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Annual Report 2013

Chairman’s Report	1
Review of Operations	2
Schedule of Tenements	12
Directors’ Report	13
Auditor's Independence Declaration	21
Corporate Governance	23
Consolidated Statement of Comprehensive Income	28
Consolidated Statement of Financial Position	29
Consolidated Statements of Cash Flows	30
Consolidated Statement of Changes in Equity	31
Notes to the Consolidated Financial Statements	32
Directors' Declaration	54
Independent Auditor’s Report	55
Shareholder Information	57

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Dear Fellow Shareholder,

It is your Board’s intention to add to shareholder value by obtaining, assessing and developing iron ore deposits. This has been an active year for Eastern Iron as it progresses towards developing iron ore assets in eastern Australia. Recently, the Company has concentrated its efforts and resources on guiding the Nowa Nowa magnetite project in eastern Victoria towards development and future production. Eastern Iron successfully completed its scoping study of the project, has further delineated the mineral resource, and has proceeded directly to a full mining feasibility study. Our overall operational concept, namely to develop an open pit mining operation and ship a raw or beneficiated product through a port to the south of Eden, remains unchanged.

We have been encouraged by the support provided by the Victorian government to this project, and look forward to developing a long-term and productive relationship with them. Discussions have also commenced with the registered native title holders, the Gunaikurnai Land and Waters Aboriginal Council, with a view to providing mutual benefit from development at Nowa Nowa.

The project has now entered the permitting phase as the feasibility study work nears completion. We have investigated various ore processing scenarios with a view to optimising future cash flows, and are focussed on obtaining cost and revenue structures appropriate to the scale of the project. The investigation of potential off-take arrangements forms a critical component of this approach.

Eastern Iron also continues to assess the Hawkwood and Eulogie titano-magnetite projects in central eastern Queensland. Both have significant albeit low-to-medium grade iron resources. We continue to search for an appropriate partner for what may be large-scale developments should sustained attractive market conditions prevail.

The spot price for iron ore has fluctuated during the year, although to some extent adverse impact has been mitigated by change in exchange rates with major currencies. However, should long-term price regression continue, potential future operating margins will be dampened. At the time of writing it is interesting to note that despite common opinion that iron ore prices should be falling, this is not – at least in the short term – occurring. Iron ore prices appear to be modestly rising, which permits cautious optimism for low-cost producers.

At the end of last financial year, the Company raised about $1.27 million before costs from a rights issue, and in September 2012 we announced that the Company had raised a further $1.26 million by a placement of shares to sophisticated investors. In more recent times, listed companies, and especially junior explorers and developers, are competing to access shrinking markets for their capital requirements. Eastern Iron has experienced typical conditions in this regard. However, the Company has put a funding process in place, the details of which should be known by shareholders by the time this report goes to press.

I would like to take this opportunity to thank Eastern Iron staff, contractors and consultants for their unstinting efforts in forwarding the Company’s interests. In particular, I acknowledge the valuable contribution made by my predecessor as chairman, Glenn Goodacre.

My fellow directors and I also thank you for your continued support, and assure you of our best endeavours to add shareholder value through advancement of our iron ore projects.

Yours faithfully,

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Steve Gemell Chairman

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Eastern Iron Limited Annual Report 2013 1

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Highlights

Nowa Nowa

Scoping Study into possible mine development completed at Nowa Nowa Iron Project.
The Scoping Study outcomes indicate robust economics for development of a mining operation based on the Five Mile resource.
Base case capital costs estimated at $37 million, producing an average 0.8Mtpa of high grade +61% Fe “fines” product over an eight year mine life at an FOB cost of around $70/t with life of mine revenues of over $800 million.
The Eastern Iron Board gives the go ahead to advance the Project to a Definitive Feasibility stage.
Upgraded resource estimate for Five Mile deposit.
Engenium appointed to deliver Feasibility Study.

Central Queensland Iron Project

Partner sought to fund the next pre-feasibility stage for these projects.

Introduction

Eastern Iron’s corporate objective is to become an iron ore producer. The Board of Eastern Iron seeks to deliver value to shareholders through building the Company’s asset base by leveraging up from low capital cost, high margin mine developments. To accomplish this, Eastern Iron seeks developments in areas with low development risk and importantly having existing open access transport infrastructure which will enable the Company to deliver its product to consumers at low cost.

The Nowa Nowa Iron Project located in Eastern Victoria has been the focus of activities over the last year and is the Company’s first potential development. The Nowa Nowa Project is a high grade magnetite iron deposit which is close to a sealed road providing access to a deep water port with bulk ship loading facilities.

During the past 12 months the Company completed a scoping study at Nowa Nowa. The results were sufficiently encouraging to advance the project to a Definitive Feasibility Study which is ongoing and due for completion at the end of 2013.

No further exploratory work was completed at the Hawkwood or Eulogie Projects in Central Queensland. During 2012 Eastern Iron announced results from resource drilling campaigns at both projects and the outcomes from a concept development study at Eulogie. Over the last 12 months the Company has been in discussion with several groups interested in funding the next stage, pre-feasibility study for these projects. These discussions are ongoing.

Nowa Nowa Iron Project

The Nowa Nowa iron deposit is located some 250km east of Melbourne close to the Princes Highway which provides access to several nearby towns and a proposed export port to the south of Eden some 200kms further east.

2 Eastern Iron Limited Annual Report 2013

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Nowa Nowa locality Plan

Iron mineralisation at Nowa Nowa occurs in several bodies of high grade magnetite skarn, some of which have been the subject of extensive drilling in the 1950s by the Victorian Government. Since that time little work has been carried out, although the published results of the Government drilling (GSV Bull 57, 1957) have been used on occasion to assess the deposits for possible development.

The magnetite bodies are well defined in surface and airborne magnetic surveys. At the 5 Mile deposit, the larger of the deposits tested by the government drilling, massive magnetite was intersected under variable cover of 2060m depth over widths up to 80m thickness.

At the 7 Mile deposit massive magnetite occurs in a small wedge-shaped body at surface. Drilling has intersected mineralisation to depths of 70m from surface which has been almost completely oxidised to massive hematite. Other bodies such as 6 Mile and 8 Mile remain to be tested by drilling.

Scoping Study

During 2012 the Company undertook a scoping study at its 100% owned Nowa Nowa iron project in Eastern Victoria. The results of the study, announced in late 2012, indicated the potential for development of a mining operation based on a previously announced resource of high grade magnetite and hematite iron at the Five Mile deposit.

The study was carried out by project delivery specialists, Engenium Ltd, with input from their engineering staff as well as independent experts in the areas of mining, metallurgical testwork, geological resource estimation and environment.

As reported in the scoping study, ore would be mined at an average of around 1.0Mtpa from an open pit at the Five Mile deposit by a mining contractor. Run-of-mine (ROM) ore would be beneficiated at site by crushing to <1.6mm with crushed-ore feed mixed with water and fed over rotating low intensity drum magnets (Wet LIMS) to produce an average annual production of 0.8Mtpa of “fines” product. Iron ore product would be loaded into standard B-double road haulage trucks at the mine site and trucked to a port on the south side of Twofold Bay, south of Eden, for loading onto bulk carrying vessels for export.

The scoping study was completed on time and on budget.

Eastern Iron Limited Annual Report 2013 3

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The estimated low capital cost of development contributed to robust economics for a potential development and in November 2012 the Board of Eastern Iron gave approval to advance the project to a Definitive Feasibility Study stage.

A summary of the main outcomes of the scoping study base case are shown in the table on the next page:

	Units
Mining rate	Max 4.8Mtpa ore and waste
Life of Mine waste: ore ratio.	2.3:1
Life of Mine average iron product shipped	803,000 tpa
Mass recovery to product	75%
Life of Mine average FOB cost of production	$70/t product
Capital cost including contingency	$37 million

The scoping study has been completed at a level of accuracy normal for such studies of +/-35%. Revenue estimates are based on a CIF price for +61% Fe fines iron product of $125/tonne.

Resource Estimate

Further resource drilling was carried out during early 2013 to upgrade the confidence level of the existing resource estimate to a level that could be converted to a mining reserve.

Quarter core samples were collected and assayed on a down-hole 2m basis except where obvious geological contacts were present. Samples were analysed by XRF. The resource estimate was compiled by H&S Consultants Pty Ltd (H&SC) using assay data from 16 diamond drillholes drilled by the GSV in 1955 and reported in GSV Bulletin 57, (G. Bell 1959), one diamond drillhole drilled by Gulf Mines Ltd in 2008, as well as results from nine diamond drill holes and ten reverse circulation (RC) holes drilled by Eastern Iron in 2012 and 2013. The estimate is shown below and has been reported at a lower cutoff grade of 40% Fe.

	Measured	Measured	Indicated	Indicated	Inferred	Inferred	Total	Total
Prospect	Mt	Fe %	Mt	Fe %	Mt	Fe %	Mt	Fe %
Five Mile	2.1	52	3.7	50	3.9	50	9.6	50

In general terms the ore body dips at 15-30 degrees east and is bound to the west by a steeply east-dipping fault. The eastern limit has not been defined except by an increase to the depth to the top of mineralisation. Overall the body plunges to the south and is thinner to the north and thicker to the south. Some resource has been added to the south by the continuation of thick intersections such as the southernmost hole drilled in the current program, NND016, which intersected 82m at 53% Fe. The mineralised body remains open in this direction and further drilling is planned here and in the north where access was not possible during the recent 2013 program.

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4 Eastern Iron Limited Annual Report 2013
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Five Mile Deposit – Drill Hole Locations

It has been noted during drilling of the magnetite resource at Five Mile that portions of the mineralised body are relatively rich in copper sulphides. The average copper grade from iron-rich (>40% Fe) mineralised intercepts in Eastern Iron’s drilling is 0.16% Cu. A summary of the higher grade copper intersections (greater than 0.1% Cu) are shown in the table on the next page. The average of these copper-rich intersections is 18.8m @ 0.37% Cu with the best being 44m at 0.46% Cu in NRC027.

Results of metallurgical testwork show potential for copper to be recovered to a sulphide concentrate during beneficiation of the magnetite ore.

Eastern Iron Limited Annual Report 2013 5

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Hole ID	Depth From	Depth To	Interval	% Cu
NDD012	53.2	88.45	35.25	0.23
NDD013	105.4	118.5	13.1	0.24
NDD014	82	88	6	0.72
NDD014	110	116	6	0.15
NDD015	26	38	12	0.56
NDD015	64	74	10	0.19
NDD016	82	110	28	0.35
NDD017	47.65	62.2	14.55	0.20
NDD019	44.2	69.35	25.15	0.37
NDD020	49	64.55	15.55	0.20
NRC022	82	88	6	0.53
NRC022	108	134	26	0.24
NRC023	60	86	26	0.45
NRC023	100	108	8	0.40
NRC024	40	62	22	0.44
NRC026	36	50	14	0.29
NRC026	62	84	22	0.38
NRC027	48	94	46	0.46
NRC029	16	24	8	0.82
NRC030	46	66	20	0.16

Significant copper intersections at >0.1% Cu – Five Mile Deposit

Mining

As reported in the scoping study ore is proposed to be mined at a rate of 1Mtpa from an open pit with a life of mine waste to ore ratio of 2.3:1. Initially a higher proportion of waste will be mined due to the overburden cover on the ore body. The proportion of waste mined reduces significantly over the final 3-4 years of operation.

Waste rock is stored at site adjacent to the open pit. The waste rock dump has been strategically placed upslope from the open pit to minimise the risk from runoff after mine closure. Geochemical testwork on the waste rock to date indicates that it is not acid generating, however, further work is planned to provide a more detailed profile of this material to assist in designing storage strategies.

Ore Processing

Metallurgical testwork carried out during the scoping study concluded that wet LIMS delivered the best balance of high iron, acceptable though still high levels of the major contaminants silica and sulphur and total iron recovery of >80%. ROM ore would be crushed to -1.6mm which was found to be optimal for the wet LIMS which delivers a product which is assumed to be sold at prices similar to 62% Fe fines.

Recent work carried out as part of the feasibility study has examined the option of using dry magnetic separation (Dry LIMS) as an alternative beneficiation technique. In this case ore is crushed to -10mm and fed over rotating drum magnets to a finished product of +58% Fe. Contaminant levels (silica and sulphur) are higher than the wet LIMS product, however, total iron recovery is higher (+90%) and the capital cost is substantially reduced with a cheaper two stage crushing plant and no requirement for a wet tailings storage and management system.

6 Eastern Iron Limited Annual Report 2013

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Dry LIMS testwork is still ongoing but summary results from testwork completed on composite samples to date are provided in the table below and are shown at -1.6mm for direct comparison with the wet LIMS results. DTR results are also provided. Total iron recoveries are 80%, 92% and 70% for the wet LIMS, dry LIMS and DTR respectively.


				1.6mm				106 Micron


Head		WLIMS			DLIMS				DTR
Fe %	Yield %	Fe %	SiO2 %	FeO %	Yield %	Fe %	SiO2 %	Yield %	Fe %	SiO2 %
55.9	72.3	61.4	9.1	20.4	86.7	58.8	10.1	55.5	70.1	2.5

Summarised metallurgical testwork results

Infrastructure

The plant site is located adjacent to the open pit and is accessible from the sealed Bruthen – Buchan road 2km to the north. Power requirements for the site are still being assessed, however, it is likely that this may be supplied from the 22kVA line which runs along the Bruthen – Buchan road. Total water requirements are low, mainly consisting of that required for dust suppression. Water for use at the mine will be provided from a combination of captured runoff, from pit dewatering and where necessary supplemented from a single bore close to the process plant.

Several towns and villages are located within a 50km radius of the site including the regional centres of Bairnsdale, Lakes Entrance and Orbost. As such this is not a remote site and the Company has adopted the approach of no accommodation village at site by using the local workforce estimated to be around 100, living in the immediate area.

