ESTRELLA RESOURCES LIMITED

PROSPECTUS

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ACN 151 155 207

AN INVESTMENT IN THE COMPANY’S SECURITIES SHOULD BE CONSIDERED SPECULATIVE

This Prospectus is an important document and should be read in its entirety. You should consult your financial advisor before subscribing for Shares under this Prospectus.

Lead Manager

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Important Information

OFFER

The Offer contained in this Prospectus is an invitation to acquire fully paid ordinary shares ( Shares ) in Estrella Resources Limited ACN 151 155 207 ( Company or Estrella ).

LODGEMENT AND LISTING

This replacement Prospectus is dated 11 April 2012 ( Prospectus ). It replaces the original prospectus lodged with ASIC on 28 March 2012 ( Original Prospectus ). The expiry of this Prospectus is 13 months after the Prospectus Date. No securities will be issued or allotted on the basis of this Prospectus later than 13 months after the Prospectus Date.

The Company will apply to ASX Limited ( ASX ) within seven days after the Prospectus Date for admission of the Company to the official list of ASX and quotation of its Shares on ASX. None of ASIC, ASX or their officers take any responsibility for the content of this Prospectus or for the merits of the investment to which this Prospectus relates.

NOTE TO APPLICANTS

The information in this Prospectus is not financial product advice and does not take into account your investment objectives, financial situation or particular needs.

It is important that you read this Prospectus carefully and in its entirety before deciding whether to invest in the Company. In particular, you should consider the risk factors that could affect the performance of the Company. You should carefully consider these risks in light of your personal circumstances (including financial and tax issues) and seek professional guidance from your stockbroker, solicitor, accountant or other independent professional adviser before deciding whether to invest in Shares.

Some of the key risk factors that should be considered by prospective investors are set out in Section 1 and Section 5. There may be risk factors in addition to these that should be considered in light of your personal circumstances. No person named in this Prospectus, nor any other person guarantees the performance of the Company or the repayment of capital or any return on investment made pursuant to this Prospectus.

FORWARD LOOKING STATEMENTS

Various statements in this Prospectus constitute statements relating to intentions, future acts and events. Such statements are generally classified as forward looking statements and involve known and unknown risks, uncertainties and other important factors that could cause those future acts, events and circumstances to differ from the way or manner in which they are expressly or implicitly portrayed in this Prospectus. Such factors include, but are not limited to:

Uncertainties related to historical resource estimates;
The work expenditure commitments;
The ability to raise sufficient capital to fund future exploration or development programs;
Changes in economic conditions or financial markets;
Changes in input prices;
Litigation;
Legislative, environmental and other judicial, regulatory, political and competitive developments;
Technological or operational difficulties or an inability to obtain permits required in connection with maintaining, or advancing projects; and
Labor relations matters.

SUITABILITY OF INVESTMENT AND GENERAL RISK FACTORS

This Prospectus provides information to help investors decide whether they wish to invest in the Company. Before deciding to invest in the Company, potential investors should read the entire Prospectus, and in particular the technical information and the risk factors that could affect the future operations and activities of the Company. The Offer contained in this Prospectus does not take into account the investment objectives, financial situation and particular needs of the investor. Please read the Application Form carefully. Professional advice should be sought before deciding to invest in any securities the subject of this Prospectus.

SPECIFIC RISKS AS AN EXPLORATION COMPANY

Applicants should carefully consider the risk factors that affect the Company specifically and the resource, mining and exploration industry in which it operates. Applicants should note that resource exploration is a high risk endeavour.

Applicants should understand that exploration is both speculative and subject to a wide range of risks and that, even if the Company is able to develop its resource into a commercially viable reserve, Applicants may lose the entire value of their investment.

Details of the risk factors of which investors should be aware are described in more detail in Section 5 ( Risks ) of this Prospectus.

EXPOSURE PERIOD

The Corporations Act prohibits the Company from processing Applications in the seven day period after the date of Prospectus lodgement ( Exposure Period ). The Company applied for and was granted an extension of the Exposure Period to 14 days. The Exposure Period for this Prospectus expires on 11 April 2012. The purpose of the Exposure Period is to enable the Prospectus to be examined by market participants prior to the raising of funds. Applications received during the Exposure Period will not be processed until after the expiry of the Exposure Period. No preference will be conferred on any Applications received during the Exposure Period.

JURISDICTION

This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. No action has been taken to register or qualify the Shares or the Offer, or to otherwise permit a public offering of the Shares in any jurisdiction outside Australia. The distribution of this Prospectus outside Australia may be restricted by law and persons who come into possession of this Prospectus outside Australia should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. This Prospectus has been prepared for publication in Australia and may not be released or distributed in the United States or otherwise outside Australia. This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The Shares have not been, and will not be, registered under the US Securities Act or the securities laws of any state of the United States, and may not be offered or sold in the United States, or to, or for the account or benefit of a US Person, except in a transaction exempt from the registration requirements of the US Securities Act and applicable United States state securities laws. The Offer is not being extended to any investor outside Australia. This Prospectus does not constitute an offer or invitation to potential investors to whom it would not be lawful to make such an offer or invitation.

ELECTRONIC PROSPECTUS

This Prospectus will be issued in paper form and as an electronic prospectus, which may be viewed online at the Company’s website at www.estrellaresources.com.au. The Offer is available to persons receiving an electronic version of this Prospectus in Australia. Applications can only be submitted on an Application Form accompanying this Prospectus or in its paper copy form downloaded in its entirety from www.estrellaresources.com.au. The Act prohibits any person from passing the Application Form on to another person, unless it is attached to, or accompanied by, a complete and unaltered version of this Prospectus.

This Prospectus is also available to Australian resident investors in electronic form at the Offer website, www.estrellaresources.com.au. The Offer constituted by this Prospectus in electronic form is available only to Australian residents accessing the website from Australia. It is not available to persons in the United States. Persons who access the electronic version of this Prospectus should ensure that they download and read the entire Prospectus.

CURRENCY

All references to dollars in this Prospectus, unless otherwise stated, are to Australian dollars ( A$ or AUD ).

DISCLAIMER

No person is authorised to give any information or to make any representation in connection with the Offer described in this Prospectus which is not contained in this Prospectus. Any information not so contained may not be relied upon as having been authorised by the Company, or any other person in connection with the Offer. You should rely only on information in this Prospectus.

The Company, the Lead Manager and the Share Registry disclaim all liability, whether in negligence or otherwise, to persons who trade Shares before receiving their holding statement.

OBTAINING A COPY OF THIS PROSPECTUS

During the Offer period, any person may obtain a hard copy of this Prospectus free of charge by contacting the Estrella Resources Limited Offer Information Line on +61 2 9993 4408 from 9.00am until 5.00pm AEDT Monday to Friday during the Offer Period.

Applications for Shares may only be made on the appropriate Application Form attached to, or accompanying, this Prospectus in its paper copy form, or in its electronic form which must be downloaded in its entirety from www.estrellaresources.com.au. By making an Application, you declare that you were given access to the Prospectus, together with an Application Form. The Corporations Act prohibits any person from passing the Application Form on to another person unless it is attached to, or accompanied by, this Prospectus in its paper copy form or the complete and unaltered electronic version of this Prospectus.

PROPERTY OF THE COMPANY

Unless otherwise stated, assets and property portrayed in photographs in this Prospectus are owned by the Company.

EXPLORATION TARGETS

All statements as to potential exploration targets of the Company made in this Prospectus are conceptual in nature.

DEFINED TERMS AND ABBREVIATIONS

Defined terms and abbreviations used in this Prospectus are explained in Section 14 ( Glossary ). Unless otherwise stated or implied, references to times in this Prospectus are to AEDT. Unless otherwise stated or implied, references to dates or years are calendar year references.

PRIVACY

By completing an Application Form, you are providing personal information to the Company, and the Share Registry, which is contracted by the Company to manage Applications. The Company, and the Share Registry on their behalf, collect, hold and use that personal information to process your Application, service your needs as a Shareholder, provide facilities and services that you request and carry out appropriate administration.

Once you become a Shareholder, the Corporations Act and Australian taxation legislation require information about you (including your name, address and details of the Shares you hold) to be included in the Company’s public register. The information must continue to be included in the Company’s public register if you cease to be a Shareholder. If you do not provide all the information requested, your Application Form may not be able to be processed. The Company, and the Share Registry may disclose your personal information for purposes related to your investment to their agents and service providers including those listed below or as otherwise authorised under the Privacy Act 1988 (Cth):

(a) The Share Registry for ongoing administration of the Shareholder register;
(b) The Lead Manager in order to assess your Application;
(c) Printers and other companies for the purpose of preparation and distribution of documents and for handling mail;
(d) Market research companies for the purpose of analysing the Company’s shareholder base and for product development and planning; and
(e) Legal and accounting firms, auditors, management consultants and other advisers for the purpose of administering, and advising on, the Shares and for associated actions.

You may request access to your personal information held by or on behalf of the Company. You can request access to your personal information or obtain further information about the Company’s privacy practices by contacting the Share Registry or the Company. The Company aims to ensure that the personal information it retains about you is accurate, complete and up to date. To assist with this, please contact the Company or the Share Registry if any of the details you have provided change.

In accordance with the requirements of the Corporations Act, information on the Shareholder register will be accessible by members of the public. This document is important and should be read in its entirety.

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Chile’s star in copper-gold

IMPORTANT INFORMATION	IFC
KEY OFFER INFORMATION	2
LETTER FROM THE CHAIRMAN	3
1. INVESTMENT OVERVIEW	4
2. COMPANY OVERVIEW	11
3. THE PROjECTS	13
4. INDEPENDENT GEOLOGIST’S REPORT	18
5. BUSINESS AND INVESTMENT RISKS	75
6. FINANCIAL INFORMATION	80
7. DIRECTORS AND MANAGEMENT	86
8. DETAILS OF THE OFFER AND CAPITAL STRUCTURE	89
9. MATERIAL CONTRACTS	94
10. CORPORATE GOVERNANCE	97
11. ADDITIONAL INFORMATION	104
12. INVESTIGATING ACCOUNTANT’S REPORT	112
13. LEGAL TENEMENT REPORT	118
14. GLOSSARY	146
APPLICATION FORMS	149
CORPORATE DIRECTORY	IBC

PROSPECTUS 1

Section 1 Key Offer Investment Information Overview

KEY DATES

Prospectus lodged with ASIC	11 April 2012
Opening Date	23 April 2012
Closing Date	11 May 2012
Expected date for allotment and issue of Shares	16 May 2012
Expected date for despatch of holding statements	17 May 2012
Expected date for the quotation of the Company’s securities on ASX	22 May 2012

The Directors reserve the right to vary the Offer dates and to extend the Offer or to close it at an earlier date. The above dates are indicative only.

KEY OFFER STATISTICS

Offer Price per Share	$0.20
Shares available under the Offer	30,000,000
Gross proceeds from the Offer	$6,000,000
Total number of Shares on issue on completion of the Offer	87,101,000
Indicative market capitalisation	$17,420,200
Indicative enterprise value1	$11,470,200

Enterprise value is calculated as market capitalisation plus debt, minus total cash and cash equivalents after the Offer.

2 ESTRELLA RESOURCES

Letter from the Chairman

11 April 2012

Dear Investor,

On behalf of the Directors, it is my pleasure to invite you to become a shareholder of Estrella Resources Limited ( Company ).

The Company’s objective is to capitalise on Chile’s unique geopolitical advantages, our strong “in-country” networks and specialist geology skills. The Board’s focus is on what we believe are highly prospective Projects that are suited to rapid development and medium term production.

The Company currently has four Projects in Chile that are prospective for copper-gold mineralisation. They include:

The Agustina Project;
The Venus Project;
The Luna Project; and
The Inca Project.

The Board has identified Chile as an attractive destination as it is the world’s largest copper producer. The Board believes that the Company’s Projects will offer low capex advantages due to their proximity and access to nearby mining infrastructure.

Estrella is ‘drill ready’ with encouraging initial sampling results and the identification of a large geophysical anomaly at Estrella’s flagship Agustina Project. Estrella intends to embark on an aggressive drill program post IPO to test this anomaly. Estrella’s key exploration objective is to identify a jORC compliant resource at its Agustina Project by Q1 2013.

The Offer provides an opportunity for you to share in our Company’s exciting future. Detailed information about the Offer and the Company’s portfolio of interests in early-stage copper-gold projects are set out in this replacement Prospectus which addresses requests from ASIC for additional disclosures regarding the investment opportunity.

This Prospectus includes a description of the key risks associated with an investment in the Company. These include risks associated with the Company maintaining its mining and exploration interests and successfully exploring and advancing the Projects. I encourage you to read this Prospectus carefully and in its entirety before making your investment decision (especially Section 5 on Risks).

To apply for Shares, you will need to fill out the Application Form that can be found at the end of this Prospectus. If you have any questions about how to apply for Shares, please call the Estrella Resources Offer Information Line on +61 2 9993 4408 (from 9.00 am to 5.00 pm AEDT) Monday to Friday during the Offer Period.

On behalf of the Board of Directors and senior management team, I look forward to welcoming you as a Shareholder.

Yours sincerely,

Gavin Solomon Non-Executive Chairman

“The Offer provides an opportunity for you to share in our exciting future.”

Section 1 Investment Overview

The Company

Estrella Resources is an Australian based, Chilean focused, copper-gold exploration company. Estrella Resources Chile SpA (Estrella Chile) is a wholly owned subsidiary of the Company which was formed to acquire and manage the Company’s Chilean exploration interests.

The Company holds:

An option to acquire 100% of the mining and exploration interests in the Agustina Project (which is the subject of the Agustina Option Agreement);
100% exploration interests in the Venus Project;
100% exploration interests in the Luna Project; and
A 91.5% mining exploration interest in the Inca Project (which is the subject of the Finder’s Fee Agreement).

Further details of the legal agreements and Estrella’s interests in its Projects are set out in the Legal Tenement Report in Section 13.

Business Overview

The Company is focused on:

Investing in highly prospective projects that are strategically located and well supported by surrounding infrastructure in Chile;
The exploration and development of Estrella’s Projects; and
Creating shareholder value through responsible and ethical management of the Company’s assets and resources.

Investment Highlights

In identifying the Company’s Projects, the Board of Estrella and its management team have focused on:

The first characteristic is the existence of several very large copper, gold and iron mines along the Atacama fault zone in which Estrella’s Projects lie. Some of which include:

(a) Andacollo (Teck Resources – NYSE:TCK) – 484Mt @ 0.35% Cu (Proven & Probable Reserves, CIM Guidelines); and
(b) Productora (Hot Chili – ASX:HCH) – 85Mt @ 0.6% Cu, 0.1g/t Au (Indicated & Inferred Resources, jORC Code).

The second is the underexplored nature of the coastal belt for IOCG style mineralisation. It was previously thought that this region is more prospective for iron mineralisation. However recent exploration has discovered the existence of copper mineralisation within Region IV of Chile.

The third is the existence of small mines and artisanal workings on the Projects. This enhances the focus of the exploration strategy as it allows Estrella to view the structures in three dimensions and view the controls in the mineralisation.

Further details of the regional geology and prospectivity of the Projects are set out in the Independent Geologists Report which is located in Section 4.

Agustina Project

The Agustina Project is the Company’s flagship Project. It comprises a total area of 18.5 km². The Agustina Project includes a number of small scale artisanal mines. Estrella Chile has a unilateral option to acquire 100% title to a total of 15 mining (exploitation) and exploration Concessions located in Central Chile.

The Company believes that the Agustina Project may host several copper, gold and iron ore prospects, some of which have been exploited historically on a small scale. An exploration program at the Agustina Project is planned to commence immediately after the IPO to fast track resource definition.

Prospective projects;
Projects with potential for low capital expenditure requirements for development;
Projects with access to nearby infrastructure; and
Projects with potential to ‘fast track’ to production.

Estrella’s Board and management team believe that shareholder value is more likely to be maximised if Estrella becomes a medium term producer.

The particular geographical region (Region IV) of Chile in which the Company’s four projects lie has a number of characteristics which the Board believes makes them highly prospective for iron oxide copper gold (IOCG) style systems.

Venus Project

Estrella Chile will, upon completion of the pending judicial process, own 100% title to a total 46 exploration Concessions located in Central Chile (Refer to the Legal Tenement Report in Section 13). The Venus Project is located adjacent to the Agustina Project. The Project comprises a total area of 85 km² and hosts a number of artisanal workings. The Company believes that the area comprising the Venus Project may be a prospective region for copper-gold.

4 ESTRELLA RESOURCES

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Luna Project

Estrella Chile will, upon completion of the pending judicial process, own 100% title to a total of 89 exploration Concessions totalling an area of 208 km² (Refer to the Legal Tenement Report in Section 13). The Luna Project is 75 km to the south of Agustina. The Company believes that the area comprising the Luna Project may be a prospective region for copper-gold.

Inca Project

The Inca Project is an area situated within the Luna Project. Whilst they are two separate projects, they are combined under the one contiguous tenement holding held solely by the Company (see Independent Geologist’s Report in Section 4). The Inca Concessions were permitted to lapse in accordance with the Finder’s Fee Agreement (details of which are in Sections 9 and 13 of the Prospectus) so that the Inca Concessions now form part of the Luna Concessions.

The Inca Project contains remnants of small scale mining and artisanal workings. Estrella Chile has an interest in the Inca Project area which totals an area of 54 km². The Company believes that the area comprising the Inca Project (which is surrounded by the Luna Project) may be a prospective region for copper-gold. The Company’s 91.5% interest in the Inca Project is the subject of the Finder’s Fee Agreement, details of which are set out in Section 13 of the Prospectus.

Access to Infrastructure

(a) The Agustina and Venus Projects are located within proximity to:
(i) Road: The Agustina and Venus Projects are accessible via the Pan American Highway which is situated 6 km from the Projects.
(ii) Rail: An existing rail line is situated 10 km to the east of the Agustina Project and runs through the south east of the Venus Project.
(iii) Power: Power is available via the construction of a 10 km line to an existing grid.
(iv) Accommodation: Exploration teams may be based at La Higuera located approximately 20 km away thus reducing camp establishment costs.
(v) Processing: A newly constructed private concentrator plant is within 15 km of Agustina and an established government owned plant (ENAMI) is located within 110 km. Both plants can treat oxide and sulphide ores as well as recover gold.
(vi) Water: Ground water is available in El Trapiche village, 13 km north west of the Projects.
(vii) Ports: Deep water port facilities are located at Coquimbo (90 km) and Huasco (160 km) from the Project areas.
(b) The Luna and Inca projects are located within proximity to:
(i) Road: Sealed road access from the town of Ovalle is available up until approximately 5 km from the Luna/ Inca Projects where it leads into the Barrick/Codelco joint venture road.
(ii) Accommodation: The site is easily accessible and allows for the establishment of an exploration camp if necessary. There is accommodation available in the nearby village of Rio Hurtado which is approximately 15 km from the Luna/Inca Projects.
(iii) Processing: An established government owned processing plant called Empresa Nacional de Minería (ENAMI) is located at Ovalle which is approximately 65 km from the Luna/Inca Projects. The ENAMI plant can treat oxide and sulphide ores as well as recover gold.
(iv) Water: Water is available via ground water or via local rivers and creek systems which adjoin the Luna/Inca Projects.
(v) Ports: Deep water port facilities are located in Coquimbo which is approximately 80 km from the Project areas.

Significant knowledge of mining and exploration in Chile

The Company has an experienced Board with significant exploration and corporate experience. The Board and management has both South American and Australian mining industry and international business expertise.

Key Risks

Investors should carefully consider the risk factors that affect the Company specifically as well as the resource, mining and exploration industry in which it operates. Investors should note that mining exploration is a high risk endeavour. The Shares to be issued under the Offer pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares.

Investors should understand that exploration is both speculative and subject to a wide range of risks and that, even if the Company makes a commercial discovery, investors may lose the entire value of their investment. Refer to Section 5 for further details.

The key risks for the Company include without limitation:

(a) Exploration Projects

There is no guarantee that the exploration of any of the Projects in which the Group now owns or will acquire an interest will result in the discovery of an economic resource. Even if an economic resource is identified, there is a risk that the Company may not be able to commercially exploit the resource.

SECTION 1 – INVESTMENT OVERVIEW 5

Section 1 Investment Overview

(b) Acquisition and Title to Exploration and Mining Concessions

Although Estrella Chile will endeavour to maintain solid Concession management, the conditions attached to the exploration and mining (exploitation) Concessions may change and Estrella Chile may not be able to comply with some or all of the conditions associated with the Concessions.

Title to the Agustina Concessions which Estrella Chile has an option to acquire is subject to compliance with the terms and conditions of the Concessions). In the event that any conditions attached to the Concessions are not met or the holder and Estrella Chile fails to comply with any legislation affecting the Concessions, Estrella Chile’s interest in the Agustina Concessions could be diminished.

Estrella Chile’s interests in certain Concessions contained within the Venus Project and Inca Project are subject to partial overlaps with third party concession holders and Estrella Chile may not be granted first preference rights to some of these overlapping areas.

Estrella Chile’s interests in the Concessions contained within the Venus Project were also subject to a third party invalidity request which was declared invalid by the initial court and is currently pending a final decision by the court of appeal. The Company believes that the outcome of the decision will be in favour of Estrella Chile.

A summary of the terms and conditions of the Concessions and mining regulatory risks associated with the Concessions are set out in the Legal Tenement Report in Section 13, the Independent Geologist’s Report in Section 4 and in Section 5 under ‘Company Specific Risks’.

