EASTERN RESOURCES LIMITED — Interim / Quarterly Report 2014

Jul 30, 2014

QUARTERLY REPORT – JUNE 2014

ASX Code: EFE

Issued Capital: 143,872,706 ASX Code: EFE (as at 30 June 2014)

Issued Capital: Directors

Share Price at Steve Gemell (Chairman) Greg De Ross (MD) Market Capitalisation at Ivo Polovineo Cash on hand at Wendy Corbett

Directors Greg Jones Glenn Goodacre - Chairman Adrian Critchlow Greg De Ross - Managing Director Michael Giles Ivo Polovineo - Non-Ex Director

Wendy Corbett - Non-Ex Director

Greg Jones - Non-Ex Director Address Steve Gemell - Non-Ex Director Level 1, 80 Chandos Street

Investor and Media Contact: St Leonards, NSW 2065 Fergus Ross

Six Degrees Investor Relations

Fergus.ross@sdir.com.au Postal

Address PO Box 956, Crows Nest Level 1, 80 Chandos Street NSW 1585 St Leonards, NSW 2065

Postal T: +61 2 9906 7751 PO Box 956, Crows Nest F: +61 2 9906 5233 NSW 1585

T: +61 2 9906 7751 Twitter: @EasternIronEFE F: +61 2 9906 5233

HIGHLIGHTS

NOWA NOWA IRON PROJECT

• Definitive Feasibility Study (DFS) nearing completion.

• Total Measured and Indicated Resource for Five Mile deposit increased 13% from 5.8Mt to 6.57Mt.

• Total Resource for Five Mile estimated at 9.05Mt @ 50.8% Fe at a lower cutoff of 40% total Fe.

• $300,000 contribution to DFS received from Victorian Government.

• Eastern Iron to examine alternative port options as a result of decision by South East Fibre Exports Pty Ltd (SEFE) not to enter into port access agreement.

• Alternative port proposal from QUBE Logistics to be assessed.

• Environmental Effects Study (EES) suspended pending finalisation of port options study.

CORPORATE

• Placement of shares raised $100,800.

• Share Purchase Plan raised $207,499.

• The Company has instituted a range of measures designed to conserve cash.

• Managing Director, Greg De Ross has resigned from his current full-time role and accepted the role of part-time CEO.

www.easterniron.com.au

Twitter: @EasternIronEFE www.easterniron.com.au

Eastern Iron Limited (ASX: EFE) is pleased to report on activities undertaken during the quarter ended 30 June 2014.

NOWA NOWA IRON PROJECT

The Nowa Nowa Iron Project is located some 250 kilometres east of Melbourne close to the Princes Highway, which provides ready access to several nearby towns and possible export sites. (Figure 1 on next page).

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Figure 1 Nowa Nowa Locality Plan

Over the past 12 months, Eastern Iron has advanced a Definitive Feasibility Study (DFS) into the potential development of the magnetite-rich iron ore at the Five Mile deposit.

Definitive Feasibility Study

Eastern Iron has previously released details of capital and operating costs arising from the feasibility study (ASX release 24 January 2014) demonstrating that the Nowa Nowa Iron Project has an extremely low capital intensity (capital cost per tonne of annual production) of A$45/t. This compares favourably with virtually all proposed Australian hematite and magnetite projects which generally range between $150-350/t. This information is available to view on the Company’s website. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement.

Before completing the associated mining studies, including a production schedule, it was necessary to complete further drilling in an area of the ore body (Five Mile North) which had been classified as inferred resource and required upgrading to a higher level of confidence. This drilling was completed in March 2014 and an updated resource reported during the last quarter.

Resource Upgrade

The drilling program at Five Mile North consisted of 10 reverse circulation (RC) drill holes totaling 590m. Holes were drilled at roughly 25m centers on east-west lines perpendicular to the overall strike of the Five Mile deposit and consistent with previous drilling programs. Collar positions are shown on the accompanying plan (Figure 2 below).

Assay samples were taken from drill chips and collected over 2m intervals from immediately above and continuously through mineralised intervals. Samples were analysed by XRF.

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The resource estimate was compiled by H&S Consultants Pty Ltd (H&S) using data from 23 drill holes drilled by the GSV in 1955 and reported in GSV Bulletin 57, (G. Bell 1959) as well as results from nine diamond drill holes and 20 RC holes drilled by Eastern Iron. The upgraded resource was reported during the quarter (ASX release 21 May 2014). This information is available to view on the Company’s website. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

The resource estimate has been compiled using ordinary kriging and divided into categories in decreasing order of confidence as follows: Measured, Indicated and Inferred. The estimate is shown below and has been reported to a lower cutoff of 40% Fe which was chosen to maximize average resource grade and minimize internal waste.