It is envisaged that finished product will be loaded at site into standard B-double trucks (42t net) and trucked 220km east along the Princes Highway to an existing port and loading facility located on the south side of Two Fold Bay in southern NSW. Eastern Iron have entered into an MOU with the port owners and operators, South Eastern Fibre Exporters (SEFE), for the stockpiling and loading of iron ore into bulk carriers for export.

Capital Cost Estimate

Scoping study estimates of initial capital cost are summarised in the table below:

Cost Centre	AU$ millions
Mine	3.6
Process Plant (inc TSF)	9.5
Product transport	2.8
Port Storage and handling	4.8
Project Infrastructure and headworks	5.1
Indirects and Contingency	12.7
Total	38.5

The capital estimate includes $4 million for the first stage of the TSF (tailings storage facility) construction. Further expenditure would be required during the life of the operation to increase capacity of the TSF, however, if the Dry LIMS option is adopted in the final development a TSF would not be required, with a commensurate reduction in capital costs.

Eastern Iron Limited Annual Report 2013 7

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Site Project Layout

Feasibility Study

The Definitive Feasibility Study is based on the project concept developed during the scoping study whilst seeking to optimise the outcomes by minimising capital cost and maximising project returns.

Eastern Iron is being assisted in the delivery of the feasibility study by a range of experienced consultant groups as follows:

Project Manager – Engenium Ltd, WA based project delivery specialist tasked with management and delivery of the feasibility study. Engenium is also providing specialist engineering input including civil and process engineering.
Metallurgical Testwork – ALS Global Ltd (formerly AMMTEC).
Resource studies – H&S Consultants Pty Ltd.
Mining Studies/Geotechnical – McCracken Mining Services/Mining One Consultants Pty Ltd.
Environmental Assessment – Earth Systems Pty Ltd, including cultural heritage, geochemical assessment and hydrogeology.
Traffic Studies – AECOM Ltd.
Hydrology – AECOM Ltd.
The feasibility study is on track for completion by the end of 2013.

Permitting and approvals

Permitting and approvals for mine development include three separate but related strands:

Mining Licence application – With an upgraded mine plan and detailed mining study it is anticipated that a mining licence application will be submitted to the Victorian Department of Environment and Primary Industries in the September quarter of 2013.

8 Eastern Iron Limited Annual Report 2013

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Environmental assessment – Under the Victorian approvals system a project is referred to the Victorian Department of Planning and Community Development for determination of the level of required environmental assessment and to determine if the proponent will be required to prepare an Environmental Effects Statement (EES). Eastern Iron has purposely delayed referral to ensure that environmental management principals were sufficiently developed to fully inform this process. The Company intends to submit the project for referral in October 2013. In planning the development the Company has adopted principles that will ensure low environmental risk especially in the post-closure period.
Native Title Agreement – Eastern Iron recognises the Gunaikurnai people as the traditional owners of the area including the proposed mine development. The Gunaikurnai people have a granted native title over the area and are represented by the Gunaikurnai Land and Waters Aboriginal Corporation (GLaWAC). The Company is in discussion with GLaWAC to negotiate a native title agreement for the mine development at Nowa Nowa.

Central Queensland Iron Project

Eulogie (EFE 100%)

Eastern Iron holds a Mining Development Lease (MDL) over the Eulogie magnetite deposit. The deposit is located in Central Queensland approximately 80km west of the port city of Gladstone. The Company has previously completed resource drilling outlining a large, low grade titanium-and-vanadium-bearing magnetite resource (see resource table). A concept development study was carried out in 2011-12 which indicated that the project was potentially viable but would require substantial expenditure to more fully define the resource and complete a pre-feasibility study before development could be assessed further.

Hawkwood (EFE earning 80%)

Eastern Iron has previously reported the results of an initial resource drilling program at Hawkwood (see resource table). Mineralisation is similar to Eulogie, with magnetite-rich horizons hosted by a basic intrusive. Metallurgical results have shown that although the magnetite is titaniferous it is significantly lower than Eulogie and after beneficiation can produce a high grade magnetite concentrate.

Both Eulogie and Hawkwood require substantial additional expenditure to advance the projects to a pre-feasibility stage and the Company has been in discussion with various groups over the last year to identify a funding partner for the projects.

NSW Iron Ore Project

(EFE 100%, 3E Steel Pty Ltd earning 77.5%)

Joint venture operators, 3E Steel continued in their assessment of the iron pisolite resource within the tenements held in the Cobar region by Eastern Iron. 3E Steel have made an offer to purchase these tenements which has been accepted by Eastern Iron. The tenement transfers have been lodged and are being processed by NSW Trade and Investment – Resources and Energy.

Program for 2013 – 2014

Nowa Nowa

The Company will complete the definitive feasibility study for Nowa Nowa by the end of calendar 2013. Activities associated with project permitting, approvals and the native title agreement will continue at least through to mid2014.

Based on a consideration of the results of the Definitive Feasibility Study the Board of Eastern Iron will determine if the project will progress to development.

Central Queensland Iron Project

The Company will continue to seek joint venture participation to fund the next stage of assessment.

NSW Pisolite Iron Project

Monitor progress of joint venture activities and divest tenements to 3E Steel.

Eastern Iron Limited Annual Report 2013 9

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Other

Actively seek and evaluate opportunities for investment in Australia and overseas for potentially valuable projects including iron and other commodities.

With advancement of the Nowa Nowa project the year ahead should see the Company make substantial progress towards its goal of becoming a producer.

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Greg De Ross Managing Director

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Greg De Ross, BSc, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Greg De Ross is Managing Director of Eastern Iron Limited and a full-time employee of Eastern Iron Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Greg De Ross consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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10 Eastern Iron Limited Annual Report 2013
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The information in this table that relates to Mineral Resources is a compilation of previously published data for which Competent Persons consents were obtained. This compilation has been prepared by Greg De Ross, BSc, who is a Fellow of the Australasian Institute of Mining and Metallurgy. There is no new information or data that materially affects the original market announcements and the same information is presented in the same context. The information is extracted from the public reports to the ASX which are listed below and available to view on www.easterniron.com.au

Nowa Nowa, Victoria


		Inferred					Indicated					Measured

Mt	Fe%	SiO2%	Al2O3%	S%	Mt	Fe%	SiO2%	Al2O3%	S%	Mt	Fe%	SiO2%	Al2O3%	S%
3.9	49.8	15.1	2.2	1.9	3.7	49.5	15.7	2.4	2	2.1	51.8	13.4	2	0.02


		Total

Mt	Fe%	SiO2%	Al2O3%
9.6	50	15.1	2.2

Resource estimated at a lower cutoff of 40%.

Full details of the Nowa Nowa Resource estimate were announced on 12 June 2013 in a report titled “Resource Upgrade and elevated copper results reported from drilling at Nowa Nowa Iron Project, Victoria”.

Eulogie, Queensland


	In	ferred				Indicated						Total

Mt	Fe%	TiO2%	V%	DTR	Mt F	e%	TiO2%	V%	DTR	Mt	Fe%	TiO2%	V%	DTR
311	14.2	3	0.1	13.1	154	14	3	0.1	12.8	465	14.2	3	0.1	13.1

Resource estimated at a lower cutoff of 10% DTR Full details of the Eulogie Resource estimate were announced on 19 October 2011 in a report titled “Maiden Resource of 465 Mt for Eulogie Magnetite Iron Project, Queensland”.

Hawkwood, Queensland


	Inferred						Total

Mt	Fe%	TiO2%	V%	DTR	Mt	Fe%	TiO2%	V%	DTR
103.7	13.8	1.8	0.05	12.2	103.	7 13.8	1.8	0.05	12.2

Resource estimated at a lower cutoff of 10% DTR Full details of the Hawkwood Resource estimate were announced on 19 May 2012 in a report titled “100Mt Maiden Resource for Hawkwood Iron Project”.

Eastern Iron Limited Annual Report 2013 11

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Tenement	Tenement Number	Interest	Joint Venture Details
New South Wales
Cobar East	EL 6710	100%	3E Steel can earn 77.5%
Coolabah West, Oakvale, Techno and Tottington	ELs 6711, 6706, 6954 and 6956	49%	PlatSearch 51% 3E Steel can earn 77.5%
Quartermaine	EL 6953	100%	3E Steel can earn 77.5%
Wendoline	EL 6957	100%	3E Steel can earn 77.5%
Shaun	EL 6958	100%	3E Steel can earn 77.5%
Wallace	EL 6959	100%	3E Steel can earn 77.5%
Gromit	EL 6960	100%	3E Steel can earn 77.5%
Gorgonzola	EL 7282	100%	3E Steel can earn 77.5%
Camembert	EL 7283	100%	3E Steel can earn 77.5%
Bimbella	EL 6671	100%	3E Steel can earn 77.5%
Euabalong	EL 6672	100%	3E Steel can earn 77.5%
McGraw	EL 6961	100%	3E Steel can earn 77.5%
Flamingo	EL 6952	100%	3E Steel can earn 77.5%
Preston	EL 6962	100%	3E Steel can earn 77.5%
Queensland
Hawkwood	EPMs 15289 and 17099	0%	Rugby 100%, Eastern can earn upto 80%,Note 1
Auburn	EPM 18566	100%	-
Fairhill and Rolleston	EPCs 2175 and 2206	100%	-
Eulogie	MDL 362	100%	-
Victoria
Nowa Nowa	EL 4509	100%	-
Nowa Nowa East	ELA 5405	100%	-

EL = Exploration Licence

ELA = Exploration Licence Application

EPM = Exploration Permit for Minerals

EPC = Exploration Permit Application for Coal

MDL = Mineral Development Licence

Note 1: Joint Venture with Rugby Mining P/L and Rugby Mining Limited whereby Eastern Iron can earn up to 80% interest.

12 Eastern Iron Limited Annual Report 2013

Directors’ Report

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Your Directors submit their report for the year ended 30 June 2013.

Directors

The names and details of the Company’s directors in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Steve Gemell, BE Mining (Hons), FAusIMM (CP), MAIME, MMICA

Non-executive chairman of the board

Director since January 2010

Steve is a consulting mining engineer with more than 30 years of experience in the mining industry, both in Australia and overseas. He has previously held senior operating roles including CEO positions, and executive and non-executive Directorships in ASX-listed mining companies and unlisted mine operations or joint ventures. His experience has included a variety of roles in areas covering resource development, feasibility studies, mine planning, and operations in a large range of commodities including base and precious metals and uranium.

During the past three years Steve has also served as a director of the following listed companies:

UXA Resources Limited - appointed March 2005, retired December 2011

Prior to joining Eastern Iron he was General Manager for a Chinese company seeking investment opportunities in the Australian and Chinese resources sector. Previous to this he spent 12 years with Highlands Pacific / Highlands Gold as General Manager Exploration where he had responsibility for exploration and pre-development work on a variety of projects including the Ramu Nickel, Frieda Copper and Kainantu Gold projects. Greg has extensive commercial experience covering joint venture negotiation and project acquisition.

During the past three years Greg has not served as a director of any other listed companies.

Wendy Corbett, BSc, Dip Ed, MAIG

Non-executive director

Director since November 2007

Wendy has 39 years of experience in mineral exploration management and administration. Wendy has strong commercial awareness assisting many explorers through their IPO and listing, specialising in tenement management and compliance, corporate agreements and liaison with government bodies and landholders. She has worked throughout Australia on numerous gold, base metals and iron projects for a variety of companies.

She is a founding director of Eastern Iron, a director of an unlisted business and Chair of the AMEC NSW Advisory Committee as well as being actively involved in the Australian Institute of Geoscientists.

Argent Minerals Limited - appointed July 2010
Indochine Mining Limited – appointed March 2011, resigned 7 June 2013
UCL Resources Limited (formally Union Resources Limited) – appointed September 2011, resigned July 2013
Golden Cross Resources Ltd – appointed as Chairman June 2012

Greg De Ross, BSc, FAusIMM

Managing director

Director since July 2010

Greg is a geologist with over 30 years of experience in corporate management, exploration and mining. His experience has included a variety of roles in areas covering exploration management, feasibility studies, resource development and mining in commodities such as base and precious metals, uranium, mineral sands, coal and iron ore. He has worked extensively in Central and South East Asia, Oceania and Australia.

During the past three years Wendy has not served as a director of any other listed companies.

Gregory Jones, BSc Hons, MAusIMM, MAIG

Non-executive director

Director since April 2009

Greg is a geologist with 33 years of exploration and operational experience gained in a broad range of metalliferous commodities both within Australia and overseas. Greg has held senior positions in a number of resource companies including Western Mining Corporation and Sino Gold Limited and his experience spans the spectrum of exploration activity from grassroots exploration through to resource definition and new project generation, as well as mine geology, ore resource/reserve generation and new mine development.

Greg was awarded the Institute Medal for academic excellence whilst at university and is credited with several economic discoveries including the Blair nickel and the Orion gold deposits in Western Australia.

13 > Eastern Iron Limited and its controlled entities Annual Report 2013

Directors’ Report

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During the past three years Greg has also served as a director of the following listed companies:

PlatSearch NL - appointed April 2009
Silver City Minerals Limited – appointed April 2009
Thomson Resources Ltd – appointed July 2009

Ivo Polovineo, FIPA

Non-executive director

Director since April 2011

Ivo has over 30 years of experience in corporate accounting, finance and company secretarial work for a diverse range of companies. He has spent the past 20 years in senior management roles in the resources sector including 7 years as company secretary (and 5 years as CFO) of Sino Gold Mining Limited (a former ASX 100 company) until December 2009. He is also company secretary of PlatSearch NL, Thomson Resources Ltd and Silver City Minerals Limited.

During the past three years Ivo has also served as a director of the following listed company:

Galaxy Resources Limited - appointed July 2010, resigned September 2011

Adrian Critchlow, BSc, FRSA, MAICD

Non-executive director

Director since October 2012

Adrian was appointed as a Non-Executive Director of the Company effective 1 October 2012.