(c) Limited History and Exploration Work

Estrella Chile has held limited historical tenure of the Projects. The exploration work done to date across the Projects is at an early stage and there is no guarantee that Estrella Chile will identify economic mineralisation or develop viable mining operations.

Further, the Company has not previously generated income and does not anticipate becoming profitable in the short to medium term. The Company may require additional capital in the future and may not be able to obtain the necessary capital on satisfactory terms. If the Company does not have sufficient funds to enable Estrella Chile to exercise the option which is the subject of the Agustina Option Agreement, Estrella Chile may not be able to obtain 100% legal title to the Concessions comprising the Agustina Project.

(d) No Mineral Resources Estimates

Currently, there are no existing mineral resource estimates in relation to any of the Group’s Projects and there is no guarantee that a mineral resource in relation to any of the Projects will be achieved in the future.

(e) Exchange Rate

All payments referred to in the Agustina Option Agreement and the Finder’s Fee Agreement are denominated in US$. Any adverse exchange rate movement with the AUD$ will increase the costs of any payments made by the Company.

(f) Sovereign Risk

Whilst Chile is considered one of South America’s most politically stable nations, the Company cannot guarantee that the legal and regulatory requirements in Chile will not change which may affect the Company’s operations. These changes may include changes to mining Concession holdings, foreign ownership, licences, taxation and land access.

(g) Liquidity Risks

A significant number of the 57,101,000 Shares on issue prior to completion of the Offer (which constitutes approximately 55% of the total Shares on issue on completion of the Offer on an undiluted basis) are likely to be classified as restricted securities by the ASX and therefore be escrowed. This may cause a liquidity risk for the Shares given 40% of the Shares (on completion of the Offer and on an undiluted basis) may not be traded for 24 months from the date of quotation. Furthermore, there is no guarantee that there will be an ongoing liquid market for Shares. If illiquidity arises, there is a real risk that Shareholders will be unable to realise their investment in the Company. Further details of the Shares on issue and restricted securities arrangements are set out in Section 8.

(h) Other Risks

Other risks include environmental, regulatory risks and reliance on key management personnel.

Further details of the associated risks are set out in Section 5.

6 ESTRELLA RESOURCES

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Directors and Management of the Company	Directors and Management of the Company
Topic	Summary	More information
Who are the	Dr Jason Berton (Managing Director)	See Section 7
Directors of the	• Over 12 years mining and exploration industry experience at Barrick,
Company and what	Homestake and BHP Billiton.
is their experience?	• Also worked as a Senior Geology Consultant for SRK Consulting and as Chief
	Geologist co-ordinating due diligence for private equity investments.
	• Specialist Structural Geologist with experience in gold, copper, uranium and
	iron ore.

PhD in Structural Geology and B.Sc (Hons), B.Ec, member of AusIMM and GSA.

Gavin Solomon (Non-Executive Chairman)

Over 30 years experience in Australian and international equity and capital markets.
Lawyer by background and experienced Director of ASX listed companies.
Founding shareholder and continuing Non-Executive Director of Endocoal Limited (ASX:EOC).

Julian Bavin (Non-Executive Director)

Over 30 years experience in the mining industry, with over 20 years with Rio Tinto including 8 years as Exploration Director – South America.
Current Executive Director of Pan Global Resources Inc. and Non-Executive Director of Exeter Resources Inc.
B.Sc Mining Geology (Hons), M.Sc Mineral Exploration, Member of Institution of Mining & Metallurgy, Chartered Engineer & Fellow of Society of Economic Geologists.
Based in Santiago de Chile and Spanish speaker.

Simon Kidston (Non-Executive Director)

20 years investment banking & equity capital markets experience in Australia, UK and Asia.
Former Director and co-founder of Endocoal Limited (ASX:EOC).
Founding shareholder and continuing Non-Executive Director of Carabella Resources Limited (ASX:CLR).
Who is on the Juan Pablo Vergas de la Vega (General Manager – Chile) See Section 7 management team • Over 10 years mining experience with Santos, Rio Tinto and BHP Billiton in of the Company? business development and project valuation.
Extensive experience in Australia, Africa and South America.
Chilean and Australian Citizen and a native Spanish speaker.
B.Ec, Masters of Mineral Economics. Justin Clyne (Company Secretary)
15 years of experience in the legal profession acting for a number of Australia’s largest corporations.
Currently a director and company secretary for a number of listed and unlisted mining, oil and gas companies.
Masters of Law (International Law) and a Chartered Company Secretary.

SECTION 1 – INVESTMENT OVERVIEW 7

Section 1 Investment Overview

Significant Interests of Key People and Related Party Transactions

More information Refer to ‘Related Party Transactions’ in Section 11 and ‘Mandate Letter’ in Section 9 and ‘Managing Director’s Employment Contract’ in Section 7


Topic	Summary	More information
What signifcant	• Dr jason Berton has been granted 3,000,000 unlisted options in the	Refer to ‘Related
benefts and interests	Company vesting in 3 tranches of 1,000,000 each, the frst of which will vest	Party Transactions’
are payable to Directors	on the date of the Company’s listing on the ASX.	in Section 11 and
and other persons	• Simon Kidston and Gavin Solomon, both Directors and Shareholders of	‘Mandate Letter’
connected with the	Estrella, are also directors and shareholders of Helmsec, the Lead Manager	in Section 9 and
issuer or Offer?	of the Offer. Accordingly, Estrella and Helmsec are related parties. Pursuant	‘Managing Director’s
	to the Mandate Letter between the Company and Helmsec, the Company	Employment
	has provided or agreed to provide to Helmsec past raising/advisory fees of	Contract’ in Section 7
	$301,950 (plus GST) and 1,105,000 options exercisable at IPO price, IPO
	raising fees of $360,000 (plus GST) and 1,500,000 options exercisable at
	IPO price, post IPO fees of $8,000 (plus GST) per month for 24 months and
	6% of capital raised from Helmsec Introduced Parties.
	The following advisers and service providers will be paid or have been paid	Refer to ‘Interests
	professional fees in relation to the services they have provided to the Company	of Advisers’ in
	or the Offer:	Section 11 and

Refer to ‘Interests of Advisers’ in Section 11 and ‘Mandate Letter’ in Section 9

(a) Grant Thornton (Investigating Accountant);
(b) Middletons (Australian Lawyers); (c) Harris Gomez (Chilean Lawyers);
(d) justin Clyne (Company Secretary);
(e) SRK Consulting (Independent Geologist); and

(f) Boardroom Pty Limited (Share Registry).

	(b) Middletons (Australian Lawyers); (c) Harris Gomez (Chilean Lawyers); (d) justin Clyne (Company Secretary); (e) SRK Consulting (Independent Geologist); and (f) Boardroom Pty Limited (Share Registry).
Substantial	There is no shareholder who holds more than 20% of the Shares on issue as at	See Section 8
shareholders	the date of this Prospectus. Details of shareholders who hold more than 5% of
	the Shares as at the date of the Offer, and who will hold more than 5% of the
	Shares after completion of the Offer are set out in Section 11.

Terms of the Offer

Topic	Summary	More information
Who is the issuer of	Estrella Resources Limited ACN 151 155 207.	See Section 2
this Prospectus?
What does the	The Company is an early-stage copper/gold explorer in Chile.	See Section 2
Company do?
What is the Offer?	The Offer is an initial public offering of Shares that will be issued	See Section 2 and
	by the Company.	Section 8
What is the Offer Price?	The Offer Price is $0.20 per Share.	See Section 8
What are the total	The total proceeds of the Offer will be $6,000,000.	See Section 8
proceeds of the Offer?
Is there a minimum and	Applications must be for a minimum of 10,000 Shares (i.e. $2,000.00) and	See Section 8
maximum subscription?	thereafter in multiples of 2,500 Shares (i.e. $500.00). The Offer contained in this
	Prospectus is for $6,000,000.

8 ESTRELLA RESOURCES

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Terms of the Offer Topic Summary What is the key The following table summarises the Company’s reviewed and pro forma financial information of consolidated statement of financial position at 31 December 2011 assuming the Company? completion of the Offer and the pro forma adjustments which are set out in Section 6 (Note 1) and should be read together with the Investigating Accountant’s Report in Section 12 and Management’s discussion and analysis of the Historical Financial Information in Section 6.

More information See Section 6 and the Investigating Accountant’s Report in Section 12

the Historical Financial Information	in Section 6.
	Reviewed	Reviewed
	as at	Pro forma as at
	31 December 2011	31 December 2011
	$’000	$’000
Cash and cash equivalents	832	6,116
Other current and non current
assets	546	612
Total assets	1,378	6,728
Total liabilities	87	87
Net assets	1,291	6,641
Issued capital	1,496	6,867
Accumulated losses	(267)	(480)
Option reserves	62	254
Total equity	1,291	6,641

The Directors have considered the matters outlined in ASIC Regulatory Guide 170. Given the Company’s limited operating history and focus on the evaluation and exploration of its interests in its prospective Projects, the Company considers that it is unable to provide potential investors with any reliable revenue, profit or cash flow projections or forecasts.

How will the total proceeds of the Offer be used?

The Company proposes to fund its intended activities as outlined in the table below.

Following the close of the Offer and upon admission to the Official List, the Company will have received from investors a total of $6,000,000. Please note that the Company had approximately $600,000 in cash as at 1 March 2012. The Company intends to apply these funds as follows:

See Section 2 and Section 4 Independent Geologist’s Report

	Anticipated expenditure for 2 years from IPO Amount ($) Agustina Project Option Fees 1,050,000 Exploration 4,000,000 IPO expenses 650,000 Working Capital and corporate overheads 900,000 Total 6,600,000
How is the Offer structured?	The issue of 30,000,000 Shares at $0.20 each. On completion of the Offer, there will be 87,101,000 Shares. See Section 8
Is the Offer underwritten?	The Offer is not underwritten. See Section 8
What is the allocation policy?	The Directors reserve the right, in their absolute discretion, to allot the Shares applied for under any Application in full or to allot any lesser number or to decline any Application for any or no reason. The Directors may in their absolute discretion give preference to certain investors in accepting Applications under the Offer. Refer to “Allotment of Shares” in Section 8

SECTION 1 – INVESTMENT OVERVIEW 9

Section 1 Investment Overview

Terms of the Ofer
Topic	Summary More information
Who can apply under the Offer?	Retail and Institutional Investors. Certain Applicants domiciled outside Australia may not be permitted to apply. See Section 8
How can I apply under the Offer?	By completing and submitting a valid Application Form, a blank copy of which accompanies and forms part of this Prospectus (including the electronic version of this Prospectus), in accordance with the instructions set out on the Application Form. Applications must be for a minimum of 10,000 Shares (i.e. $2,000.00) and thereafter in multiples of 2,500 Shares (i.e. $500.00). Applications for less than the minimum accepted application of 10,000 Shares will not be accepted. To remit Application Monies, Applicants must apply and pay via cheque issued by an Australian domiciled bank. See Application Form
What will the market capitalisation of the Company be upon listing on the ASX?	Based on the Offer Price, the expected market capitalisation of the Company at the date of listing on the ASX will be $17,420,200. See Key Offer Information
What are the key dates of the Offer?	The key dates for the Offer are as follows: See Important Information Prospectus lodged with ASIC 11 April 2012 Opening Date 23 April 2012 Closing Date 11 May 2012 Expected date for allocation of Shares 16 May 2012 Expected date for despatch of holding statements 17 May 2012 Expected date for the quotation of the Company’s securities on ASX 22 May 2012 The above dates are indicative only and may change without notice. The Company reserves the right to extend the Closing Date or close the Offer early without notice.
What are the key benefts of investing in the Company?	The key benefts of investing in the Company include: • Investing in a copper-gold focused exploration company; and • The Company’s mining interests are in Chile. See Section 2
Is there any brokerage, commission or stamp duty payable by applicants?	No brokerage, commission or stamp duty is payable by Applicants on acquisition of Shares under the Offer. See Section 8
When will dividends on the Shares be paid?	The Directors intend to give priority to the development of the Company’s Projects. Accordingly, the Directors do not anticipate paying any dividends in the short term. See Section 11
What are the costs of the Offer?	The costs of the Offer are estimated at approximately $650,000 (exclusive of GST and VAT). These costs will be paid by the Company out of the proceeds of the Offer. See Section 12
Where can I fnd more information about this Prospectus or the Offer?	Further information can be obtained by reading this Prospectus in its entirety. For advice on the Offer, you should speak to your stockbroker, accountant or other professional adviser. If you require assistance or additional copies of this Prospectus please contact the Company on +61 2 9993 4408. See Section 11
Can the Offer be withdrawn?	The Company reserves the right not to proceed with the Offer at any time before the issue of Shares to successful Applicants. If the Offer does not proceed, Application monies will be refunded. No interest will be paid on any Application monies refunded as a result of the Offer being withdrawn. See Section 8

10 ESTRELLA RESOURCES

Section 2 Company Overview

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Image: View south to small scale mining adits at the Orion prospect at the Agustina Project (Feb 2012)

SECTION 2 – COMPANY OVERVIEW 11

What does Estrella do?

Estrella is an Australian based, Chilean focused coppergold exploration company. The Company’s wholly owned subsidiary, Estrella Chile, has been granted or is acquiring various mining Concessions in Chile.

Estrella Chile holds:

A unilateral option to acquire 100% of mining exploration interests in the Agustina Project (which is the subject of the Agustina Option Agreement);
A 100% mining exploration interest in the Venus Project;
A 100% mining exploration interest in the Luna Project; and
A 91.5% mining exploration interest in the Inca Project (which is the subject of the Finder’s Fee Agreement).

Chile is the world’s largest copper producer producing approximately 34% of global copper output and having approximately 28% of global copper reserves.

The Company believes that Chile is well positioned to service both the Asian and South American market. Chile is an export oriented country that has good infrastructure via existing ports, roads, rail and power.

Corporate Objectives

The Company’s business objectives are:

(a) To identify a jORC compliant resource by the end of Q1 2013;
(b) To continually assess the region for highly prospective projects;
(c) To develop the Projects, where appropriate, into operating mines; and
(d) To create value for shareholders.

The Directors are satisfied that following the close of the Offer and upon admission to the Official List, the Company will have sufficient working capital to meet its stated business objectives for the next two years. These objectives and the expenditure applied thereto may change depending on the results of exploration at the Projects during this period.

Use of Funds

The Company proposes to fund its intended activities as outlined in the table below. It should be noted that the budgets will be subject to changes on an on-going basis depending on the results obtained from the exploration undertaken. This involves an on-going assessment of the Company’s Projects and may lead to increased or decreased levels of expenditure on certain interests.

Following the close of the Offer and upon admission to the Official List, the Company will have received from investors a total of $6,000,000. Please note that the Company has approximately $600,000 in cash as at 1 March 2012. The Company intends to apply these funds as follows:

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

Anticipated expenditure Amount
for two years from IPO ($)
----- End of picture text -----

Agustina Project Option Fees	1,050,000
Exploration (see breakdown	4,000,000
below)
IPO expenses	650,000
Working capital and	900,000
corporate overheads
Subtotal	6,600,000

The Company’s proposed exploration program and budget estimates over the two year period, following Listing, has been reviewed by SRK Consulting, the Independent Geologist. Dr Greentree of SRK Consulting has concluded that these proposals are well planned and merited. For further details, please see Section 4, Independent Geologist’s Report.

Exploration Costs

The Company intends to apply available funds and those raised from the Offer for exploration at its Projects as follows:

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

Year 1 Year 2 Total
Amount Amount Amount
Item ($) ($) ($)
----- End of picture text -----

Concession costs	120,000	120,000	240,000
Geochemistry	90,000	40,000	130,000
Geophysics	190,000	110,000	300,000
Consultants
and Wages	373,000	480,000	853,000
Drilling and Sampling	576,000	1,436,000	2,012,000
Assaying	85,000	180,000	265,000
Environmental
and Community	85,000	115,000	200,000
Subtotal	1,519,000	2,481,000	4,000,000

The actual expenditures set out in the above table may vary from the above estimates and the Directors reserve the right to vary the expenditure dependent on the circumstances and other opportunities. For a cost breakdown of the four individual Projects, refer to the Independent Geologist Report in Section 4.

Following completion of the Offer, the Company will have sufficient working capital to carry out its stated objectives.

12 ESTRELLA RESOURCES

Section 3 The Projects

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Image: Dr Jason Berton (left) and SRK consultant inside Historical mine adit at Agustina Project (Oct 2011)

SECTION 3 – ThE PROjECTS 13

Projects

Estrella has four prospective Projects which are within 100 km of La Serena in Region IV in central northern Chile (see Figure 1). The Projects are prospective for iron-oxide copper gold (IOCG) style mineralisation. Estrella’s four projects are:

The Agustina Project;
The Venus Project;
The Luna Project; and
The Inca Project.

Figure 1: Location of Estrella’s Projects

==> picture [216 x 307] intentionally omitted <==

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

300000 400000
Copiapo
Candelaria
Huasco port Relincho (Teck)
La Productora El Morro
Chile
Pascua Lama
Argentina
Venus Veladero
Agustina
El Romeral
La Serena
Legend El Indio
Estrella Projects
Other ProjectsAtacama Fault Zone Andacollo Lun a 0 10 Legend 20 40 60Km
Railroad Inca
Pan American Hwy 300000 400000
40
5
150
40
40 40
5
150
5
5
55
5 Pan American Hwy
5
5
7000000 7000000
6900000 6900000
6800000 6800000
6700000 6700000
----- End of picture text -----

Agustina Project

The Agustina Project is Estrella’s flagship project. Agustina lies in the Coastal Ranges of Region IV and is located within the Atacama Fault Zone (AFZ). The AFZ is a known host of significant IOCG deposits. These deposits include:

Andacollo (Teck Resources – NYSE:TCK) – 484 Mt @ 0.35% Cu (Proven & Probable Reserves. CIM Guidelines); and
Productora (Hot Chili – ASX:HCH) – 85 Mt @ 0.6% Cu, 0.1 g/t Au (Indicated & Inferred Resources, jORC Code).

Estrella has already identified five preliminary prospects within the Agustina Project (see Figure 2) of which Orion has several highly prospective drill targets. These targets have been identified following the completion of:

Structural mapping and sampling; and
Magnetic, resistivity and induced polarisation (IP) geophysical surveys.

The Agustina Project is situated within close proximity to major infrastructure including;

An existing rail line that is situated 10 km from the east of the Concessions;
The Pan American Highway which is located 6 km west of the Concessions;
Grid power is within 10 km of the Concessions; and
A newly constructed copper processing plant is within 15 km from the Project.

Estrella’s objectives at Agustina are to delineate a maiden jORC compliant resource by the end of Q1 2013 and thereafter, potentially fast track to production.

The Agustina Project Concessions comprise a total area of 25 km[2] with first preference rights to 18.5 km[2] . Additional details can be found in the Independent Geologist’s Report and Material Contracts Section of this Prospectus in Section 4 and Section 9.

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

Figure 2: Agustina Project area with prospects and
significant grab samples overlaid.
6 Cu 0.31%
Orion North Fe 17.42% Au 1.11g/t
Aurora 7 Cu 0.85%
Au 0.18g/tFe 14.19% 3 Cu 1.25%
Centauri8 Cu 0.04%Au 69.25g/tFe 20.29% Orion1 Cu 6.1%Au 0.61g/tFe 21.48%Au 0.07g/t
Nova 2 Cu 1.89%
9 Cu 0.78%Au 0.04g/tFe 7.8% 4 Cu 1.15% Au 0.02g/tFe 30.6%
Au 0.27g/t Fe 17.34% 5 Cu 0.87%
Au 0.03g/tFe 25.86%
Legend 0 0.2 0.4 0.8 1.2Km
Minor roads
Estrella Agustina tenements
Artisan permit
6742500 6742500
6740000 6740000
0 673750 6737500
----- End of picture text -----

Figure 2 sets out the perimeter of the Agustina Project and the first preference areas that Estrella has interests in as described in the Agustina Option Agreement which is summarised in Section 9 and Section 13. The Agustina Project hosts a number of drill targets as well as old artisanal mines that are highlighted in Figure 2 in yellow. In january 2012, Estrella undertook a geophysical ground survey over the south eastern portion of the Agustina Project. The area in which the survey was completed is shown in Figure 2 by the purple shading.

The independent geological site inspection and review by SRK Consulting;

14 ESTRELLA RESOURCES

Grab sample results from the Agustina Project included the following select results:

6.1%, 1.89%, 1.25%, 1.15% Cu at Orion;
69.25 g/t Au at Centauri; and
30.6%, 26.96% and 25.86% Fe at Orion.

The IP survey at Orion (see Figures 3 and 4 below) was designed to test the subsurface ‘chargeability’ of the prospect. It has identified several significant anomalous zones that Estrella considers highly prospective drilling targets. The IP survey identified a large IP anomaly which is 2 km long, 600 m wide and 300 m deep from surface and appears open to the west and at depth. This anomaly is a high priority target which Estrella plans to drill immediately after the IPO.

==> picture [227 x 231] intentionally omitted <==

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

Figure 3: Induced Polarisation (IP) survey results in
plan view.
A A ’
----- End of picture text -----

Figure 3 above shows the results of the IP survey for the Agustina Project. The location of the large IP anomaly is shown by the black ellipse. The red line indicates the dominant mineralised fault trend. The IP anomaly shown in Figure 3 coincides with surface sample results which provide strong support to identify this zone as a priority drill target.

Figure 4: Cross sectional view of the IP anomaly.

