EASTERN RESOURCES LIMITED — Interim / Quarterly Report 2013

Jan 30, 2013

==> picture [595 x 26] intentionally omitted <==

==> picture [595 x 26] intentionally omitted <==

==> picture [595 x 26] intentionally omitted <==

==> picture [595 x 27] intentionally omitted <==

==> picture [595 x 26] intentionally omitted <==

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

QUARTERLY REPORT – DEC 2012
----- End of picture text -----

ASX Code: EFE

Issued Capital (31 Dec 2012) 114,679,032

Cash (31 Dec 2012) $2.6M

Directors

Steve Gemell (Chair) Greg De Ross (MD) Ivo Polovineo Wendy Corbett Greg Jones Adrian Critchlow

HIGHLIGHTS

NOWA NOWA IRON PROJECT

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

• Decision to advance the Nowa Nowa iron project to the 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

• Initial 8 year mine life

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

Address

Level 1, 80 Chandos Street St Leonards, NSW 2065

Postal

PO Box 956, Crows Nest NSW 1585

T: +61 2 9906 7751 F: +61 2 9906 5233

Twitter: @EasternIronEFE

• 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.

• Recent metallurgical testwork shows improved beneficiation results by wet low intensity (LIMS) magnetic separation.

• At -1.6mm (1600 micron) crush, beneficiated samples from the Five Mile deposit averaged 64% Fe, 6.8% SiO2, 0.4% S with a mass recovery of 66%.

CORPORATE

• Steve Gemell was elected Chairman following the resignation of founding Chairman Glenn Goodacre.

www.easterniron.com.au

==> picture [378 x 40] intentionally omitted <==

==> picture [378 x 38] intentionally omitted <==

==> picture [595 x 21] intentionally omitted <==

==> picture [99 x 56] intentionally omitted <==

Eastern Iron Limited (“Eastern Iron”) (ASX:EFE) is pleased to provide an activity report for the quarter ended 31 December 2012.

NOWA NOWA IRON PROJECT

During in the quarter the Company announced the completion of a scoping study at its 100% owned Nowa Nowa iron project in Eastern Victoria (See ASX announcement dated 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.

==> picture [388 x 38] intentionally omitted <==

==> picture [388 x 38] intentionally omitted <==

==> picture [388 x 38] intentionally omitted <==

==> picture [388 x 39] intentionally omitted <==

==> picture [388 x 38] intentionally omitted <==

==> picture [388 x 38] intentionally omitted <==

==> picture [388 x 37] intentionally omitted <==

Nowa Nowa Locality Plan

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

==> picture [595 x 4] intentionally omitted <==

Page | 2

Quarterly Report – December 2012

==> picture [99 x 56] intentionally omitted <==

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
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.

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.

WET LIMS TESTWORK RESULTS

	Method	Magnetic Intensity	Crush size	Mass Rec%	Fe %	**SiO2 % **	S %	Fe Rec %
Sample1	Wet LIMS	1100G	-1.6mm	73.3	63.9	7.5	0.58	82.90
	Dry LIMS		-1.6mm	90.6	58.6	10.6	1.53	93.97
Sample 2	Wet LIMS	1100 G	-1.6mm	64	62.5	7.9	0.27	75.76
	Dry LIMS		-1.6mm	86.3	56.2	12	0.57	91.86
Sample 3	Wet LIMS	1100 G	-1.6mm	60.9	66.3	5.1	0.36	68.09
	Dry LIMS		-1.6mm	83.1	61.5	7.8	1.16	86.18
Average	Wet LIMS	1100G	-1.6mm	66.1	64.2	6.8	0.4	75.6

==> picture [595 x 4] intentionally omitted <==

Page | 3

Quarterly Report – December 2012

==> picture [99 x 56] intentionally omitted <==

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.

EULOGIE IRON - VANADIUM PROJECT

In the previous quarter, Eastern Iron reported that it had commenced discussions with parties interested in participating in further studies of a potential development at Eulogie. There has been no further development on this front during this last quarter. The Company anticipates approaching other potentially interested groups during this coming reporting period in an effort to secure funding for the project.

NSW IRON ORE PROJECT

Joint venture partners 3E Steel Pty Ltd are continuing to evaluate the results of the recent drilling campaign and compile an updated resource estimate.

CORPORATE

During the quarter, the Board of Eastern Iron announced that it had appointed Mr Steve Gemell as Chairman of the Company. This followed the resignation of the company’s previous and founding Chairman, Mr Glenn Goodacre.

Mr Gemell is an Independent Director of the Company and has been a Director of Eastern Iron since January 2010.

The Board further announced that Mr Adrian Critchlow had been appointed as a Non-Executive Director of the Company effective 1 October 2012.

FORWARD PROGRAM

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

• Planning and executing arrangements for the feasibility study.

• Further metallurgical optimisation studies.

==> picture [595 x 4] intentionally omitted <==

Page | 4

Quarterly Report – December 2012

==> picture [99 x 56] intentionally omitted <==

FINANCIAL POSITION

Total exploration expenditure for the quarter was $279,000. Expenditure by joint venture partners on exploration tenements in which Eastern Iron has an interest amounted to $185,000. The cash balance at the end of the quarter was $2,569,000.

==> picture [90 x 49] 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.

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.

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

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

==> picture [595 x 4] intentionally omitted <==

Page | 5

Quarterly Report – December 2012