Adrian holds a Bachelor of Science degree with an engineering major and has a background in the development of start-up technology companies including founding Active Hotels/Booking.com which is now a significant part of Priceline.com, the largest hotel online booking engine in the world. He is also the founder of the Australian Solar Group Ltd which is developing alternative energy projects in Australia. Adrian brings to the Board connections to various financial institutions in Australia and the UK and will be valuable in assisting the Company to secure funding for future developments.

During the past three years Adrian has not served as a director of any other listed companies.

Glenn Goodacre, BA

Non-executive chairman of the board

Director since November 2007

Resigned 31 October 2012.

Directors' interests in shares and options

As at the date of this report, the interests of the Directors in the shares and options of Eastern Iron Limited were:

	Shares directly and indirectly held
Directors		Options
S Gemell	544,769	900,000
G De Ross	75,000	2,800,000
W Corbett	317,000	900,000
G Jones	1,164,959	900,000
I Polovineo	50,000	900,000
A Critchlow	22,883,106	450,000

Company secretary

Ian White, BBus, MBA, Grad Dip CSP, FCPA, CIA, JP

Ian is an experienced business professional who holds a Bachelor of Business, a Graduate Diploma in Company Secretarial Practise and an MBA specialising in Marketing. His experience has been gained over 35 years including periods as CFO and Group Company Secretary for a number of large ASX listed companies. More recently, Ian has focused on the resources sector.

Ian was appointed as Company Secretary of Eastern Iron Limited on 14 August 2012 and is a Director of Professional Edge Pty Ltd, a company that provides legal, financial and company secretarial services to a number of ASX listed companies.

Michelle Lilley

Resigned as Company Secretary in August 2012.

Principal activities

The principal activity of the Group is the exploration for and delineation of iron ore, precious and base metals resources in Australia/Asia Pacific region and the development of those resources into economic, cash flow generating mines.

Results

The net result of operations after applicable income tax expense was a loss of $1,157,557 (2012: $929,470) which includes the write-off of exploration expenditure during the year of $1,401,611 (2012: $41,765).

Dividends

No dividends were paid or proposed during the period.

14 > Eastern Iron Limited and its controlled entities Annual Report 2013

Directors’ Report

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Review of operations

A review of the operations of the Company during the financial period and the results of those operations commence on page 2 in this report.

Significant changes in the state of affairs

The Directors are not aware of any significant changes in the state of affairs of the Group occurring during the financial period, other than as disclosed in this report.

Significant events after the balance date

There were, at the date of this report, no matters or circumstances which have arisen since 30 June 2013 that have significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years, other than:

The Company has previously agreed terms with 3E Steel Pty Ltd for the transfer of Eastern Iron’s remaining interests in tenements located in NSW which relate to the NSW Iron Pisolite Project. The terms include $150,000 cash to be paid at the transfer of the tenements expected to occur later in 2013.
In September 2013, the Company entered into an agreement with the Victorian Government whereby the Government would provide a grant of up to $300,000 to cover the cost of studies relating to the provision of infrastructure for the development of the Nowa Nowa project. These studies are being undertaken as part of the Feasibility Study for Nowa Nowa and it is expected that the funds will be received in early 2014.

Likely developments and expected results

As the Company’s areas of interest are at an early stage of exploration, it is not possible to postulate likely developments and any expected results. The Company is hoping to identify other iron ore, precious and base metal exploration and evaluation targets.

Shares under option or issued on exercise of options

Details of unissued shares or interests under option for Eastern Iron Limited as at the date of this report are:

No. shares under option		Exercise price of option
	Class of share		Expiry date of options
1,200,000	Ordinary	$0.18	09/03/2015
1,850,000	Ordinary	$0.20	23/11/2013
1,650,000	Ordinary	$0.18	23/11/2013
3,700,000	Ordinary	$0.10	23/11/2015
8,400,000

The holders of these options do not have the right, by virtue of the option, to participate in any share issue of the Company or of any other body corporate or registered scheme.

There were no shares issued during or since the end of the financial year as a result of exercise of the above options.

Environmental performance

Eastern Iron holds exploration licences issued by New South Wales Department of Trade and Investment - Resources and Energy, the Victorian Department of Environment and Primary Industries and the Queensland Department of Natural Resources and Mines which specify guidelines for environmental impacts in relation to exploration activities. The licence conditions provide for the full rehabilitation of the areas of exploration in accordance with the Departments’ guidelines and standards. There have been no significant known breaches of the licence conditions.

Indemnification and insurance of directors and officers

Indemnification

The Company has not, during or since the end of the financial period, in respect of any person who is or has been an officer of the Company or a related body corporate indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer, including costs and expenses in successfully defending legal proceedings except for the Company Secretary who has been granted an indemnity for services provided under his contract.

Insurance premiums

During the financial period the Company has paid premiums to insure each of the Directors and officers against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director or officer of the Company, other than conduct involving a wilful breach of duty in relation to the Company.

15 > Eastern Iron Limited and its controlled entities Annual Report 2013

Directors’ Report

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The premiums paid are not disclosed as such disclosure is prohibited under the terms of the contract.

Remuneration report (audited)

This remuneration report for the year ended 30 June 2013 outlines the remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been audited as required by section 308(3C) of the Act.

The remuneration report details the remuneration arrangements for key management personnel (KMP) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent company.

Details of key management personnel

Details of KMP including the top five remunerated executives of the Parent and Group are set out below.

Directors
Steve Gemell	Non-executive Chairman
GregDe Ross	ManagingDirector
WendyCorbett	Non-executive Director
GregJones	Non-executive Director
Adrian Critchlow	Non-executive Director
Ivo Polovineo	Non-executive Director
	Non- executive Chairman (resigned Oct2012)
Glenn Goodacre

Key managementpersonnel
Michelle Lilley	Financial Controller

These criteria result in a framework which can be used to provide a mix of fixed and variable remuneration, and a blend of short and long term incentives in line with the Company’s limited financial resources.

Fees and payments to the Company’s Non-Executive Directors and Senior Executives reflect the demands which are made on, and the responsibilities of, the Directors and the senior management. Such fees and payments are reviewed annually by the Board. The Company’s Executive and Non-Executive Directors, Senior Executives and Officers are entitled to receive options under the Company’s Employee Share Option Scheme.

Non-executive director remuneration arrangements

Directors are entitled to remuneration out of the funds of the Company but the remuneration of the NonExecutive Directors (NED) may not exceed in any year the amount fixed by the Company in general meeting for that purpose. The aggregate remuneration of the NED’s has been fixed at a maximum of $250,000 per annum to be apportioned among the NED’s in such a manner as the Board determines. Directors are also entitled to be paid reasonable travelling, accommodation and other expenses incurred in consequence of their attendance at Board meetings and otherwise in the execution of their duties as Directors.

The Chairman’s fee was set at $54,000 p.a. (2012: $54,000) and NED fees at $36,000 p.a. (2012: $36,000) for the year ended 30 June 2013. In addition, members of the Board Committees are paid 10% of NED fees.

Remuneration philosophy

The objective of the Company’s remuneration framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives and the creation of value for shareholders. The Board believes that executive remuneration satisfies the following key criteria:

Competitiveness and reasonableness.
Acceptability to shareholders.
Performance linkage/alignment of executive compensation.
Transparency.
Capital management.

16 > Eastern Iron Limited and its controlled entities Annual Report 2013

Directors’ Report

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Service agreements

Remuneration and other terms of employment for key management personnel are formalised in employment contracts and contractor agreements. Details of these agreements are set out below.

Non-Executive Chairman – Steve Gemell

Contract term: Rolling contract. No notice is required from either party to terminate the agreement.
Remuneration: $200 (2012: $200) per hour plus GST for consultancy services as at 30 June 2013.
Termination payments: Nil.

Managing Director – Greg De Ross

Contract term: No fixed term. Either party may terminate the letter of employment with two months’ notice.
Remuneration: $283,920 p.a. as at 30 June 2013 (2012: $273,000) to be reviewed annually.
Termination payments: A three month severance pay with an additional three months after more than five years.

Non-Executive Director – Wendy Corbett

Contract term: Rolling contract. Either party may terminate the agreement with one months’ notice.
Remuneration: $108.16 (2012: $104) per hour plus GST for consultancy services as at 30 June 2013.
Termination payments: Nil.

Non-Executive Director – Greg Jones

Contract term: Rolling 12 months contract with PlatSearch NL (45.3% shareholder of Eastern Iron) of which Greg is an employee. No notice is required from either party to terminate the agreement.
Remuneration: $163 (2012: $153) per hour plus GST for consultancy services as at 30 June 2013. Greg’s fees were paid directly to PlatSearch NL.
Termination payments: Nil.

Financial Controller – Michelle Lilley

Contract term: Rolling 12 months contract with PlatSearch NL (45.3% shareholder of Eastern Iron) of which Michelle is an employee. No notice is required from either party to terminate the agreement.
Remuneration: $112 (2012: $98) per hour plus GST for consultancy services as at 30 June 2013. Michelle’s fees were paid directly to PlatSearch NL.
Termination payments: Nil.

Company Secretary – Ian White

Contract term: Rolling contract. Either party may terminate the agreement with one months’ notice.
Remuneration: Retainer amount of $2,400 per month plus $150 per hour (2012: $2,400 plus $150) plus GST for services outside the initial scope of work as at 30 June 2013.
Termination payments: Nil.

17 > Eastern Iron Limited and its controlled entities Annual Report 2013

Directors’ Report

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Directors and key management personnel remuneration for the year ended 30 June 2013

			Post employment	Share-based payments

	Short-term benefits

	Cash salary and fees $	Consulting	Superannuat			Consisting of options %
		fees	ion	Options	Total $
		$	$	$
Directors
S Gemell	50,642	11,166	4,558	3,510	69,876	5%
G De Ross	259,642	-	23,368	7,800	290,810	3%
W Corbett	36,330	61,214	3,270	3,510	104,324	3%
G Jones	36,330	-	3,270	3,510	43,110	8%
I Polovineo	35,229	-	3,171	3,510	41,910	8%
A Critchlow(a)	24,771	-	2,229	3,510	30,510	12%
G Goodacre(b)	18,716	17,400	1,684	-	37,800	-
Total Directors	461,660	89,780	41,550	25,350	618,340
Other - key managementpersonnel
M Lilley (c)	-	-	-	-	-	-
Total KMP	-	-	-	-	-	-
Totals	461,660	89,780	41,550	25,350	618,340

No performance based remuneration was paid in the 2013 and 2012 financial period.

a) Appointed October 2012.
b) Resigned October 2012.
c) M Lilley’s fees are paid directly to PlatSearch NL.

Directors and key management personnel remuneration for the year ended 30 June 2012


			Post employment	Share-based payments
	Short-term benefits
	Cash salary and fees $		Superannua			Consisting of options %
		Consulting	tion	Options	Total $
		$	$	$
Directors
S Gemell	39,633	1,820	3,567	9,645	54,665	18%
G De Ross	250,459	-	22,541	38,580	311,580	12%
W Corbett	36,330	57,200	3,542	9,645	106,717	9%
G Jones	36,330	-	3,270	9,645	49,245	20%
I Polovineo	34,266	-	1,651	28,935	64,852	45%
A Critchlow	-	-	-	-	-	-
G Goodacre	56,147	33,720	5,326	9,645	104,838	9%
Total Directors	453,165	92,740	39,897	106,095	691,897
Other - key managementpersonnel
M Lilley	-	11,796	-	-	11,796	-
Total KMP	-	11,796	-	-	11,796
Totals	453,165	104,536	39,897	106,095	703,693

18 > Eastern Iron Limited and its controlled entities Annual Report 2013

Directors’ Report

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Share-based compensation

Employee share option plan

The Company has established the Eastern Iron Employee Share Option Plan (“Plan”) to assist in the attraction, retention and motivation of employees of the Company. There have been 1,350,000 options granted under the Plan as at the date of this report. The Plan will be administered by the Board in accordance with the rules of the Plan, and the rules are subject to the Listing Rules.

A summary of the Rules of the Plan is set out below. All full-time employees will be eligible to participate in the Plan. The allocation of options to each employee is at the discretion of the Board. The options will be issued for nil consideration and are non-transferable, except with the consent of Directors. However, at the time of accepting the offer to participants of the Plan, the eligible employee may nominate another person in whose favour the options should be granted. If permitted by the Board, options may be issued to an employee’s nominee (for example, a spouse or family company).

Each option is to subscribe for one fully paid ordinary share in the Company and will expire five years from its date of issue. An option is exercisable at any time from its date of issue. Options will be granted free. The exercise price of options will be determined by the Board. The total number of shares the subject of options issued under the Plan, when aggregated with issues during the previous five years pursuant to the Plan and any other employee share plan, must not exceed 5% of the Company’s issued share capital.

If, prior to the expiry date of options, a person ceases to be an employee of a Group company for any reason (other than termination with cause), the options held by that person (or that person’s nominee) must be exercised within one month thereafter otherwise they will automatically lapse. The Plan may be terminated or suspended at any time.

Except with the consent of the Directors, options may not be transferred. The Company will not apply for official quotation of any options. Shares issued as a result of the exercise of options will rank equally with the Company’s previously issued shares.

If there is a bonus share issue to the holders of shares, the number of shares over which an option is exercisable will be increased by the number of shares which the optionholder would have received if the option had been exercised before the record date for the bonus issue. The options or exercise price of the options will be adjusted if there is a pro-rata issue, bonus issue or any reconstruction in accordance with the Listing Rules. If there is a pro-rata issue (other than a bonus share issue) to the holders of shares, the exercise price of an option will be reduced to take account of the effect of the pro-rata issue. If there is a reorganisation of the issued capital of the Company, unexercised options will be reorganised in accordance with the Listing Rules.

Subject to obtaining required members’ approval to authorise the granting of financial assistance to a participant, the Directors can make loans to eligible employees in connection with shares to be issued upon exercise of options under the Plan.

The Board may amend the Plan Rules subject to the requirements of the Listing Rules.

