EASTERN RESOURCES LIMITED — Interim / Quarterly Report 2013

Mar 13, 2013

Directors’ Report

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EASTERN IRON LIMITED ABN 70 126 678 037

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2012

Table of Contents

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Directors’ Report ............................................................................................................................................................ 1 Consolidated Statement of Comprehensive Income ...................................................................................................... 5 Consolidated Statement of Financial Position ................................................................................................................ 6 Consolidated Statement of Changes in Equity ............................................................................................................... 7 Consolidated Statement of Cash Flows ......................................................................................................................... 8 Notes to the Consolidated Financial Statements ............................................................................................................ 9 Directors’ Declaration ................................................................................................................................................... 13 Independent Auditor’s Review Report .......................................................................................................................... 14 Auditor’s Independence Declaration ............................................................................................................................ 16 Corporate Directory ...................................................................................................................................................... 17

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Eastern Iron Limited

Directors’ Report

Your directors submit their report for Eastern Iron Limited for the half year ended 31 December 2012.

Directors

The names of the Company’s directors in office during the half year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Steve Gemell	Non-Executive Chairman
	(appointed as Chairman on 31 October 2012)
Greg De Ross	Managing Director
Wendy Corbett	Non-Executive Director
Greg Jones	Non-Executive Director
Ivo Polovineo	Non-Executive Director
Adrian Critchlow	Non-Executive Director
	(appointed 25 September
	2012)
Glenn Goodacre	Non-Executive Chairman
	(retired 31 October 2012)

Review and results of operations

Financial results

The net results of operations after applicable income tax expense for the half year was a loss of $63,854 (2011: $479,099).

Highlights

NOWA NOWA IRON PROJECT

• Completion of a scoping study on time and on budget.

• Decision to advance the project to the feasibility stage.

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

• Resource upgrade of 23% at Five Mile Iron Deposit.

• New Five Mile resource of 11 Mt at 49.8% Fe includes 6.8Mt Indicated and 4.2Mt Inferred.

• MOU executed with South East Fibre Exporters Pty Ltd, operators of Eden export port facility.

EULOGIE/HAWKWOOD

• Preliminary discussions with potential funding parties for the next stage of evaluation at Eulogie and Hawkwood.

NSW 3E STEEL PISOLITE IRON JOINT VENTURE

• Compilation of resource inventory and beneficiation studies are ongoing.

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Introduction

Early in 2012 Eastern Iron announced that it had exercised an option to acquire a 100% interest in the Nowa Nowa iron deposit in eastern Victoria. Nowa Nowa is a relatively small tonnage, but high grade, magnetite iron deposit. This project has the potential for a low capital cost development and represents a clear opportunity for Eastern Iron to achieve operator status and generate a cashflow capable of sustaining further growth in the Company. During the latter part of 2012 further drilling at the 5 Mile deposit resulted in a resource upgrade and a scoping study into development at Nowa Nowa was completed by Engenium Pty Ltd. The Company is also seeking other similar opportunities in Australia and elsewhere as it seeks to build its production profile through the aggregation of production from several producing mines.

Nowa Nowa Iron Project

(EFE 100%)

The Nowa Nowa iron deposit is located some 250 kilometres east of Melbourne close to the Princes Highway which provides access to several nearby towns and a proposed export point at the Port of Eden some 200 kilometres further east.

The iron mineralisation at Nowa Nowa occurs in several bodies of high grade magnetite some of which were extensively drilled in the 1950’s by the Victorian Government. Since that time little work has been carried out although the results of the Government drilling, which were published in a bulletin (GSV Bull 57, 1957), have been used on occasion to assess the deposits for possible development.

The magnetite bodies can be clearly identified by surface and airborne magnetics. At the 5 Mile deposit, the larger of the deposits tested by the government drilling, massive magnetite was intersected under variable cover of 20-60m depth over widths up to 80m. At the 7 Mile deposit massive magnetite occurs in a small wedge-shaped body at surface. Drilling has intersected mineralisation to depths of 70m from surface which has been almost completely oxidised to massive hematite. Other bodies such as 6 Mile and 8 Mile remain to be tested by drilling.

