Eastern Resources Limited announced the signing of a binding Strategic Partnership Agreement with Yongxing Special Materials Technology Co.,Ltd (YONGXING) to provide a framework for the companies' future collaboration in relation to the potential acquisition and development of lepidolite projects in Australia. The partnership will provide the company a solid framework for co-operation with YONGXING on joint acquisition and development of Projects, which extends to establishing for YONGXING a first right of refusal for an offtake agreement for lepidolite concentrates products. Partnership with YONGXING on lepidolite and Yahua on spodumene is part of the Company's strategy and plan to achieve a low-cost operation and to be a long term player in lithium industry.

Key terms of the Strategic Partnership Agreement are as follows: YONGXING and the Company wish to establish a long-term strategic partnership for the potential supply of lepidolite concentrates, and the potential acquisition and development of lepidolite projects. YONGXING will be the exclusive partner of the Company and the Company will be the exclusive partner of YONGXING when either Party seeks, acquires and develops the Projects. Before acquiring the Projects, YONGXING and the Company wish to enter a joint venture relationship for seeking Projects.

The parties agree in principle that: A joint venture (Pre-Acquisition JV) will be established to carry out works related to pre-acquisition of Lepidolite Projects. The interests in the Pre-Acquisition JV will be 60% for the Company and 40% for YONGXING or its subsidiaries. The funding contributions to the Pre-Acquisition JV will be $100,000 by the company and $900,000 by YONGXING.

The parties will discuss the termination or continuation of the Pre-Acquisition JV if no acquisition of a Lepidolite Project occurs within 12 months after formation of the Pre-Acquisition JV. When YONGXING and the Company make a decision on acquiring any Lepidolite Projects, the Parties will enter a joint venture (Lepidolite JV) for acquisition and development of the Projects, on the following key principles: The Lepidolite JV is to be responsible for carrying out further exploration drilling, completing a feasibility study, and development of the Projects. The interests of the Parties in each Lepidolite JV will be 60% for the Company and 40% for YONGXING or its subsidiaries, or the interests as mutually agreed when the parties form each Lepidolite JV.

Both parties to contribute to the costs of operation of the Lepidolite JV on a pro rata basis. With mutual agreement by the Parties, either Party could sell part of or all of its equity interests to a third party, and the Parties will hold a pre-emptive right on any sale of another party's joint venture interest to acquire that interest on the same terms offered to the third party (Pre-emptive Right). The Pre-emptive Right does not apply when either party sells part of or all of its joint venture interest to a wholly owned subsidiary and/or an entity controlled by that party.

The Company to be the manager of the Lepidolite JV subject to holding a 35% or greater interest in the Lepidolite JV and if YONGXING (or its subsidiaries) sells part of its joint venture interest to a third party resulting in that third party holding a joint venture interest in the Lepidolite JV of not more than 35%. Under any other circumstances the joint venture parties will negotiate to determine the manager of the Lepidolite JV. YONGXING will be granted a first right of refusal on offtake of lepidolite products from any of the JV projects.

Any further transactions pursuant to the Strategic Partnership Agreement remain subject to formal agreement.