19 > Eastern Iron Limited and its controlled entities Annual Report 2013

Directors’ Report

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Compensation options: granted and vested during the year

The following options were granted during the financial year.

Share-based payments awarded during the year to directors and key management


					Value of options granted at the grant dated (note 14) $		Value of options exercised at the exercise date $	Value of options lapsed at the date of lapse $
						Number of options exercised
	Grant date	Granted no.	Vested no.	Vested %

Directors
S Gemell	23 Nov 12	450,000	450,000	100%	3,510	-	-	-
G De Ross	23 Nov 12	1,000,000	1,000,000	100%	7,800	-	-	-
W Corbett	23 Nov 12	450,000	450,000	100%	3,510	-	-	-
G Jones	23 Nov 12	450,000	450,000	100%	3,510	-	-	-
I Polovineo	23 Nov 12	450,000	450,000	100%	3,510	-	-	-
A Critchlow	23 Nov 12	450,000	450,000	100%	3,510	-	-	-

The value of options granted during the period is recognised as compensation over the vesting period of the grant, in accordance with Australian Accounting Standards. There were no options exercised during the year.

For details on the valuation of the options, including models and assumptions used, please refer to Note 14.

There were no alterations to the terms and conditions of options granted as remuneration since their grant date. There were no forfeitures during the period.

Meetings of directors

The following table sets out the number of Directors’ meetings (including meetings of Committees of Directors) held during the financial year and the number of meetings attended by each Director:

			Remuneration and *nomination committee **	Remuneration and *nomination committee **
	Board of directors				Audit committee

	Held	Attended	Held	Attended	Held	Attended
Directors
S Gemell	11	9	1	-	4	4
G De Ross	11	11	-	-	-	-
W Corbett	11	9	-	-	4	4
G Jones	11	11	1	1	-	-
I Polovineo	11	11	-	-	3	3
A Critchlow	9	9	-	-	-	-
G Goodacre(resigned 31 Oct 12)	3	3	1	1	1	-

The duties of the Corporate Governance Committee were carried out by the full Board at Board meetings for the 2013 financial year.

20 > Eastern Iron Limited and its controlled entities Annual Report 2013

Directors’ Report

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Auditor’s independence and non-audit services

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21 > Eastern Iron Limited and its controlled entities Annual Report 2013

Directors’ Report

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Non-audit services

The Company’s auditor, BDJ Partners did not provide non-audit services for Eastern Iron during the financial year ended 30 June 2013. The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor independence was not compromised.

Signed at Sydney this 24th day of September 2013 in accordance with a resolution of the Directors.

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Steve Gemell Chairman

22 > Eastern Iron Limited and its controlled entities Annual Report 2013

Corporate Governance

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The Board has adopted a corporate framework for the Company which is underpinned by the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (2[nd] Edition) (“the Recommendations”) applicable to ASX-listed entities.

This section addresses each of the Corporate Governance Principles and where the Company has not followed a Recommendation, provides the reasons for not following the Recommendation.

Principle 1: Lay solid foundations for management and oversight

Recommendation 1.1 – Functions reserved to the board and delegated to senior executives

The Company has established functions reserved to the Board and functions delegated to senior executives.

The functions reserved to the Board include:

(1) Oversight of the Company, including its control and accountability systems;
(2) Appointing and removing the Managing Director (MD) (or equivalent), including approving the remuneration of the MD and the remuneration policy and succession plans for the MD;
(3) Ratifying the appointment and, where appropriate, the removal of the Chief Financial Officer (or equivalent) and the Secretary;
(4) Input to, and the final approval of management’s corporate strategy and performance objectives;
(5) Reviewing and ratifying systems of risk management, internal control, compliance, code of conduct and legal compliance;
(6) Monitoring senior management’s performance and implementation of strategy, and ensuring appropriate resources are available;
(7) Approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestitures;
(8) Approving and monitoring financial and other reporting;
(9) Appointment and composition of committees of the Board;
(10) On recommendation of the Audit Committee, appointment of external auditors; and
(11) On recommendation of the Nomination and Remuneration Committee, initiating Board and director evaluation.
(1) Implementing the Company’s vision, values and business plan;
(2) Managing the business to agreed capital and operating expenditure budgets;
(3) Identifying and exploring opportunities to build and sustain the business;
(4) Allocating resources to achieve desired business outcomes;
(5) Sharing knowledge and experience to enhance success;
(6) Facilitating and monitoring the potential and career development of the Company’s people resources;
(7) Identifying and mitigating areas of risk within the business;
(8) Managing effectively the internal and external stakeholder relationships and engagement strategies;
(9) Sharing information and making decisions across functional areas;
(10) Determining the senior executives’ position on strategic and operational issues; and
(11) Determining the senior executives’ position on matters that will be referred to the Board.

Recommendation 1.2 – Performance evaluation of senior executives

The Board reviews the performance of the Managing Director and executives to ensure they execute the Company’s strategy through the efficient and effective implementation of the business objectives. The Managing Director and executives are assessed against the performance of the Company and individual performance.

Recommendation 1.3 – Performance evaluation of senior executives during the financial year

During the financial year ended 30 June 2013 a performance evaluation of the Managing Director and senior executives was carried out in accordance with the guide to reporting on Principle 1.

Principle 2: Structure the board to add value.

Recommendation 2.1 – A majority of the board should be independent directors

Recommendation 2.1 requires a majority of the Board to be independent Directors.

The functions delegated to senior executives include:

23 > Eastern Iron Limited and its controlled entities Annual Report 2013

Corporate Governance

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The Corporate Governance Council defines independence as being free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of unfettered and independent judgement.

The Board has determined that only one of its five nonexecutive directors is independent as defined under Recommendation 2.1. The Company is therefore at variance with Recommendation 2.1 in that a majority of directors are not independent. Mr Gemell is the nonexecutive directors deemed to be independent. The other non-executive directors of the Company are not considered to be independent due to their association with the company’s major shareholder PlatSearch NL or in the case of Mr Critchlow, his substantial shareholding. All non-executive directors may also undertake consultancy work for the company.

Mr De Ross is the Managing Director and Chief Executive Officer of the Company. As the Chief Executive Officer of the Company, Mr De Ross is not an independent Director of the Company in accordance with the definition above.

The Board has nevertheless determined that the composition of the current Board represents the best mix of directors that have an appropriate range of qualifications and expertise and that can understand and competently deal with current and emerging business issues.

Nomination and Remuneration Committee is available on the Company’s website.

Recommendation 2.5 – Process for evaluating the performance of the board

In accordance with the charter of the Nomination and Remuneration Committee, the Committee responsible for the:

(1) Annual evaluation and review of the performance of the Board against both measurable and qualitative indicators established by the Committee;
(2) Evaluation and review of the performance of individual directors against both measurable and qualitative indicators established by the Committee;
(3) Review of and making of recommendations on the size and structure of the Board; and
(4) Review of the effectiveness and programme of Board meetings.

Recommendation 2.6 – Additional

information concerning the board and directors

(1) The skills and experience of each Director is set out in the Directors section of the Directors’ Report.
(2) The period of office of each Director is as follows:

Name Term in office

S Gemell – 3.4 years

Each individual member of the Board is satisfied that whilst the Company may not comply with Recommendation 2.1, all directors bring an independent judgment to bear on Board decisions.

Recommendation 2.2 – The chair should be an independent director

The Company’s chairman, Mr Gemell, is an independent director as defined under Recommendation 2.1.

Recommendation 2.3 – The roles of chair and managing director should be separated

The roles of Chairman and Managing Director are not exercised by the same individual. The Board charter summarises the roles and responsibilities of the Chairman, Mr Gemell and the Managing Director, Mr De Ross.

Recommendation 2.4 – Nomination committee

The Board has established a Nomination and Remuneration Committee. A copy of the charter of the

G De Ross – 3.0 years G Jones – 4.2 years W Corbett – 5.6 years I Polovineo – 2.2 years A Critchlow - 0.75 years

(3) The reasons why Messrs De Ross, Jones and Polovineo, Critchlow and Ms Corbett, are considered not to be independent Directors are disclosed in the response to Recommendation 2.1.
(4) There are procedures in place, agreed by the Board, to enable Directors, in furtherance of their duties, to seek independent professional advice at the Company’s expense.
(5) Details of the names of members of the Nomination and Remuneration Committee are disclosed in the response to Recommendation 8.2 and attendances at meetings are set out in the Directors Meetings section of the Directors’ Report.
(6) An evaluation of the performance of the Board, its committees and individual Directors took place during the financial year. That evaluation was in accordance with the process disclosed.

24 > Eastern Iron Limited and its controlled entities Annual Report 2013

Corporate Governance

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(7) The Nomination and Remuneration Committee is responsible for providing the Board with advice and recommendations regarding the ongoing development of:
(a) A plan for identifying, assessing and enhancing director competencies; and
(b) A succession plan that is designed to ensure that an appropriate balance of skills, experience and expertise is maintained on the Board.

The Nomination and Remuneration Committee Charter requires that prior to identifying an individual for nomination for directorship, the Committee must evaluate the range of skills, experience and expertise currently existing on the Board to ensure that the Committee identifies the particular skills, experience and expertise that will most effectively complement the Board’s current composition. If a new candidate is approved by the Nomination and Remuneration Committee, the appointment of that new candidate is ultimately subject to shareholder approval in accordance with the Corporations Act 2001 and the Company’s Constitution.

Further details are set out in the Nomination and Remuneration Charter. A copy of the Nomination and Remuneration Committee Charter is available on the Company’s website.

Principle 3: Promote ethical and responsible decision making

Recommendation 3.1 – Code of conduct

The Company has established a Code of Conduct as to the:

(1) Practices necessary to maintain confidence in the Company’s integrity;
(2) Practices necessary to take into account the Company’s legal obligations and the expectations of stakeholders; and
(3) Responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

A copy of the Code of Conduct is available on the Company’s website .

Recommendation 3.2 – Diversity policy

The Company has established a Diversity Policy.

The Company recognises the need to set diversity measures in each of its operating locations taking into account the differing diversity issues within each geographic location in which it operates. A copy of the Diversity Policy is available on the Company’s website.

The policy includes requirements for the Board, at the appropriate stage of its development, to establish measurable objectives for achieving gender diversity and for the Board to assess annually thereafter both the objectives and progress in achieving them.

Recommendation 3.3 – Measurable objectives for achieving gender diversity

Due to the size of the Company and its workforce the Board does not consider it appropriate to set measurable objectives at this time.

The Company intends to establish measurable objectives at the appropriate stage of its development.

Recommendation 3.4 – Proportion of women employees

Refer Recommendation 3.3 above.

At the date of this report the Company has only two employees (including the Managing Director) both of whom are male.

The Company has a services contract with PlatSearch NL (“PlatSearch”), a major shareholder, whereby PlatSearch provides the Company with technical, accounting and administrative services. Two of the persons involved in the provision of these services are female.

The Board comprises of six directors of which one is female representing 16.7%.

Recommendation 3.5 – Documents on company website

Copies of the Code of Conduct and the Diversity Policy are available from the Company’s website.

Principle 4: Safeguard integrity in financial reporting

Recommendation 4.1 – Audit committee

The Company has established an Audit Committee.

Recommendation 4.2 – Structure of the audit committee

The Company’s Audit Committee does not comply with all of the requirements of Recommendation 4.2. Details are as follows:

(1) The Audit Committee consist of three nonexecutive directors however only one of the members is an independent director. The members of the Audit Committee are Messrs Polovineo, Gemell, and Ms Corbett.

25 > Eastern Iron Limited and its controlled entities Annual Report 2013

Corporate Governance

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(2) Ms Corbett and Mr Polovineo are not considered to be independent directors for the reasons given under Recommendation 2.1.
(3) The Audit Committee is chaired by Mr Polovineo, who is not an independent director. Mr Polovineo is however the director most qualified in financial matters and not the Chairman of the Board.

Although not all of the members of the Audit Committee are independent and the Chairman of the Committee is not an independent director, the Board has nevertheless determined that the composition of the Audit Committee represents the only practical mix of directors that have an appropriate range of qualifications and expertise and that can understand and competently deal with current and emerging relevant business issues.

Recommendation 4.3 – Audit committee charter

The Company has adopted an Audit Committee Charter which sets out its role, responsibilities and membership requirements and reflects the matters set out in the commentary and guidance for Recommendation 4.3.

Recommendation 4.4 – Additional

information concerning the audit committee

The skills and experience of each member of the Audit Committee and the number of Audit Committee meetings attended by each member is set out in the Directors’ Report.

In accordance with the guide to reporting on Principle 4, the Company’s Audit Committee Charter is available on the Company’s website.

Principle 5: Make timely and balanced disclosure

Recommendation 5.1 – ASX listing rule disclosure requirements

The Company has established a Continuous Disclosure Policy which sets out the key obligations of directors and employees in relation to continuous disclosure as well as the Company’s obligations under the Listing Rules and the Corporations Act.

Recommendation 5.2 – Continuous disclosure policy

There were no departures from Recommendation 5.1 during the financial year.

A copy of the Company’s Continuous Disclosure Policy is available on the Company’s website.

Principle 6: Respect the rights of shareholders

Recommendation 6.1 – Shareholder communications policy

The Company has adopted a Shareholder Communications Policy for:

(1) Promoting effective communication with shareholders; and
(2) Encouraging shareholder participation at annual and other general meetings.

A copy of the Company’s Shareholder Communications Policy is available on the Company’s website.

Recommendation 6.2 – Availability of shareholder communications policy

A copy of the Company’s Shareholder Communications Policy is available on the Company’s website.

Principle 7: Recognise and manage risk

Recommendation 7.1 – Risk management policies

The Company has established policies for the oversight and management of its material business risks as follows:

(1) The Audit Committee oversees financial risks pursuant to the Audit Committee Charter. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information as well as nonfinancial considerations such as the benchmarking of operational key performance indicators.
(2) The finance department, under the supervision of the Managing Director, manages financial risks.