RESOURCE ESTIMATE

Early in 2012 Eastern Iron released details of an initial Inferred Resource estimate for the Five and Seven Mile deposits at Nowa Nowa. In September 2012 Eastern Iron announced a 23% upgrade in the resource estimate for the Five Mile deposit. This upgrade is the result of further definition of the resource from recent

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Directors’ Report

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drilling completed by Eastern Iron and by using higher values for the specific gravity of the ore, based on actual measurements taken during drilling.

Estimates were based on assays from 2,755m of drilling in 27 holes. All but four of the drillholes are vertical and are on a nominal 30mX30m grid with an average depth of 102m.

The estimate was compiled by H & S Consultants Pty Ltd (“H&S”) using data from both the Victorian Government and the recent Eastern Iron drilling.

The estimate, at a lower cutoff of 40% Fe is shown in the table below:

	Indicated	Indicated	Inferred	Inferred	Total	Total
Prospect	Mt	Fe %	Mt	Fe %	Mt	Fe %
Five Mile	6.8	50.4	4.2	49.0	11	49.8
Seven Mile			0.55	48.3	0.55	48.3
Total	6.8	50.4	4.75	48.9	11.55	49.8

Note: decimals do not imply precision and are used to avoid rounding errors.

SCOPING STUDY

Late in 2012 the Company announced the completion of a scoping study at the Nowa Nowa iron project (ASX announcement 6 December 2012). The study confirmed 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 a mining contractor. ROM ore

would then be beneficiated at site by crushing to <1.6mm and low intensity magnetic separation (LIMS) to produce average annual production of 0.8Mtpa of “fines” product. Iron ore product would be loaded into standard B-double road haulage trucks at the mine site and trucked to a port on the south side of Twofold Bay south of Eden for loading onto bulk carrying vessels for export.

The scoping study was completed on time and on budget. The low estimated capital cost has contributed to robust economics for a potential development and the Board of Eastern Iron has been sufficiently encouraged by the results of the scoping study to approve advancing the project to the feasibility stage. Planned work over the coming months will culminate in the completion of a bankable feasibility study.

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

	Units
Miningrate	Max 4.8Mtpa ore and waste
Life of Mine waste: ore ratio.	2.3:1
Life of Mine average iron product shipped	803,000 tpa
Mass recovery to product	75%
Life of Mine average FOB cost of production	$70/t product
Capital cost incl 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.

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Directors’ Report

FURTHER METALLURGICAL TESTWORK RESULTS

During the feasibility study the Company will investigate various means to optimise the returns for the project. These include low cost methods of improving product quality and increasing iron recovery to product.

The first stage in this work has been to investigate wet LIMS separation in contrast to the dry separation process tested during the scoping study. Recent testwork, shown below, indicates that wet LIMS process will provide greater efficiency in separating the various mineral phases. The testwork was conducted on three separate drill core composite samples crushed to minus 1.6 mm and treated by wet magnetic separation at 800 and 1100 gauss. The results show considerable improvement in rejecting silica and sulphur with a resultant enhancement in the iron levels of the final product. Overall average mass recovery was 66% and iron recovery 76%. Further optimisation work will focus on scavenging iron (hematite) from the non-magnetic tail to increase total iron recovery.

The Wet LIMS product produced above is a high quality iron product similar to many magnetite concentrates in iron content and the level of deleterious elements but superior in being a coarse product which does not require pelletising and can be sold as a blast furnace feed.

MOU - SOUTH EAST FIBRE EXPORTS PTY LTD

South East Fibre Products Pty Ltd (SEFE) operates a woodchip mill and associated wharf and bulk loading port facility at Two Fold Bay near Eden in southern NSW. Eastern Iron and SEFE have executed an MOU which will see the two companies cooperate in assessing the Two Fold Bay facility as a possible site for export of iron ore product from Eastern Iron’s Nowa Nowa project. The assessment will form part of the ongoing scoping study being carried out on Eastern Iron’s behalf by Engenium.

Eulogie Project

(EFE 100%)

Early in 2012 Eastern Iron reported the results of a concept development study for a possible mining development at Eulogie. The study was based on open pit mining of a drill defined global Indicated and Inferred resource of 465Mt at 14.6%Fe (for details of the resource estimate see ASX announcement 19 October 2011). The mining operation was scoped to mine around 20 million tonne of ROM ore per year. Capital costs are estimated at close to $600 million for a project producing 3.2 million tonne per year of magnetite concentrate to be exported via Gladstone Port.

