EASTERN RESOURCES LIMITED — Capital/Financing Update 2012

Dec 5, 2012

ASX Announcement - December 2012

SCOPING STUDY SUCCESSFULLY COMPLETED AT NOWA NOWA IRON PROJECT VICTORIA – MOVING TO MINE FEASIBILITY STAGE

• The Eastern Iron Board has reached a decision to advance the Nowa Nowa iron project to the mine feasibility stage.

• Scoping Study outcomes indicate robust economics for development of a mining operation based on the Five Mile resource.

• Base case includes:

  • Low CAPEX of $37 million producing an average 0.8Mtpa of high grade +61% Fe “fines” product over an initial 8 year mine life.

  • FOB cost of approximately $70/t with life-of-mine revenues over $800 million.

• Excellent local infrastructure and port facility contribute to low capital cost with MOU already in place with port operators.

• Feasibility stage will include further drilling at Five Mile deposit with potential to extend resource base.

Eastern Iron Limited (ASX:EFE) is pleased to announce completion of scoping studies at its 100% owned Nowa Nowa iron project in Eastern Victoria. Outcomes of the study indicate the potential for development of a mining operation based on a previously announced resource of high grade magnetite and hematite iron.

The scoping study was completed by project delivery specialists, Engenium, with input from Engenium’s 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 contract mining operator. ROM ore would then be beneficiated at site by crushing to <1.6mm and wet low intensity magnetic separation (LIMS) to produce average annual production of 0.8Mtpa of “fines” product grading +61% Fe. Iron ore product will be loaded into standard B-double road haulage trucks at the mine site and trucked to a port on the south side of Two Fold Bay south of Eden for loading onto bulk capable vessels for export.

==> picture [596 x 41] intentionally omitted <==

----- Start of picture text -----

ABN 70 126 678 037
----- End of picture text -----

==> picture [99 x 55] intentionally omitted <==

Eastern Iron’s Managing Director, Greg De Ross, commented: “We are pleased with the encouraging outcome of the initial scoping study delivered on time and within budget, and in a short time frame since we acquired the Nowa Nowa iron project. The economics of the project are robust and we will be moving quickly to undertake a feasibility study with initial activity due to commence shortly.

“Significant exploration upside potential remains at the project and we will be continuing activity to build on the potential JORC resource base at the Five Mile deposit and other regional targets at the project area.

“The exceptionally low capital cost is achieved as a result of the excellent infrastructure available in the project area including sealed roads, power and an export port with an operating bulk loading facility at Eden.

“In addition, the majority of the workforce is expected to be drawn from the local population living in the several towns and villages that exist within a 30km radius of the project site. We also look forward to engaging with the local community for what could be an important development for eastern Victoria”, Mr De Ross added.

A summary of the main outcomes of the study base case are shown in the table below:

	Units
Mining rate	Max 4.8Mtpa ore and waste
Life of Mine waste: ore ratio.	2.3:1
Life of Mine average ironproduct shipped	803,000 tpa
Mass recovery toproduct	75%
Life of Mine average FOB cost ofproduction	$70/tproduct
Capital cost inc 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.

Potential Project Enhancements

During the feasibility stage the company will investigate various possible enhancements to the development base case.

These include:

• Potential to expand total resource and therefore extend the life of the operation. The Five Mile deposit remains open in several directions including to the north where overburden is thinner. Increased resource in this area would extend the life of the operation as well as contributing production to a lower strip ratio starter pit.

Page | 2

ASX Announcement – December 2012

==> picture [99 x 55] intentionally omitted <==

• Higher iron recoveries. Recent testwork has indicated that whilst wet low intensity separation gives a better quality product with iron recoveries of up to 85%, significant amounts of iron report to the non-magnetic tail as hematite. Various methods will be trialled to determine an effective means of recovering this material to be blended back into the product stream thereby increasing the total amount of product shipped. As this has already been mined and crushed it has the potential to contribute significantly to the economics of the operation.

Next Steps

The program over the next 12 months will consist of further resource drilling at Five Mile which will be designed to investigate extensions to the resource as well as recovering core samples for further metallurgical optimisation studies and testing for ore variability.

Following the completion of the metallurgical studies the company will engage a suitably qualified engineering group to undertake a feasibility study including final capital and operating cost estimates.

Over the coming months Eastern iron will also be seeking to formalise arrangements with the port operators at Eden.

The Company aims to progress the feasibility study over the next 12 months along with commencement of community consultation and the permitting and approval process. To that end, the company will shortly engage a suitably qualified group to undertake preliminary baseline studies as well as ecological studies and development of a cultural heritage plan.

About Nowa Nowa

The Nowa Nowa project is 100% owned by Eastern Iron and is located in eastern Victoria some 50km east of the regional centre of Bairnsdale. The Company is investigating the potential to mine high grade iron ore from several magnetite deposits located north of the village of Nowa Nowa and close to the Princes Highway. During 2012 Eastern Iron has completed preliminary drilling and metallurgical testing culminating in a published resource totalling 11.55Mt @ 49.8%Fe (see ASX announcement dated 4 September 2012) and a completed scoping study.

Page | 3

ASX Announcement – December 2012

==> picture [99 x 55] intentionally omitted <==

==> picture [452 x 303] intentionally omitted <==

INVESTOR INFORMATION

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

==> picture [76 x 41] intentionally omitted <==

Mr Greg De Ross Managing Director Mob: 0417 711 274

The information in this report that relates to Exploration Results, Mineral Resources and 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 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”. Mr De Ross consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

ASX: EFE

For enquiries on your shareholding or change of address please contact: Boardroom Limited GPO Box 3993, Sydney NSW 2001 Phone: (02) 9290 9600

Page | 4

ASX Announcement – December 2012