EASTERN RESOURCES LIMITED — Capital/Financing Update 2011

Jan 18, 2011

. . . ASX Announcement

19 January 2011

EULOGIE IRON PROJECT SALE AND PURCHASE AGREEMENT SIGNED

Eastern Iron has completed due diligence and together with the vendor, RMM Capital Pty Ltd, has signed the sale and purchase agreement for the Eulogie Iron Project. Completion of the agreement is now subject only to approval by the Queensland Government of the transfer of the related project tenement.

Eulogie Magnetite Project

The Eulogie project is located 23km south of Mount Morgan in Central Queensland, close to world class bulk tonnage infrastructure including sealed roads and the main Moura – Gladstone railway line, which is part of the Central Queensland coal network leading to the expanding deepwater export port of Gladstone.

Iron-bearing magnetite with accessory titanium and vanadium is concentrated within shallow dipping (30-40 degrees), gabbroic layers (ferrigabbro) up to 100m thick within a layered igneous complex. The geology and nature of the ferrigabbro layers is almost identical to that at Hawkwood, Eastern Irons other Central Queensland iron project located some 220km to the south.

In 1989 Thiess Contractors Pty Ltd examined the project as a possible source of iron ore for a proposed steel plant located in Gladstone. A pre-feasibility study was completed and included 30 reverse circulation and cored drill holes. Based on the limited drilling Thiess estimated a resource, which was not reported under the guidelines of the JORC code. Theiss identified potential upside to this estimate beyond the areas tested by drilling.

Thiess also completed some preliminary magnetic separation testwork which at a relatively coarse final grind size of 100 micron produced high grade iron ore concentrate samples containing 5864% Fe, 2-5% TiO2 and significantly, an average 0.87% V2O5, a valuable additive to high quality steels.

Eastern Iron believes that it may be possible, based on the existing drill coverage, to prepare a resource estimate that can be reported in accordance with the 2004 JORC Code as well as investigating the exploration upside within areas untested by Theiss. Furthermore, the excellent location of Eulogie, close to operating, world class infrastructure, is a great addition to the company’s growing portfolio of quality iron ore prospects within its Central Queensland Iron Project.

Sale Terms

In consideration of acquiring a 100% interest in the Eulogie project and associated Mineral Development Licence, Eastern Iron will issue RMM Capital Pty Ltd, or its nominee 2,500,000 shares in Eastern Iron Limited. These shares will be issued upon receipt of Queensland Government approval of the MDL transfer. There remains an overriding 2.5% gross proceeds royalty on production from the MDL which is payable to the original vendors of the property.

Level 1, 80 Chandos Street St Leonards, NSW 2065 PO Box 956, Crows Nest, NSW 1585 Ph: 02 9906 7551 Fax: 02 9906 5233 www.easterniron.com.au

…iron’s new horizon

…ASX Announcement

Eastern Iron Limited

Central Queensland Iron Project

The acquisition of the Eulogie project provides Eastern with a potential additional source of iron ore in the Central Queensland area supplying a common export point at Gladstone Port. Eulogie is ideally placed with respect to infrastructure and potentially could be brought on stream at relatively low capital cost and in a short time frame.

Investor Information

Eastern Iron is exploring magnetite iron projects at Hawkwood, Eulogie and Auburn in the Central Queensland area. Further resource drilling and metallurgical studies to be carried out in 2011 will assist Eastern in assessing the potential to develop a large scale iron export operation in an area already well serviced by existing infrastructure. (Figure 1).

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Figure 1 - Location of Eastern Iron’s Hawkwood and Eulogie Projects

Further information, previous Eastern Iron announcements and exploration updates are available at the News and Reports tab on the Company’s website - www.easterniron.com.au

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Mr Greg De Ross, Managing Director Mob: 0417 711 274

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 CEO 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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…iron’s new horizon