EASTERN RESOURCES LIMITED — Interim / Quarterly Report 2012

Apr 29, 2012

Quarterly Activities Report For the period ending 31[st] March 2012

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30 April 2012

HIGHLIGHTS FOR THE QUARTER

 NOWA NOWA IRON PROJECT

• Finalised acquisition of 100% in the Nowa Nowa iron project

• 9.4Mt @ 49.1% Fe Maiden Resource

• Preliminary metallurgical testwork indicates potential to produce a low cost, high value iron product

• 600m large diameter core drilling program to commence in May 2012

• Scoping study to commence on completion of drilling program

 CENTRAL QUEENSLAND IRON PROJECT

Eulogie Iron – Vanadium Project

• Concept Development Study indicates capital costs of $500-$600 million for a mining development producing 3.2 million tonne magnetite concentrate per year.

Hawkwood Iron – Vanadium Project

• Results from Hawkwood drilling received with Maiden Resource estimate to be released shortly.

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March 2012 Quarterly Report

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NOWA NOWA IRON PROJECT

Eastern Iron continues to focus its activities on the evaluation of a possible mining development at the Nowa Nowa Project in eastern Victoria. During the quarter the Company finalised the acquisition of a 100% interest in the project, announced a Maiden JORC Resource for the Five and Seven Mile iron deposits and released the results of preliminary metallurgical analysis. The Company will focus on progressing the project to a Scoping Study during the next quarter.

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During the quarter the Company announced that it had exercised its option to acquire 100% of the Nowa Nowa Iron project in eastern Victoria from holder Waygara Mines Pty Ltd (“Waygara”). The successful transfer of the enclosing exploration license 4509 to Eastern Iron was completed following approval of the transfer by the Victorian Department of Primary Industries issued on the 3 February 2012.

Under the terms of the option agreement Eastern Iron paid $100,000 and allotted 1 million shares to Waygara on transfer of the title. A 1% revenue royalty is payable from production.

Resource Estimate

Early in February 2012 Eastern Iron released details of an initial resource estimate for the Five and Seven Mile deposits at Nowa Nowa.

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March 2012 Quarterly Report

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The resource estimate was compiled by H & S Consultants Pty Ltd (“H&S”) using data from drilling carried out in the 1950’s by the Victorian Government. Estimates were based on 593 assays from 24 drillholes (1,309m). All but four of the drillholes are vertical and are on a nominal 30m X 30m grid with an average depth of 99m.

The Resource has been classified as Inferred because it is based on drilling and assay data that is not verifiable due to its age. The lack of density measurements also introduces a level of uncertainty. The Inferred Resource estimates at a cut off of 40%. Total Fe are shown in the table below.

Inferred Resource Estimates at a cut off of 40 % Fe

Zone	TONNES (MT)	SG	Total Fe %
Five Mile	8.92	3.90	49.2
Seven Mile	0.55	3.90	48.3
Total	9.47	3.90	49.1

Note: Significant figures quoted do not imply precision and are to minimise round-off errors.

The Seven Mile deposit outcrops at surface and has been the subject of small scale mining in the past. The mineralisation, although originally magnetite, is now almost completely oxidised to hematite and may represent an opportunity to mine a coarse DSO lump hematite product early in the life of the operation. Further drilling will be required to outline the mineralised area.

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Oblique view showing wireframes of the mineralised bodies and drill hole locations

The mineralised body at Five Mile occurs below a variable thickness of younger sands and volcanic rocks and as such is largely unweathered. Primary mineralisation consists predominantly of magnetite with hematite becoming more common at depth. The mineralisation is also quite massive and as the section below indicates, at the 40% Fe cutoff there is little internal waste. This should assist mining efficiency and once the overburden is removed waste to ore ratios during mining should be low.

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March 2012 Quarterly Report

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Five Mile Deposit: Section looking north showing Fe grade blocks and drillholes

Additional resource potential exists in the surrounding area and in a broad magnetic feature between the Five and Seven Mile deposits known as the Six Mile prospect. This may represent further faulted bodies of magnetite/hematite mineralisation under younger volcanic rocks and will be drill tested at a later stage during resource definition.