The policy also provides procedures for internal notification and external disclosures, as well as procedures for promoting understanding of compliance with disclosure requirements.

(3) A Risk Committee will oversee the Company’s other material business risks.

The policy reflects the matters set out in the commentary and guidance for Recommendation 5.1.

26 > Eastern Iron Limited and its controlled entities Annual Report 2013

Corporate Governance

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Recommendation 7.2 – Risk management and internal control system

The Board has required management to design and implement a risk management and internal control system to manage the Company’s business risks.

The Board has required management to report to it on whether those risks are being managed effectively.

Recommendation 7.3 – Statement from the chief executive officer and the chief financial officer

When considering the Audit Committee’s review of financial reports the Board receives a signed statement from each of the Financial Controller and the Managing Director in accordance with section 295A of the Corporations Act. This statement confirms that the Company’s financial reports are founded on a sound system of risk management and internal control, and that the system is operating effectively in all material respects in relation to financial risks and that nothing has occurred since period-end that would materially change the position.

Recommendation 7.4 – Additional information concerning risk management

The Board has received assurance from the Managing Director and the Financial Controller under Recommendation 7.3.

The Company is in the process of developing a Risk Committee Charter together with a risk management framework.

Principle 8: Remunerate fairly and responsibly

Recommendation 8.1 – Remuneration committee

The Company has established a Nomination and Remuneration Committee which has delegated responsibilities in relation to the Company’s remuneration policies as set out in the Company’s Nomination and Remuneration Committee Charter. The charter reflects the matters set out in the commentary and guidance for Recommendation 8.1.

Recommendation 8.2 – Structure of the remuneration committee

The Company’s Nomination and Remuneration Committee does not comply with all of the requirements of Recommendation 8.2. Details are as follows:

only one of the members is an independent director. The members of the Nomination and Remuneration Committee are Messrs Jones, Gemell, and Critchlow.

(2) Mr Jones and Mr Critchlow are not considered to be independent directors for the reasons given under Recommendation 2.1.
(3) The Nomination and Remuneration Committee is chaired by Mr Jones, who is not an independent director. Mr Jones however is not the Chairman of the Board.

Although not all of the members of the Nomination and Remuneration Committee are independent and the Chairman of the Committee is not an independent director, the Board has nevertheless determined that the composition of the Nomination and Remuneration Committee represents the only practical mix of directors that have an appropriate range of qualifications and expertise and that can understand and competently deal with current and emerging relevant business issues.

Recommendation 8.3 – Remuneration of executive directors, executives and nonexecutive directors

The Company complies with Recommendation 8.2 by clearly distinguishing the structure of non-executive directors’ remuneration from that of executive directors and senior executives. The commentary that follows each Recommendation does not form part of the Recommendation. The aggregate remuneration of the non-executive directors has been fixed at a maximum of $250,000 per annum to be apportioned among the nonexecutive directors in such a manner as the Board determines.

Neither the non-executive directors nor the executives of the Company receive any retirement benefits, other than superannuation.

Recommendation 8.4 – Additional information concerning remuneration

The skills and experience of each member of the Nomination and Remuneration Committee and the number of Committee meetings attended by each member is set out in the Directors’ Report.

A copy of the Company’s Nomination and Remuneration Committee Charter is available on the Company’s website.

(1) The Nomination and Remuneration Committee consist of three non-executive directors however
27 > Eastern Iron Limited and its controlled entities Annual Report 2013

Consolidated Statement of Comprehensive Income

For the year ended 30 June 2013

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		2013 $	2012 $
	Note
Revenue	3	1,272,040	162,376


ASX and ASIC fees		(23,119)	(28,405)
Audit fees	18	(23,000)	(19,900)
Conferences and training		(19,464)	(19,707)
Contract administration services		(169,577)	(180,347)
Directors fees		(205,189)	(202,707)
Employee costs(net of costs recharged to explorationprojects)		(267,064)	(259,926)
Exploration expenditure expensed	9	(1,401,611)	(41,765)
Marketingcosts		(73,862)	(73,318)
Rent		(25,685)	(24,420)
Share basedpayments	14	(28,860)	(106,095)
Travel and accommodation		(71,735)	(34,925)
Other expenses from ordinaryactivities		(120,431)	(100,331)

Loss before income tax expense		(1,157,557)	(929,470)


Income tax expense	4	-	-


Loss after income tax expense	13	(1,157,557)	(929,470)


Other comprehensive income

Other comprehensive income for the period, net of tax		-	-
Other comprehensive (loss)		-	-

Total comprehensive (loss) attributable to members of Eastern Iron Limited
		(1,157,557)	(929,470)


Basic lossper share(centsper share)	15	1.06	1.37
Diluted loss per share (cents per share)	15	1.06	1.37

The Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

28 > Eastern Iron Limited and its controlled entities Annual Report 2013

Consolidated Statement of Financial Position

As at 30 June 2013

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		2012 $
	2013 $
Note
5 6 7 7 8 9 10 11 11 12 13 14		917,310 43,055 -

	1,673,146
	82,592
	130,000
		960,365
	1,885,738
		118,350 31,497 4,711,801



	15,850
	26,950
	5,546,961
		4,861,648
	5,589,761

	7,475,499	5,822,013
		252,964 33,688



	436,920
	48,907
		286,652
	485,827

		10,816




	22,356

		10,816
	22,356

		297,468
	508,183

		5,524,545
	6,967,316
		8,031,695 (2,941,825) 434,675



	10,603,162
	(3,984,816)
	348,970
		5,524,545
	6,967,316

The Statement of Financial Position should be read in conjunction with the accompanying notes.

29 > Eastern Iron Limited and its controlled entities Annual Report 2013

Consolidated Statement of Cash Flows

For the year ended 30 June 2013

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Cash flows from operating activities Payment to suppliers and employees R&D tax concession offset Consulting fees Rental income Interest received Net cash flows (used in) operating activities Cash flows from investing activities Purchase of motor vehicle and fixed assets Sale of fixed assets Expenditure on mining interests (exploration) Purchase of tenements Tenement security deposits Net cash flows (used in) investing activities Cash flows from financing activities Proceeds from issue of shares/share applications received Equity raising expenses Net cash flows from financing activities Net increase/(decrease) in cash held Add opening cash brought forward Closing cash carried forward	Note	2013 $ 2012 $
	25 25	(970,687) (985,261) 1,135,769 - 43,329 48,442 - - 90,143 146,810
		298,554 (790,009)
		(19,476) (9,321) 9,867 - (1,954,870) (1,811,181) - (100,000) (27,500) (10,000)
		(1,991,979) (1,930,502)
		2,503,661 19,278 (54,400) -
		2,449,261 19,278
		755,836 (2,701,233) 917,310 3,618,543
		1,673,146 917,310

The Statement of Cash Flows should be read in conjunction with the accompanying notes.

30 > Eastern Iron Limited and its controlled entities Annual Report 2013

Consolidated Statement of Changes in Equity

For the year ended 30 June 2013

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Attributable to the shareholders of Eastern Iron Limited	Attributable to the shareholders of Eastern Iron Limited	Attributable to the shareholders of Eastern Iron Limited
	Issued capital $ Accumulated losses $ 7,552,017 (2,012,355) - (929,470) - -	Reserves $ Total equity $ 328,580 5,868,242 - (929,470) - -
Note
14 12 14 12
	- (929,470) - - 460,400 - 19,278 -	- (929,470) 106,095 106,095 - 460,400 - 19,278
	8,031,695 (2,941,825)	434,675 5,524,545
	8,031,695 (2,941,825) - (1,157,557) - -	434,675 5,524,545 - (1,157,557) - -
	- (1,157,557) - - 2,595,745 - (19,278) - (5,000) - - 114,566	- (1,157,557) 28,860 28,860 - 2,595,745 - (19,278) - (5,000) (114,565) 1
	10,603,162 (3,984,816)	348,970 6,967,316

The Statement of Changes in Equity should be read in conjunction with the accompanying notes.

31 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements For the year ended 30 June 2013

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1. Corporate information

The financial report of Eastern Iron Limited (the Company) for the year ended 30 June 2013 was authorised for issue in accordance with a resolution of the Directors on 20 September 2013.

Eastern Iron Limited is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange Ltd using the ASX code EFE.

The consolidated financial statements comprise the financial statements of Eastern Iron Limited and its subsidiaries (the Group or Consolidated Entity).

The nature of the operations and principal activities of the Consolidated Entity are described in the Directors’ Report.

All inter-company balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Subsidiaries are fully consolidated from date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.

Property, plant and equipment

Plant and equipment is stated at cost, less accumulated depreciation and any impairment in value. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

Plant and equipment – 3 - 5 years.
Motor vehicle – 6 years.

Impairment

2. Summary of significant accounting policies

Basis of preparation

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards. The financial report has been prepared on a historical cost basis. All amounts are presented in Australian dollars.

Statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law. Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial statements and notes of the Company comply with International Financial Reporting Standards (IFRS).

Basis of consolidation

The consolidated financial statements comprise the financial statements of Eastern Iron Limited (Eastern Iron or the “Company”) and its subsidiaries if applicable (“the Group”) as at 30 June each year. The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. An item of plant and equipment is derecognised upon disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the period the item is derecognised.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an asset that necessarily takes a substantial period of time to get ready for its intended use or sale) are capitalised as part of the cost of that asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Interest in jointly controlled operations – joint ventures

The Company has an interest in exploration joint ventures that are jointly controlled. A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. A jointly controlled operation involves use of assets and other resources of the venturers rather than establishment of a separate entity. The Company recognises its interest in the jointly controlled operations by recognising the assets that it controls and the liabilities that it incurs.

32 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements For the year ended 30 June 2013

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The Company also recognises the expenses that it incurs and its share of any income that it earns from the sale of goods or services by the jointly controlled operations.

Recoverable amount of assets

At each reporting date, the Company assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Company makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount. Recoverable amount is the greater of fair value less costs to sell and value in use.

For investments where there is no quoted market price, fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of the investment.

Purchases and sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place are recognised on the trade date, being the date that the Company commits to purchase he asset.

Exploration, evaluation, development and restoration costs

Exploration and evaluation

Investments

All investments are initially recognised at cost, being the fair value of the consideration given and including acquisition charges associated with the investment. After initial recognition, investments, which are classified as held-for-trading and available-for-sale, are measured at fair value. Gains or losses on investments held-for-trading are recognised in the income statement. Gains or losses on available-for-sale investments are recognised as a separate component of equity until the investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in the income statement. Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Company has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Other long term investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost using the effective interest method.

Amortised cost is calculated by taking into account any discount or premium on acquisition, over the period to maturity.

For investments carried at amortised cost, gains and losses are recognised in income when the investments are derecognised or impaired, as well as through the amortisation process. For investments that are actively traded in organised financial markets, fair value is determined by reference to Securities Exchange quoted market bid prices at the close of business on the balance sheet date.

Exploration and evaluation expenditure incurred by or on behalf of the Company is accumulated separately for each area of interest. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure, but does not include general overheads or administrative expenditure not having a specific connection with a particular area of interest.

Exploration and evaluation costs in relation to separate areas of interest for which rights of tenure are current are brought to account in the year in which they are incurred and carried forward provided that:

Such costs are expected to be recouped through successful development and exploitation of the area, or alternatively through its sale.
Exploration and/or evaluation activities in the area have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves.

Once a development decision has been taken, all past and future exploration and evaluation expenditure in respect of the area of interest is aggregated within costs of development.

Exploration and evaluation – impairment

The Directors assess at each reporting date whether there is an indication that an asset has been impaired and for exploration and evaluation cost whether the above carry-forward criteria are met.

33 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements For the year ended 30 June 2013

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Accumulated costs in respect of areas of interest are written off or a provision made in the Income Statement when the above criteria do not apply or when the Directors assess that the carrying value may exceed the recoverable amount. The costs of productive areas are amortised over the life of the area of interest to which such costs relate on the production output basis, provisions would be reviewed and if appropriate, written back.

Remaining mine life

In estimating the remaining life of the mine at each mine property for the purpose of amortisation and depreciation calculations, due regard is given not only to the volume of remaining economically recoverable reserves but also to limitations which could arise from the potential for changes in technology, demand, product substitution and other issues that are inherently difficult to estimate over a lengthy time frame.

Development

Development expenditure incurred by or on behalf of the Company is accumulated separately for each area of interest in which economically recoverable reserves have been identified to the satisfaction of the Directors. Such expenditure comprises net direct costs and, in the same manner as for exploration and evaluation expenditure, an appropriate portion of related overhead expenditure having a specific connection with the development property.

All expenditure incurred prior to the commencement of commercial levels of production from each development property is carried forward to the extent to which recoupment out of revenue to be derived from the sale of production from the relevant development property, or from the sale of that property, is reasonably assured.

No amortisation is provided in respect of development properties until a decision has been made to commence mining. After this decision, the costs are amortised over the life of the area of interest to which such costs relate on a production output basis.

Restoration

Provisions for restoration costs are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Mine property held for sale

Where the carrying amount of mine property and related assets will be recovered principally through a sale transaction rather than through continuing use, the assets are reclassified as Mine Property Held for Sale and carried at the lower of the assets’ carrying amount and fair value less costs to sell – where such fair value can be reasonably determined, and otherwise at its carrying amount. Liabilities and provisions related to mine property held for sale are similarly reclassified as Liabilities – Mine Property Held for Sale and, Provisions – Mine Property Held for sale, as applicable, and carried at the value at which the liability or provisions expected to be settled.

Trade and other receivables

Trade receivables, which generally have 7-30 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified.

Cash and cash equivalents

Cash and short term deposits in the balance sheet comprise cash at bank and in hand and short term deposits with an original maturity of one year or less. For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of any outstanding bank overdrafts, if any.