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The relatively low total capital cost is a function of the favourable location of the project being in close proximity to the Port of Gladstone with the potential to load product onto capesize vessels across open access wharves.

Eastern Iron has had initial discussions with parties interested in joining Eastern Iron in further evaluation of the project including funding to completion of the mine feasibility study. These discussions are ongoing.

Hawkwood Iron Ore Joint Venture

(EFE earning 80%)

The Hawkwood iron-vanadium project is located in Central Queensland approximately 240 kilometres south east by rail from the port of Gladstone, Australia’s third largest coal export port. Eastern Iron has previously carried out a low level airborne magnetic survey with follow up preliminary drilling campaign. During 2011 the company completed a further program of RC drilling along the northern section of the magnetic feature which defines the underlying magnetite bearing gabbro. The results of this drilling were used to generate an initial resource for the project.

Further work on this project has been suspended pending the successful completion of efforts by the Company secure funding by an incoming party for further expenditure on the project.

NSW Iron Ore Project

(EFE 100%, 3E Steel Pty Ltd earning 77.5%)

Joint venture partners 3E Steel Pty Ltd have 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.

Program For 2013

NOWA NOWA

Following the successful completion of the scoping study for the Nowa Nowa project the directors of Eastern Iron approved advancing the project to the next stage of completing further technical studies preliminary to undertaking a definitive feasibility study.

Over the coming six months activities related to the Nowa Nowa project will include:

• Commencement of an RC and diamond core drilling program at the Five Mile deposit to further delineate the orebody for mine planning purposes, investigate the potential to extend

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Directors’ Report

the known resource, and obtain further samples for metallurgical testwork.

• Upscale processing testwork to finalise plant design and product specifications.

• Planning and executing arrangements for the feasibility study.

• Commence the project impact and environmental studies preliminary to project permitting.

EULOGIE/HAWKWOOD

• Continue the search for a funding partner for these projects.

NSW PISOLITE IRON PROJECT

• Monitor progress of joint venture activities.

OTHER

• Actively seek and evaluate opportunities for investment in Australia and overseas for potentially valuable projects in commodities including iron and other commodities.

The year ahead should see the company add significantly to the value of its project portfolio and at Nowa Nowa make substantial progress towards its goal of being a producer.

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Significant events after the balance date

There were, at the date of this report, no matters or circumstances which have arisen since 31 December 2012 that have significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.

Auditor’s independence declaration

A copy of the Auditor’s Independence Declaration to the Directors as required under section 307C of the Corporations Act 2001 is set out on page 16.

Signed at Sydney this 14[th] day of March 2013 in accordance with a resolution of the directors.

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Steve Gemell Chairman

Greg De Ross Managing Director

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 Managing Director of Eastern Iron Limited 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.

Principal activities

The principal activity of the Group is the exploration for and delineation of iron ore, precious and base metals resources in the Australia/Asia Pacific region and the development of those resources into economic, cash flow generating mines.

Dividends

No dividends were paid or proposed during the period.

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Consolidated Statement of Comprehensive Income

For the half year ended 31 December 2012

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	31 Dec 2012 $ 31 Dec 2011 $
Note
Revenue 4 ASX and ASIC fees Audit fee Conferences and training Contract administration services Directors fees Employee costs (net of costs recharged to exploration projects) Exploration expenditure written off Marketing costs Rent R&D concession expense Share based payments Travel and accommodation costs Other expenses from ordinary activities Loss before income tax expense Income tax expense Loss after income tax expense Other comprehensive income Other comprehensive income for the period, net of tax Total comprehensive income for the period Total comprehensive income for the period attributable to members of Eastern Iron Limited Earnings per share Basic loss per share (cents per share) 8 Diluted loss per share (cents per share) 8	504,342 108,712 (22,917) (26,713) (13,500) (7,000) (15,317) (12,860) (94,696) (86,566) (104,472) (100,734) (148,813) (110,667) - (30,431) (39,228) (14,669) (12,750) (11,670) (900) (18,433) (25,350) (106,095) (33,693) (16,567) (56,560) (45,406)
	(63,854) (479,099) - -
	(63,854) (479,099)
	- -
	- -
	(63,854) (479,099)
	(0.06) (0.71) (0.06) (0.71)

The Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

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Consolidated Statement of Financial Position

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As at 31 December 2012

	31 Dec 2012 $ 30 Jun 2012 $
Note
ASSETS Current assets Cash and cash equivalents 5 Receivables Total current assets Non-current assets Tenement security deposits 7 Plant and equipment Deferred exploration and evaluation expenditure 6 Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Provisions Total current liabilities Non-current liabilities Provisions Total non-current liabilities Total liabilities Net assets EQUITY Contributed equity 9 Accumulated losses Reserves 10 Total equity	2,568,705 917,310 37,008 43,055
	2,605,713 960,365
	148,350 118,350 31,965 31,497 5,358,183 4,711,801
	5,538,498 4,861,648
	8,144,211 5,822,013
	113,431 252,964 32,419 33,688
	145,850 286,652
	13,659 10,816
	13,659 10,816
	159,509 297,468
	7,984,702 5,524,545
	10,530,356 8,031,695 (2,891,114) (2,941,825) 345,460 434,675
	7,984,702 5,524,545

The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

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Consolidated Statement of Changes in Equity

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For the half year ended 31 December 2012

		Contributed	Accumulated
		equity $	losses $	Reserves	Total equity $
	Note
				$
At 1 July 2011 Loss for the period Other comprehensive income Total comprehensive income/(loss) for the period Transactions with owners in their capacity as owners: Issue of share capital, net of transaction costs Cost of share based payments taken directly to equity At 31 December 2011		7,552,017	(2,012,355) (479,099) -	328,580	5,868,242 (479,099) -
		-		-
		-		-
					(479,099) 450,000 106,095
		- (479,099)		-
	9	450,000 -		-
	10	- -		106,095
		8,002,017	(2,491,454)	434,675	5,945,238
		Contributed equity	Accumulated losses $
				Reserves	Total equity $
	Note	$		$
At 1 July 2012 Loss for the period Other comprehensive income		8,031,695	(2,941,825) (63,854) -	434,675	5,524,545 (63,854) -
		-		-
		-		-
Total comprehensive income/(loss) for the period Transactions with owners in their capacity as owners: Issue of share capital, net of transaction costs Expiry of options Cost of share based payments taken directly to equity At 31 December 2012					(63,854) 2,503,661 (5,000) 25,350
		- (63,854)		-
	9	2,503,661 -		-
	10	(5,000) 114,565		(114,565)
	10	- -		25,350
		10,530,356	(2,891,114)	345,460	7,984,702

The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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Consolidated Statement of Cash Flows

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For the half year ended 31 December 2012

		31 Dec 2012 $ 31 Dec 2011 $
	Note
Cash flows from operating activities Payment to suppliers and employees Interest received Consulting fee income R&D tax concession offset Net cash flows (used in) operating activities Cash flows from investing activities Purchase of fixed assets Proceeds from sale of fixed assets Expenditure on mining interests (exploration) Tenement security deposits Net cash flows (used in) investing activities Cash flows from financing activities Proceeds from issue of shares Equity raising expenses Net cash flows from financing activities Net increase (decrease) in cash held Add opening cash brought forward Closing cash carried forward		(538,509) (558,890) 48,630 107,081 23,664 26,664 429,668 -
		(36,547) (425,145)
		(1,800) (7,462) 14,095 - (743,614) (1,338,559) (30,000) (10,000)
		(761,319) (1,356,021)
		2,503,661 - (54,400) -
		2,449,261 -
		1,651,395 (1,781,166) 917,310 3,618,543
	5	2,568,705 1,837,377

The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

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Notes to the Consolidated Financial Statements

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For the half year ended 31 December 2012

1. Corporate information

The financial report of Eastern Iron Limited (the Company) for the half year ended 31 December 2012 was authorised for issue in accordance with a resolution of the directors on 14 March 2013. Eastern Iron Limited is a company incorporated in Australia and limited by shares which are publicly traded on the Australian Securities Exchange using the ASX code EFE.

The nature of the operations and principal activities of the Company are described in the Directors Report.

2. Summary of significant accounting policies

The half year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Company as the full financial report.

The half year financial report should be read in conjunction with the Annual Financial Report of Eastern Iron as at 30 June 2012.

