
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Eastern Iron – PlatSearch tenement
Swap Agreement
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•
Benefits for Eastern Iron
–
3E will fund a metallurgical program into making a saleable
product and therefore attempt to unlock value in the project.
–
Tenement Swap agreement removes Eastern Iron’s
obligations under the 2008 PlatSearch agreement including
the free carry and expenditure obligations.
–
Allows Eastern Iron to focus on other projects such as
Hawkwood while retaining some exposure to any upside in
the NSW iron project.
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Eastern Iron – PlatSearch
Tenement Swap Agreement
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•
Because PlatSearch and Eastern are related parties
(PTS 48.65% shareholding in EFE) the Tenement
Swap agreement requires Eastern Iron shareholder
approval.
•
Geos Mineral Consultants’ Independent Report has
concluded that the transaction is both fair and
reasonable for Eastern Iron.
•
Eastern Iron’s independent (non-PlatSearch)
directors have unanimously recommended that
Eastern Iron shareholders approve the transaction.
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:
Corporate Strategy
–
Focus on relatively advanced projects in Iron, Coal
and Gold both nationally and internationally
–
Develop promising Hawkwood Iron Project
–
Seek ground positions for metallurgical coal in
proven areas such as the Hunter and Bowen
Basins.
–
Seek acquisitions in other iron and gold projects.
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Hawkwood Iron – Vanadium - Titanium
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•
Recently completed RC drill program confirmed magnetite-bearing
gabbro (ferrigabbro) as the source of 12km long magnetic anomaly.
•
Thick sections of ferrigabbro (up to 112m thick down hole and assaying
up to 35% Fe) with exploration target resource of 300-400Mt of 20-25%
contained magnetite.
(Potential exploration target tonnages and grades are conceptual in nature as there has been insufficient exploration to define a
Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource.
Tonnages and grades are not to be quoted outside this context.)
•
Davis tube analysis is ongoing with results expected in early November
– gives product yield and iron concentrate (saleable product) analysis.
•
Exploration over the next few months to focus on core drilling to enable
a resource estimation that complies with the JORC code and more
detailed metallurgical testwork.
•
Transport and infrastructure options including rail and port access
provide potential for rapid relatively low cost development.
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Coal
•
Two competing
applications in the Bowen
Basin – proven coal areas
EFE Applications
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Questions?
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