==> picture [217 x 58] intentionally omitted <==

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

A 600m A’
300m
----- End of picture text -----

Figure 4 above shows the west to east profile of the IP anomaly line A to A’ as illustrated by the black line in Figure 3. Figure 4 shows that the high anomalous response (black circle) commences from surface and extends to a depth of approximately 300 m. This anomaly is open at depth and to the west and further exploration will be required to test its boundary. The anomaly is a primary drill target for the maiden drilling program at the Agustina Project.

The Agustina Project hosts a number of small-scale artisanal mines and adits which are highly concentrated at the Orion Prospect (see Figure 5). Some of these mines have extended

into the hillside up to 80 m in length. The artisanal mines are no longer in production however their presence should enhance the focus of the exploration program. The artisanal mines allow Estrella to view the controls in mineralisation and fault structures up to 80 m into the hill. Estrella’s mapping and sampling programs show Orion is likely to host mineralisation continuity due to:

The dominant mineralised fault breccia structures have long strike lengths (up to 4 km) trending north-northwest and dipping steeply to the east; and
Two additional steeply dipping mineralised fault sets trending north to northeast have been mapped and these older faults provide a fault linked mineralised network.

Figure 5: Artisanal Mines within the Orion prospect at the Agustina Project (Oct 2011).

==> picture [217 x 163] intentionally omitted <==

Figure 6: SRK Geologists observing fault structures at a mine adit at Orion (Oct 2011).

==> picture [217 x 277] intentionally omitted <==

SECTION 3 – ThE PROjECTS 15

Figure 6 shows Estrella’s Managing Director, Dr jason Berton and Estrella’s independent consulting geologist from SRK observing the fault controls within one of the Orion adits. The yellow lines show the outline of the mineralised faults.

A conceptual structural model is presented in Figure 7 to illustrate the intersecting fault sets at the Agustina Project. These fault sets pre-date the mineralisation event. They provided a linking fault network that enabled fluid pathways for subsequent mineralisation.

Figure 7: Conceptual structural model used for Estrella’s exploration targeting at Agustina.

==> picture [218 x 275] intentionally omitted <==

Figure 7 shows the intersecting faults in detail. Early generation faults (blue) and later generation faults (red) provided a fracture network within the host rock that acted as a pathway for deeper sourced mineralised fluids depicted by vectors to form the mineralised occurrences observed at the Agustina Project.

Estrella’s drill targets at the Agustina Project will focus on the coincidence of:

High grade grab sample results at Orion taken from mapped fault zones (for example stations 1, 2 and 3 which are shown in Figure 3);
High anomalous zones delineated by the IP, resistivity and magnetic surveys; and
Trenching, mapping and sampling will be utilised at Centauri to follow-up high grade sample results (69.25 & 13.15 g/t Au) to identify drill targets.

Please refer to the Independent Geologists Report, Section 4, for further details on the Agustina Project.

Venus Project

The Venus Project Concessions total an area of 131 km[2] with first preference rights to 85 km[2] . The Venus Project also lies in the AFZ, immediately to the southwest and southeast of the Agustina Project (see Figures 8 and 9). The region is highly prospective for high grade copper and gold mineralisation in IOCG systems similar to the Agustina Project.

The Venus Project hosts many old artisanal mining prospects situated along fault splay structures. Estrella owns 100% of the Venus Project. The project is accessible via both a rail line that passes through the eastern side of the Venus Concessions as well as good road access. Figure 8 shows the road access that already exists at the Venus Project.

Figure 8: The Venus Project is accessible via road (Oct 2011).

==> picture [218 x 133] intentionally omitted <==

Figure 9: Venus and Agustina Concessions are within close proximity to road and rail infrastructure.

==> picture [218 x 309] intentionally omitted <==

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

300000 310000
.
Legend
Railroad
Pan American Hwy
Minor roads
Estrella Venus tenements
0 0.5 1 2 3
Agustina artisan permit Legend Km
Venus artisan permits
Estrella Agustina tenements
300000 310000
5
6750000 6750000
6740000 6740000
6730000 6730000
----- End of picture text -----

16 ESTRELLA RESOURCES

Luna Project

The Luna Project is located approximately 90 km southeast of Coquimbo. The Project is situated in a highly prospective region for high grade copper and gold mineralisation. As seen in Figure 10, the Project is situated within a 15 km long structural corridor that hosts numerous artisanal mines.

The Luna Project is 100% owned by Estrella and covers an area of 208 km[2] within the Luna Concessions. The Luna Concessions are adjacent to exploration Concessions held by Barrick Gold, Codelco, BHP Billiton and Teck. Major projects in the region that are held by Barrick Gold include Veladero (Argentina), El Indio (closed) and Pascua Lama.

Figure 10: Inca and Luna Project boundaries with regional fault and prospects overlaid.

==> picture [218 x 309] intentionally omitted <==

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

350000 360000 370000
#
#
#
#
#
#
#
#
Legend
Inca
Luna .
non Estrella
Alto del Valle
Faults 2 1 0 2 Kilometres
Barrick-Codelco JV road
# artisan & historical mines
350000 360000 370000
6640000 6640000
6630000 6630000
6620000 6620000
6610000 6610000
----- End of picture text -----*

Inca Project

The Inca Project Concessions total an area of 55 km[2] with first preference rights to 54 km[2] . The Inca Project is an area situated within the Luna Concessions, which combine to give 262 km[2] of contiguous exploration Concessions (see Figure 10 for more details).

Estrella has an interest in 91.5% of the Inca Project (refer to the Legal Tenement Report in Section 13 for more information). The mineralised structural corridor also transects the Inca Project and features several epithermal breccia style mineralised prospects which have been historically exploited by artisanal miners. Results from reconnaissance sampling of bornite bearing epithermal breccia’s in artisanal mines adjacent to Inca include 5.4% Cu and 5.2% Cu.

Estrella considers the fault related mineralised occurrences within the Inca Project to be the most prospective exploration areas. These areas are easily accessible via the open access Barrick-Codelco joint venture road for both the Luna and Inca Projects.

Refer to the Independent Geologists Report in Section 4 for further details of the Luna and Inca Projects.

SECTION 3 – ThE PROjECTS 17

Section 4 Independent Geologist’s Report

==> picture [469 x 557] intentionally omitted <==

Image: Copper ore found at historic Agustina mine (Feb 2012)

18 ESTRELLA RESOURCES

Independent Geologist’s Report for Estrella Resources Ltd

Report Prepared for

Estrella Resources Ltd

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==> picture [310 x 155] intentionally omitted <==

Report Prepared by

SRK Consulting (Australasia) Limited ERS001 April 2012

SECTION 4 – INDEPENDENT GEOLOGIST’S REPORT 19

SRK Consulting

Page i

Independent Geologist’s Report for Estrella Resources Ltd

Estrella Resources Ltd

Level 17, 15 Castlereagh St, Sydney NSW 2000

SRK Consulting (Australasia) Limited

Level 1, 10 Richardson St, West Perth WA 6005

e-mail: [email protected] website: www.srk.com.au

Tel: +61 8 9288 2000 Fax: +61 8 9288 2001

SRK Project Number: ERS001

April 2012

Compiled by

Peer Reviewed by

Dr Matthew Greentree Principal Consultant (Geology)

Deborah Lord Principal Consultant (Geology)

Email: [email protected]

Author:

Dr Matthew Greentree

GREE/LORD/reay

ERS001_Independent_Geologist's_Report_Rev8

5 April 2012

20 ESTRELLA RESOURCES

SRK Consulting

Page ii

The Directors

Estrella Resources Limited Level 17, 15 Castlereagh Street Sydney NSW 2000 Australia

Dear Directors,

Estrella Resources Limited (“Estrella”) commissioned SRK Consulting (Australasia) Pty Ltd (“SRK”) to provide an Independent Geologist Report (“Report”) on four copper exploration projects located in Republic of Chile. This Report is to be included in a prospectus to be issued in support of a listing on the Australian Securities Exchange (“ASX”). This prospectus will offer 30,000,000 shares at an issue price of $0.20 per share to raise a total of $6,000,000 before the costs of issue (“Prospectus”). Estrella proposes to lodge the Prospectus with the Australian Securities and Investment Commission (“ASIC”) on or about 10 April 2012.

Estrella has advised SRK that it intends spending approximately $4,000,000 of the amount raised on exploration of the projects during the first two years post-listing.

Standard of the Report

This Report has been prepared to the standard of, and is considered by SRK to be, a Technical Assessment Report under the guidelines of the JORC and VALMIN Codes. The VALMIN Code is the code adopted by the Australasian Institute of Mining and Metallurgy and the standard is binding upon all Australasia Institute of Mining and Metallurgy (AusIMM) and Australia Institute of Geoscientists (AIG), and the standard is binding on all AusIMM and AIG member. The VALMIN Code incorporates the JORC Code for the reporting of Exploration Results, Mineral Resources and Ore Reserves.

This Report is not a Valuation Report and does not express an opinion regarding the value of the mineral assets or tenements involved, nor to the ‘fairness and reasonableness’ of any transaction between Estrella and any other parties.

Statement of SRK Independence

Neither SRK nor any of the authors of this Report have any material present or contingent interest in the outcome of this Report, nor do they have any pecuniary or other interest that could be reasonably regarded as being capable of affecting their independence or that of SRK. SRK has no prior association with Estrella concerning the mineral assets that are the subject of this Report. SRK has no beneficial interest in the outcome of the technical assessment being capable of affecting its independence. SRK’s fee for completing this Report is based on its normal professional daily rates plus reimbursement of incidental expenses. The payment of that professional fee is not contingent upon the outcome of the Report.

Information basis of this Report

SRK has derived the technical information, which forms that basis of its Report on information provided by Estrella. SRK has supplemented this information where necessary with information from its own extensive regional geological database. However, where discrepancies arise and no alternative comments are provided, data and interpretations provided by Estrella prevail in this Report. The past exploration history for these tenements has been derived from previous explorers reports, as provided by Estrella and verified by SRK, as well as government records of exploration activities within the Project area.

GREE/LORD/reay

ERS001_Independent_Geologist's_Report_Rev8

5 April 2012

SECTION 4 – INDEPENDENT GEOLOGIST’S REPORT 21

SRK Consulting

Page iii

The principal sources of information are included in a reference list at the end of the Report. The Report has been prepared to include information available up to the data of this Report. Estrella has stated that all information provided by Estrella may be presented in the Report and that none of the information is regarded as confidential.

The work included a five-day site visit to Estrella’s Chilean assets and a laboratory inspection. Background research was conducted at SRK’s offices, and included searches of government datasets and public domain data sources. The work included a review of Estrella’s proposed exploration program and budget.

Note on the Tenement Status and Material Contents

SRK has not independently verified ownership and the current standing of the tenements and is not qualified to make legal representations in this regard. Instead, SRK has relied on information provided by Estrella. SRK has prepared this Report on the understanding that all the tenements of Estrella are currently in good standing, and that there is no cause to doubt the eventual granting of any tenement applications. SRK has not attempted to establish the legal status of tenements with respect to Native Title or potential environmental and access restrictions. The tenement schedule as supplied to SRK on 21 February 2012 is included in Appendix 1.

Within this Prospectus, the current ownership status and legal standing of the tenements within the project areas are dealt with in the Solicitor’s Report on Mining Tenements.

SRK and Authors

The SRK Group comprises more than 900 staff, offering expertise in a wide range of resource engineering disciplines. The SRK Group’s independence is ensured by the fact that it holds no equity in any project. This permits the SRK Group to provide its clients with conflict-free and objective recommendations on crucial judgement issues. The SRK Group has a demonstrated track record in undertaking independent assessments of exploration assets, resources and reserves, project evaluations and audits, competent person’s reports, independent audits and independent feasibility evaluations to bankable standards on behalf of exploration and mining companies and financial institutions worldwide.

This Report was prepared by SRK Consultants, Matthew Greentree, Principal Consultant (Geology) and Deborah Lord, Principal Consultant (Geology), reviewed the exploration programmes and budget and undertook internal peer review. Both are permanent employees of SRK.

The information in this Report that refers to Exploration Results is based on information compiled by Matthew Greentree. Matthew Greentree is a Member of the AIG and has sufficient experience which is relevant to the style of mineralisation and the type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person in terms of the JORC Code. Matthew Greentree consents to the inclusion of such information in the Report in the form and context in which it appears.

Matthew Greentree, PhD, BSc Hons, MAIG, MGSA – Principal Consultant

Matthew has over 14 years of experience in mineral exploration geology, and has international experience working on numerous deposit styles, including lode gold, iron oxide copper-gold, sediment-hosted copper-cobalt and base metal deposits, magmatic nickel, and BIF-hosted iron ores. His industry experience includes his role as a gold exploration geologist for Sons of Gwalia, and various grass-roots and advanced nickel exploration projects in China and Central Australia, whilst in the employ of Anglo American Exploration. Matthew’s consultancy expertise is in advanced exploration targeting techniques. Matthew is a Member of the AIG and carried out the site visit, including a brief review of the Actlab laboratory in La Serena, Chile where the analytical work is being carried out.

GREE/LORD/reay

ERS001_Independent_Geologist's_Report_Rev8

5 April 2012

22 ESTRELLA RESOURCES

SRK Consulting Page iv Deborah Lord, BSc Hons, MAIG, MGSA, MSEG – Principal Consultant Deborah has over 20 years’ experience in the mineral exploration industry and has consulted with SRK for more than a decade based in Australia and South America. Her expertise is in the development of valuation techniques for assessment of exploration assets and the application of these principles in valuation reports to VALMIN standard for release to the ASX and independent technical assessments or due diligence. Deborah is a Member of the AIG and completed project management, reviewed the exploration programmes and budgets and undertook internal SRK peer review.

Warranties and Indemnities

Estrella has warranted in writing to SRK that full disclosure has been made of all material information and that, to the best of its knowledge and understanding, such information is complete, accurate and true.

As recommended by the VALMIN Code, Estrella has provided SRK with an indemnity under which SRK is to be compensated for any liability and/or any additional work or expenditure resulting from any additional work required:

which results from SRK's reliance on information provided by Estrella or to Estrella not providing material information; or
which relates to any consequential extension workload through queries, questions or public hearings arising from this Report.

Consents

SRK consents to this Report being included, in full, in the Estrella prospectus, in the form and context in which the technical assessment is provided, and not for any other purpose.

SRK provides this consent on the basis that the technical assessments expressed in the Summary and in the individual sections of this Report are considered with, and not independently of, the information set out in the complete Report and the Cover Letter.

Yours faithfully

SRK Consulting (Australasia) Pty Ltd

Dr Matthew Greentree, PhD, BSc Hons, MAIG, MGSA Principal Consultant (Geology) 5 April 2012

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Disclaimer ................................................................................................................................................... viii	Disclaimer ................................................................................................................................................... viii
List	of Abbreviations .................................................................................................................................... ix
Executive Summary .......................................................................................................... xi
1 Background .................................................................................................................. 1
1.1	Climate and geography ....................................................................................................................... 1
1.2	Regional Geology................................................................................................................................ 3
	1.2.1 Volcano-sedimentary rocks ..................................................................................................... 3
	1.2.2 Intrusive rocks ......................................................................................................................... 4
	1.2.3 Atacama Fault Zone ................................................................................................................ 5
1.3	Regional metallogeny.......................................................................................................................... 5
	1.3.1 IOCG deposits ......................................................................................................................... 7
	1.3.2 Massive Magnetite .................................................................................................................. 9
	1.3.3 Porphyry copper deposits........................................................................................................ 9
	1.3.4 Manto-type copper deposits .................................................................................................... 9
	1.3.5 VHMS deposits ...................................................................................................................... 10
2 Estrella’s Projects ...................................................................................................... 11
2.1	Agustina–Venus Projects .................................................................................................................. 13
	2.1.1 Orion ...................................................................................................................................... 18
	2.1.2 Aurora .................................................................................................................................... 22
	2.1.3 Nova ...................................................................................................................................... 22
	2.1.4 Venus .................................................................................................................................... 22
	2.1.5 Centauri Prospect .................................................................................................................. 24
2.2	Exploration Potential ......................................................................................................................... 26
	2.2.1 Agustina................................................................................................................................. 26
	2.2.2 Venus .................................................................................................................................... 27
2.3	Luna and Inca Projects ..................................................................................................................... 27
	2.3.1 Luna and Inca Projects–Exploration potential ..................................................................... 33
2.4	Proposed work program and budget ................................................................................................. 33
	2.4.1 Agustina................................................................................................................................. 33
	2.4.2 Venus .................................................................................................................................... 34
	2.4.3 Luna ....................................................................................................................................... 35
	2.4.4 Inca ........................................................................................................................................ 35
	2.4.5 SRK’s opinion on exploration plan and budget..................................................................... 36
3 Conclusions and Recommendations ........................................................................ 37
3.1	Agustina and Venus Projects ............................................................................................................ 37
3.2	Luna and Inca Projects ..................................................................................................................... 38
4 References .................................................................................................................. 39
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List of	Tables
Table 1-1:	Current resources and reserves of significant IOCG deposits in currently being exploited or
	developed in Chile (Source MEG database, extracted February 2012) ...................................... 8
Table 2-1:	Rock chip samples from within the Agustina Project ................................................................. 17
Table 2-2:	Grab samples from the Alto del Valle workings ......................................................................... 31
Table 2-3:	Drilling allocation for the Agustina Project ................................................................................. 33
Table 2-4:	Budget for the Agustina Project ................................................................................................. 34
Table 2-5:	Drilling allocation for the Venus Project ..................................................................................... 34
Table 2-6:	Budget for the Venus Project ..................................................................................................... 34
Table 2-7:	Drilling allocation for the Luna Project ....................................................................................... 35
Table 2-8:	Budget for the Luna Project ....................................................................................................... 35
Table 2-9:	Drilling allocation for the Inca Project ......................................................................................... 36
Table 2-10:	Budget for the Inca Project ........................................................................................................ 36
Table 2-11:	Overall budget for proposed exploration–Estrella Projects...................................................... 36

List of Figures

Figure	1-1:	Location of Estrella’s project areas.............................................................................................. 2
Figure	1-2:	Time-space diagram showing the distribution of magmatic arc rocks relative to IOCG
		mineralisation (Sillitoe, 2002) ....................................................................................................... 4
Figure	1-3:	Metallogenic map showing the location of the major deposit belts, boundaries for
		metallogenic belts from Sillitoe (2002) and location porphyry deposits and IOCG’s deposits
		with resources reported (MEG database; February, 2012) ......................................................... 6
Figure	2-1:	Estrella’s Project areas.............................................................................................................. 12
Figure	2-2:	Geology of the Agustina–Venus Project area (Sernageomin, 2003) ......................................... 14
Figure	2-3:	Legend for the geological map of Agustina (Sernageomin, 2003) ............................................ 15
Figure	2-4:	Agustina Project area with prospect and maximum assays values obtained from rock chip
		sampling ..................................................................................................................................... 16
Figure	2-5:	Ground Induced Polarisation (IP) survey over the Orion Prospect ............................................ 19
Figure	2-6:	Adits targeting copper–magnetite mineralisation within the Orion area .................................. 20
Figure	2-7:	Malachite mineralisation within the Agustina adit ...................................................................... 20
Figure	2-8:	Mineralised faults zone within the Agustina Adits, showing the variable intensity of iron
		oxide alteration and the interaction of smaller linking structures ............................................... 21
Figure	2-9:	Magnetite–copper mineralisation surrounding a strike-slip fault (70/054°) at the on the
		southern boundary of the Agustina tenement ............................................................................ 21
Figure	2-10:	Chlorite-epidote alteration selvedge surrounding epidote and magnetite veins in the
		Aurora prospect area ................................................................................................................. 22
Figure	2-11:	Artisanal Cu mine–Venus west ................................................................................................ 23
Figure	2-12:	Artisanal Cu processing plant–Venus west.............................................................................. 23
Figure	2-13:	Artisanal mine and stockpile–Venus west................................................................................ 24
Figure	2-14:	Biotite veining associated with Centauri gold workings ............................................................. 25
Figure	2-15:	Cross-cutting quartz veining in the Centauri gold workings ....................................................... 25

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SRK Consulting Page vii Figure 2-16: Sample of mineralised rock from Centauri (SRK011, 13.15 g/t Au) .......................................... 26 Figure 2-17: Geology of the Luna Project area (Sernageomin, 2003) ........................................................... 28 Figure 2-18: Geological legend for map of the Luna area (Sernageomin, 2003) ........................................... 29 Figure 2-19: Location of workings in the Luna and Inca Project areas .......................................................... 30 Figure 2-20: View to the southwest showing the contact between the Late Cretaceous (south) granites and the older volcanic succession (north) .................................................................... 31 Figure 2-21: Breccia with chloritic quartz veining and copper mineralisation (malachite) .............................. 32 Figure 2-22: Copper-silver rich ore from the Alto del Valle workings (sample SRK020) ............................... 32

Appendices

Appendix A: Tenement Schedule

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Disclaimer

The opinions expressed in this Report have been based on the information supplied to SRK Consulting (SRK) by Estrella Resources (Estrella). The opinions in this Report are provided in response to a specific request from Estrella to do so. SRK has exercised all due care in reviewing the supplied information. Whilst SRK has compared key supplied data with expected values, the accuracy of the results and conclusions from the review are entirely reliant on the accuracy and completeness of the supplied data. SRK does not accept responsibility for any errors or omissions in the supplied information and does not accept any consequential liability arising from commercial decisions or actions resulting from them. Opinions presented in this Report apply to the site conditions and features as they existed at the time of SRK’s investigations, and those reasonably foreseeable. These opinions do not necessarily apply to conditions and features that may arise after the date of this Report, about which SRK had no prior knowledge nor had the opportunity to evaluate.