It is also recommended that the half year financial report be considered together with any public announcements made by Eastern Iron during the half year ended 31 December 2012 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001 .

Basis of preparation

The half year financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 , applicable Accounting Standards, including AASB 134 Interim Financial Reporting and other mandatory professional reporting requirements. The half year financial report has been prepared on a historical cost basis.

For the purpose of preparing the half year financial report, the half year has been treated as a discrete report period.

Significant accounting policies

The half year consolidated financial statements have been prepared using the same accounting policies as used in the annual financial statements for the year ended 30 June 2012.

Management has reviewed and assessed the new accounting standards effective 1 July 2012 and these have been deemed to be not applicable to the Group.

Basis of consolidation

The half year consolidated financial statements comprise the financial statements of Eastern Iron Limited and its subsidiaries (the Group). The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All inter-company balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. The subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. The Group includes Eastern Iron Limited and its wholly owned subsidiaries.

3. Financial report by segment

The operating segment identified by management is as follows:

Exploration projects funded directly by Eastern Iron Limited (“Exploration”)

Regarding the Exploration segment, the Chief Operating Decision Maker (the Board of directors) receives information on the exploration expenditure incurred. This information is disclosed in Note 6 of the half year financial report. No segment revenues are disclosed as each exploration tenement is not at a stage where revenues have been earned. Furthermore, no segment costs are disclosed as all segment expenditure is capitalised, with the exception of expenditure written off which is disclosed in Note 6 of the half year financial report.

Financial information about each of these tenements is reported to the Managing Director on an ongoing basis.

Corporate office activities are not allocated to operating segments as they are not considered part of the core operations of any segment and comprise of the following:

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Notes to the Consolidated Financial Statements

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For the half year ended 31 December 2012

 Interest revenue

• Corporate costs

• Depreciation and amortisation of non-project specific property, plant and equipment

The Group’s accounting policy for reporting segments is consistent with that disclosed in Note 2.

4. Revenue

. Revenue
Interest received Consulting fee income R&D tax concession offset	31 Dec 2012 $ 31 Dec 2011 $
	54,676 78,715 19,998 29,997 429,668 -
	504,342 108,712

5. Cash and cash equivalents

. Cash and cash equivalents
Cash at bank Money market securities – bank deposits	31 Dec 2012 $ 30 Jun 2012 $
	442,580 401,183 2,126,125 516,127
	2,568,705 917,310

6. Deferred exploration and evaluation expenditure

Costs brought forward Costs incurred during the period Expenditure written off during the period Expiry of options issued in January 2008 for purchase of tenements Purchase of tenements Costs carried forward		31 Dec 2012 $ 30 Jun 2012 $
		4,711,801 2,458,669 651,382 1,676,897 - (41,765) (5,000) - - 618,000
	(i)
		5,358,183 4,711,801

(i) An amount of $450,000 was paid as consideration for the purchase of Eulogie Park project by the issue of 2,500,000 fully paid ordinary shares at $0.18. An amount of $168,000 was paid as consideration for the purchase of the Nowa Nowa project of which $100,000 was paid in cash and 1,000,000 fully paid ordinary shares were issued at $0.068.

7. Contingent assets and liabilities

The Company has provided guarantees totalling $148,350 in respect of exploration tenements in NSW, Victoria and Queensland. These guarantees in respect of exploration tenements are secured against deposits with QLD DEEDI ($7,500) and various banking institutions ($140,000). Rugby Mining has been reimbursed $850 by the Company for Eastern Iron’s share of the security deposit on EPM 17099 in Queensland. The Company does not expect to incur any material liability in respect of the guarantees.

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Notes to the Consolidated Financial Statements

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For the half year ended 31 December 2012

8. Earnings per share

8. Earnings per share
	31 Dec 2012	31 Dec 2011
	$	$
Net profit/(loss) used in calculating basic and diluted gain/(loss) per share	(63,854)	(479,099)
	Number	Number
Weighted average number of ordinary shares outstanding during the year used in calculation of basic EPS 103,661,734
		67,115,638
Centsper share		Centsper share
Basic earnings(loss) per share (0.06)		(0.71)
Diluted earnings(loss) per share (0.06)		(0.71)

The number of potential ordinary shares that are not dilutive, by reason of the loss result, and not included in determining diluted EPS are 7,950,000.