Trade and other payables and provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

34 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements For the year ended 30 June 2013

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Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Employee entitlements

Liabilities for wages and salaries are recognised and are measured as an amount unpaid at the reporting date at current pay rates in respect of an employee’s services up to that date. Current employees are entitled to annual leave and long service leave. A liability in respect of superannuation at the current superannuation guarantee rate has been accrued at the reporting date.

Share-based payments

In addition to salaries, the Company provides benefits to certain employees (including Directors and Key Management personnel) of the Company in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (“equity-settled transactions”). There is currently an Employee Share Option Plan in place to provide these benefits.

The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value of the options is determined by using the Black-Scholes option pricing model. In valuing transactions settled by way of issue of options, no account is taken of any vesting limits or hurdles, or the fact that the options are not transferable. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the vesting conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

The cumulative expense recognised for equitysettled transactions at each reporting date until vesting date reflects:

The extent to which the vesting period has expired.
The Company’s best estimate of the number of equity instruments that will ultimately vest.

No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

If the terms of an equity-settled award are modified, at a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification. If an equity-settled award is cancelled, it is treated as if it had vested on the date of the cancellation, and any expense not yet recognised is recognised immediately. However, if a new award is substituted for the cancelled award and designated a replacement award on the date it is granted, the cancelled and the new award are treated as if there was a modification of the original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share except where such dilution would serve to reduce a loss per share.

Leases

Finance leases, which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases.

35 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements For the year ended 30 June 2013

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Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as the lease income. Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Sale of goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to the buyer at the time of delivery of the goods to the customer.

Interest

Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.

In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax assets and unused tax losses can be utilised:

Except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

Dividends

Revenue is recognised when the shareholder’s right to receive the payment is established.

Income tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the balance sheet date.

Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences:

Except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Income taxes relating to items recognised directly in equity are recognised in equity and not in the income statement.

Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

36 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements For the year ended 30 June 2013

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Where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable.
Receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

Currency

Both the functional and presentation currency is Australian dollars (A$).

Investment in controlled entities

The Company’s investment in its controlled entities is accounted for under the equity method of accounting in the Company’s financial statements.

Impairment of assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs.

When the carrying amount of an asset or cashgenerating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at a revalued amount (in which case the impairment loss is treated as a revaluation decrease).

An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

Significant accounting judgements, estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Share-based payment transactions

The Company measures the cost of cash-settled share-based payments at fair value at the grant date using the Black-Scholes formula taking into account the terms and conditions upon which the instruments were granted, as detailed in Notes 14 and 16.

37 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

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Capitalisation and write-off of capitalised exploration costs

The determination of when to capitalise and writeoff exploration expenditure requires the exercise of judgement based on various assumptions and other factors such as historical experience, current and expected economic conditions.

Issued capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Earnings per share

Basic earnings per share is calculated as net profit attributable to members of the Company, adjusted to exclude any costs of servicing equity divided by the weighted average number of ordinary shares.

Diluted earnings per share is calculated as net profit attributable to members of the Company, adjusted for:

Costs of servicing equity.
The after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses.
Other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares.
Divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

Accounting standards issued but not yet effective

Australian Accounting Standards and interpretations that have been issued or amended but are not yet effective have not been adopted by the Consolidated Entity for the year ended 30 June 2013. The Consolidated Entity plans to adopt these standards at their application dates as detailed below.

AASB 9 Financial Instruments (Application date 1 January 2015)

AASB 9 includes requirements for the classification and measurement of financial assets resulting from the first part of Phase 1 of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and Measurement).

These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139. The main changes from AASB 139 are described below.

(a) Financial assets are classified based on (1) the objective of the entity’s business model for managing the financial assets; (2) the characteristics of the contractual cash flows. This replaces the numerous categories of financial assets in AASB 139, each of which had its own classification criteria.
(b) AASB 9 allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument.
(c) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases.

AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010)[AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023, & 1038 and interpretations 2, 5, 10, 12, 19 & 127] (Application date 1 January 2015)

The requirements for classifying and measuring financial liabilities were added to AASB 9. The existing requirements for the classification of financial liabilities and the ability to use the fair value option have been retained. However, where the fair value option is used for financial liabilities the change in fair value is accounted for as follows:

The change attributable to changes in credit risk are presented in other comprehensive income (OCI)

The remaining change is presented in profit or loss

If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss.

38 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

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Consolidated Financial Statements (Application date 1 January 2013)

IFRS 10 establishes a new control model that applies to all entities. It replaces parts of IAS 27 Consolidated and Separate Financial Statements dealing with the accounting for consolidated financial statements and SIC-12 Consolidation – Special Purpose Entities.

The new control model broadens the situations when an entity is considered to be controlled by another entity and includes new guidance for applying the model to specific situations, including when acting as a manager may give control, the impact of potential voting rights and when holding less than a majority voting rights may give control. This may to lead to more entities being consolidated into the group.

Joint Arrangements (Application date 1 January 2013)

IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly- controlled Entities – Nonmonetary Contributions by Ventures. IFRS 11 uses the principle of control in IFRS 10 to define joint control, and therefore the determination of whether joint control exists may change. In addition IFRS 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, accounting for a joint arrangement is dependent on the nature of the rights and obligations arising from the arrangement. Joint operations that give the venturers a right to the underlying assets and obligations themselves is accounted for by recognising the share of those assets and obligations. Joint ventures that give the venturers a right to the net assets is accounted for using the equity method. This may result in a change in the accounting for the joint arrangements held by the group.

Disclosure of Interests in Other Entities (Application date 1 January 2013)

IFRS 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structures entities. New disclosures have been introduced about the judgements made by management to determine whether control exists, and to require summarised information about

joint arrangements, associates and structured entities and subsidiaries with non-controlling interests.

Fair Value Measurement (Application date 1 January 2013)

IFRS 13 establishes a single source of guidance under IFRS for determining the fair value of assets and liabilities. IFRS 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value under IFRS when fair value is required or permitted by IFRS. Application of this definition may result in different fair values being determined for the relevant assets.

IFRS 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includes information about the assumptions made and the qualitative impact of those assumptions on the fair value determined.

AASB 128 Investments in Associates and Joint Ventures (2011), AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards

(Applicable to annual reporting periods beginning on or after 1 January 2013)

This Standard supersedes AASB 128 Investments in Associates and prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures.

The Standard defines 'significant influence' and provides guidance on how the equity method of accounting is to be applied (including exemptions from applying the equity method in some cases). It also prescribes how investments in associates and joint ventures should be tested for impairment.

Note: Early application is permitted by 'for-profit' entities, but not by 'not-for-profit' entities. Entities early adopting this standard must also adopt the other standards included in the 'suite of six' standards described in the commentary regarding AASB 10 'Consolidated Financial Statements' above.

39 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

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3. Revenue from ordinary activities

3. Revenue from ordinary activities

	2013 $	2012 $

Interest received – otherpersons/corporation	96,275	110,601
R&D tax concession offset	1,135,769	-
Consultingfees	39,996	51,775
	1,272,040	162,376

4. Income tax

4. Income tax
	2013 $	2012 $


Prima facie income tax(credit)on operating (loss)at 30%	347,267	278,841
Future income tax benefit in respect of timingdifferences – not recognised	(347,267)	(278,841)
Income tax expense	-	-

No provision for income tax is considered necessary in respect of the Company as at 30 June 2013.

The Company has a deferred income tax liability of $252,048 (2012: $490,540) associated with exploration costs deferred for accounting purposes but expensed for tax purposes. This liability has been brought to account and offset by deferred tax assets attributed to available tax losses. No recognition has been given to any deferred income tax asset which may arise from available tax losses, except to the extent offset against deferred tax liabilities. The Company has estimated its losses at $7,358,489 (2012: $5,368,094) as at 30 June 2013.

A benefit of 30% of approximately $2,207,547 (2012: $1,610,428) associated with the tax losses carried forward will only be obtained if:

The Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised.

The Company continues to comply with the conditions for deductibility imposed by the law.

No changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the losses.

5. Cash and cash equivalents

5. Cash and cash equivalents

	2013 $	2012 $

Cash at bank	262,104	401,183
Moneymarket securities – bank deposits	1,411,042	516,127
	1,673,146	917,310

Bank negotiable certificates of deposit, which are normally invested between 30 and 365 days were used during the period and are used as part of the cash management function.

6. Receivables – current

6. Receivables – current

	2013 $	2012 $

Trade receivables	-	3,666
Other debtors	3,568	5,303
GST receivables	49,195	11,544
Interest receivable	7,257	1,125
Prepayments	22,572	21,417
	82,592	43,055

40 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

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7. Tenement security deposits

7. Tenement security deposits

	2013 $	2012 $

Cash at bank – bank deposits	140,000	-
Cash withgovernment mines departments and other	5,850	118,350
	145,850	118,350

These deposits are restricted so that they are available for any rehabilitation that may be required on exploration tenements (Note: 21).

8. Property, plant and equipment

		Plant and equipment
	Motor vehicle		Total
Year ended 30 June 2012
Openingnet book amount	12,522	25,375	37,897
Additions	-	9,321	9,321
Disposals	-	-	-
Depreciation expense	(4,028)	(11,693)	(15,721)
Closingnet book amount	8,494	23,003	31,497
At 30 June 2012
Cost	24,166	46,178	70,344
Accumulated depreciation	(15,672)	(23,175)	(38,847)
Net book amount	8,494	23,003	31,497
Year ended 30 June 2013
Openingnet book amount	8,494	23,003	31,497
Additions	-	19,476	19,476
Disposals	-	(9,867)	(9,867)
Depreciation expense	(4,027)	(10,129)	(14,156)
Closingnet book amount	4,467	22,483	26,950
At 30 June 2013
Cost	24,166	51,557	75,723
Accumulated depreciation	(19,699)	(29,074)	(48,773)
Net book amount	4,467	22,483	26,950

9. Deferred exploration and evaluation expenditure


	2013 $	2012 $
Costs brought forward	4,711,801	2,458,669
Costs incurred duringtheperiod	2,241,771	1,676,897
Expenditure written off during period	(1,401,611)	(41,765)
Miningtenements acquired(discussed below)	-	618,000
Value of options expired duringtheyear	(5,000)	-
Costs carried forward *	5,546,961	4,711,801
Exploration expenditure costs carried forward are made up of:
 Expenditure onjoint venture areas	1,533,312	2,754,995
 Expenditure on nonjoint venture areas	4,013,649	1,956,806
Costs carried forward	5,546,961	4,711,801

41 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

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The above amounts represent costs of areas of interest carried forward as an asset in accordance with the accounting policy set out in Note 2. The ultimate recoupment of deferred exploration and evaluation expenditure in respect of an area of interest carried forward is dependent upon the discovery of commercially viable reserves and the successful development and exploitation of the respective areas or alternatively sale of the underlying areas of interest for at least their carrying value. Amortisation, in respect of the relevant area of interest, is not charged until a mining operation has commenced.

*’ Of the above costs carried forward of $5,546,961, tenements to the value of $150,000 are subject to a letter of intent for the sale and transfer at book value subject to various terms and conditions which are expected to be finalised subsequent to balance date.

Mining tenements acquired

The following mining tenements were acquired during the 2012 financial year:

An amount of $450,000 was paid as consideration for the purchase of the Eulogie Park project by the issue of 2,500,000 fully paid ordinary shares at $0.18.
An amount of $168,000 was paid as consideration for the purchase of the Nowa Nowa project of which $100,000 was paid in cash and 1,000,000 fully paid ordinary shares were issued at $0.068.

10. Payables – current liabilities

10. Payables – current liabilities

	2013 $	2012 $
Trade creditors	321,567	92,011
Accrued expenses	100,451	155,418
PAYG and superannuationpayable	14,564	5,200
GSTpayable	338	335
	436,920	252,964

11. Provisions – liabilities

11. Provisions – liabilities

	2013 $	2012 $
Current
Annual leave	48,907	33,688
Non-current
LongService Leave	22,356	10,816

12. Contributed equity

12. Contributed equity

	2013 $	2012 $
Share capital

115,892,475 fully paid ordinaryshares(2012: 68,807,419)	10,960,725	8,364,980
Fully paid ordinary shares carry one vote per share and carry the right to dividends.


Share capital applications received	-	19,278

Options on issue

Nil(2012: 5,000,000)	-	5,000

Share issue costs	(357,563)	(357,563)

	10,603,162	8,031,695

42 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

==> picture [487 x 9] intentionally omitted <==


	Number	$

Movements in ordinary shares on issue

At 1 July 2011	65,307,419	7,846,980

Shares issued forpurchase of tenements (i)	2,500,000	450,000
Shares issued forpurchase of tenements (ii)	1,000,000	68,000

At 30 June 2012	68,807,419	8,364,980

Shares issued (iii)	23,028,507	1,266,568
Shares issued (iv)	22,843,106	1,256,371
Shares issued (v)	1,213,443	72,806

At 30 June 2013	115,892,475	10,960,725

(i) The Company issued 2,500,000 shares at $0.18 as consideration for the acquisition of the Eulogie Park project in August 2011 (refer note 9).

(ii) The Company issued 1,000,000 shares at $0.068 as consideration for the acquisition of the Nowa Nowa project in February 2012 (refer note 9).

(iii) The Company issued 23,028,507 shares at $0.055 under its pro-rata non-renounceable Entitlement Offer.

(iv) The Company issued 22,843,106 shares at $0.055 being the shortfall for its pro-rata non-renounceable Entitlement Offer mentioned above in (iii)
(v) The Company issued 1,213,443 shares at $0.06 to a creditor as settlement for services provided.


	Number	$

Movements in options on issue
At 1 July 2011	5,000,000	5,000
Expired	-	-
At 30 June 2012	5,000,000	5,000
Expired (i)	(5,000,000)	(5,000)
At 30 June 2013	-	-

(i) 5,000,000 options issued in January 2008 expired on 19 December 2012.

An additional 8,400,000 options are on issue under Share based payments (Note: 14).

Terms and conditions of contributed equity

Ordinary shares

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

Options

Options do not carrying voting rights or rights to dividend until options are exercised.