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List of Abbreviations

Term	Meaning
andesite	A pale coloured volcanic rock with 52%-63% SiO2
arc	A arcuate zone of volcanoes or volcanic rocks
barite	A barium sulphate mineral (BaSO4)
basalt	A dark-coloured volcanic rock with 45%-52% SiO2
biotite	A black mica mineral (K(Mg, Fe)3AlSi3O10(F, OH)2)
bornite	A copper-iron-sulphide mineral (Cu5FeS4)
breccia	Fragmented rock
calc-alkaline	A group of igneous rocks, common in volcanic arcs, high in calcium and potassium
calcite	A calcium carbonate mineral (CaCO3)
chalcocite	A copper-sulphide mineral (Cu2S)
chalcopyrite	A copper-iron-sulphide mineral (CuFeS2)
Cretaceous	A period of geological time (65.5 million years ago to 145.5 million years ago)
diorite	An intrusive igneous rock with similar composition to andesite
dyke	A narrow tabular intrusive rock body
epithermal mineralisation	A style of mineralisation formed by deposition from hot fluids in fissures near the earth’s surface
granodiorite	A type of granitic rock with abundant feldspar
hydrothermal breccia	A breccia formed by explosion of superheated water migrating from depth to the surface
hypogene	Formed from water ascending from within the earth
induced polarisation (IP) survey	Geophysical survey method to measure the electrical property of rocks in the Earth
intrusive	An igneous rock formed entirely within the Earth’s crust
magma	Molten rock
magmatic	Formed from molten rock
meta-	A prefix used to indicate the precursor rock type of a metamorphic rock
metamorphic rock	A rock altered by temperature and pressure within the earth
plutonic	An igneous rock crystallised at depth in the earth’s crust
porphyry	An intermediate or acid igneous rock of fine-grained size, with some larger crystals, usually feldspar, scattered in the finer- grained groundmass
pyrite	A mineral of iron sulphide (FeS2)
quartz	A silicon mineral SiO2
sericite	A mineral composed of fine-grained white mica
siltstone	A fine-grained granular sedimentary rock

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		Meaning A geological process whereby oceanic rocks are thrust beneath other rocks (either continental or oceanic) Formed at or near theEarth’ssurface A period of geological time (1.5 million years ago to 65.5 million years ago) A type of basalt commonly formed on the ocean floor Formed by or associated with a volcano Debris or rock formed from volcanic eruptions A platy rock-forming mineral with chemical composition KAl2(AlSi3O10)(F,OH)2
	Term	Meaning
	subduction	A geological process whereby oceanic rocks are thrust beneath other rocks (either continental or oceanic)
	supergene	Formed at or near theEarth’ssurface
	Tertiary	A period of geological time (1.5 million years ago to 65.5 million years ago)
	tholeiite	A type of basalt commonly formed on the ocean floor
	volcanic	Formed by or associated with a volcano
	volcaniclastic	Debris or rock formed from volcanic eruptions
	white mica	A platy rock-forming mineral with chemical composition KAl2(AlSi3O10)(F,OH)2

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Executive Summary

Estrella has four copper-gold projects in northern Chile that offer the investor an opportunity to gain exposure to early stage copper and gold exploration projects in an established mining district. The projects are located in geological settings favourable to hosting Iron Oxide-Copper-Gold (IOCG) and epithermal copper-silver-gold (Cu-Ag-Au) mineralisation. The four project areas are located in Northern Chile and cover a total of 365.5 km[2] :

Agustina: 15 contiguous tenements including both exploration & exploitation – 18.5 km[2]
Venus: exploration permits 85 km[2]
Inca: project area 54 km[2]
Luna: 89 exploration permits – 208 km[2]

Agustina is Estrella’s most advanced project with a number of significant artisanal mines targeting IOCG style mineralisation as well as Estrella’s recent ground based geophysics survey, mapping and sampling. This mineralisation is hosted by steeply dipping faults within granodioritic units. Based on outcropping mineralisation, geological mapping and rock chip sampling four prospect areas having been defined – Orion, Nova, Centauri and Aurora.

Orion is the largest and most advanced prospect. IOCG-style copper mineralisation occurs along a series of steeply dipping mineralised fault zones which extend for over 2 km in strike length. Each mineralised zone has a width between 5 m and 50 m, many of which have structures linking the parallel zones. Rock chip sampling has shown moderate copper grades of between 0.40 - 1.89% Cu with coincident elevated gold grades up to 1.0 g/t Au.

The Centauri, Nova and Aurora Prospects are located in the western portion of the Agustina Project area. The Centauri Prospect is centred on gold workings where grab sampling has returned gold grades of up to 13.15 g/t. Nova and Aurora are early stage copper prospects in the west of the Agustina Project area which have similar structural setting to that of Orion.

Venus, which covers an area of over 85 km[2] , lies along the southern boundary with the Agustina tenement. The Venus tenements provide some early-stage exploration opportunities and potential extensions to the known mineralisation at Agustina. Within Venus, there are a number of copper workings and Venus has a similar geological setting to that of Agustina.

Luna and Inca are two separate projects due to separate rights distributions for each project but they are combined under the one contiguous tenement title holding (Luna 1 to 89) held solely by Estrella. Estrella is entitled to 100% of the Luna area (208 km[2] ) and 91.5% of the Inca area (54 km[2] ).

The Inca Project area contains numerous Cu-Ag-Au artisanal workings. Rock chip samples of epithermal breccia contains chalcopyrite and bornite, and analysis of this material returned grade results of 5.5% Cu and 161 g/t Ag. This sampling highlights the high grade Cu potential with potential hosts repeated as fault breccias over a 20 km[2] area.

The Agustina, Venus, Inca and Luna projects secured by Estrella include both early stage exploration as well as more advanced prospects located adjacent to small scale mines. As most of these projects are at a relatively early stage exploration, it is more speculative in nature and involves some degree of exploration risk. However, more advanced targets within the Agustina Project have been identified which are ready to be drilled.

Estrella has acquired the mineral tenements on the basis of sound geological concepts and technical merit. Preliminary work supports these exploration models and reconnaissance sampling has returned economic grades for copper, silver and gold. The projects have varying degrees of prospectivity for economically extractable copper, gold, and silver mineralisation and, in SRK’s opinion; further exploration is justified at the budgetary levels proposed by Estrella.

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1 Background

Chile is currently the world’s largest exporter of copper, accounting for 34 % of the global copper production (approximately 5.4 Mt between 2008 and 2009; USGS, 2009). In addition to copper, Chile is also a major exporter of other metals such as molybdenum, gold, iron ore and silver. The well-established mining sectors combined with open governance provide stable operating environment for an exploration or mining company.

Chile has a stable political environment and is one of the largest economies in South America and a pro-business economic outlook (Control Risk, 2011). Free-trade agreements between Chile and the EU, US and China are consistent with Chile's reputation as the region's stable and outward-looking economy (Control Risk, 2011).

1.1 Climate and geography

– Both the Luna and Agustina projects are located within 100 km of La Serena and within central north of Chile ~ 27° - 30°S (Figure 1-1). This region is well supported by infrastructure and access to the project is via the Pan-American Highway.

Chile has a diverse range of climates and landscapes; however, in northern Chile where Estrella’s projects are located, the climate is Mediterranean. It is a semi-arid region whose central area receives an average of about 25 mm of rain during the winter months, with only small amount of rain during the rest of the year. Droughts are common though the region. The region becomes more arid further to the north in the Atacama Desert, which is one of the driest regions in the world.

Temperatures are typically moderate, with an average of 18.5°C during the summer and about 12°C during the winter at sea level with colder temperatures at higher altitudes. The winter rains and the melting of the snow that accumulates on the Andes feed rivers which have variable seasonal flows, but which carry water year round.

The coastal areas have a distinct microclimate where moisture of the sea is trapped by high bluffs overlooking the ocean. Because the river valleys provide breaks in the coastal elevations, moisture can penetrate inland and further decrease the generally arid climate in those valleys. The higher elevations in the interior sections are covered with shrubs and cacti.

Agustina is located near the coast in open and generally arid country covered in shrubs and cacti. The Agustina Project has moderate relief with elevations ranging from 600 m -1,800 m ASL with elevations increasing towards the south in the Venus area.

The Luna Project has higher relief and dissected by a deep river valley, with elevations ranging between 2,400 – 4,400 m ASL. The northern portion of the tenement has the highest elevations and is dissected by a river valley in the centre of the tenement area. Vegetation is restricted to the central valley, where open forest exists.

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Figure 1-1: Location of Estrella’s project areas
Map Co-ordinates: UTM zone 19S, WGS 84 Datum
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1.2 Regional Geology

Estrella’s project areas are located along the Coastal Cordillera of Chile and are hosted in volcanic and intrusive rocks of Early-Mid Cretaceous age.

Geologically, the region is characterised by the eastward migration of the magmatic arc during the Mesozoic-Cenozoic (Figure 1-2). This has resulted in a series of N-S striking plutonic and volcanic belts which parallel the High Andes (to the east). The Mesozoic plutonic complexes were emplaced into similarly aged volcanic successions and the underlying metasedimentary units of Palaeozoic age. Paleoproterozoic basement underpins the central segment of the Coastal Cordillera and the adjoining Andean Cordillera (Ramos and Aleman, 2000).

Extensive longitudinal brittle fault systems and/or ductile shear zones, including the Atacama Fault Zone (AFZ; e.g. Scheuber and Andriessen, 1990) were active during the Mesozoic. Widespread extension induced tilting of the volcano-sedimentary sequences. Immediately east of the Mesozoic arc terrane of the Coastal Cordillera, in northern Chile and southern Peru, sedimentary sequences accumulated in a series of interconnected marine back-arc basins.

Early Jurassic to mid-Cretaceous magmatism within the Coastal Cordillera and adjoining regions are generally considered to have taken place under extensional conditions in response to slab roll-back and steep Mariana-type subduction (e.g. Grocott and Taylor, 2002).

1.2.1 Volcano-sedimentary rocks

The Jurassic to Early Cretaceous arc and intra-arc volcanic sequences are dominated by basaltic andesite and appear to possess greater amounts of lava and lack significant felsic volcanic rocks. There is little evidence of major volcanic centres typical of most subduction-related arc terranes suggesting and the volcanic environment may well have been more akin to flood basalt provinces (Sillitoe, 2002).

The Middle to Late Jurassic La Negra Formation contains between 5,000–10,000 m of subaerial to locally shallow-submarine basalt, basaltic andesite and andesite lavas, tuffs and minor intercalated sedimentary rocks, and correlative formations comprise the arc and intra-arc tholeiitic and calc-alkaline compositional fields (Pichowiak et al., 1990).

Late Jurassic to Early Cretaceous arc volcanism, which occurred along the eastern side of the Coastal Cordillera are included in the Punta del Cobre Group. It contains up to 3,000 m of basaltic andesite, andesite and dacite volcanic rocks. This volcanic sequence hosts the Candelaria-Punta del Cobre IOCG district (e.g. Marschik and Fontbote, 2001).

The volcanic rocks have undergone a regional low-grade metamorphism. This is thought to have resulted from crustal thinning was active during accumulation of all the Mesozoic arc and intra-arc volcanic sequences (e.g. Levi et al., 1989).

The Jurassic and Early Cretaceous back-arc domain in northern Chile, the Tarapaca basin, is dominated by marine carbonate and continental terrigenous sequences, although interbedded andesitic volcanic rocks (e.g. Ardill et al., 1998). Evaporite horizons appear locally, especially in the Late Jurassic (e.g. Ardill et al.,1998). In the back-arc basin of central Chile (Aconcagua Platform), a Jurassic marine carbonate sequence, including a thick gypsum horizon, is overlain by Late Jurassic continental red beds and Early Cretaceous marine carbonates, while farther west up to 5,000 m of Early Cretaceous volcanic and volcaniclastic sedimentary rocks accumulated in an intra-arc basin formed in response to vigorous extension (e.g. Aberg et al. 1984; Ramos 2000). Most of the volcanic rocks range in composition from basalt to andesite and are high-K calc-alkaline to shoshonitic in composition; parts of the sequence display compositional bimodality (Levi et al., 1989).

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1.2.2 Intrusive rocks

The plutonic complexes range in composition from primitive early gabbro and diorite through to quartz diorite, quartz monzodiorite, tonalite, granodiorite and rare monzogranite. They were emplaced throughout the Jurassic and Early Cretaceous as a series of relatively short pulses, each estimated to last roughly 3 to14 Ma (e.g. Ramos and Aleman, 2000)

The intrusive rocks are typically oxidised and belong to the magnetite-series (Ishihara and Ulrikse, 1980). The Jurassic and Early Cretaceous intrusions are hornblende bearing, metaluminous and have a calc-alkaline composition, although the early gabbros are more tholeiitic in composition (e.g. Pichowiak, 1994).

A marked decrease in initial Sr isotopes ratios of Middle-Late Jurassic and Early Cretaceous plutonic rocks towards the east for the rocks suggest extension, crustal thinning with limited minimal crustal contamination during this period (Sillitoe, 2002). However, the mantle wedge remained the main site of magma generation throughout the Jurassic to the Early Cretaceous (Rogers and Hawkesworth, 1989).

Plutonic complexes of the Coastal Cordillera were emplaced syntectonically during the Early to Middle Jurassic as gently dipping sheet-like bodies up to several kilometres thick, controlled by eastdipping extensional fault systems (e.g Grocott and Taylor 2002). Later plutonic bodies were emplaced as steep, slab-like bodies along ductile shear zones (Grocott and Wilson 1997). The outcropping plutons were emplaced at relatively high crustal levels <10 km and cooled rapidly with a relatively restricted (<4 km) contact-metamorphic aureole being developed.

Magmatism ceased along the Costal Cordillera after 90 Ma, with most of the Late Cretaceous and younger plutonism, including emplacement of the main Coastal Batholith of southern Peru, was restricted to belts farther to the east (e.g. Grocott and Taylor, 2002).

Abundant andesite, basaltic andesite and basalt dykes cut many of the plutons and the country rocks (e.g. Sempere et al., 2002). Both synplutonic emplacement features (Moore and Agar, 1985; Regan, 1985) and radiometric dating (Dallmeyer et al., 1996) show that the dykes are broadly synchronous with host or nearby plutons.

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Figure 1-2: Time-space diagram showing the distribution of magmatic arc rocks relative to IOCG mineralisation (Sillitoe, 2002)

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1.2.3 Atacama Fault Zone

The Atacama Fault Zone (AFZ) is the largest structure along the Chilean Coastal Cordillera. It can be traced for over 1000 km striking in a north-south orientation and is in places it is up to 30 km wide. The Atacama Fault System is the best documented of three major orogen-parallel fault systems in northern Chile which is paralleled by the ductile to brittle Tigrillo and Chivato systems (Grocott and Taylor, 2002).

It forms a series of NNW, N and NNE striking ductile and brittle faults which have undergone a variety of movement directions including sinistral and strike-slip (e.g. Scheuber and Andriessen, 1990) which has occurred at shallow crustal levels (<10 km). Movement along the AFZ fault has a close association with the emplacement of Mesozoic plutons. As the arc cooled, the faults became more brittle in character and were localised in pre-existing mylonite zones, particularly those along pluton margins (Brown et al., 1993).

1.3 Regional metallogeny

The Coastal Cordillera of northern Chile is well endowed iron, copper, gold, silver and zinc mineralisation. The mineralisation occurred from the early Jurassic to mid-Cretaceous age, but exact ages are somewhat equivocal. The oldest of these deposits includes the Early Cretaceous porphyry copper deposits. With the tectonic evolution of the Chilean Andes, other deposit types - - were formed, including iron oxide-copper-gold (IOCG) deposits, ‘Kiruna type’ massive magnetite (apatite), porphyry copper-(gold), manto-type copper-(silver) and volcanic hosted massive sulphide (VHMS) zinc-copper-barite deposit types.

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Figure 1-3: Metallogenic map showing the location of the major deposit belts, boundaries for metallogenic belts from Sillitoe (2002) and location porphyry deposits and IOCG’s deposits with resources reported (MEG database; February, 2012)

Map Co-ordinates: UTM zone 19S, WGS 84 Datum

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1.3.1 IOCG deposits

The IOCG deposits of northern Chile are the most common mineralisation type in the region (Sillitoe, 2002). During the 1860s and 1870s, such IOCG veins accounted for Chile’s position as the world’s leading copper producer, but until recently these deposits have received less attention from explorers due to their perceived small size. However, these deposits can have a considerable metal content (Table 1-1) and are the target of Estrella’s exploration work.

The latitudinal extent of the Mesozoic IOCG deposits in the central Andes resembles that of Tertiary porphyry copper belt. Although there are many similarities between the deposit types, IOCG deposits can be distinguished from porphyry deposits by the broad potassic alteration and copper(gold) mineralisation not confined to porphyry stocks (Sillitoe, 2002), as well as the abundance of the iron oxides that define the IOCG class (Sillitoe, 2002).

In northern Chile, most of the IOCG deposits are hosted by the La Negra Formation (or the stratigraphic equivalents) as well as by the Late Jurassic and Early Cretaceous plutons that intrude them. Candelaria and some smaller IOCG deposits were formed near Early Cretaceous plutons emplaced near the contact between Late Jurassic-Early Cretaceous volcanogenic sequences and marine carbonate sequences.

Major IOCG deposits and numerous smaller examples are located to the east of the Coastal Cordillera and are Early Cretaceous in age. One of the largest of these younger IOCG deposits is Dulcinea , situated about 12 km east of the eastern border of the Coastal Cordillera, which is hosted by a diorite-monzodiorite intrusion and andesitic metavolcanic rocks assigned ages of 65–60 Ma (Iriarte et al., 1996). The La Africana deposit, at the southern extremity of the IOCG belt and also previously mined formally, cuts a diorite of presumed Late Cretaceous age. The El Espino deposit may also be Late Cretaceous or Palaeocene rather than Early Cretaceous, as stated above, if the Late Cretaceous-Palaeocene age favoured for the nearby diorite intrusion by Rivano and Sepu´ lveda (1991) is substantiated. A few small and less important IOCG deposits, as well as several small massive magnetite deposits, of Late Cretaceous or Palaeocene age are also present immediately east of the Coastal Cordillera in northern Chile. Minor IOCG vein deposits also occur in the coastal batholith of Peru, where they are likely to be of Late Cretaceous age (Vidal, 1985). The age distribution of IOCG deposits and occurrences in the Coastal Cordillera is certainly more complex and potentially occurred as four metallogenic events i.e. 188–172, 167–153, 141–132 and 130–98 Ma, coinciding with the eastwardly younging intrusive belts (Sillitoe, 2002).

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Contained Molybdenum	Mo (%)								0.015
	Mo (Mt)								13,000
Contained Iron	Fe (%)		33.80			44.90
	Fe (Mt)		97,005,000			201,601,000
Contained Copper	Cu (%)	0.517		3.00	0.57		0.533	1.40	0.60
	Cu (Mt)	3,194,000		162,000	74,000		1,753,000	14,000	511,000
Contained Gold	Au (g/t)	0.103		2.062					0.10	0.80
	Au (oz)	2,045,000		358,000					274,000	247,000
Contained Silver	Ag (g/t)	1.623		102.86
	Ag (oz)	32,244,000		17,858,000
Total Reserve/ Resources (Mt)		618,000,000	287,000,000	5,400,000	13,090,000	449,000,000	328,700,000	1,000,000	85,200,000	9,600,000
Company		Freeport-McMoRan Copper and Gold Inc	Compania Minera del Pacifico SA	Private company	Global Hunter	Compania Minera del Pacifico SA	Anglo American plc	Q Resources plc	Hot Chili Ltd	Sali Hochschild SA
Project Name		Candelaria	El Romeral	Julia Maria	La Corona Cobra	Los Colorados	Mantoverde	Montechristo	Productora	Resguardo

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1.3.2 Massive Magnetite

The massive magnetite (e.g. Kiruna-type) deposits occupy the same belt as do IOCG deposits (Sillitoe, 2002). Although many investigators subscribe to a hydrothermal-replacement origin for the magnetite and minor associated actinolite and apatite (Sillitoe, 2002), a number of workers advocate a magmatic origin for these deposits (e.g. Chen, 2010; Chen et al, 2011). Several large magnetite deposits, including El Romeral and El Algarrobo are found in northern Chile, are steep, lens-like bodies within intrusion-bounded screens of Early Cretaceous andesitic volcanic rocks along splays of the Atacama Fault System (Sillitoe, 2002). However, the major Marcona deposit in Peru differs as it is a series of strata-bound bodies (mantos) which replace principally early Palaeozoic, but also Jurassic carbonate horizons. Inclusion of the magnetite deposits as iron rich members of the IOCG deposit class (Hitzman et al., 1992) is supported by the abundance of early-stage magnetite in many IOCG deposits, the occurrence of late-stage pyrite, chalcopyrite and gold in and near some massive magnetite deposits and the commonality of certain alteration and gangue minerals, especially actinolite and apatite, although nowhere are the two deposit types observably transitional.

Nevertheless, magnetite veins and lens-like bodies occur in both Jurassic and Early Cretaceous IOCG vein districts, including some of the more important ones like Los Pozos, Mantoverde; Naguaya´n and Monte Cristo (e.g. Sillitoe, 2002). There are also several examples of IOCG deposits located alongside major concentrations of massive magnetite (e.g. Mina Justa in the Marcona district; e.g. Sillitoe, 2002). The genetic model for the massive magnetite bodies in the Coastal Cordillera is likely to possess major components in common with that preferred for the IOCG deposits.

