EASTERN RESOURCES LIMITED — Interim / Quarterly Report 2009

Jul 28, 2009

. . . Quarterly Activities Report for the period ending 30 June 2009

Highlights from …iron’s new horizon

• All assay results from the drilling conducted at the Hutch JV have now been received, with broad intersections of iron-bearing gravels intersected. Most intersections are from surface and represent the primary grade of iron-rich gravels, prior to magnetic separation upgrade. Highlights include:

• 26m @ 7.07% Fe (0-26m) incl. 1m @ 20.6% Fe (21-22m) - Hutch Prospect 24m @ 7.59% Fe (0-14m) incl. 8m @ 12.5% Fe (16-24m) - Hutch Prospect

• The company is continuing to process samples from previous drilling campaigns with the Hutch JV being the main focus of beneficiation tests during the Quarter.

• Hellman and Schofield Pty Ltd has been engaged to provide resource estimations for the Belah Tank and other prospects in both the Cobar and Main Line project areas.

• A scoping study to determine broad economic, mining, metallurgical, transport and marketing issues associated with development of the maghemite projects has commenced and is planned to be completed by the end of October.

• The company met with several delegations from potential project partners and has reviewed a number of iron ore project opportunities in Eastern Australia.

• After trimming net cash outflow during the June quarter to $143,000, Eastern Iron had $3.3 million in cash at 30 June.

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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

…Quarterly Report – June 2009

Eastern Iron Limited

EXPLORATION

Cobar Project - Hutch JV Assay results

The Hutch JV between Eastern Iron Limited and Drysdale Resources (a private unlisted company) covers alluvial minerals, particularly iron, in Exploration Licence 6751. The JV area contains an extensive iron-bearing palaeochannel network, close to Cobar road and rail infrastructure (Figure 1). Exploration Licence 6751 has an area of 295 square kilometres and interpretation of aeromagnetic data by Eastern Iron indicates that 35 linear kilometres of palaeochannel target exist within the licence. These channels form part of a major palaeochannel system being explored and drilled by Eastern Iron.

To date, Eastern Iron has completed 1,104 metres of Air Core drilling in 45 holes (EIAC0498-0542) with iron pisolite-bearing gravels intersected at all areas drill tested. The Hutch JV area is approximately 30 km north of Cobar via a sealed road and parts of the palaeochannel system tested with the drilling are within 18 km of the nearest operating rail line.

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Assay results in the JV area are generally of a lower grade than those in nearby areas, but intersections are considerably thicker. Unlike many other Eastern Iron prospects, the palaeochannel system at Hutch is very deep, with an average depth of 20 metres, whereas iron-bearing channels at prospects such as Belah have an average depth of 8 metres. Results are variable with some channels containing large quantities of magnetic pisolite (Table 1).

Figure 1: Hutch JV drilling

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…iron’s new horizon

…Quarterly Report – June 2009

Eastern Iron Limited

MAGNETIC SEPARATION TEST WORK

Samples collected during the scout drilling phase at Hutch (and others reported in ASX announcement, 16 February 2009) have been subjected to magnetic separation testing and subsequent analysis of bulk oxide and minor element analysis by XRF methods.

To date, samples have been processed from 10 prospect areas and the program is approximately 50% complete with prospects such as McGraw and Techno yet to be processed. On an individual metre basis, magnetic product recovery generally varies between 5 and 30% product and there seems to be little correlation between head grade of gravel and quality of magnetic iron product. With regard to the average magnetic iron product after magnetic separation, there is significant variability from one area to another. It is becoming clear that while some areas can produce grades greater than 50% iron (up to 54%), the grade from some areas will be typically 35-40% iron using only the simple, one pass, dry magnetic separation technique.

Eastern Iron commissioned the University of Western Sydney to provide Scanning Electron Microscope (SEM) imagery and analysis of pisolite samples and concentrates from a number of prospect areas. The major result of the study is that maghemite-bearing pisolites are dominantly composed of iron (Fe2O3 as maghemite), silica (SiO2 as free quartz) and lesser alumina (Al2SiO3 as muscovite) with all other minerals and contaminants occurring in only trace amounts.

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Figure 2. Scanning Electron Microscope (SEM) imagery of pisolite samples from the Shaun prospect. Black lines are desiccation cracks and small dark grey rounded areas in the pisolite represent quartz contamination whilst elongated darker material in the lower right pisolite is muscovite.

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…iron’s new horizon

…Quarterly Report – June 2009

Eastern Iron Limited

Continuing Work

Further fine grinding, floatation and pyro-metallurgical test work programs are being considered and joint funding of these activities will be pursued with potential customers.

A scoping study to determine broad economic, mining, metallurgical, transport and marketing issues associated with development of the maghemite projects has commenced and is planned to be completed by the end of October. Eastern Iron has secured the services of an experienced project engineer to manage the study and will use Hellman and Schofield Ltd to generate resource estimates in project areas where there has been sufficient drilling for use in the study.

Joint venture negotiations are continuing with interested groups and proposals with potential to add value to Eastern Iron are currently being evaluated.

Cash Position

The Company had over $3.3 million in cash at 30 June 2009 and no borrowings. Eastern Iron has already completed many of the high cost elements of its exploration projects. Ongoing work to conduct ore resource estimations and negotiations with potential partners is expected to be relatively low cost.

