EASTERN RESOURCES LIMITED — Interim / Quarterly Report 2009

Apr 28, 2009

. . . Quarterly Activities Report for the period ending 31 March 2009

Highlights from …iron’s new horizon

• Scout drill testing was completed in the Hutch joint venture area with 1,104 metres of air core drilling in 45 holes. Iron-bearing gravels were intersected at all areas drill tested.

• In February, Eastern Iron released a summary of all results from the scout drilling program (ASX announcement, 16 February 2009). Drilling results have identified twelve large channel iron deposit exploration targets in NSW with iron grades comparable to pre-concentrate grades at some major West and South Australian magnetite deposits. Most Eastern Iron drill intersections are from the surface, in shallow, free-digging gravels that can be mined without the need for significant waste stripping and blasting.

• Magnetic separation upgrade test work and iron ore assay results have been received for a number of prospects. Highlights include:

Belah Tank Prospect - 52.4% Fe from EIAC178 (2-3 metres down hole)

Gromit Prospect - 53.8% Fe from EIAC396 (5-6 metres down hole)

Wendoline Prospect - 49.2% Fe from EIAC329 (5-6 metres down hole)

• Analysis of results of XRF bulk oxides indicates that there is regional variability of iron and contaminant contents of magnetic pisolite between prospect areas. This may result in tailored beneficiation pathways for ores from different prospects.

• Assay results of magnetic separation tests for the trial resource definition drilling at Belah Tank are in line with previously reported results which indicated that a single pass magnetic separation could produce grades of ~50% Fe.

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Suite 3, 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 – March 2009

Eastern Iron Limited

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Figure 1. Location of Eastern Iron, Cobar Project licence areas and the Hutch joint venture area.

EXPLORATION

Cobar Project - Hutch Joint Venture Drilling

The Hutch joint venture area is approximately 30 kilometres north of Cobar via a sealed road with parts of the palaeochannel system some 18 kilometres from the nearest operating rail line. The joint venture with Drysdale Resources (Drysdale) (a private unlisted company) covers alluvial material, particularly iron, in EL 6751. Drysdale retains the rights to base and precious metals in basement rocks.

Scout drill testing of an extensive iron-bearing palaeochannel network (Figures 1 and 2) was completed in the joint venture area, where access issues had previously delayed work. Air core drilling of 1,104 metres was completed in 45 holes (EIAC0498-0542) and iron pisolite-bearing gravels were intersected in all areas tested. Samples have been submitted for bulk (preconcentrate) iron content and selected samples will be subjected to magnetic separation test work and bulk iron quality analysis.

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…iron’s new horizon

…Quarterly Report – March 2009

Eastern Iron Limited

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Figure 2. Hutch Joint Venture drilling

MAGNETIC SEPARATION TEST WORK

Samples collected during the major scout drilling phase (reported in ASX announcement, 16 February 2009) have been subjected to magnetic separation testing and subsequent analysis of bulk oxide and minor elements by XRF methods. Drill samples have been collected in bags containing cuttings for individual metres of each drillhole. These samples are screened and then passed over a barrel magnetic separator (Figure 3). This relatively simple processing step aims to replicate a low cost, bulk mining operation and results in a rapid upgrade of iron content and reduction in contaminant mineralogy, without the need for crushing or grinding.

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…iron’s new horizon

…Quarterly Report – March 2009

Eastern Iron Limited

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Figure 3. Barrel magnetic separator, processing drill samples at MetCon Laboratories. Note the magnetic product adheres to the barrel and is deposited in a separate sample bin to the discarded, low iron, non-magnetic component.

To date, 1,509 samples have been processed from nine prospect areas. Table 1 shows the best XRF results of magnetic products at each prospect as well as an average of all samples taken at that prospect. On an individual metre basis, magnetic product recovery generally varies between 5% and 30% with apparently little correlation between head grade of gravel and quality of magnetic iron product. One result of the work to date has been the identification of possible regional trends in iron and contaminant mineralogy. For instance, samples from the Wendoline prospect have a relatively low alumina content which does not vary between samples. However, iron and silica levels at the Wendoline prospect vary between pisolite samples and also along the length of the palaeochannels. Generally, magnetic product has a simple mineralogy of iron, silica and alumina with very minor amounts of other contaminants, such as phosphorous or sulphur. The recognition of varying mineralogy between prospect areas may assist in developing a “tailored” approach to beneficiation for individual prospect areas.