1.3.3 Porphyry copper deposits

Porphyry copper deposits are distributed throughout the Coastal Cordillera of northern Chile. – Most of them are Early Cretaceous in age (135 100 Ma).

The best-known deposit is Andacollo where a zone of supergene chalcocite enrichment is exploited. However, several others have been extensively drill tested (e.g. Galenosa-Puntillas, Antucoya-Buey Muerto, Mercedita). Several prospects also exist in the Coastal Cordillera of southern Peru, where Tía María is likely to be Jurassic in view of available radiometric ages for nearby plutonic rocks (Clark et al. 1990). The deposits are typically much smaller (< 300 Mt) than those in the Tertiary porphyry copper belts farther east and hypogene grades are relatively low (< 0.4% Cu). The deposits are related to small stocks of quartz diorite to granodiorite porphyry emplaced into arc plutonic or volcanic rocks, and tend to be dominated by potassic alteration.

1.3.4 Manto-type copper deposits

Manto-type copper deposits are strata-bound disseminated bodies, the occur as steep hydrothermal breccias surrounding barren, finger-like gabbro to diorite plugs and as related veins, mostly within basaltic to andesitic arc volcanic sequences of the La Negra Formation.

However, the largest deposit, Mantos Blancos, is unusual in being partly hosted by felsic volcanic rocks and plugs (Ramírez, 1996). Broadly similar copper-silver deposits, including El Soldado, are widespread in the Early Cretaceous volcanic and sedimentary rocks of the Central Chile intra-arc basin (e.g. Maksaev and Zentilli, 2002). The highest-grade parts of manto-type deposits, typically controlled by the permeability provided by faults, hydrothermal breccias, dyke contacts, vesicular flow tops and flow breccias, are characterised by hypogene chalcocite and bornite, which grade outwards and downwards through chalcopyrite to minor distal concentrations of pyrite.

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The chalcocite-bornite cores of large deposits occur near the redox boundaries of the host stratigraphy, with the sulphide rich cores being flanked by sulphide-poor zones containing hematite (Sillitoe, 1992; Kirkham, 1996). Albite, quartz and chlorite are the main alteration minerals in the cores of the deposits. Opinion is divided between magmatic-hydrothermal and metamorphic (e.g. Sillitoe 1990, 1992) fluid origins for the manto-type deposits, although the latter alternative is favoured by the obvious similarities to stratiform, sediment-hosted copper deposits (Kirkham 1996). Nevertheless, emplacement of plutonic complexes may have been instrumental in causing the fluid circulation that resulted in manto-type copper formation (Maksaev and Zentilli, 2002).

The manto-type deposits comprise a distinctive class of copper mineralisation uncommon outside the Coastal Cordillera of northern and central Chile (Sillitoe, 1992; Kirkham, 1996). Although many manto-type copper deposits contain albite alteration, calcite and minor hematite, and some are spatially related to gabbro and diorite bodies—features shared with some central Andean IOCG — deposits (see below) the manto-type style appears to be distinguished by its asymmetrical sulphide- oxide zonation and marked deficiency in gold. Caution is necessary, however, because the breccia-hosted IOCG deposit at Olympic Dam in South Australia is also characterised by similar asymmetrical sulphide-oxide zonation, with distal pyrite giving way through chalcopyrite and bornitechalcocite to overlying hematite (Reeve et al., 1990). Notwithstanding these apparent differences, some investigators treat at least selected large manto-type deposits (e.g. Mantos Blancos) as members of the IOCG class (Williams, 1999; Pollard, 2000), and include the two deposit types in a broader manto-type category (Injoque, 2000) or propose that manto-type deposits are shallow manifestations of the IOCG type (Vivallo and Henríquez, 1998; Orrego et al., 2000). Manto-type deposits are apparently nowhere observed to be directly related or transitional to IOCG deposits; while an intimate genetic connection cannot be precluded at present, substantive geological support is a clear necessity.

1.3.5 VHMS deposits

Several Kuroko-type VHMS deposits are recognised in Peru, hosted within the Early Cretaceous volcanosedimentary rocks. The VHMS belt overlaps with the northern recognised limit of the IOCG belt in the Can˜ ete intra-arc basin. The deposits display classic massive and stringer types of mineralisation and are particularly noted for their zinc and barite contents, although copper is important at Cerro Lindo, the most southerly deposit (Sillitoe, 2002).

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2 Estrella’s Projects

Estrella has recently acquired tenements prospective for copper, gold, iron and silver. Estrella plans to focus on copper and gold exploration and will advance exploration on these areas with the issue of this prospectus in support of listing and capital raising on the ASX.

Both of Estrella’s project areas are located along the Atacama Fault zone in northern Chile. The – projects are split into two project groups based on location Agustina in the north and the Luna Project in the south (Figure 2-1).

– The Agustina Venus Project is the most advanced of the four project groups with a number of artisanal workings which have targeted vein-type IOCG copper-gold mineralisation as well as vein-hosted gold mineralisation. The project area includes Venus (85 km[2] ) project areas which are located to the south of the main Agustina tenement (18.5 km[2] ) (Figure 2-1). Estrella holds an option agreement that provides Estrella the right to perform exploration activities at Agustina and to acquire the tenements anytime within the three year option period. This is detailed by the legal report in the prospectus as will be the case for the other tenements.

The Luna – Inca projects cover the largest area of Estrella’s projects. Neither Luna (208 km[2] ) or Inca projects (54 km[2] ) have received much in the way modern exploration. Artisanal workings have targeted copper, silver and gold workings in the north of the licence area (Figure 2-1).

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Figure 2-1: Estrella’s Project areas

Map Co-ordinates: Geographic co-ordinates, WGS 84 Datum

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2.1 Agustina–Venus Projects

– Agustina Venus Projects are underlain by Late Cretaceous intrusive rocks which include diorite, quartz diorite and granodiorite (Figure 2-2). The Late Cretaceous intrusive rocks form part of a regionally extensive north-south trending belt. Strike slip faulting is common throughout the project area with the largest and most regionally extensive being the AFZ.

The area has a number of small adits and artisanal mines in the project area. Most of these have targeted copper mineralisation occurring along fault zones which can be seen in outcrop, with the largest of these workings having copper and iron mineralisation occurring along steeply dipping faults. The northern tenement border is adjacent to Global Hunter’s La Corona de Cobre Project where mineralisation occurs within 15 known mineralised shear zones ranging from 20 to 250 m in width and 0.5 to 9 km in length, with copper oxide mineralisation to an average depth of 150 m (Global Hunter Website, Table 1-1).

The Agustina Project includes four prospect areas namely Orion, Centauri, Nova and Aurora (Figure 2-4). The tenement area contains a number of mine adits and shallow open pits targeting structurally controlled copper-iron and gold mineralisation. The most developed are those in the Orion prospect and include well developed underground workings (Figure 2-5). SRK’s site visit focused on the copper-iron mineralisation in workings associated with the Orion prospect. These workings are found on the eastern portion of the exploration licence, they are along the sub-parallel strike-slip faults within which a granodiorite. Based on an initial reconnaissance mapping and rock chip sampling program, four prospect areas have been identified.

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Figure 2-2: Geology of the Agustina Venus Project area (Sernageomin, 2003)
Map Co-ordinates: UTM zone 19S, WGS 84 Datum
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Figure 2-4: Agustina Project area with prospect and maximum assays values obtained
from rock chip sampling
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Table 2-1: Rock chip samples from within the Agustina Project

Sample number	Decimal degrees	Decimal degrees		g/t		Per	cent
	Latitude	Longitude	Au	Ag	Cu	Pb	Zn	Fe
AUG-001	-29.44932	-71.02388	0.00	3.25	0.92	0.00	0.02	21.41
AUG-002	-29.44932	-71.02388	0.02	0.84	0.63	0.00	0.04	19.27
AUG-003	-29.44967	-71.02372	0.02	0.80	1.27	0.00	0.01	14.37
AUG-41-60-01	-29.43008	-71.02925	1.10	0.95	0.31	0.00	0.00	17.42
AUG-41-60-02	-29.43008	-71.02925	0.80	1.15	0.43	0.00	0.00	22.44
NAC-001	-29.44358	-71.04195	0.18	1.67	0.85	0.00	0.00	14.19
NAC-002	-29.44358	-71.04195	0.07	1.41	0.55	0.00	0.00	14.23
SRK001	-29.44932	-71.02388	0.00	1.77	0.40	0.00	0.01	31.83
SRK002	-29.44932	-71.02388	0.02	2.16	0.40	0.00	0.01	28.51
SRK003	-29.44932	-71.02388	0.03	2.78	1.03	0.00	0.01	25.14
SRK004	-29.44967	-71.02372	0.04	10.87	0.85	0.00	0.11	17.72
SRK005	-29.44978	-71.02379	0.09	8.46	1.81	0.00	0.04	11.09
SRK006	-29.44730	-71.02476	0.02	0.86	0.01	0.00	0.00	25.68
SRK007	-29.44496	-71.02529	0.02	1.34	0.89	0.00	0.02	8.40
SRK008	-29.44496	-71.02529	0.02	0.82	1.08	0.00	0.01	16.50
SRK009	-29.44582	-71.05755	0.02	2.28	1.89	0.00	0.07	30.60
SRK010	-29.44574	-71.05757	0.06	0.27	0.08	0.00	0.00	17.57
SRK011	-29.44574	-71.05757	13.15	1.89	0.06	0.00	0.00	22.10
SRK019	-29.50860	-71.03510	0.05	0.76	1.37	0.00	0.02	4.78
OCZ-001	-29.44860	-71.02705	0.42	6.73	4.51	0.00	0.01	8.39
OCZ-002	-29.44860	-71.02705	0.39	3.70	0.57	0.00	0.00	9.69
OCZ-004	-29.44797	-71.02458	0.00	0.26	0.04	-1.54	0.00	6.54
OCZ-005	-29.44818	-71.02473	0.00	0.17	0.01	-2.00	0.02	9.01
OCZ-006	-29.44510	-71.02288	0.07	3.11	1.25	0.00	0.02	26.96
OCZ-007	-29.44510	-71.02288	0.06	1.87	0.25	0.00	0.01	21.39
OCZ-008	-29.44540	-71.02282	0.01	0.34	2.06	0.00	0.06	9.86
OCZ-009	-29.44813	-71.03107	0.12	8.45	2.07	0.03	0.04	7.03
OCZ-010	-29.45445	-71.03173	0.14	0.68	0.96	0.00	0.00	28.09
OCZ-011	-29.45445	-71.03173	0.01	0.55	1.29	0.00	0.05	6.85
OCZ-012	-29.45250	-71.03225	0.16	2.34	0.63	0.00	0.00	19.97
CEN-001	-29.44574	-71.05757	0.91	0.27	0.05	0.00	0.00	16.14
CEN-002	-29.44574	-71.05757	69.25	0.26	0.04	0.00	0.00	20.30
CEN-003	-29.44574	-71.05757	9.01	0.55	0.17	0.00	0.00	12.14
CEN-004	-29.44574	-71.05757	1.18	0.20	0.04	0.00	0.00	10.66
CEN-005	-29.44574	-71.05757	4.25	0.40	0.08	-2.00	0.00	21.26
OSW-001	-29.45415	-71.03350	0.15	2.61	1.16	0.00	0.00	3.64
OSW-002	-29.45415	-71.03350	0.27	1.95	1.15	0.00	0.01	17.34
OSW-003	-29.45643	-71.03280	0.18	0.22	1.08	0.00	0.00	8.02
OSW-004	-29.45643	-71.03280	0.09	1.08	0.26	0.00	0.00	27.86
OSW-005	-29.45698	-71.03258	0.02	3.21	0.55	0.00	0.01	28.56
OSE-001	-29.45582	-71.01565	0.03	0.99	0.87	0.00	0.07	25.86

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2.1.1 Orion

The Orion Prospect is located along the western margin of the licence area and includes the Agustina and Tina workings (Figure 2-6). The copper-iron mineralisation at Orion is hosted within series of steeply dipping faults within a Cretaceous granodiorite. The mineralised faults have a strike length which extends for over 2 km within Estrella’s tenements. Results from initial reconnaissance sampling, geophysics and surface mapping suggest the iron alteration and copper mineralisation is found along its entire strike length of these fault zones (Figure 2-5), with higher copper grades (e.g. OSW-008; 6.1% Cu, 0.61 g/t Au & 21.48% Fe) having a coincident magnetic and IP response (target 1; Figure 2-5 and Table 2-1). The mineralised fault zones have strong surface expression and can be mapped using remote sensing techniques (Figure 2-6).

Deep weathering in the area is noted, and during SRK’s site visit, no fresh sulphide minerals were visible at surface or within the mining adits. The copper minerals present in this prospect include malachite, crysocolla or azurite and are commonly found along fractures and joints within the fault zones (Figure 2-7). Exploration work on the adjoining La Corona de Cobre property (Global Hunters website) suggests the base of oxidisation extends to depth 140 m, with mineralisation varying in width between 40 and 60 m. Initial drilling on Orion would aim to test the depth extent of the oxide mineralisation as well as testing any sulphide potential at depth.

The iron oxide-copper mineralisation at Orion follows a series of steeply dipping faults. Each fault has a relatively consistent orientation strikes approximately NNW-SSE (~160°) and each dip steeply between ~70 - 80° towards the NE. At least six of these large steeply dipping faults are identified within the Orion prospect, in addition to the major faults several smaller cross-cutting or linking faults are observed in the mineralised areas. All structures observed in Orion prospect are brittle, which indicates they occurred at a relatively shallow level deformation and late stage mineralisation. The faults have a relatively simple geometry.

Parallel structures to the west of Agustina suggest potential for copper mineralisation outside of the currently identified mineralised trend. The strong structural control of copper mineralisation along the regional fault zone provides obvious drill targets. Parallel structures may also be considered as prospective for similar styles of copper mineralisation.

– Distal alteration surrounding the Orion prospect includes a chlorite epidote assemblage which increases in intensity with closer to the mineralised fault zones. Locally, chlorite veining and quartz sericite alteration zone where noted in areas with malachite in outcrop. Proximally to the copper – mineralisation in the Agustina Tina adits is an increasingly intense magnetite alteration which follows closely the NNW striking fault zones. Within these mineralised fault zones, the intensity of iron oxide – alteration varies, with local zones of intense magnetite goethite alteration which replaces the host rock entirely and obscuring the original fabric and mineralogy but may be focused into a narrow zone. Locally, mineralised fault zones contain multiple smaller cross-cutting or linking faults.

Copper mineralisation and the iron oxide alteration generally follows the poorly developed foliation and fractures within of the host rock suggesting these zones provided greater permeability for mineralising fluids (Figure 2-7). In the main mineralised zones visible in the Agustina–Tina adits, outcrops suggest a network of small faults linking the larger structures has provided necessary sites for mineralisation and increases the width of this mineralisation.

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Figure 2-5: Ground Induced Polarisation (IP) survey over the Orion Prospect

Map Co-ordinates: UTM zone 19S, WGS 84 Datum

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– Figure 2-6: Adits targeting copper magnetite mineralisation within the Orion area

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Figure 2-7: Malachite mineralisation within the Agustina adit

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Figure 2-8: Mineralised faults zone within the Agustina Adits, showing the variable intensity of iron oxide alteration and the interaction of smaller linking structures

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– Figure 2-9: Magnetite copper mineralisation surrounding a strike-slip fault (70/054°) at the on the southern boundary of the Agustina tenement

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2.1.2 Aurora

Aurora is located along strike from Naciamento copper workings (Figure 2-4), which is a small (0.29 km[2] ) exploitation license excised from Estrella’s tenement.

The Aurora prospect is located on a NNW-striking fault zone cross-cutting a Late Cretaceous granodiorite. The faults in Aurora are sub-parallel to those faults that control mineralisation at Orion. Magnetite alteration is generally in the same orientation to that of the main structural trend with magnetite veins and malachite mineralisation follows the same orientation to that of the joint planes.

Within this prospect, chlorite-epidote alteration is more evident than in the Orion prospect, suggesting differences in the hydrothermal fluids associated with mineralisation.

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Figure 2-10: Chlorite-epidote alteration selvedge surrounding epidote and magnetite veins in the Aurora prospect area

2.1.3 Nova

The Nova prospect is located on the western portion of the tenement area and long a NNW-striking fault zone, similar to that of the Aurora and Orion prospect areas. There are several small artisanal workings targeting magnetite veins. Generally, the workings at Nova are smaller than those found in the Orion and Aurora prospect areas. However, the presence of copper mineralisation along these faults suggests they have acted as a conduit for mineralising fluids.

2.1.4 Venus

SRK’s site visit looked at the northernmost part of the Venus area and no detailed observations were made. Within Venus, a number of artisanal mines and small privately operated mines targeting copper mineralisation along large fault zones, similar to those found in Agustina. Venus also includes an extension to the south-western boundary of Agustina, approximately 2 km[2 ] in area. SRK visited several artisanal mines in this region as well as a small-scale artisanal processing plant (Figure 2-11 and Figure 2-12).

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Venus area contains a suite of Early Cretaceous granites, older than the granodiorite of the Agustina area. A number of the NNW-striking faults found in the Agustina Project area extend into Venus.

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Figure 2-11: Artisanal Cu mine – Venus west

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Figure 2-12: Artisanal Cu processing plant – Venus west

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Figure 2-13: Artisanal mine and stockpile – Venus west

2.1.5 Centauri Prospect

The Centauri Prospect is located in the western portion of the Agustina Tenement and is centred on Artisanal gold workings (Figure 2-4). Centauri is located along on a NE-striking fault that intersects the NNW-striking structure that controls Nova copper mineralisation. There is limited structural data to provide an understanding of key controls on this mineralisation, but there are a number of differences in mineralisation styles to the rest of the Agustina Project area. These include the presence of biotite veining, sericite alteration associated with quartz veining and the absence of magnetite alteration.

The artisanal workings targeted gold mineralisation associated with quartz-sericite veining (Figure 2-16). Sampling of these veins has returned high-grade gold mineralisation (Table 2-1; SRK011, 13.15 g/t and CEN002, 69.5 g/t Au). Sampling of the biotite veins did not return any significant results (Table 2-1; SRK010), suggesting the biotite veins are not significant to gold mineralisation. However, there is significant potassic alteration across this prospect area and gold mineralisation is associated with sericite altered granodiorite (Figure 2-14 and Figure 2-15).

The high-grade gold results from rock chip sampling suggest further work is warranted to assess potential gold mineralisation.

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Figure 2-14: Biotite veining associated with Centauri gold workings

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Figure 2-15: Cross-cutting quartz veining in the Centauri gold workings

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Figure 2-16: Sample of mineralised rock from Centauri (SRK011, 13.15 g/t Au)

2.2 Exploration Potential

SRK’s assessment of the exploration potential on is based on a site visit made to the area in October 2011; the results of samples collected in the field as well as recent ground based geophysical survey of the Agustina area. SRK’s site assessment focused on the Orion, Centauri, Nova, Aurora as well as a regional reconnaissance to Venus, Luna and Inca.

2.2.1 Agustina

The Agustina Project has a number of artisanal workings and small mines with the majority in the Orion prospect area. However, due to the lack of modern systematic exploration the entire licence area remains prospective for IOCG vein-style magnetite-copper-gold mineralisation as well as vein hosted copper mineralisation.

Mineralisation in this projects area has strong structural controls with identified mineral occurrences being concentrated along NNW-striking fault zones. The largest and most prospective of these areas is the Orion prospect, in particular the area surrounding Agustina–Tina mine adits.

A ground magnetic and IP survey has been undertaken in the Orion prospect and has identified the extent of magnetite alteration associated with copper mineralisation. Modelling of this data using either forward or inversion techniques to assist in understanding the 3D geometry of the mineralisation will assist with drill targeting. Initial drill targets should focus on testing the depth extent of mineralisation. In addition to the currently identified oxide mineralisation, drilling should test potential sulphide mineralisation below the base of oxidation.

The western portion of the tenement has potential for gold mineralisation, although this is based on a single small working where high-grade gold veins exist. This suggests potential for gold mineralisation in the area, but will require substantial further exploration to assess the potential for an economic accumulation of gold.

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Surface mapping combined with rock chip sampling is an effective exploration tool in this project area. This program should capture information relating to alteration, mineralisation and structure, rock type and magnetic susceptibility. An appropriate assay scheme should include Cu, Au, Ag, Pb, Zn, Mo, Sb, As, Fe, K, Na, Mn, S and Ba. To date, rock chip sampling has shown economic copper and gold grades through the project area.

A program of diamond / reverse circulation (RC) drilling should be designed to test the depth – potential and strike extent (>2 km) of the Agustina Tina mineralisation. The drilling should focus along the mineralised fault which is considered to be the major control on mineralisation. Drill targeting should be based on the results of the magnetic survey and surface mapping.

2.2.2 Venus

Venus covers an area of 85 km[2] and has a number of artisanal workings and small mining operations across the tenement area targeting copper mineralisation. Some of the artisanal workings at Venus have copper mineralisation hosted in quartz veins with intense sericite alteration, suggesting there is potential for porphyry-style mineralisation.

Estrella’s tenements at Venus feature the continuation of regional fault structures known to be mineralised and exploited by artisanal miners. These structures are considered to be prospective and further assessment of their mineralisation potential should be a target for exploration activity by Estrella.

2.3 Luna and Inca Projects

The Project area is divided into the Luna (208 km[2] ) and Inca (54 km[2] ). There has been little modern exploration and both areas can be considered as early-stage exploration. Outcropping high-grade copper and silver mineralisation has been targeted by artisanal workers, suggesting there is potential for larger mineralised system (Table 2-2).