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

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Peter M Buckley, BSc (Hons), who is a member of the Australian Institute of Geoscientists. Peter M Buckley is Managing Director of Eastern Iron Limited and a full-time employee of PlatSearch NL. Peter M Buckley 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”. Peter M Buckley consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Investor Information

Mr Glenn Goodacre, Chairman, 0419 877 734 Mr Peter Buckley, Managing Director, 0405 513 993 Website: www.easterniron.com.au

ASX:EFE

*Note:

These exploration targets are reported according to Clause 18 of the JORC Code. This means that the potential quantity and grade is conceptual in nature and that considerable further exploration, particularly drilling, is necessary before any identified mineral resource can be reported. It is uncertain if further exploration will lead to larger, smaller or any mineral resource.

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… the eastern dragon

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…iron’s new horizon

…Quarterly Report – June 2009

Eastern Iron Limited

Table 1: Drilling results Hutch JV

Hole ID	East GDA94 Zone 54	North GDA94 Zone 54	Depth (metres)	Depth (metres)	Prospect	Intersection
EIAC0498	401080	6549800		21	Hutch	14m @ 6.94% Fe (0-14m)
EIAC0499	401160	6549875		21	Hutch	17m @ 6.53% Fe (0-17m)
EIAC0500	401240	6549950		21	Hutch	16m @ 8.09% Fe (0-16m)
EIAC0501	401320	6550025		21	Hutch	12m @ 6.79% Fe (0-12m)
EIAC0502	401400	6550100		12	Hutch	8m @ 8.54% Fe (0-8m)
EIAC0503	401480	6550175		15	Hutch	6m @ 5.27% Fe (0-6m)
EIAC0504	401000	6549730		18	Hutch	13m @ 5.90% Fe (0-13m)
EIAC0505	401945	6550640		9	Hutch	4m @ 5.52% Fe (0-4m)
EIAC0506	399260	6555250		33	Hutch	28m @ 5.30% Fe (0-28m)
EIAC0507	399180	6555205		33	Hutch	28m @ 5.81% Fe (0-28m)
EIAC0508	399100	6555160		33	Hutch	30m @ 5.78% Fe (0-30m)
EIAC0509	399020	6555115		30	Hutch	26m @ 7.07% Fe (0-26m) incl 1m @ 20.60% Fe (21-22m)
EIAC0510	398940	6555065		27	Hutch	21m @ 7.30% Fe (0-21m)
EIAC0511	398860	6555020		24	Hutch	16m @ 5.47% Fe (0-16m)
EIAC0512	399120	6555720		30	Hutch	24m @ 7.59% Fe (0-24m) incl 8m @ 12.51% Fe (16-24m)
EIAC0513	403880	6553375		18	Hutch	14m @ 5.02% Fe (0-14m)
EIAC0514	403960	6553420		21	Hutch	18m @ 6.89% Fe (0-18m)
EIAC0515	404040	6553465		21	Hutch	18m @ 6.11% Fe (0-18m)
EIAC0516	404120	6553550		21	Hutch	19m @ 5.99% Fe (0-19m)
EIAC0517	404200	6553550		21	Hutch	19m @ 5.48% Fe (0-19m)
EIAC0518	404280	6553595		24	Hutch	19m @ 6.41% Fe (0-19m)
EIAC0519	403960	6553750		30	Hutch	26m @ 6.15% Fe (0-26m)
EIAC0520	403800	6553940		27	Hutch	23m @ 4.85% Fe (0-23m)
EIAC0521	403640	6554130		27	Hutch	21m @ 5.91% Fe (0-21m)
EIAC0522	403480	6554320		21	Hutch	15m @ 6.87% Fe (0-15m)
EIAC0523	403320	6554510		21	Hutch	16m @ 5.87% Fe (0-16m)
EIAC0524	403160	6554705		27	Hutch	21m @ 6.48% Fe (0-21m)
EIAC0525	404760	6552800		27	Hutch	19m @ 4.88% Fe (0-19m)
EIAC0526	405200	6552765		24	Hutch	19m @ 5.82% Fe (0-19m)
EIAC0527	405280	6552785		27	Hutch	23m @ 6.86% Fe (0-23m)
EIAC0528	405360	6552808		24	Hutch	19m @ 6.00% Fe (0-19m)
EIAC0529	405440	6552850		21	Hutch	16m @ 6.50% Fe (0-16m)
EIAC0530	405520	6552900		15	Hutch	12m @ 5.26% Fe (0-12m)
EIAC0531	405600	6552950		15	Hutch	11m @ 5.82% Fe (0-11m)
EIAC0532	405680	6552995		12	Hutch	7m @ 4.80% Fe (0-7m)
EIAC0533	405755	6553050		9	Hutch	5m @ 4.20% Fe (0-5m)
EIAC0534	395920	6547500		33	Hutch	27m @ 3.71% Fe (0-27m)
EIAC0535	395929	6547700		36	Hutch	33m @ 3.43% Fe (0-33m)
EIAC0536	395935	6547900		36	Hutch	31m @ 3.40% Fe (1-32m)
EIAC0537	395930	6548100		33	Hutch	30m @ 3.85% Fe (0-30m)
EIAC0538	395935	6548300		36	Hutch	33m @ 3.75% Fe (0-33m)
EIAC0539	395940	6548500		36	Hutch	34m @ 3.78% Fe (0-34m)
EIAC0540	395940	6548700		30	Hutch	28m @ 2.94% Fe (0-28m)
EIAC0541	395945	6548900		30	Hutch	27m @ 3.23% Fe (0-27m)
EIAC0542	395945	6549100		33	Hutch	28m @ 3.51% Fe (0-28m)

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…iron’s new horizon