43 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

==> picture [487 x 9] intentionally omitted <==

13. Accumulated losses

13. Accumulated losses

	2013 $	2012 $
Balance at the beginningofperiod	2,941,825	2,012,355
Operatingloss after income tax expense	1,157,557	929,470
Expired option value transferred to Accumulated Losses	(114,566)	-
Balance at the end ofperiod	3,984,816	2,941,825

14. Reserves/share-based payments

Reserves

Reserves

10.96	2013 $	2012 $
Balance at 1 July	434,675	328,580
Share-basedpayment expense duringthe financialyear	28,860	106,095
Expired option value transferred to Accumulated Losses	(114,565)	-
Balance at 30 June	348,970	434,675

The share-based payment plans are described below. There have been no cancellations or modifications to any of the plans during 2013 and 2012.

Types of share-based payment plans

Share-based payments

An Employee Share Option Plan (ESOP) has been established where selected officers and employees of the Company can be issued with options over ordinary shares in Eastern Iron Limited. The options, issued for nil consideration, will be issued in accordance with a performance review by the Directors. The options cannot be transferred and will not be quoted on the ASX. There have been 1,350,000 options granted under the Plan as at the date of this report.

Summary of options granted by the parent entity


	2013 no.	2012 no.
Outstandingat the beginningof theyear	4,700,000	3,050,000
Granted duringtheyear	3,700,000	1,650,000
Forfeited duringtheyear	-	-
Exercised duringtheyear	-	-
Expired duringtheyear	-	-
Outstandingat the end of theyear	8,400,000	4,700,000

The outstanding balance as at 30 June 2013 is represented by:

1,650,000 options exercisable at $0.18, expiry 23 November 2013
1,850,000 options exercisable at $0.20, expiry 23 November 2013
1,200,000 options exercisable at $0.18, expiry 9 March 2015
3,700,000 options exercisable at $0.10, expiry 23 November 2015

44 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

==> picture [487 x 9] intentionally omitted <==

Option pricing model and terms of options

The following table lists the inputs to the options model and the terms of options granted:

	Number of options issued				Risk- free rate
								Model used
Grant date		Exercise price	Expiry date	Expected volatility		Expected life years	Estimated fair value

Mar 10	1,200,000	$0.18	9 Mar 15	104.16%	5.01%	5	$0.0712	Binomial	(a)
Sep10	150,000	$0.20	23 Nov 13	106.99%	4.87%	3	$0.0695	Binomial	(b)
Nov 10	1,700,000	$0.20	23 Nov 13	106.99%	4.87%	3	$0.0695	Binomial	(c)
Nov 11	1,650,000	$0.18	23 Nov 13	146.61%	3.64%	2	$0.0643	Binomial	(d)
Nov 12	3,250,000	$0.10	23 Nov 15	60.44%	2.38%	3	$0.0078	Binomial	(e)
Jan 13	450,000	$0.10	23 Nov 15	60.44%	2.38%	3	$0.0078	Binomial	(f)

(a) 1,200,000 options were issued to Greg De Ross. 600,000 options vested on grant date and 600,000 vested on 9 March 2011.
(b) 150,000 options were issued to a consultant. The options vested on grant date.
(c) 1,700,000 options were issued to Directors and approved by shareholders at the AGM held in November 2010. The
options vested on grant date.
(d) 1,650,000 options were issued to Directors and approved by shareholders at the AGM held in November 2011. The
options vested on grant date.
(e) 3,250,000 options were issued to Directors and approved by shareholders at the AGM held in November 2012. The options vested on grant date.
(f) 450,000 options were issued to a creditor as settlement for services provided. The options vested on grant date.

Weighted average disclosures on options

2013
	2012

Weighted average exerciseprice of options at 1 July $0.19	$0.19
Weighted average exerciseprice of optionsgranted during period $0.10	$0.18
Weighted average exerciseprice of options outstandingat 30 June $0.15	$0.19
Weighted average exerciseprice of options exercisable at 30 June $0.15	$0.19
Weighted average contractual life 1.47years	1.73years
Range of exerciseprice $0.10 -$0.20	$0.18 -$0.20

15. Earnings per share

15. Earnings per share
2013
	2012

Netprofit/(loss)used in calculatingbasic and dilutedgain/(loss) per share (1,157,557)	(929,470)
Number	Number
Weighted average number of ordinary shares outstanding during the year used in calculation of basic EPS 108,995,168
	67,841,666

Centsper share	Centsper share
Basic earnings(loss) per share (1.06)	(1.37)
Diluted earnings(loss) per share (1.06)	(1.37)

45 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

==> picture [487 x 9] intentionally omitted <==

16. Key management personnel

Key management personnel compensation

The aggregate compensation made to key management personnel of the Company is set out below:


	2013 $	2012 $
Short term employee benefits	551,440	557,701
Post-employment benefits	41,550	39,897
Other longterm benefits	-	-
Termination benefits	-	-
Share-basedpayments	25,350	106,095
	618,340	703,693

Shareholdings of key management personnel

Fully paid ordinary shares held in Eastern Iron Limited

			Received on exercise of options no.
	Balance at 1 July no.	Granted as compensation no.		Net other change no. *	Balance at 30 June no.

2013
S Gemell	-	-	-	544,769	544,769
G De Ross	45,000	-	-	30,000	75,000
W Corbett	75,000	-	-	242,000	317,000
G Jones	698,975	-	-	465,984	1,164,959
I Polovineo	-	-	-	50,000	50,000
A Critchlow	-	-	-	22,883,106	22,883,106
M Lilley	-	-	-	-	-
G Goodacre	640,000	-	-	535,000	1,175,000
	1,458,975	-	-	24,750,859	26,209,834
2012
S Gemell	-	-	-	-	-
G De Ross	-	-	-	45,000	45,000
W Corbett	75,000	-	-	-	75,000
G Jones	698,975	-	-	-	698,975
I Polovineo	-	-	-	-	-
M Lilley	-	-	-	-	-
G Goodacre	480,000	-	-	160,000	640,000
	1,253,975	-	-	205,000	1,458,975

*On market trade and Shares issued as part of 2 for 1 pro-rata non-renounceable Entitlement Offer

46 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

==> picture [487 x 9] intentionally omitted <==

Option holdings of key management personnel

Share options held in Eastern Iron Limited

		Granted as compensa tion no.					Vested but not exercisa ble no.	Vested and exercisa ble no.	Options vested during year no.
					Balance at 30 June no.	Balance vested at 30 June no.
	Balance at 1 July no.		Exerci sed no.	Net other change no. *

2013
S Gemell	450,000	450,000	-	-	900,000	900,000	-	900,000	450,000
G De Ross	1,800,000	1,000,000	-	-	2,800,000	2,800,000	-	2,800,000	1,000,000
W Corbett	450,000	450,000	-	-	900,000	900,000	-	900,000	450,000
G Jones	450,000	450,000	-	-	900,000	900,000	-	900,000	450,000
I Polovineo	450,000	450,000	-	-	900,000	900,000	-	900,000	450,000
A Critchlow	-	450,000	-	-	450,000	450,000	-	450,000	450,000
M Lilley	150,000	-	-	-	150,000	150,000	-	150,000	-
G Goodacre	650,000	-	-	-	650,000	650,000	-	650,000	-
	4,400,000	3,250,000	-	-	7,650,000	7,650,000	-	7,650,000	3,250,000
2012
S Gemell	300,000	150,000	-	-	450,000	450,000	-	450,000	150,000
G De Ross	1,200,000	600,000	-	-	1,800,000	1,800,000	-	1,800,000	600,000
W Corbett	300,000	150,000	-	-	450,000	450,000	-	450,000	150,000
G Jones	300,000	150,000	-	-	450,000	450,000	-	450,000	150,000
I Polovineo	-	450,000	-	-	450,000	450,000	-	450,000	450,000
M Lilley	150,000	-	-	-	150,000	150,000	-	150,000	-
G Goodacre	500,000	150,000	-	-	650,000	650,000	-	650,000	150,000
	2,750,000	1,650,000	-	-	4,400,000	4,400,000	-	4,400,000	1,650,000

*Expired options

17. Related party disclosures

Subsidiaries

The consolidated financial statements include the financial statements of Eastern Iron Limited (the Parent Entity) and the following subsidiaries:


		% Equity interest

Name	Country of incorporation	2012	2011
Queensland Iron PtyLtd	Australia	100	100
Eastern Resources PNG Limited	Papua New Guinea	100	100

Queensland Iron Pty Ltd was incorporated on 18 November 2010. Eastern Resources PNG Limited was incorporated on 21 April 2009.

Transactions with other related parties

PlatSearch NL

PlatSearch NL (PlatSearch) is a 45.3% shareholder of Eastern Iron. The Company engaged PlatSearch to provide the technical services of Mr Greg Jones with payments totalling $9,367 for the year ended 30 June 2013 (2012: $Nil).

The Company has paid PlatSearch rent of $25,500 (2012: $24,420) for the financial year ended 30 June 2013 which includes reimbursement of office costs. The contract with PlatSearch is based on normal commercial terms and conditions.

47 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

==> picture [487 x 9] intentionally omitted <==

On 6 May 2013 Eastern Iron entered into a loan agreement with PlatSearch NL for $2,000,000 based on normal commercial terms. The repayment date of the loan was no longer than 6 months from the drawndown date and the interest rate payable on the loan was 8% p.a. The loan was repaid to PlatSearch on 13 May 2013 together with interest of $3,507.

18. Auditors’ remuneration

18. Auditors’ remuneration

	2013 $	2012 $
Total amounts receivable bythe current auditors of the Companyfor:
Audit of the Company’s accounts	23,000	19,900
Other services	-	-
	23,000	19,900

19. Joint ventures

The Company is a party to two joint venture agreements to explore for iron ore. Under the terms of the agreements the Company will be required to contribute towards the exploration and other costs in the Queensland JV if it wishes to maintain or increase its percentage holdings. The joint ventures are not separate legal entities. There are contractual arrangements between the participants for sharing costs and future revenues in the event of exploration success. There are no assets and liabilities attributable to the Company at the balance date resulting from these joint ventures, other than exploration expenditure costs carried forward as detailed as in Note 9.

Percentage equity interests in joint ventures at 30 June 2013 were as follows:

Percentage equity interests in joint ventures at 30 June 2013 were as follows:

Percentage interest 2013	Percentage interest 2012
New South Wales
Eastern Tenement Block(4 Exploration Licences) 49%	49%
Western Tenement Block(13 Exploration Licences) 100%	100%

Queensland

Hawkwood – EFE can earn 80% 0%	0%

20. Financial report by segment

The operating segments identified by management are as follows:

Exploration projects funded directly by Eastern Iron Limited (“Exploration”)

Regarding the Exploration segment, the Chief Operating Decision Maker (the Board of directors) receives information on the exploration expenditure incurred. This information is disclosed in Note 9 of this financial report. No segment revenues are disclosed as each exploration tenement is not at a stage where revenues have been earned. Furthermore, no segment costs are disclosed as all segment expenditure is capitalised, with the exception of expenditure written off which is disclosed in Note 9.

Financial information about each of these tenements is reported to the Managing Director on an ongoing basis.

Corporate office activities are not allocated to operating segments as they are not considered part of the core operations of any segment and comprise of the following:

Interest revenue.
Corporate costs.
Depreciation and amortisation of non-project specific property, plant and equipment.

The Group’s accounting policy for reporting segments is consistent with that disclosed in Note 2.

48 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

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21. Contingent liabilities

The Company has provided guarantees totalling $145,000 in respect of exploration tenements in NSW, Victoria and Queensland. These guarantees in respect of exploration tenements are secured against deposits with NSW Department of Trade and Investment – Resources and Energy, the Victorian Department of Environment and Primary Industries and Queensland Department of natural Resources and Mines and various banking institutions. Rugby Mining has been reimbursed $850 by the Company for Eastern Iron’s share of the security deposit on EPM 17099 in Queensland. The Company does not expect to incur any material liability in respect of the guarantees.

22. Financial instruments

The Board as a whole is responsible for reviewing the Company’s policies on risk oversight and management and satisfying itself that Senior Management have developed and implemented a sound system of risk management and internal control. The Company’s risk management policy has been designed to identify, assess, monitor and manage material business risks to ensure effective management of risk. These policies are reviewed regularly to reflect material changes in market conditions and the Company’s risk profile.

The main risks identified in the Company’s financial instruments are capital risk, credit risk, liquidity risk, interest rate risk and commodity price risk. Summarised below is information about the Company’s exposure to each of these risks, their objectives, policies and processes for measuring and managing risk, the management of capital and financial instruments.

Capital risk management

The Company manages its capital to ensure that it will be able to continue as a going concern. The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the Company. In order to achieve this objective, the Company seeks to maintain a sufficient funding base to enable the Company to meet its working capital and strategic investment needs.

The Board ensures costs are not incurred in excess of available funds and will seek to raise additional funding through the issue of shares for the continuation of the Company’s operations when required.

The Company considers its capital to comprise of its ordinary share capital, option reserve and accumulated losses. There were no changes in the Company’s approach to capital management during the year. The Company is not subject to externally imposed capital requirements.

Financial risk management objectives

In common with all other businesses, the Company is exposed to risks that arise from its use of financial instruments. This note describes the Company’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

There have been no substantive changes in the Company’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

The Board has overall responsibility for the determination of the Company’s risk management objectives and policies and, whilst retaining ultimate responsibility for them it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Company’s finance function. The Company’s risk management policies and objectives are designed to minimise the potential impacts of these risks on the results of the Company where such impacts may be material. The Board receives regular reports from the Financial Controller through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets. These risks include credit risk, liquidity risk, interest rate risk and commodity price risk. The Company does not use derivative financial instruments to hedge these risk exposures.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s competitiveness and flexibility. Further details regarding these risks are set out below.

49 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

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Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.