The Luna Project covers the contact between Late Cretaceous granite in the southern portion of the tenement and a succession of Cretaceous intermediate to mafic volcanic and volcaniclastic rocks in the north of the tenement (Figure 2-17 and Figure 2-20). Within the volcanic sequence, a broadly defined NW-striking structural corridor which has a weakly developed foliation and several discrete fault zones. Outcropping copper, silver and gold mineralised veins are found along a NW-SE striking fault zone which outcrops for over 20 km within Estrella’s tenement. Within this structural corridor there are several small artisanal workings including the Alto del Valle workings (Figure 2-19).

SRK observed copper, silver and gold mineralisation at several workings associated with breccia and copper veining. Within small workings (Alto Del Valle, located in small excision within Estrella’s tenement), a number of altered and mineralised breccias were noted. Visible copper mineralisation breccia bodies contain copper as bornite and malachite. From visual estimations, the breccia contains >1% copper with higher grades anticipated locally within veins. Alteration within the breccia includes epidote, chlorite and biotite (potassic alteration).

Alto del Valle copper-silver-gold mineralisation occurs in veins hosted by a brecciated andesite and basalt (Figure 2-21). The Alto del Valle mineralisation is contained within quartz-bornitechalcopyrite-magnetite veining (Figure 2-21, Figure 2-2 and Table 2-2). Although no immediate drill targets are evident from the reconnaissance work, an initial work program could include rock chip sampling, stream sediment and geological mapping to identify the high grade copper, silver and gold mineralisation veins.

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Figure 2-17: Geology of the Luna Project area (Sernageomin, 2003) Map Co-ordinates: UTM zone 19S, WGS 84 Datum

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Figure 2-18: Geological legend for map of the Luna area (Sernageomin, 2003)

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Figure 2-19: Location of workings in the Luna and Inca Project areas
Map Co-ordinates: UTM zone 19S, WGS 84 Datum
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Figure 2-20: View to the southwest showing the contact between the Late Cretaceous (south) granites and the older volcanic succession (north)

Table 2-2: Grab samples from the Alto del Valle workings

Sample #	Decimal degrees	Decimal degrees	Parts per million	Parts per million		Percent
	Latitude	Longitude	Au	Ag	Cu	Pb	Zn
SRK020	-30.4018	-70.5380	0.14	161.2779	5.2936	0.001	0.0034
SRK021	-30.4018	-70.5380	0.16	134.5067	5.4868	0.0008	0.004

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Figure 2-21: Breccia with chloritic quartz veining and copper mineralisation (malachite)

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Figure 2-22: Copper-silver rich ore from the Alto del Valle workings (sample SRK020)

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The Luna and Inca Projects are at an early stage, and modern and systematic exploration techniques have not yet been applied. A number of small workings including the Alto del Valle workings occurring along a fault zone, indicating potential for a larger high-grade copper-silver-gold mineralised system along a large strike length of over 20 km.

At least two separate mineralised breccia occurrences are found in this area, the presence of high-grade mineralisation justifies further exploration work. An initial work program would include rock chip sampling, stream sediment and geological mapping to identify areas containing high-grade copper, silver and gold mineralisation.

2.4 Proposed work program and budget

Estrella provided a detailed exploration program and budget for the two-years post-listing, based on an $6 million fund raising. The actual expenditures may vary from the estimates below and the management reserves the right to vary the expenditures dependent on the results of the initial exploration.

2.4.1 Agustina

The Year 1 Program will focus on identifying copper and gold mineralisation adjacent to known workings through geological mapping, ground geophysics and targeted surface sampling followed up by drilling of suitable targets (Table 2-3 and Table 2-4). At present, there are four prospects defined in the Agustina Project area. The most advanced of these targets is Orion, which will be the focus of work in the first year.

Geochemical sampling will include stream sediment, soils sampling, and rock chip sampling over identified target areas (900 samples).

Ground magnetic and induced polarisation (IP) surveys (17 line km) will be used assist in targeting RC and diamond drillholes. Initial drill testing will comprise of 10 RC drillholes and 6 diamond holes at average depth of 200 m for a total of 3,200 m.

The Year 2 Program will include additional drilling geochemistry and geophysics and follow-up drilling (RC) of confirmed targets and to develop regional targets off the main Agustina trend. Drilling will consist of 20 RC and 4 diamond holes with an average depth of 216 m for a total of 5,200m.

Table 2-3: Drilling allocation for the Agustina Project

Drilling type	Year 1	Year 1	Year 2	Year 2
	Holes	Metres	Holes	Metres
RC	10	2,000	20	4,000
Diamond	6	1,200	4	1,200
Total	16	3,200	24	5,200

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Table 2-4: Budget for the Agustina Project

Work type	Year 1	Year 2
Tenement Costs	50,000	50,000
Geochemistry	20,000	0
Geophysics	50,000	0
Consultants and Wages	273,000	350,000
Drilling and Sampling	576,000	936,000
Assaying	70,000	100,000
Environmental and Community	35,000	50,000
Total	$1,074,000	$1,486,000

2.4.2 Venus

Venus represents the regional extension of the Agustina project, the Year 1 Program will focus on identifying copper and gold mineralisation adjacent to known workings through geological mapping, ground geophysics and targeted surface sampling (Table 2-3 and Table 2-4). At present, there are no defined prospect areas and initial work will aim at delineating drill targets.

The Year 1 Program will include regional surface sampling programme including stream sediment and soils sampling (1,800 samples) to define target areas, as well as ground geophysics (IP, resistivity and magnetics) for a total of 13 line km.

The Year 2 Program will include initial drill testing of targets generated in Year 1 as well as an ongoing program of surface geochemistry (900 samples) and geophysics.

Detailed ground magnetics and IP (20 line km) will be used to target RC and diamond drilling.

Drilling will consist of 5 RC holes at average depth of 180 m for a total of 900 m.

Table 2-5: Drilling allocation for the Venus Project

Drilling type	Year 1	Year 1	Year 2	Year 2
	Holes	Metres	Holes	Metres
RC	0	0	5	900
Diamond	0	0	0	0
Total	0	0	5	900

Table 2-6: Budget for the Venus Project

Work type	Year 1	Year 2
Tenement Costs	25,000	25,000
Geochemistry	40,000	20,000
Geophysics	40,000	60,000
Consultants and Wages	40,000	70,000
Drilling and Sampling	0	250,000
Assaying	15,000	30,000
Environmental and Community	10,000	25,000
Total	$170,000	$480,000

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2.4.3 Luna

The Year 1 Program is aimed focusing exploration and to provide initial drill targets to be tested in year two. Remote sensing will be used to direct reconnaissance mapping and sampling. This phase of exploration will focus on the NW-striking fault zone where high grade copper-gold mineralisation is identified at surface (Table 2-7 and Table 2-8).

Geochemical sampling will include stream sediment and rock chip sampling (1,200 samples). Ground-based geophysical (magnetic and IP) surveys are to be conducted over any areas with identified geochemical or structural targets for a total of 16 line km.

The Year 2 Program is designed to build on the previous year’s results and follow-up targets generated in Year 1, as well as conducting some early stage exploration on outlying areas including soils sampling (200 samples) (Table 2-7 and Table 2-8).

An allowance has been made for 10 diamond holes at 250 m for a total of 2,500 m to follow up the most prospective targets. Detailed ground magnetics (8 line km) will be used to target diamond drilling.

Table 2-7: Drilling allocation for the Luna Project

Drilling type	Year 1	Year 1	Year 2	Year 2
	Holes	Metres	Holes	Metres
RC	0	0	0	0
Diamond	0	0	2	600
Total	0	0	2	600

Table 2-8: Budget for the Luna Project

Work type	Year 1	Year 2
Tenement Costs	36,500	36,500
Geochemistry	10,000	10,000
Geophysics	50,000	25,000
Consultants and Wages	30,000	30,000
Drilling and Sampling	0	125,000
Assaying	0	25,000
Environmental and Community	20,000	20,000
Total	$146,500	$271,500

2.4.4 Inca

The Year 1 Program is aimed at focusing exploration to test potential mineralisation along the NWstriking faults near where the Alto del Valle workings are located and to provide initial drill targets to be tested in Year 2 (Table 2-9 and Table 2-10).

Geochemical sampling will include stream sediment and rock chip sampling (800 samples). Groundbased geophysical (magnetic and IP) surveys are to be conducted over any areas with identified geochemical or structural targets for a total of 16 line km.

The Year 2 Program is designed to build on the previous year’s results and follow-up targets generated in Year 1, as well as conducting some early-stage exploration on outlying areas including some surface sampling (200 samples).

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An allowance has been made for 2 diamond holes at 300 m for a total of 600 m to follow up the most prospective targets. Detailed ground magnetics (8 line km) will be used to target diamond drillholes.

Table 2-9: Drilling allocation for the Inca Project

Drilling type	Year 1	Year 1	Year 2	Year 2
	Holes	Metres	Holes	Metres
RC	0	0	0	0
Diamond	0	0	2	600
Total	0	0	2	600

Table 2-10: Budget for the Inca Project

Work type	Year 1	Year 2
Tenement Costs	8,500	8,500
Geochemistry	20,000	10,000
Geophysics	50,000	25,000
Consultants and Wages	30,000	30,000
Drilling and Sampling	0	125,000
Assaying	0	25,000
Environmental and Community	20,000	20,000
Total	$128,500	$243,500

2.4.5 SRK’s opinion on exploration plan and budget

SRK considers that further exploration is justified at the budgetary levels proposed by Estrella. A total budget of $4 million has been allocated to exploration by Estrella over the next two years post-listing, which is sufficient to complete the exploration programmes presented by the Company.

Estrella needs to establish an in country management team to direct this exploration program and budget, as a priority. Nonetheless, the projects have and will be acquired on the basis of sound geological concepts in areas that have high potential for significant copper and gold mineralisation.

Table 2-11: Overall budget for proposed exploration – Estrella Projects

Project	Year 1	Year 2
Agustina	$1,074,000	$1,486,000
Venus	$170,000	$480,000
Luna	$146,500	$271,500
Inca	$128,500	$243,500
Total	$1,519,000	$2,481,000
Overall Total	$4,000,000

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3 Conclusions and Recommendations

Estrella’s copper-gold exploration projects in northern Chile are located within the prospective Atacama Fault zone, within the Chilean Coastal Cordillera. They are split into four projects based on – location and mineralisation style Agustina in the north and the Luna Project in the south.

The Agustina Project is the most advanced of the four projects with a number of artisanal workings which have targeted IOCG-style copper mineralisation as well as vein-hosted gold mineralisation. The Agustina Project consists of 15 license blocks over an area of 18.5 km[2] and the Venus Project consists of 46 license blocks over an area of 85 km[2] .

The Luna Project area consists of 89 tenement blocks (208 km[2] ) and the Inca Project area has an area of 54km[2] . This is the largest of the four project areas, but has received little in the way of modern exploration. Several copper-gold workings are found in the north of the tenement targeting brecciated quartz veining containing bornite, chalcopyrite and magnetite.

The Agustina and Luna projects secured by Estrella include both early-stage exploration as well as more advanced prospects located adjacent to small-scale mines. Within the Agustina Project, four prospects have been identified which can be regarded as having targets which should be tested by drilling. As this is relatively early-stage exploration, it is more speculative in nature and involves some degree of exploration risk. Nevertheless, Estrella has acquired interest in the mineral tenements on the basis of sound geological concepts and technical merit. Preliminary work has supported these exploration models and reconnaissance sampling has returned economic grades for copper, silver and gold. The projects have varying degrees of prospectivity for economically extractable copper, gold, and silver mineralisation and, in SRK’s opinion further exploration is justified at the budgetary levels proposed by Estrella.

3.1 Agustina and Venus Projects

The Agustina Project is the most advanced and is highly prospective for IOCG-style magnetitecopper-gold mineralisation. Although the area has had little in the way of modern exploration, near-surface copper-gold mineralisation has been targeted by shallow mine and artisanal workings. Recent work by Estrella has included ground-based geophysical (magnetic and IP) surveys, as well rock chip sampling.

Copper mineralisation is focused within magnetite-hematite alteration surrounding steeply dipping faults. The faults extend for over 2 km and provide the major control on mineralisation, with a relatively consistent dip and strike. Based on initial reconnaissance sampling studies, the Agustina Project offers the most immediate exploration potential. A number of artisanal workings and adits have in the past been exploited IOCG-style copper and gold mineralisation. This mineralisation hosted is hosted by steeply dipping faults within granodiorites. Based on outcropping mineralisation, geological mapping and rock chip sampling, four prospect areas have been defined – Orion, Nova, Centauri and Aurora.

Orion is the largest and most advanced prospect area. IOCG-style copper mineralisation occurs along a series of steeply dipping mineralised fault zones which extend for over 2 km in strike length. Each mineralised zone has a width between 5 m and 50 m, many of which have structures linking the parallel zones observed. Rock chip sampling has shown moderate copper grades between 0.4 - 1.89% Cu that are coincident with elevated gold grades up to 1.0 g/t Au.

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The Centauri, Nova and Aurora prospects are located in the west of the Agustina Project area. The Centauri Prospect is centred on gold workings where grab sampling has returned gold grades of up to 13.15 g/t. Nova and Aurora are early-stage copper prospects in the west of the Agustina Project area which occur in a similar structural setting to Orion.

In the western portion of the tenement, hydrothermal vein-hosted gold mineralisation is evident. This mineralisation occurs within quartz veins and has a broad potassic alteration zone surrounding it, suggesting it may represent part of a larger mineralised system.

Adjacent to the Agustina tenements are the Venus and Venus west tenement blocks, these cover a significant area (84.5 km[2] ). Venus is geologically similar to Agustina and contains strike extensions of mineralised structures found at Agustina.

The Agustina tenement features exploration prospects that are ready to drill, as well as less advanced prospects with significant exploration potential. Orion hosts artisanal mines that have previously exploited IOCG-style mineralisation as demonstrated by SRK’s observations and sampling. Further to this, Estrella performed geophysical surveying, mapped the host mineralisation structures and has undertaken additional sampling to improve the geological understanding of the area which has identified exploration targets that are ready to drill. Estrella has acquired the rights to explore the mineral tenements on the basis of sound geological concepts and technical merit. In SRK’s opinion; further exploration is justified at the budgetary levels proposed by Estrella.

3.2 Luna and Inca Projects

The Luna and Inca projects can be considered as a greenfields project. Outcropping high-grade copper and silver mineralisation related epithermal breccias and is adjacent to a regional fault system. This mineralisation has been the targeted by artisanal workers at Alto del Valle and has potential to represent a larger mineralised system.

The project has broadly two main rock units; a granite suite and a thick sequence of volcanic rocks include basalt and andesite. Within the volcanic sequence a broadly defined NW-striking structural corridor defined by a weak foliation and several discrete fault zones. This structural corridor hosts several small artisanal workings including the Alto del Valle workings.

At the Alto del Valle workings, copper-silver-gold mineralisation occurs in veins hosted by a brecciated andesite and basalt. The Alto del Valle workings mineralisation is contained quartz-bornite-chalcopyrite-magnetite veining (5.49 % Cu, 161 g/t Ag, 0.16 g/t Au). At least two separate mineralised breccia occurrences are found in this area. Although no immediate drill targets are evident from the reconnaissance work, an initial work program could include surface sampling and mapping to identify the high-grade copper and silver veins.

The high-grade copper and silver values from SRK’s sampling warrant a further and more comprehensive exploration work program to identify the extent of this mineralisation. SRK recommends a systematic work program that includes further rock chip sampling, stream sediment sampling and geological mapping to identify continuity of the high-grade copper, silver and gold-bearing epithermal breccia system(s) as observed at Alto del Valle. Initial exploration studies could be targeted using remote sensing techniques could be used to map structures, hydrothermal alteration and prospective rock types. This initial work could be used to focus a second phase of surface sampling and geological mapping and sampling programs. A program of stream sediment and rock chip sampling should be undertaken across the tenement area. The assay scheme should include are Au, Ag, Pb, Zn, Mo, Sb, As, K, Na, S, Mn, Hg, Tl and Ba. Use of remote sensing techniques and utilisation of existing road access will maximise the efficiency of exploration expenditures in both Inca and Luna projects.

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4 References

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Brown M, Dıaz F, Grocott J (1993). Displacement history of the Atacama fault system 25’00°S– 27’00°S, northern Chile. Geol Soc Am Bull 105:1165–1174.

Chen H. (2010). Mesozoic IOCG Mineralisation in the Central Andes: an Updated View. In: Porter – T.M. (ed) 2010 Hydrothermal Iron Oxide Copper-gold and Related Deposits: A Global Perspective Advances in the Understanding of IOCG Deposits Volume 3, PGC Publishing Adelaide.

Chen H., Kurtis K., Clark A., (2011). Contrasting fluids and reservoirs in the contiguous Marcona and Mina Justa iron oxide-Cu (-Ag-Au) deposits, south-central Peru. Miner Deposita 46:677-706.

Grocott J, Taylor GK (2002) Magmatic arc fault systems, deformation partitioning and emplacement of granitic complexes in the Coastal Cordillera, northern Chilean Andes (25’30°S to 27’00°S). J Geol Soc Lond 159:425–442.

Hitzman MW, Oreskes N, Einaudi MT (1992). Geological characteristics and tectonic setting of Proterozoic iron oxide (Cu-U-Au-REE) deposits. Precamb Res 58:241–287.

– Levi B, Nystro¨m JO, Thiele R, Aberg G (1988). Geochemical trends in Mesozoic Tertiary volcanic rocks from the Andes in central Chile and tectonic implications. J S Am Earth Sci 1:63–74.

Marschik R, Fontbote´ L (2001). The Candelaria-Punta del Cobre iron oxide Cu-Au (-Zn-Ag) deposits, Chile. Econ Geol 96:1799–1826.

Morata D, Féraud G, Aguirre L, Arancibia G, Belmar M, Morales S and Carrillo J (2008). Geochronology of the Lower Cretaceous volcanism from the Coastal Range (29°20’-30°S), Chile . Revista Geológica de Chile 35 (1) pp. 123-145.

Pichowiak S, Buchelt M, Damm K-W (1990). Magmatic activity and tectonic setting of the early stages of the Andean cycle in northern Chile. In: Kay SM, Rapela CW (eds) Plutonism from Antarctica to Alaska . Geol Soc Am Spec Pap 241:127–144.

Pichowiak S (1994). Early Jurassic to Early Cretaceous magmatism in the Coastal Cordillera and the Central Depression of north Chile. In: Reutter K-J, Scheuber E, Wigger PJ (eds) Tectonics of the southern central Andes . Springer, Berlin Heidelberg New York, pp 203–217.

Ruiz F. C, Ortiz F, Moraga A, Aguilar A (1968). Genesis of the Chilean iron ore deposits of Mesozoic age. Rep 23rd Int Geol Congr 7:323–338.

Sempere T, Carlier G, Soler P, Fornari M, Carlotto V, Jacay J,Arispe O, Neraudeau D, Cardenas J, – Rosas S, Jimenez N (2002). Late Permian Middle Jurassic lithospheric thinning in Peru and Bolivia, and its bearing on Andean-age tectonics. Tectonophysics 345:153–181. Sernageomin (2003). Mapa Geologico de Chile: version digital. Sevico Ncional de Geologia y Mineria, Publicacion Geologica Digital, No, 4 Santiago.

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Scheuber E, Hammerschmidt K, Friedrichsen H (1995).[40] Ar/[39] Ar and Rb-Sr analyses from ductile shear zones from the Atacama Fault Zone, northern Chile: The age of deformation. Tectonophysics 250:61–87.

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Sillitoe R H (1990). Copper deposits and Andean evolution. In: Ericksen GE, Can˜ as Pinochet MT, Reinemund JA (eds) Geology of the Andes and its relation to hydrocarbon and mineral resources. Circum-Pacific Council Energy Min Resour Earth Sci Ser 11:285–311.