Conversion, call, subscription or issue after 31 December 2012

Since the end of the financial half year there have been no other conversions to, call of, or subscriptions for ordinary shares or issues of potential ordinary shares since the reporting date and before the completion of these financial statements.

9. Contributed equity

. Contributed equity
Share capital 114,679,032 fully paid ordinary shares (30 June 2012:68,807,419) Fully paid ordinary shares carry one vote per share and carry the right to dividends. Share capital applications received Options on Issue Nil (30 June 2012: 5,000,000) Share issue costs	31 Dec 2012 $ 30 Jun 2012 $
	10,887,919 8,364,980 - 19,278 - 5,000 (357,563) (357,563)
	10,530,356 8,031,695

	Number $
	67,807,419 8,296,980 1,000,000 68,000
Movements in ordinary shares on issue At 1 January 2012 Shares issued (i) At 30 June 2012 Shares issued (ii) At 31 December 2012
	68,807,419 8,364,980
	45,871,613 2,522,939
	114,679,032 10,887,919

(i) The Company issued 1,000,000 fully paid ordinary shares at $0.068 as consideration for the acquisition of the Nowa Nowa project in February 2012 (Note: 6).

(ii) The Company issued 23,028,507 fully paid ordinary shares (in July 2012) and 22,843,106 fully paid ordinary shares (in September 2012) at $0.055 in an Entitlement Offer.

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Notes to the Consolidated Financial Statements

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For the half year ended 31 December 2012

	Number $
Movements in options on issue At 1 January 2012 Options issued At 30 June 2012 Options expired At 31 December 2012	5,000,000 5,000 - - 5,000,000 5,000 (5,000,000) (5,000) - -

An additional 7,950,000 options are on issue under Share based payments (Note: 10).

10. Reserves (share based payments)

10. Reserves (share based payments)
	Number $
Movements in share based payments At 1 January 2012 Options issued At 30 June 2012 Options issued (i) Expired option value transferred to Accumulated Losses At 31 December 2012	4,700,000 434,675 - -
	4,700,000 434,675
	3,250,000 25,350 - (114,565)
	7,950,000 345,460

(i) 3,250,000 options were issued to Directors and approved by shareholders at the Company’s AGM held in November 2012. The options were issued with an exercise price of $0.10 and expiry date of 23 November 2015.

11. Events after the balance sheet date

There were, at the date of this report, no matters or circumstances which have arisen since 31 December 2012 that have significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.

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Directors’ Declaration

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In accordance with a resolution of the directors of Eastern Iron Limited, I state that:

In the opinion of the Directors:

• (a) The financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001 , including:

• (i) Give a true and fair view of the consolidated entity’s financial position as at 31 December 2012 and of its performance for the half year ended on that date; and

• (ii) Complying with Australian Accounting Standards AASB 134 “Interim Financial Reporting” and the Corporations Regulations 2001; and

• (b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the Board

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Steve Gemell Chairman

Sydney, 14 March 2013

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Independent Auditor’s Review Report

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Independent Auditor’s Review Report

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Auditor’s Independence Declaration

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Corporate Directory

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Eastern Iron Limited

ABN 70 126 678 037

Directors

Steve Gemell Non-Executive Chairman Greg De Ross Managing Director Wendy Corbett Non-Executive Director Greg Jones Non-Executive Director Ivo Polovineo Non-Executive Director Adrian Critchlow Non-Executive Director

Company Secretary

Ian White

Registered and Administration Office

Level 1, 80 Chandos Street St Leonards, NSW 2065 PO Box 956, Crows Nest, NSW 1585 Telephone: 02 9906 7551 Facsimile: 02 9906 5233 Website: www.easterniron.com.au E-mail: info@easterniron.com.au

Share Registry

Boardroom Pty Limited GPO Box 3993 Sydney, NSW 2001 Telephone: +61 2 9290 9600 Facsimile: +61 2 9279 0664 Website: www.boardroomlimited.com.au

Auditors

BDJ Partners

Bankers

Commonwealth Bank of Australia Bank West Macquarie Bank Suncorp-Metway Ltd

Stock Exchange Listing

Listed on Australian Securities Exchange Limited ASX Code: EFE

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