The Company mitigates credit risk on cash and cash equivalents by dealing with banks that have high credit ratings assigned by Standard and Poors. There are two counterparties for Cash and Cash equivalents which are Commonwealth Bank and Bank of Western Australia Limited. Credit risk of receivables is low as it consists predominantly of GST recoverable from the Australian Taxation Office and interest receivable from deposits held with regulated banks.

The maximum exposure to credit risk at balance date is as follows:

The maximum exposure to credit risk at balance date is as follows:

	2013 $	2012 $
Cash and cash equivalents	1,673,146	917,310
Receivables	82,592	43,055
Deposits with Government Departments and banks	145,850	118,350
	1,901,588	1,078,715

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due.

Ultimate responsibility for liquidity risk rests with the Board of Directors, who have built an appropriate risk management framework for the management of the Company’s short, medium and long-term funding and liquidity requirements. The Company manages liquidity by maintaining adequate cash reserves by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The following table details the Company’s contractual maturities of financial liabilities:

	Carrying amount $
		<12 months	1-3 years	>3 years $
Financial liabilities		$	$
2013
Payables	436,920	436,920	-	-
	436,920	436,920	-	-
2012
Payables	252,964	252,964	-	-
	252,964	252,964	-	-

50 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

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The following table details the Company’s expected maturity for financial assets:

	Carrying amount $
		<12 months	1-3 years	>3 years $
Financial assets		$	$
2013
Cash at bank and term deposits	1,673,146	1,673,146	-
Receivables	82,592	82,592	-
Deposits with banks and Government Departments	145,850
		130,000	-	15,850
	1,901,588	1,885,738	-	15,850
2012
Cashat bankand termdeposits	917,310	917,310	-
Receivables	43,055	43,055	-
Deposits with banks and Government Departments	118,350
		-	-	118,350
	1,078,715	960,365	-	118,350

Interest rate risk

The Company’s exposure to the risks of changes in market interest rates relates primarily to the Company’s cash holdings and short term deposits. These financial assets with variable rates expose the Company to cash flow interest rate risk. All other financial assets and liabilities in the form of receivables and payables are non-interest bearing. The Company does not engage in any hedging or derivative transactions to manage interest rate risk.

At balance date, the Company was exposed to floating weighted average interest rates as follows:

At balance date, the Company was exposed to floating weighted average interest rates as follows:

2013 $	2012 $
Weighted average rate of cash balances 0.35%	0.88%
Cash balances $262,104	$401,183
Weighted average rate of term deposits 3.87%	4.02%
Term deposits $1,411,042	$516,127

The Company invests surplus cash in interest-bearing term deposits with financial institutions and in doing so it exposes itself to the fluctuations in interest rates that are inherent in such a market. Term deposits are normally invested between 30 to 365 days and other cash at bank balances are at call.

The Company’s exposure to interest rate risk is set out in the table below:

		+1.0% of AUD IR	+1.0% of AUD IR	-1.0% of AUD IR	-1.0% of AUD IR
			Other equity $		Other equity $
	Carrying amount	Profit $		Profit $
Sensitivity analysis
2013
Cash and cash equivalents	1,673,146	16,731	-	(16,731)	-
Tax charge of 30%	-	(5,019)	-	5,019	-
After taxprofit increase/(decrease)	1,673,146	11,712	-	(11,712)	-
2012
Cash and cash equivalents	917,310	9,173	-	(9,173)	-
Tax charge of 30%	-	(2,752)	-	2,752	-
After taxprofit increase/(decrease)	917,310	6,421	-	(6,421)	-

The above analysis assumes all other variables remain constant.

51 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

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Commodity price risk

The Company is exposed to commodity price risk. This risk arises from its activities directed at exploration and development of mineral commodities. If commodity prices fall, the market for companies exploring for these commodities is affected. The Company does not hedge its exposures.

Net fair value of financial assets and liabilities

The carrying amount of financial assets and liabilities of the Company approximate their net fair values, given the short time frames to maturity and or variable interest rates.

23. Commitments

Exploration licence expenditure requirements

In order to maintain the Company’s tenements in good standing with the various mines departments, the Company will be required to incur exploration expenditure under the terms of each licence. The Company has commitments to expend funds towards earning or retaining an interest under its joint venture agreement with Rugby Mining Pty Ltd.


	2013 $	2012 $
Payable not later than oneyear	33,853	14,149
Payable later than oneyear but not later than fiveyears	50,000	120,000
	83,853	134,149

It is likely that the granting of new licences and changes in licence areas at renewal or expiry will change the expenditure commitment to the Company from time to time.

24. Events after the balance sheet date

The Company has previously agreed terms with 3E Steel Pty Ltd for the transfer of Eastern Iron’s remaining interests in tenements located in NSW which relate to the NSW Iron Pisolite Project. The terms include $150,000 cash to be paid at the transfer of the tenements expected to occur later in 2013.
In September 2013, the Company entered into an agreement with the Victorian Government whereby the Government would provide a grant of up to $300,000 to cover the cost of studies relating to the provision of infrastructure for the development of the Nowa Nowa project. These studies are being undertaken as part of the Feasibility Study for Nowa Nowa and it is expected that the funds will be received in early 2014.

52 > Eastern Iron Limited and its controlled entities Annual Report 2013

Notes to the Consolidated Financial Statements

For the year ended 30 June 2013

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25. Statement of cash flows

25. Statement of cash flows

	2013 $	2012 $
Reconciliation of net cash outflow from operating activities to operating loss after income tax


(a)Operating (loss)after income tax	(1,157,557)	(929,470)
Depreciation	9,927	15,721
Share basedpayments	28,860	106,095
Exploration costs expensed	1,401,611	41,765
Other – Non operatingcosts in creditors	(154,694)	48,320
Other	(771)	25,864
Change in assets and liabilities:
(Increase)/decrease in receivables	(39,537)	41,639
(Decrease)/increase in trade and other creditors	183,956	(165,555)
(Decrease)/increase inprovisions	26,759	25,612
Net cash outflow from operatingactivities	298,554	(790,009)
(b) For the purpose of the Statement of Cash Flows, cash includes cash on hand, at bank, deposits and bank bills used as part of the cash management function. The Company does not have any unused credit facilities.
The balance at 30 June 2013 comprised:
Cash assets	262,104	401,183
Bank deposits(Note: 5)	1,411,042	516,127
Cash on hand	1,673,146	917,310
26. Parent entity information Current assets Total assets Current liabilities Total liabilities Issued capital Accumulated losses Share basedpayment reserve Total shareholders’ equity Profit/(loss)of theparent entity Total comprehensive income/(loss) of theparent entity

	2013 $	2012 $
	1,755,736	960,363
	7,475,911	5,822,425
	508,183	286,652
	508,183	297,468
	10,603,162	8,031,695
	(3,984,404)	(2,941,413)
	348,970	434,675
	6,967,728	5,524,957

	(1,157,557)	(929,470)
	(1,157,557)	(929,470)

53 > Eastern Iron Limited and its controlled entities Annual Report 2013

Directors’ Declaration

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In accordance with a resolution of the Directors of Eastern Iron Limited, I state that:

In the opinion of the Directors:

(a) The financial statements and notes of the Group are in accordance with the Corporations Act 2001, including:
(i) Giving a true and fair view of the Group financial position as at 30 June 2013 and of its performance for the year ended on that date.
(ii) Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.
(b) The financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 2; and
(c) There are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.
(d) This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2013.

On behalf of the Board

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Steve Gemell Chairman

Sydney, 24 September 2013

54 > Eastern Iron Limited and its controlled entities Annual Report 2013

Independent Auditor’s Report

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55 > Eastern Iron Limited and its controlled entities Annual Report 2013

Independent Auditor’s Report

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56 > Eastern Iron Limited and its controlled entities Annual Report 2013

Shareholder Information

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Information relating to shareholders at 18 September 2013 (per ASX Listing Rule 4.10)

Ordinary shares

There were a total of 115,892,475 fully paid ordinary shares on issue.

Options

There were a total of 8,400,000 unquoted options on issue.

Substantial shareholders	Shareholding
PlatSearch NL -group	52,500,000
Mr Adrian Critchlow	22,843,106

Top 20 shareholders of ordinary shares as at 18 September 2013	Number	%
PLATSEARCH NL	40,000,000	34.52
MR ADRIAN CRITCHLOW	22,843,106	19.71
BLUESTONE 23LIMITED	12,500,000	10.79
MR CHRIS CARR & MRS BETSY CARR	2,000,000	1.73
MR NEVILLE JOHN HOLZ & MRS LYNETTE HOLZ	2,000,000	1.73
MR MALCOLMJAMESHILL	1,722,000	1.49
WARMAN INVESTMENTS PTY LTD	1,500,000	1.29
AOTEA MINERALS LTD	1,377,285	1.19
BUDBERTH PTY LTD	1,325,000	1.14
BELMONT PARK INVESTMENTS PTY LTD	1,250,000	1.08
PANORAMA RIDGE PTY LTD	1,250,000	1.08
PLANNING &PROPERTY PARTNERSPTY LTD	1,213,443	1.05
MR GREGORY FRANCIS PATRICK JONES	1,164,959	1.01
MRS FIONA LEE BUTLER	913,250	0.79
MRSANNETTESYLVIA MIZON	800,000	0.69
MR GREGORY LEE & MRS LESLEY LEE & MISS SHANNA LEE SUPER FUND A/C>
	737,500	0.64
HART FINANCIAL SERVICES PTY LTD	725,000	0.63
RIGHT ANGLE BUSINESS SERVICES PTY LTD A/C>
	650,000	0.56
DAVALIK PTY LTD	544,769	0.47
GE REVELEIGH& COPTY LTD	500,000	0.43
Total of top 20 holdings	95,016,312	82.02
Other holdings	20,876,163	17.98
Total fully paid shares issued	115,892,475	100

Distribution of shareholders
Range of shareholding	No of shareholders	Ordinary shares
1 – 1,000	23	10,787
1,001 – 5,000	60	199,921
5,001 – 10,000	90	801,805
10,001 – 100,000	297	10,791,501
100,001 – and over	67	104,088,461
	537	115,892,475

57 > Eastern Iron Limited and its controlled entities Annual Report 2013

Shareholder Information

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At the prevailing market price of $0.036 per share, there are 203 shareholders with less than a marketable parcel of $500.

There is no current on-market buy-back.

Voting rights

There are no restrictions on voting rights. On a show of hands every member present or by proxy shall have one vote and upon a poll each share shall have one vote. Where a member holds shares which are not fully paid, the number of votes to which that member is entitled on a poll in respect of those part paid shares shall be that fraction of one vote which the amount paid up bears to the total issued price thereof. Optionholders have no voting rights until the options are exercised.

Distribution of optionholders
Range of optionholding	No of optionholders	Unlisted options
1 – 1,000	-	-
1,001 – 5,000	-	-
5,001 – 10,000	-	-
10,001 – 100,000	-	-
100,001 – and over	13	8,400,000
	13	8,400,000

58 > Eastern Iron Limited and its controlled entities Annual Report 2013

Corporate Directory

Board of Directors Steve Gemell

Non-Executive Chairman Greg De Ross Managing Director

Gregory Jones Non-Executive Director

Wendy Corbett Non-Executive Director

Adrian Critchlow Non-Executive Director

Ivo Polovineo Non-Executive Director

Company Secretary Ian White

Registered Office and Place of Business Level 1, 80 Chandos Street St Leonards, NSW 2065 PO Box 956, Crows Nest NSW 1585 Phone: (+61 2) 9906 7551 Email: [email protected] Website: www.easterniron.com.au

Share Registry Boardroom Pty Limited GPO Box 3993

Sydney, NSW 2001 Phone: (+61 2) 9290 9600 Website: www. boardroomlimited.com.au

ACN 126 678 037

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EASTERN IRON LIMITED Level 1, 80 Chandos Street St Leonards, NSW 2065 Australia ACN 126 678 037

AI assistant

EASTERN RESOURCES LIMITED — Annual Report 2013

64824_rns_2013-09-23_f7b0dfac-9900-4b2c-ad9c-7e8da0af6c1f.pdf

Annual Report 2013

Contents

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Dear Fellow Shareholder,

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Highlights

Nowa Nowa

Central Queensland Iron Project

Introduction

Nowa Nowa Iron Project

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Scoping Study

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Resource Estimate

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Mining

Ore Processing

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Infrastructure

Capital Cost Estimate

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Feasibility Study

Permitting and approvals

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Central Queensland Iron Project

Eulogie (EFE 100%)

Hawkwood (EFE earning 80%)

NSW Iron Ore Project

(EFE 100%, 3E Steel Pty Ltd earning 77.5%)

Program for 2013 – 2014

Nowa Nowa

Central Queensland Iron Project

NSW Pisolite Iron Project

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Other

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Nowa Nowa, Victoria

Resource estimated at a lower cutoff of 40%.

Eulogie, Queensland

Hawkwood, Queensland

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Directors’ Report

Directors

Steve Gemell, BE Mining (Hons), FAusIMM (CP), MAIME, MMICA

Non-executive chairman of the board

Director since January 2010

Wendy Corbett, BSc, Dip Ed, MAIG

Non-executive director

Director since November 2007

Greg De Ross, BSc, FAusIMM

Managing director

Gregory Jones, BSc Hons, MAusIMM, MAIG

Non-executive director

Directors’ Report

Ivo Polovineo, FIPA

Non-executive director

Adrian Critchlow, BSc, FRSA, MAICD

Non-executive director

Glenn Goodacre, BA

Non-executive chairman of the board

Directors' interests in shares and options

Company secretary

Ian White, BBus, MBA, Grad Dip CSP, FCPA, CIA, JP

Michelle Lilley

Principal activities

Results

Dividends

Review of operations

Significant changes in the state of affairs

Significant events after the balance date

Likely developments and expected results

Shares under option or issued on exercise of options

Environmental performance

Indemnification and insurance of directors and officers

Indemnification

EASTERN RESOURCES LIMITED Annual Report 2013

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