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Appendix A

Appendix A: Tenement Schedule

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	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993	Number License ID Holder % Interest License Type Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Expenditure Commitment Expiration Date of the Concessions (dd/mm/yy) Comments 1 Agustina 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 2 Agustina 41 al 60 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 3 Agustina Dos 41 al 61 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 4 Agustina Cuatro 1 al 20 Andale 100% Exploitation 100 769 as per Option Agreement No expiration date 5 Agustina Dos 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 6 Agustina Dos 21 al 40 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 7 Tina 1 al 20 Andale 100% Last stage to change into to exploitation 100 769 as per Option Agreement No expiration date whilst bridging into exploitation 10 Garrafal 1 al 60 Andale 100% Started process to exploitation 300 2,306 as per Option Agreement No expiration date whilst bridging into exploitation Assumed annual fee, final fee will be a pro-rata fee once submission has been approved 8 Agustina Uno Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 9 Agustina Cuatro Andale 100% Exploration 200 307 as per Option Agreement 15/07/2012 11 Garrafon Andale 100% Exploration 300 461 as per Option Agreement 15/07/2012 12 Violeta Uno Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 13 Violeta Dos Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 14 Violeta Tres Andale 100% Exploration 100 154 as per Option Agreement 31/05/2012 15 Violeta Cuatro Andale 100% Exploration 200 307 as per Option Agreement 31/05/2012 Total 2,500 9,993
Agustina Project	Comments								Assumed annual fee, final fee will be a pro-rata fee once submission has been approved
		No expiration date	No expiration date	No expiration date	No expiration date	No expiration date whilst bridging into exploitation	No expiration date whilst bridging into exploitation	No expiration date whilst bridging into exploitation	No expiration date whilst bridging into exploitation	15/07/2012	15/07/2012	15/07/2012	31/05/2012	31/05/2012	31/05/2012	31/05/2012
	Expiration Date of the Concessions (dd/mm/yy)

	Expenditure Commitment	as per Option Agreement	as per Option Agreement	as per Option Agreement	as per Option Agreement	as per Option Agreement	as per Option Agreement	as per Option Agreement	as per Option Agreement	as per Option Agreement	as per Option Agreement	as per Option Agreement	as per Option Agreement	as per Option Agreement	as per Option Agreement	as per Option Agreement
		769	769	769	769	769	769	769	2,306	461	307	461	307	307	154	307	9,993
	Mining Patents 2012-2013 USD$1=CLP520

	Area (ha)	100	100	100	100	100	100	100	300	300	200	300	200	200	100	200	2,500
	License Type	Exploitation	Exploitation	Exploitation	Exploitation	Last stage to change into to exploitation	Last stage to change into to exploitation	Last stage to change into to exploitation	Started process to exploitation	Exploration	Exploration	Exploration	Exploration	Exploration	Exploration	Exploration	Total
	% Interest	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%
	Holder	Andale	Andale	Andale	Andale	Andale	Andale	Andale	Andale	Andale	Andale	Andale	Andale	Andale	Andale	Andale
	License ID	Agustina 1 al 20	Agustina 41 al 60	Agustina Dos 41 al 61	Agustina Cuatro 1 al 20	Agustina Dos 1 al 20	Agustina Dos 21 al 40	Tina 1 al 20	Garrafal 1 al 60	Agustina Uno	Agustina Cuatro	Garrafon	Violeta Uno	Violeta Dos	Violeta Tres	Violeta Cuatro
	Number	1	2	3	4	5	6	7	10	8	9	11	12	13	14	15

SECTION 4 – INDEPENDENT GEOLOGIST’S REPORT 73

													Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Total 41,800 70,413	Area (ha) Mining Patents 2012-2013 USD$1=CLP520 Total 41,800 70,413
Venus Project	Comments				Comments				Comments	No annual patents as concession have expired
		6/10/2013				7/06/2013				April 11
	Expiration Date of the Concessions (dd/mm/yy)				Expiration Date of the Concessions (dd/mm/yy)				Expiration Date of the Concessions (dd/mm/yy)
	Expenditure Commitment	nil	13,100 20,140		Expenditure Commitment	nil			Expenditure Commitment	nil
		461	20,140			461	40,280			0	0	Total – all projects		70,413
	Mining Patents 2012-2013 USD$1=CLP520				Mining Patents 2012-2013 USD$1=CLP520				Mining Patents 2012-2013 USD$1=CLP520				Mining Patents 2012-2013 USD$1=CLP520
	Area (ha)	300	13,100		Area (ha)	300	26,200		Area (ha)	300	5,500		Area (ha)	41,800
	License Type	Exploration			License Type	Exploration			License Type	Exploration	Total			Total
	% Interest	100%			% Interest	100%			% Interest	91.50%
	Holder	Nicolas Coll on Behalf of Estrella Resources	Total	Luna Project	Holder				Holder	Estrella Resources
						Sebastian Huidobro on behalf of Estrella Resources
							Total	Inca Project
	License ID	Venus 1 - 46			License ID	Luna 1 - 89			License ID	Inca 1 - 19
	Number	105			Number	16			Number

74 ESTRELLA RESOURCES

Section 5 Business and Investment Risks

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Image: Copper oxide mineralisation at Agustina (Oct 2011)

SECTION 5 – BUSINESS AND INVESTMENT RISKS 75

Overview

There are factors, both specific to the Company and of a general nature, which may affect the future operating and financial performance of the Company and the value of Shares. Some of these risks may be mitigated by the Company, however many of these factors are outside the control of the Directors and management of the Company.

This Section identifies some, but not all, of the risks associated with an investment in the Company. Applicants should consider the risk factors described below, together with information contained elsewhere in this Prospectus, before deciding whether or not to apply for Shares.

Resources and Reserves

The Company’s success depends on its ability to locate, identify and/or acquire JORC reserves that may become economically recoverable. Potential exploration areas included in the Prospectus are conceptual in nature and no assurance can be given that an identified resource will ever be located/ identified nor that it may in time qualify as a commercially viable resource which can be legally and economically exploited.

There can be no assurance that the Company’s exploration plans disclosed in this Prospectus will result in any significant mineable copper and gold reserves. Mining involves a high degree of risk.

Nature of Investment

Any potential investor should be aware that subscribing for Shares involves various risks. Participating in the Offer should be considered speculative. Exploration, development and extraction of minerals is generally considered a high-risk activity.

The Shares to be issued pursuant to the Offer carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares. The future performance of the Shares may be influenced by a range of factors, some of which are set out below.

Company Specific Risks

Limited Operating History in Chile

The Company is in the early stages of exploration and development of the Projects in which it has interests which are considered highly prospective.

The Company has only limited historical operating data and financial information available upon which Applicants can base their evaluation of the Company’s business and prospects. As a result, the Group may not have sufficient experience to address the risks frequently encountered by companies with a limited operating history, including the Company’s potential failure to:

Establish the Company’s mining capacity;
Conduct profitable mining operations;
Attract, train, motivate and retain qualified personnel;
Keep up with evolving industry standards and market developments;
Manage the Company’s operations, including the integration of any future acquisitions;
Anticipate and adapt to any changes in government regulation, mergers and acquisitions involving the Company’s competitors and other significant competitive and market dynamics; or
Maintain adequate control over the Company’s costs and expenses.

The prospects of the Company must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly in the mineral exploration sector, which has a high level of inherent uncertainty.

Exploration and Development

There are no mineral resource estimates listed in this Prospectus by the Company. As most of the Projects are at an early stage of exploration, they are more speculative in nature and involve a degree of exploration risk.

The Independent Geologist’s Report does contain references to potential exploration targets but these are conceptual in nature and in no way any form of JORC statement nor do they contain any references by a Competent Person as defined under the JORC regime. There is insufficient information from the exploration activities to establish whether further exploration will result in the determination of a mineral resource within the guidelines of the JORC Code.

No assurance can be given that any future identified resource will ever qualify as a commercially viable resource which can be legally and economically exploited. The Company’s future production and processing operations will most likely also involve risks such as failure to achieve predicted quality specifications, problems in commissioning and operating plant and equipment, metallurgical problems affecting extraction and mineralisation characteristics.

The Company’s ability to carry out the exploration program as set out in this Prospectus is subject to risks including but not limited to, operational and technical difficulties encountered in surveying, drilling and other exploration activities, electrical or mechanical failure or equipment breakdown, access to infrastructure, availability and costs of power and other utilities, access to skilled labour and personnel and delays due to adverse weather conditions and other natural disasters. As at the date of this Prospectus the Company is not aware of any particular factor that is likely to cause delay.

Acquisition of Concessions the subject of

the Agustina Option

The mining exploration Concessions and the mining exploitation Concessions which comprise the Agustina Project are not currently held by the Company. The Company has entered into the Agustina Option Agreement for the option to acquire 100% of the Concessions at any time up to 1 January 2015. A summary of the Agustina Option Agreement is in Section 9 (Material Contracts).The option period under the Agustina Option Agreement is for 3 years (unless in case of force majeure). There is a risk that the Company may not be able to conduct the necessary activities to ascertain whether the Concessions are economically viable in that time.

76 ESTRELLA RESOURCES

Title to the Agustina Concessions is subject to compliance with the terms and conditions of the Concessions. This includes renewal before the expiry date of certain exploration Concessions in the Agustina Project. In the event that any conditions attached to the Concessions are not met or the holder and Estrella Chile fails to comply with any legislation affecting the Concessions, Estrella Chile’s interest in the Agustina Concessions could be diminished.

Certain Concessions contained within the Agustina Project will expire in May 2012 and July 2012. Pursuant to its rights under the Agustina Option Agreement, in March 2012 the Company made applications for mining claims to convert the exploration concessions to mining exploitation concessions (which upon grant are for an indefinite period provided the Company maintains the concessions in good standing and pays applicable taxes).

The Company is not aware of any reason why the applications for the above mentioned mining claims would not be granted prior to the relevant expiry dates (refer to the Legal Tenement Report in Section 13).

Maintaining Title to Concessions in the Projects

Interests in exploration and mining (exploitation) Concessions in Chile are governed by Chilean national legislation and are evidenced by the granting of Concessions. Each exploration Concession is for a specific term and carries with it administrative and rent payment conditions which require compliance. The Company could lose title or its interest in its exploration mining Concessions if conditions are not met or if there are insufficient funds to meet the rent and annual fee commitments.

Further, the Company must renew its exploration mining Concessions when they are due. The Company cannot guarantee that all exploration mining Concessions will be renewed.

Although Estrella Chile will endeavour to maintain the Concessions in good standing, the conditions attached to the exploration and mining (exploitation) Concessions may change and Estrella Chile may not be able to comply with some or all of the conditions associated with the Concessions.

In addition to maintaining the Concessions, the Company’s exploration, development and appraisal activities are also dependent upon the grant and maintenance of appropriate licences, permits, resource consents, access and water rights arrangements which may not be granted, may be withdrawn or delayed or made subject to limitations or material changes by the relevant granting authority, including dilution of the

Group’s interest in, or even loss of, the relevant licence or consent.

A summary of the terms and conditions of the Concessions and mining regulatory risks associated with the Concessions are set out in the Legal Tenement Report in Section 13 and the Independent Geologist’s Report in Section 4.

Future Prospecting Operations will be concentrated on the Company’s Projects

The Company currently has no operating cash flows or sales. The Company’s future prospecting operations will focus on its current Projects. All of the Company’s future operating cash flows and sales are expected to be derived from the sale of copper/gold produced from the Company’s Projects.

Future financing will be required by the Company to support proposed exploration and development plans. There can be no assurance that such funding will be available on satisfactory terms or at all. Inability to obtain funding could adversely affect the Company’s ability to complete exploration programs and assess the exploration potential of the Concessions.

Any significant operational or other difficulties in the mining, processing, storing or transporting of resources at and from the Projects could reduce, disrupt or halt the Company’s future production, which would materially or adversely affect the Company’s business, prospects, financial condition and results of operations.

Environmental Approval Risks

Developing the Company’s assets will be dependent on each Project meeting environmental guidelines and, where required, being approved by governmental authorities.

The Company’s exploration activities do not require any environmental approvals. However, once the Company starts conducting significant mining activities (not anticipated within the first 2 years after listing), it will be subject to environmental approvals as outlined below.

The Company’s mining activities will be subject to an Environmental Impact Study (EIS) which could take up to 24 months or an Environmental Impact Declaration (DIA) which could take up to 15 months depending on the location and impacts. Failure to obtain such approvals will prevent or delay the Company from undertaking its desired mining activities.

Whilst the Company does not anticipate any fees for environmental approval for the next two years, provision has been made in the exploration budget for each Project for future environmental rehabilitation work consistent with industry practice for exploration activities.

The Company’s Projects are also subject to environmental laws. Despite efforts to conduct its activities in an environmentally responsible manner and in accordance with all applicable laws, the Company could be subject to liability due to environmental risks inherent to its activities, such as groundwater contamination, subsidence, accidental spills, leakages or other unforeseen circumstances. The legal framework governing this area is constantly developing in all jurisdictions. The Company is unable to fully ascertain any future liability that may arise from any new laws or regulations.

SECTION 5 – BUSINESS AND INVESTMENT RISKS 77

Mineral exploration and production can be environmentally sensitive activities which can give rise to substantial costs for environmental rehabilitation, damage, control and losses. Further, if there are environmental rehabilitation conditions attached to the exploration and mining Concessions of the Company, failure to meet such conditions could lead to forfeiture of these Concessions.

Liquidity Risk

In addition, there is also a risk of a large sell down of restricted securities on expiry of the relevant escrow period, which may affect the price of the Shares and market for the Shares.

Further details of the Shares on issue and restricted securities arrangements are set out in Section 8.

Key Personnel Risk

The Directors’ and senior managers’ ability to successfully manage the Company’s performance and to expand and exploit the opportunities identified in this Prospectus will directly affect the success of the Company. The Company may be adversely affected if any of the Directors or senior management leaves the Company. The Group may not be able to replace them with persons of equivalent expertise and experience within a reasonable period of time or at all and the Company may incur additional expenses to recruit, train and retain personnel.

mining and exploration activities may affect the operations of the Company.

Operational Risk

If the Company discovers commercially viable resources and decides to develop and commission a mine, the operations of the Company including mining and processing will carry significant risks. These include but are not limited to failure to achieve predicted quality specifications in exploration, mining and processing, technical difficulties encountered in commissioning and operating plant and equipment, difficulties in access to infrastructure, mechanical failure, metallurgical problems affecting extraction rates and costs, adverse weather conditions, industrial and environmental accidents, industrial disputes, unexpected shortages or increases in the costs of consumables, spare parts, labour, plant and equipment.

Contractual Risks

As a party to contracts, the Company will have various contractual rights in the event of non-compliance by a contracting party. However, no assurance can be given that all contracts will be fully performed by all contracting parties and that the Company will be successful in securing compliance with the terms of each contract by the relevant third party.

Commodity Price Volatility Risk

Commodity prices fluctuate and are affected by numerous factors beyond the control of the Company. These factors include world demand for commodities such as copper and gold, changes in global copper and gold mining capacity, forward selling by producers, and production cost levels in major metal-producing regions.

Moreover, commodity prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and global and regional demand for, and supply of, the commodity as well as general global economic conditions. These factors may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities.

Sovereign Risk

The Company’s operations in Chile are subject to the risks associated with operating in a foreign country. Whilst Chile is considered one of South America’s most politically stable nations, the Company cannot guarantee that the legal and regulatory requirements in Chile will not change which may affect the Company’s operations.

These risks may include economic, social or political instability or change, hyperinflation, currency non-convertibility or instability and changes of law affecting foreign ownership, government participation, taxation, working conditions, rates of exchange, exchange control, exploration licensing, export duties, repatriation of income or return of capital, environmental protection, mine safety, labour relations as well as government control over mineral properties or government regulations that require the employment of local staff or contractors or require other benefits to be provided to local residents.

Foreign Exchange Rate Risk

Commercialisation Risks

If the Company discovers commercial quantities of minerals, there is a risk that the market price of the minerals could be below the costs of production. The Company could experience losses on exploration and have to curtail or suspend some or all of its proposed exploration and/or mining activities. Obtaining necessary regulatory and environmental approvals before implementing its projects may be a lengthy and costly process for the Company, and there is a risk that these approvals may not be obtained at all.

Adverse changes in government policies or legislation in Chile affecting foreign ownership of mineral interests, taxation, profit, repatriation, royalties, land access, labour relations and

78 ESTRELLA RESOURCES

General Risks

Most of the general risks discussed below are outside the control of the Group and the Directors and cannot be mitigated.

Share Market Risk

The price of Shares may rise or fall depending upon a range of factors beyond the Group’s control and which are unrelated to the Group’s operational performance. Investors who decide to sell their Shares after listing may not receive the entire amount of their original investment. The price of Shares listed on ASX may also be affected by a range of factors including the Group’s financial performance and by changes in the business environment specifically affecting the resources sector and exploration companies in particular.

The Shares carry no guarantee in respect of profitability, dividends, return on capital, or the price at which they may trade on the ASX.

There are a number of national and international market factors that may affect the Share price including movements on international stock markets, economic conditions and general economic outlook, interest rates and exchange rates, inflation rates, commodity supply and demand, government taxation and royalties, legislation, monetary and other policy changes and general investors’ perceptions. Neither the Group nor its Directors have control of these factors.

General Economic Conditions

The general economic climate may affect the performance of the Group. These factors include the general level of international and domestic economic activity, inflation and interest rates, commodity pricing and the general level of activity within the mining industry. These factors are beyond the control of the Group and thus the impact cannot be predicted.

Changes in Laws and Government Policy

Changes in Australian and/or Chilean government regulations and policies (including changes to mineral resources legislation and royalties), both domestically and internationally, may adversely affect the financial performance or the current and proposed operations generally of the Group and the attractiveness of an investment in the Group.

Government Actions

The impact of actions by domestic and international governments may affect the Group’s activities, including in relation to its infrastructure, compliance with environmental regulations, export, taxation and royalties.

Unforeseen Expenses

The proposed expenditure on the Group’s Projects may be adversely affected by any unforeseen expenses which arise in the future and which have not been considered in this Prospectus.

SECTION 5 – BUSINESS AND INVESTMENT RISKS 79

Section 6 Financial Information

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Image: Historical Agustina Mine Adit (Feb 2012)

80 ESTRELLA RESOURCES

Introduction

The financial information set out in this Section 6 summarises the Company’s selected consolidated financial data. The Company’s reviewed consolidated statement of financial position as at 31 December 2011 in addition to a pro forma statement of financial position as at 31 December 2011 is set out on the following pages.

This Section contains the following financial information, prepared by the Directors:

(a) The Historical Consolidated Statement of Financial Position as at 31 December 2011; and
(b) A Pro Forma Consolidated Statement of Financial Position as at 31 December 2011, which assumes completion of the transactions set out in this Section 6 (Note 1) as at that date, including the Offer under this Prospectus.

The Directors of the Company are responsible for the inclusion of all financial information in this Prospectus. The Historical and Pro Forma Statements of Financial Position have been reviewed by Grant Thornton Corporate Finance Pty Ltd whose Investigating Accountant’s Report is contained in Section 12.

Management’s Discussion & Analysis of the Historical Financial Information

Overview

The Company was incorporated on 27 May 2011 and is an Australian domiciled, Chilean focused copper gold exploration company which has been granted or is acquiring various mining and exploration concessions within Chile. The Company’s major assets are comprised of interests in exploration Concessions and mining exploitation Concessions relating to the Agustina, Luna, Venus and Inca Projects. In the six months ended 31 December 2011, the Company applied for or has purchased the exploration rights for each of these four Projects through its wholly owned subsidiary Estrella Resources (Chile) SpA. Other than these transactions, the Company has had limited operating history.

Reviewed Financial Statements

The Company’s financial statements from incorporation to 31 December 2011 were reviewed by Grant Thornton Audit Pty Limited and an unqualified opinion provided.

The information set out in this Section 6 and the Company’s selected consolidated financial information should be read together with:

(a) Management’s discussion & analysis;
(b) The business and investment risks described in Section 5;
(c) The Investigating Accountants Report on the Historical and Pro Forma Financial Information set out in Section 12; and
(d) The other information contained in this Prospectus.

Potential investors should be aware that historical performance is not an indication of future performance.

SECTION 6 – FINANCIAL INFORMATION 81

Pro Forma Consolidated Statement of Financial Position as at 31 December 2011

The following pro forma consolidated statement of financial position has been prepared to illustrate the effects of the pro forma adjustments including the Offer which are set out in Note 1, as if they had occurred on or before 31 December 2011.

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Reviewed
Reviewed as at Pro Forma as at
31 December 2011 Adjustments 31 December 2011
Pro Forma financial information Notes $’000 [(1)] $’000 $’000 [(2)]
----- End of picture text -----

Current Assets
Cash and cash equivalents	2	832	5,284	6,116
Trade and other receivables		10	66	76
Other current assets		6	–	6
Total current assets		848	5,350	6,198
Non current assets
Exploration and evaluation assets		530	–	530
Total non current assets		530	–	530
Total Assets		1,378	5,350	6,728
Current Liabilities
Trade and other payables		79	–	79
Provisions		7	–	7
Total Current Liabilities		86	–	86
Non Current Liabilities
Provisions		1	–	1
Total Non Current Liabilities		1	–	1
Total Liabilities		87	–	87
Net Assets		1,291	5,350	6,641
Equity
Issued capital	3	1,496	5,371	6,867
Accumulated losses	4	(267)	(213)	(480)
Option reserves	5	62	192	254
Total Equity		1,291	5,350	6,641

1. The historical statement of financial position has been extracted from the reviewed financial statements of Estrella for the period ended 31 December 2011.

2. The pro forma statement of financial position as at 31 December 2011 reflects the pro forma adjustments, the application of the funds from the Offer less the costs associated with the Offer as set out below.

The statement of financial position should be read in conjunction with the Notes set out in the following section.

NOTE 1 – Pro Forma Adjustments

The following transactions and events contemplated in this Prospectus, referred to as the Pro Forma Adjustments, which are to take place on or before the completion of the Offer are presented as if they together with the Offer had occurred on or before 31 December 2011.

advertising and other expenses), estimated to be $650,000 (exclusive of GST and VAT). An amount of $437,000 has been charged against issued capital and $213,000 against accumulated losses.

Lead Manager Options

The issue of 1,500,000 options with an exercise price of $0.20 to the Lead Manager for IPO and advisory services. The options vest immediately and expire five years from the date of listing and have a fair value of $192,000.

The Offer

The issue of 30,000,000 fully paid ordinary shares at $0.20 each, amounting to $6,000,000 under the Offer.

Offer Costs

A deferred tax asset has not been recognised in relation to the capitalised Offer costs due to the uncertainty surrounding the flow of economic benefits that will flow to the Company in future periods.