Metallurgical Results

Drill core samples collected by Eastern Iron from a diamond core hole drilled by a previous explorer at the Five Mile deposit have been submitted for preliminary metallurgical analysis consisting of assay of head samples, crushing and grinding at various sizings, dry low intensity magnetic separation (LIMS), Davis Tube Recovery (DTR) and quantitative electron microscopy (QEMSCAN). The work was carried out by ALS AMMTEC and supervised by Resource Engineering Pty Ltd. The object of this limited program has been to determine product characteristics for a potential mining development at Nowa Nowa.

Fresh unoxidised composite half core samples were taken from drillhole NND08002 which intersected a continuously mineralised interval from 45.8m to 113.5m (62.9m) and averaged 51%Fe. Samples taken from this core were as follows:

Sample ID	Drillhole Number	From (m)	To (m)	Interval (m)
Upper Composite	NND08002	61	65	4
Middle Composite		91	93	2
Lower Composite		104	107	3

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Head assay results from the three composite samples were as follows:

	Fe	SiO2	Al2O3	P	S
	(%)	(%)	(%)	(%)	(%)
Upper Composite	62.3	6.75	0.9	0.010	0.540
Intermediate Composite	55.4	10.6	2.28	0.013	0.800
Lower Composite	60.0	8.24	1.11	0.008	2.560

The results show that a substantial proportion of the mineralisation has a high Fe content and could be classified as direct shipping (DSO).

The three samples were crushed to -6.3mm and separated by dry LIMS separation into a magnetic and non-magnetic product. Assay results and mass recoveries for the magnetic products from each sample are summarised in the table below:

Analysis of -6.3mm Dry LIMS product

	LIMS	Wt.	Fe	SiO2	Al2O3	P	S
	-6.3mm	(%)	(%)	(%)	(%)	(%)	(%)
Upper Comp	LIMS Mags	99.7	61.90	6.70	0.92	0.009	0.620
Middle Comp	LIMS Mags	35.5	58.90	9.31	1.34	0.007	0.410
Lower Comp	LIMS Mags	69.10	64.00	6.30	0.77	0.007	0.610

Although dry LIMS separation would be more applicable to lower grade material in the deposit the results do suggest that the ore is highly amenable to this low cost beneficiation process producing a +61%Fe product at an average weight recovery of 68%.

Samples from the three composite samples were also tested by Davis Tube (DTR) analysis at grind sizes of 80% passing 250, 106, 75, 53, and 38 micron. The results from the coarser grinds are summarised below and indicate that a high grade product can be produced at these coarse grindsizes:

Analysis of DTR magnetite concentrates at 250 micron grind

DTR Conc.		Wt.	Fe	SiO2	Al2O3	P	S
		(%)	(%)	(%)	(%)	(%)	(%)
Upper Composite	250 micron	86.1	67.50	3.63	0.40	0.006	0.150
Intermediate Composite	250 micron	15.5	67.60	3.30	0.35	0.003	0.092
Lower Composite	250 micron	44.2	68.70	2.82	0.30	0.003	0.084

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March 2012 Quarterly Report

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Product Transport

As part of its investigations into the potential for mine development at Nowa Nowa, Eastern Iron commissioned a study into product transport options by logistics consultants Innovative Shipping Pty Ltd. Innovative Shipping identified several possible transport options, these include:

• Trucking iron product from Nowa Nowa to one of two wharves at Eden on the NSW south coast.

One of the wharves is operated by South East Fibre Exports Pty Ltd (SEFE) who operate a private terminal with its own jetty, shiploader and conveyor system on the southern side of Twofold Bay. The berth can accommodate vessels up to Small Panamax Class of about 65,000 DWT comfortably and is designed for loading high volume woodchips. Eastern Iron has commenced preliminary discussions with SEFE with a view to entering into a cooperative agreement to investigate the potential for loading iron product from Nowa Nowa from this facility.