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…iron’s new horizon

…Quarterly Report – March 2009

Eastern Iron Limited

Continuing Work

Prospect	Drillhole	Interval(m)	Interval(m)				XRF Assay (%)	XRF Assay (%)	XRF Assay (%)					*LOI 1000
		From	To	Fe	SiO2	Al2O3	TiO2	Cao	Mn	P	S	MgO	K2O
Belah Tank EL 6706	EIAC0178	2	3	52.4	12.5	7.5	0.72	0.10	**0.02 **	0.05	0.09	0.23	**0.84 **	2.08
	Average of659 samples			47.4	16.6	9.2	0.84	0.10	0.03	0.04	0.05	0.29	0.95	3.38
Carpenters EL 6706	**EIAC0061 **	0	1	45.0	18.4	10.9	0.96	0.16	**0.01 **	**0.04 **	0.03	**0.31 **	1.58	**2.92 **
	Average of 15 samples			41.9	19.8	12.2	1.08	0.11	0.03	0.02	0.02	0.46	1.58	4.25
Power Line EL 6706	**EIAC0032 **	4	5	48.2	18.1	7.7	0.85	**0.07 **	0.00	0.03	**0.02 **	0.27	0.76	2.88
	Average of54samples			42.8	22.8	9.2	0.91	0.09	0.03	0.03	0.04	0.38	1.05	3.53
Gadsbys Tank EL 6706	EIAC0041	7	8	48.8	14.5	8.4	1.16	**0.04 **	**0.02 **	0.03	**0.02 **	**0.31 **	0.77	**4.57 **
	Average of 47samples			42.9	22.2	9.4	0.93	0.08	0.03	0.03	0.03	0.37	1.08	3.85
Gromit EL6960	EIAC0396	5	6	53.8	11.6	6.2	0.88	0.08	0.00	**0.02 **	0.03	0.29	0.38	3.17
	Average of 198 samples			42.3	25.5	8.5	0.64	0.09	0.02	0.04	0.04	0.36	1.08	2.74
Quartermaine EL6953	EIAC0356	4	5	49.2	16.9	7.4	1.12	0.11	**0.01 **	0.03	0.03	0.28	0.66	2.60
	Average of 264samples			37.9	31.2	8.4	0.79	0.10	0.01	0.04	0.03	0.36	1.28	3.13
Shaun EL 6958	**EIAC0081 **	5	6	44.2	24.0	7.3	**0.64 **	0.11	**0.01 **	0.03	0.03	0.28	0.68	3.25
	Average of 100 samples			37.7	32.9	7.3	0.55	0.11	0.01	0.06	0.05	0.34	1.04	3.20
Wendoline EL 6957	EIAC0329	5	6	49.2	17.4	6.4	**0.91 **	**0.07 **	0.03	**0.04 **	0.03	0.24	**0.52 **	**3.57 **
	Average of 123 samples			42.7	27.6	6.0	0.85	0.09	0.02	0.05	0.06	0.23	0.52	2.77
Fishnet EL 6959	EIAC0068	5	6	48.1	18.3	7.6	0.77	0.21	**0.02 **	**0.04 **	**0.02 **	0.36	0.93	2.38
	Average of 49 samples			40.2	26.9	8.4	0.67	0.27	0.01	0.05	0.04	0.42	1.20	3.91

Table 1. Summary of magnetic separation test work results completed at each prospect to date with a selection of results from better individual metre samples and a summary of the average at each prospect from scout drilling. Samples have been passed over a fixed magnet, barrel separator and the relative abundance of rejected material and magnetic product measured. Magnetic products were then subjected to XRF analysis.

• Note: Analyses conducted by ALS using X-Ray Fluorescence Spectrometry with Loss on Ignition (LOI) determined using ThermoGravimetric Analyses at 1,000°C.

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. Opportunities for joint marketing arrangements with other iron ore explorers and developers are being sought and considered. The test work program in progress will provide information on the consistency of product grade and its likely sale price for input into economic studies.

Staffing

Eastern Iron is pleased to announce the appointment of Owen Janes to a consultancy role guiding resource assessment and iron channel modeling. Owen is an experienced iron ore specialist with postgraduate qualifications in geostatistics and has worked in exploration, development drilling and resource modeling at major Pilbara iron ore operations. His experience in iron ore resource modeling in Western Australia, particularly on channel iron deposits will enhance the ability of Eastern Iron to rapidly progress existing palaeochannel projects, including the Belah Tank resource drilling trial as well as assisting with the assessment of further iron exploration and development opportunities currently being considered by the Company.

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…iron’s new horizon

…Quarterly Report – March 2009

Eastern Iron Limited

Cash Position

The Company had over $3.435 million in cash at 31 March 2009 and no borrowings. Eastern Iron has already achieved many of the high cost elements of its exploration projects and intends to be selective about how it spends its funds.

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

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… the eastern dragon

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…iron’s new horizon