Prospect	Measured	Measured	Indicated	Indicated	Inferred	Inferred	Total	Total
	Mt	Fe %	Mt	Fe%	Mt	Fe %	Mt	Fe %
Five Mile	2.25	52.8	4.32	50.4	2.49	49.7	9.05	50.8

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

Compared with the previous (June 2013) estimate, total tonnes in the current estimate are slightly lower. This is partly a result of more accurate positioning of the western boundary fault in the northern part of the resource but also due to a reinterpretation of historic GSV drillhole positions used in this latest estimate and derived from newly acquired LIDAR digital terrain modelling.

Mineralisation at Five Mile North is comparable to that intersected in earlier drilling programs in the main Five Mile deposit, ie massive magnetite iron ore with minor pyrite, chalcopyrite and hematite apparently replacing limey sediments and associated with limestones and felsic volcanics. The deposit is faulted along the western boundary by a prominent steeply eastdipping fault and may also be faulted along the eastern side were the mineralised section appears to be downthrown to the east.

The total Measured and Indicated Resource has increased from 5.8Mt to 6.57Mt as a result of the conversion of ‘inferred’ resource in the north to a ‘measured and indicated’ category, which was the objective of the drilling program.

The resource at Five Mile North also tends to be higher grade than the bulk of the resource so that inclusion of this material has lifted the average grade of both the measured and indicated categories of the total resource.

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Figure 2 Drill hole locations – Five Mile deposit

Port Options

In July 2012 Eastern Iron entered into an MOU with South East Fibre Exports Pty Ltd (SEFE) to investigate the use of the SEFE bulk ship loader and wharf facility at the Port of Eden for the loading of iron ore from Eastern Iron’s planned development at Nowa Nowa. Despite reaching advanced negotiations for the finalisation of a commercial agreement between the parties SEFE have now advised that their Japanese shareholders, Nippon Paper Group and Itochu Corporation, have decided not to enter into an agreement with Eastern Iron thereby denying use of the SEFE facility.

SEFE further advised that the Japanese shareholders were unable to make any positive decision for Eastern Iron’s use of the site prior to them making a decision on the future of the SEFE operation itself. This could leave the door open for future use of the site by Eastern Iron once these plans are finalised, however, no timetable for this decision was provided.

As an alternative to using the SEFE facility, Eastern Iron has received an indicative proposal from Qube Logistics, a division of Qube Holdings Limited (ASX: QUB), for a full service truck and shiploading solution using Qube’s Rotabox technology and based on using the multi-user Naval wharf

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which is adjacent to the SEFE wharf. Eastern Iron will investigate this option in greater detail including the size and type of ship that can be accommodated at the Naval wharf. Other options including the use of road and rail westwards to the Port of Melbourne will be investigated in greater detail over the next quarter.

Project Permitting

During the quarter scoping requirements for the Environmental Effects Study (EES) were finalised by the Victorian Government after receiving and reviewing several submissions from members of the public.

Studies describing the existing environment at the project site have largely been completed and reported to Government. However, in light of the recent decision by SEFE not to allow access to their Eden port facilities, Eastern Iron have advised Government that further work on the EES will be suspended until such time as an alternative port solution has been identified.

CORPORATE

Share Purchase Plan

During the quarter the Company completed a small capital raising by a Share Purchase Plan (SPP) launched on 5 May 2014 and closing on 26 May 2014. The SPP was designed to provide shareholders with the opportunity to purchase shares in the Company at $0.042 per share. Notwithstanding the weakness in the iron ore price and share price volatility during the SPP offer period, subscriptions were received for a total of 4,940,446 ordinary shares for proceeds of $207,500. The SPP issue price was the same as the issue price for the share placements announced on 6 March 2014 and 15 April 2014 to Harland Capital Fund LLC, which raised a total of $701,400 (Placements). The funds raised from the SPP and Placements will be utilised for ongoing work on the Nowa Nowa Iron Project including completion of the DFS.

Capital Management

The Company has taken steps to reduce operating cash requirements. These include a 50% reduction in fees paid to Directors and the Managing Director and Mr De Ross resigning as a Director of the Company and being retained on a part time (50%) basis as Chief Executive Officer on a reduced remuneration package. These measures will be reviewed in the future as changed circumstances permit.

• Complete and report results from studies undertaken as part of the Nowa Nowa Iron Project DFS

• Undertake a review of alternative Port options

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FINANCIAL POSITION

Total exploration expenditure for the quarter was $398,000. The cash balance at the end of the quarter was $247,000.

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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 2012 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.

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

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