Close by the SEFE operation is a multi user wharf built by the Australian Navy to handle munitions. The berth has capacity for vessels up to 36-38,000 DWT and apart from Naval use is used for other cargo including forest logs.

• Trucking from the mine site to a possible barge trans-shipping facility in the Port Anthony/Corner inlet area of southern Victoria. A barging facility is currently under construction at Port Anthony and will be assessed for suitability closer to a development decision at Nowa Nowa.

• There are several port options at Westernport/Port of Hastings which have deep water anchorages and are serviced by an operating railway line. Further discussions will need to be conducted with the operators of these facilities before any decision is made as to their viability for export of iron product from Nowa Nowa.

EULOGIE IRON - VANADIUM PROJECT

Concept Study

Eastern Iron has completed a concept study into a potential development of the defined resource at the Eulogie project. The financial model for the study has yet to be finalised but has indicated capital costs of between $500-600 million producing 3.2 million tonne of magnetite concentrate to be exported via Gladstone Port.

Eastern is currently in discussions with the Gladstone Port Corporation with a view to securing an MOU covering the potential to ship concentrate from the port area.

Eastern Iron has approached several parties with a view to securing funding for the feasibility study into development at Eulogie. These discussions are ongoing.

HAWKWOOD IRON PROJECT

Resource Estimate

Eastern Iron has completed a resource drilling program at Hawkwood The program consisted of 2,689m in 17 reverse circulation (RC) drill holes and was designed to test magnetite-bearing ferrigabbro layers inferred to be present at shallow depth from an interpretation of the results of an earlier airborne magnetic survey.

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March 2012 Quarterly Report

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Previous drilling by Eastern Iron at Hawkwood has confirmed that elongate airborne magnetic anomalies represent layers of magnetite enriched ferri-gabbro within a layered basic igneous complex. Collectively these anomalies extend over 12kms along strike and consist of ferrigabbro layers up to 100m thick. Holes have been drilled on strike normal lines approximately 400m apart. Holes are spaced at 50m across strike.

Chip samples from the drilling were assayed for iron and associated elements and samples were composited over 6m for Davis Tube (DTR) analysis. Concentrates from the DTR analysis were assayed for Fe, SiO2, Al2O3, P, LOI, CaO, K2O, MgO, Mn, Na, S and TiO2..

Results are currently being compiled and the resource estimate will be released shortly.

NSW IRON ORE PROJECT

(EFE 100%, 3E Pty Ltd may earn 77.5%)

Joint venture partner 3E Steel Pty Ltd has completed drilling of additional palaeochannel areas within the joint venture tenements near Cobar in central western NSW. The objective of this drilling will be to substantially increase the current total resource. 3E have also approved a program of beneficiation testwork at a major Chinese University to be completed over the next six months.

FORWARD PROGRAM

Over the coming period the company will focus on the following:

Nowa Nowa

• Complete the planned drilling program at the Five and Seven Mile Deposits

• Initiate the Scoping Study

Queensland Iron Project

• Progress discussions with potential joint venture partners for the Queensland Iron Project

FINANCIAL POSITION

Total exploration expenditure for the quarter was $326,000 with an additional $100,000 paid for the exercise of the Nowa Nowa option. Expenditure by joint venture partners on exploration tenements in which Eastern Iron has an interest amounted to $215,000. The cash balance at the end of the quarter was $1.32 million.

INVESTOR INFORMATION

Eastern Iron is investigating the potential for development of a high grade magnetite resource at Nowa Nowa in eastern Victoria as well as a magnetite processing operation based on magnetite deposits it holds under permit in Central Queensland. The Company is also in joint venture with 3E Steel to investigate the potential for developing large low cost low grade iron deposits in central western NSW.

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March 2012 Quarterly Report

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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

ASX: EFE

The information in this report that relates to Exploration Results 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 fulltime 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”. The information in this report that relates to Mineral Resources is based on information compiled by Arnold van der Heyden, BSc, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr van der Heyden is a full-time employee of H & S Consultants Pty Ltd 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” Both Messrs van der Heyden and De Ross consent to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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

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