Expenses associated with the offer (including advisory, legal, accounting and administrative fees as well as printing,

82 ESTRELLA RESOURCES

Notes to the Pro Forma Statement of Financial Position

NOTE 2 – Cash and Cash Equivalents

The Pro Forma cash and cash equivalents are set out below:

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Pro Forma
$’000
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Cash and cash equivalents at 31 December 2011	832
Pro Forma transactions:
Proceeds from Shares issued under the Offer	6,000
Payment of the Offer costs (including GST and VAT)	(716)
Pro Forma cash and cash equivalents	6,116

NOTE 3 – Issued Capital

The Pro Forma issued capital is set out below:

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Pro Forma
$’000
Issued capital at 31 December 2011 1,496
Pro Forma transactions:
Proceeds from Shares issued under the Offer 6,000
Capital raising costs of the Offer (exclusive of GST and VAT) (437)
Fair value of the options issued to the lead manager for IPO services (192)
Pro Forma issued capital 6,867
Pro Forma
Number of shares
Number of shares issued at 31 December 2011 57,101,000
Pro Forma transaction:
Shares issued under the Offer 30,000,000
Pro Forma number of shares issued 87,101,000
NOTE 4 – Accumulated Losses
The Pro Forma accumulated losses position has been calculated as follows:
Pro Forma
$’000
Accumulated losses at 31 December 2011 (267)
Pro Forma transaction:
Offer costs expensed to the income statement (exclusive of GST and VAT) (213)
Pro Forma accumulated losses (480)
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SECTION 6 – FINANCIAL INFORMATION 83

NOTE 5 – Option Reserves

The Pro Forma option reserves position has been calculated as follows:

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Pro Forma
$’000
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Option reserves at 31 December 2011	62
Pro Forma transaction:
Fair value of the options issued to the lead manager for IPO services(1)	192
Pro forma option reserves	254

1. The fair value of share options issued to the Lead Manager were calculated using the Black Scholes methodology.

NOTE 6 – Share Options

The Pro Forma number of options has been calculated as follows:

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Pro Forma
’000
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Number of options at 31 December 2011	5,705,000
Pro Forma transaction:
Issue of options to the lead manager for IPO services	1,500,000
Pro Forma number of options issued	7,205,000

The Pro Forma number of share options at the date of the Prospectus has been set out below:

Type of unlisted option	Exercise price	Expiry date	Number of options
Tranche 1 $0.25 12 September 2014 3,600,000 Tranche 2 $0.25 25 October 2014 1,000,000 Tranche 3 $0.20 25 October 2016 600,000 Tranche 4 $0.20 19 December 2016 505,000
Total number of options at 31 December 2011 5,705,000
Issue of options to the lead manager for IPO services $0.20 5 years from the date of listing 1,500,000
Pro Forma number of options issued 7,205,000

84 ESTRELLA RESOURCES

NOTE 7 – Summary of Significant Accounting Policies

Basis of Preparation

The Pro Forma Consolidated Statement of Financial Position presented in this Financial Information represents the ongoing business of the Company.

The financial information set out in this Prospectus has been prepared in accordance with the recognition and measurement principles (but not all the disclosure requirements) prescribed by Australian Accounting Standards and other pronouncements of the Australian Accounting Standards Board. The adoption of Australian Accounting Standards did not result in any changes to the consolidated entity’s accounting policies which are set out below.

Significant Accounting Policies

Impairment of non-financial assets

At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income.

Impairment testing is performed annually for intangible assets with indefinite lives and intangible assets not yet available for use. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.

Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Exploration, evaluation and development expenditure

Pre licence costs are recognised in the income statement as incurred. Exploration, evaluation and development expenditure, including the costs of acquiring licences, are capitalised on a project by project basis. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves.

Expenditure deemed to be unsuccessful is recognised in the statement of comprehensive income immediately.

Goods and Services Tax (“GST”)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Critical accounting estimates and judgments

The Directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and by the Company. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Share based payments

The Company measures the cost of equity settled transactions by reference to the fair value of the equity instruments at the date which they are granted. The fair value is determined by Director’s assessment as to the cost of the last equity based transaction made. The accounting estimates and assumptions in relation to equity settled share based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity.

Principles of consolidation

The consolidated financial information incorporates the assets, liabilities and results of entities controlled by Estrella Resources Limited at 31 December 2011. A controlled entity is any entity over which Estrella Resources Limited has the power to govern the financial and operating policies so as to obtain benefits from its activities.

Where controlled entities have entered or left the group during the year, the financial performance of those entities is included only for the period of the year that they were controlled.

In preparing the consolidated financial information, all intergroup balances and transactions between entities in the consolidated group have been eliminated in full on consolidation.

Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the equity section of the consolidated statement of financial position and statement of comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

Exploration, evaluation and development assets are assessed for impairment if facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

SECTION 6 – FINANCIAL INFORMATION 85

Section 7 Directors and Management

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Image: IOCG mineralisation in underground adit at Agustina (Oct 2011)

86 ESTRELLA RESOURCES

Board of Directors

The Board of Directors brings relevant experience and skills needed for a proposed ASX listed company. The Directors have expertise in geological, mining, financial management and corporate governance. The Board comprises:

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Gavin Solomon Non-Executive Chairman

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Gavin has over 30 years’ experience in equity and capital markets in Australia and overseas. Gavin is a Sydney based lawyer by background and has been a director of a number of ASX listed companies as well as many unlisted public and private companies. Gavin is a Non-Executive Director and co-founder of Endocoal Limited (EOC:ASX). Gavin has also held executive and non-executive positions with a range of companies in commercial fields such as mineral exploration, media, property and telecommunications both within Australia and overseas. Gavin holds a bachelor of Commerce/Law from the University of New South Wales is a Notary Public and is a member of the Australian Institute of Company Directors. Gavin is also a Director of the Bradman Foundation (including the International Cricket Hall of Fame).

Jason has over 12 years’ mining and exploration experience including a number of years working for major mining companies including Homestake, Barrick and BHP Billiton. Jason later moved into consulting and gained broader project experience covering a number of commodities with SRK Consulting. He worked for two years in private equity investment co-ordinating due diligence, performing mineral asset valuations, developing strategic planning and generating acquisition targets. Jason holds two Bachelor Degrees, Bachelor of Economics and Bachelor of Science (Hons) and a PhD in Structural Geology, all from Macquarie University. Jason is a member of the AusIMM.

Dr Jason Berton Managing Director

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Julian Bavin Non-Executive Director

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Julian is an independent director who was educated at the University of Leicester, the Royal School of Mines and London Business School. He has 30 years of technical, operational and commercial experience in mineral exploration gained from work in a wide range of commodities, jurisdictions and cultures most of which was spent with the Rio Tinto Group in South America, Australia, Indonesia and Europe. From 2001 to 2009 he was responsible for the Rio Tinto exploration in South America and the teams which identified the potential in a range of projects now in various stages of feasibility including the PRC potash and Altar copper/gold projects in Argentina, the Mina Justa, Constancia and La Granja copper projects in Peru, and the Amargosa bauxite project in Brazil. Julian is also a Director of Exeter Resource Corporation and a Director and CEO of Pan Global Resources. Julian holds a Bachelor of Science and a Master’s of Science and is a member of MIMM.

Simon has 20 years investment banking experience in Australia, UK and Asia. He has an equity capital markets background and has considerable experience assisting companies raise capital. Simon is a Non-Executive Director and co-founder of Carabella Resources Limited (CLR:ASX). He holds a Bachelor of Commerce degree from Griffith University and has a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia. Simon is also a member of the Australian Institute of Company Directors.

Simon Kidston Non-Executive Director

Senior management

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Juan Pablo Vargas de la Vega General Manager (Chile)

Juan Pablo (JP) has experience as an equity resource analyst. Prior to working as a resource analyst, JP worked in the resources industry with Santos and BHP Billiton as a senior analyst for business development and project valuation. Over the past 10 years, JP has had extensive exposure to both hard rock and oil and gas projects at a corporate level as well as site-based experience in Australia, South America and Africa. JP has worked for a number of resources majors including Rio Tinto, Minara, Leighton and Petroleum Geoservices. JP is a native Spanish speaker and holds an undergraduate degree in Economics from Gabriela Mistral University in Santiago, Chile. He is currently finishing a Masters in Science in Mineral Economics from Curtin University in Western Australia. JP is located full-time in Chile.

SECTION 7 – DIRECTORS AND MANAGEMENT 87

Management Structure

The chart below illustrates the management structure of the Company:

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GAVIN SOLOMON
Non-Executive Chairman
SIMON KIDSTON JASON BERTON
Non-Executive Director Managing Director
JUAN PABLO VARGAS JUSTIN CLyNE
DE LA VEGA Company Secretary
General Manager – Chile
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JULIAN BAVIN
Non-Executive Director
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Managing Director’s Employment Contract

The Company and Dr Jason Berton entered into an employment agreement dated 15 August 2011 whereby Dr Berton was appointed the Managing Director of the Company. Dr Berton reports to the Board. Dr Berton is entitled to the following remuneration package, which is subject to annual review:

An annual base salary of A$180,000 including superannuation; and
Bonus payments at the discretion of the Company.

Whilst there is no limit on the amount of the bonus payment, the Company will only pay a bonus amount that is in accordance with the Act, Listing Rules and the Company’s remuneration policies and which is appropriate having regard to the Company’s size, operations and industry practice, to ensure bonus payments are aligned with the achievement of individual and Company-related performance targets.

In addition, Dr Berton has been granted 3,000,000 options on the terms and conditions set out in the Additional Information Section 11.

Dr Berton’s employment agreement may be terminated by either party by providing 1 month notice although the parties can agree to a shorter notice period. The Company can terminate the agreement with Dr Berton by paying an amount in lieu of notice. The Company can also terminate without notice to Dr Berton in the event Dr Berton has engaged in serious or wilful misconduct in the performance of his duties under the employment agreement.

On termination of the employment agreement, Dr Berton must resign as a Director or from any other office held with the Company, Estrella Chile or any other subsidiary of the Company or group company.

During his employment with the Company, Dr Berton may not hold any other engagement or position without the prior written consent of the Company. Post the termination of his employment, Dr Berton is restrained from competing with the Company and soliciting business contacts or the personnel of the Company for a period of up to 12 months in respect of a maximum restraint area comprising South America.

General Manager – Chile’s Employment Contract

The Company and Juan Pablo Vargas de la Vega entered into an employment agreement whereby Mr Vargas de la Vega was appointed to act as the General Manager of Chile from 1 November 2011. Mr Vargas de la Vega reports to the Managing Director, Dr Berton.

Mr Vargas de la Vega is entitled to the following remuneration package, which is subject to annual review:

An annual base salary of A$145,000 including superannuation; and
Bonus payments at the discretion of the Company.

In addition, Mr Vargas de la Vega has been granted 500,000 options, 250,000 vesting on 12 March 2013 and 250,000 vesting on 12 September 2013 which are subject to certain exercise conditions.

Mr Vargas de la Vega’s employment agreement may be terminated by either party by providing 1 month notice to the other party, although the parties can agree to a shorter notice period. The Company can terminate the agreement with Mr Vargas de la Vega by paying an amount in lieu of notice. The Company can also terminate without notice to Mr Vargas de la Vega in the event Mr Vargas de la Vega has engaged in serious or wilful misconduct in the performance of his duties under the employment agreement.

On termination of the employment agreement, Mr Vargas de la Vega must resign as a Director or from any other office held with the Company, Estrella Chile or any other subsidiary of the Company or group company.

During his employment with the Company, Mr Vargas de la Vega may not hold any other engagement or position without the prior written consent of the Company. Post termination of his employment, Mr Vargas de la Vega is restrained from competing with the Company and soliciting business contacts or the personnel of the Company for a period of up to 12 months in respect of a maximum restraint area comprising South America.

88 ESTRELLA RESOURCES

Section 8 Details of the Offer and Capital Structure

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Image: SRK consultant sampling Historic Agustina mine (Oct 2011)
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SECTION 8 – DETAILS OF THE OFFER AND CAPITAL STRUCTURE 89

Description of the Offer

The Offer comprises the issue of new fully paid ordinary shares in the Company.

The Offer includes the offer of 30,000,000 Shares at an Offer Price of $0.20 per Share under the Offer to raise approximately $6,000,000.

The Shares to be issued under the Offer will represent approximately 34% of the total number of Shares on issue on completion of the Offer on an undiluted basis.

All Shares being offered under this Prospectus will rank equally with each other.

Capital Structure

The capital structure of the Company immediately prior to, and at the Completion of the Offer is shown in the table below:

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Before the Offer At Completion of the Offer
Shares Existing Shares % Shares %
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Shares currently on issue	57,101,000	100%	57,101,000	65.6% (on an undiluted basis)
				and 60.5% on a diluted basis
				(see Note below)
Shares to be issued	–	–	30,000,000	34.4% (on an undiluted basis)
pursuant to the Offer				and 31.8% on a diluted basis
				(see Note below)
Total Shares on issue	57,101,000	100%	87,101,000	100%

Note to Table: A diluted basis assumes that a total of 7,205,000 vested Options on issue after completion of the Offer are capable of being exercised and are exercised. For more information about the terms of all Options, see Section 11.

Substantial Shareholders

Details of Shareholders who hold 5% or more of the Shares on issue as at the date of this Prospectus, and after completion of the Offer, are set out in the table below:

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% of total
% of total % of total Shares after
Shares as at Shares as after completion of
Shares held date of this completion the Offer (on a
as at the Prospectus of the Offer diluted basis,
date of this (undiluted (undiluted see Note 1
Number Shareholder Prospectus basis) basis) below)
1. Pancho (NSW) Pty Limited 4,825,000 8.4% 5.5% 5.1%
(an entity controlled by Director, Gavin Solomon)
2. KFT Capital Pty Limited 4,825,000 8.4% 5.5% 5.1%
(an entity controlled by Director, Simon Kidston)
3. GJN Holdings Pty Limited 4,825,000 8.4% 5.5% 5.1%
(a related entity of a director of Helmsec)
4. Rocky Rises Pty Limited 4,825,000 8.4% 5.5% 5.1%
(a related entity of a director of Helmsec)
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Note 1: A diluted basis assumes that a total of 7,205,000 vested Options on issue after completion of the Offer are capable of being exercised and are exercised. For more information about the terms of all Options, see Section 11.

The above table assumes that none of the above Shareholders will participate in the Offer. If they participate, details of their Shareholdings and percentage of total Shares held will increase.

90 ESTRELLA RESOURCES

Restricted Securities

As a condition of admitting the Company to the Official List, the ASX may classify certain Shares held prior to the date of this Prospectus as restricted securities. Prior to Quotation it will be necessary for these holders of restricted securities to enter into restriction agreements with the Company. The effect of the restriction agreements will be that the restricted securities cannot be dealt with for a period as determined by the ASX.

The determination of which shares will be escrowed is subject to the discretion of the ASX however, at the very least, the shares and options held by the Directors of the Company as detailed in the table below will be escrowed for a period of two years from the date of quotation of the Company’s shares on the ASX.

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Name of Director No. of Shares No. of Options
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Gavin Solomon	4,825,000	143,650
Jason Berton	1,000,000	3,000,000
Julian Bavin	500,000	1,000,000
Simon Kidston	4,825,000	143,650

* Being shares and/or options held by each Director or their related entities.

In addition to this it is also expected that the ASX will escrow for a period of time shares and options held by other parties (not being deemed by the ASX as being promoters of the Company) who have subscribed for shares in the Company prior to the IPO but not persons who subscribe for shares under this Prospectus.

As at the date of this Prospectus the Company believes that 15% of Shares on issue following the Offer and the IPO of the Company will be subject to an escrow period of 12 months from their respective date of issue and approximately 40% of Shares on issue following the Offer will be subject to an escrow period of 24 months from the date of quotation under the ASX Listing Rules. Accordingly, approximately 55% of the total Shares on issue on completion of the Offer are likely to be classified as restricted securities. The likely escrow periods for approximately 15% of the total Shares on completion of the Offer will expire in June 2012, August 2012, September 2012 and December 2012.

During the period in which the restricted securities are prohibited from being transferred, assigned or otherwise disposed of, trading in Shares may be less liquid which may impact on the ability of a Shareholder to dispose of Shares in a timely manner.

Details of those restriction agreements (including the number of Shares and Options and the duration of escrow period) will be disclosed to the market on ASX’s announcements platform prior to commencement of Official Quotation of the Shares.

No Underwriting and no oversubscriptions

The Offer is not underwritten.

Oversubscriptions will not be accepted by the Company.

No Brokerage

No brokerage, commission or stamp duty is payable by Applicants on acquisition of Shares under the Offer.

Application Monies held on trust

Application Monies received under the Offer will be held on trust in a special purpose account until Shares are issued to successful Applicants. Applicants under the Offer whose Applications are not accepted, or who are allocated a lesser dollar amount of Shares than the amount applied for, will be mailed a refund (without interest) of all or part of their Application Monies, as applicable. Interest will not be paid on any monies refunded and any interest earned on Application Monies pending the allocation or refund will be retained by the Company.

You should ensure that sufficient funds are held in the relevant account to cover your Application Monies. If the amount of Application Monies is less than the amount specified on the Application Form, you may (unless your Broker advises otherwise) be taken to have applied for such lower dollar amount of Shares as for which your cleared Application Monies will pay (and to have specified that amount on your Application Form) or your Application may be rejected.

Allotment of Shares

The Directors will finalise the allotment of the Shares as soon as possible after the Closing Date. The Company reserves the right to authorise the issue of a lesser number of Shares than those for which an Application has been made or to reject any Application. The final allocation of Shares between Applicants will be determined solely by the Company. If no issue or allocation of Shares is made or the number of Shares allotted is less than the number applied for, the surplus Application Monies will be refunded to the Applicant. Interest will not be paid on any refunded Application Monies.

Any Applicants who sell Shares before they receive their transaction confirmation statements will do so at their own risk.

A completed and lodged Application Form, together with a cheque for the Application Monies, constitutes a binding and irrevocable application for the number of Shares specified in the Application Form, or any lesser number allotted by the Company.

If the Application Form is not completed correctly, or if the accompanying payment of the Application Monies is for the wrong amount, it may still be treated as a valid Application. The Directors may complete any blanks or spaces left in any Application Form and the Applicant, by lodging the Application, appoints the Directors severally as its attorneys in this regard and authorises all such amendments. The Directors’ decision whether to treat the Application as valid and how to construe, amend or complete the Application Form is final. However, an Applicant will not be treated as having applied for more Shares than can be subscribed for by the amount of the cheque for the Application Monies. The Company’s decision on the number of Shares to be allocated to an Applicant will also be final.

No securities will be allotted or issued under this Prospectus later than 13 months after the date of this Prospectus.

SECTION 8 – DETAILS OF THE OFFER AND CAPITAL STRUCTURE 91

ASX Listing

Application for admission of the Company to the official list of ASX and quotation of the Shares on ASX will be made to ASX no later than seven days after the date of this Prospectus. The Company’s expected ASX code will be ESR.

If the Company does not make such an application within seven days after the date of this Prospectus, or the Company is not admitted to the official list of ASX within three months of the date of this Prospectus (or any longer period permitted by law), the Offer will be cancelled and all Application Monies will be refunded (without interest).

The fact that ASX may admit the Company to the official list is not to be taken as an indication of the merits of the Company or the Shares offered for subscription. Trading of Shares on ASX, if admission to the official list is granted, is expected to commence on or about 22 May 2012.

Subject to certain conditions (including any waivers obtained by the Company from time to time), the Company will be required to comply with the ASX Listing Rules.

Applications outside Australia

This Prospectus does not, and is not intended to constitute an Offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an Offer or issue this Prospectus. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

The Company has not taken (nor will it take) any action to permit the offer of Shares under this Prospectus in any jurisdiction other than Australia.

It is the responsibility of non-Australian resident investors to obtain all necessary approvals for the allotment and issue of Shares pursuant to this Prospectus. The return of a completed Application Form will be taken by the Company to constitute a representation and warranty by the Applicant that all approvals have been obtained. Applicants who are nominees or persons proposing to act as nominees should seek independent advice as to how they should proceed.

Selling restrictions

No action has been taken to register or qualify this Prospectus, the Shares or the Offer or otherwise permit a public offering of the Shares in any jurisdiction outside Australia.

The Shares have not been, and will not be, registered under the US Securities Act or the securities laws of any state or other jurisdiction in the United States and may not be offered or sold in the United States or to, or for the account or benefit of, US Persons, except in accordance with an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act, and any other applicable securities laws.

not be offered, sold or resold in the United States, or to or for the account or benefit of US Persons, except in a transaction exempt from, or not subject to, registration under the US Securities Act 1933 and any other applicable securities laws;

(b) It is not in the United States or a US Person, and is not acting for the account or benefit of a US Person;
(c) It has not and will not send the Prospectus or any other material relating to the Offer to any person in the United States or to any person that is, or is acting for the account or benefit of, a US Person; and
(d) It will not offer or sell the Shares in the United Sates or to, or for the account or benefit of, any US Person or in any other jurisdiction outside Australia except in transactions exempt from, or not subject to, registration under the US Securities Act 1933 and in compliance with all applicable laws in the jurisdiction in which Shares are offered or sold.

CHESS

The Company will apply to participate in ASX’s Clearing House Electronic Subregister System ( CHESS ), in accordance with the ASX Listing Rules and the ASX Settlement Operating Rules. CHESS is an electronic transfer and settlement system for transactions in securities quoted on ASX under which transfers are effected in an electronic form.

When the Shares become approved financial products (as defined in the ASX Settlement Operating Rules), holdings will be registered in one of two subregisters, an electronic CHESS subregister or an issuer sponsored subregister. For all successful Applicants, the Shares of a Shareholder who is a participant in CHESS or a Shareholder sponsored by a participant in CHESS will be registered on the CHESS sub-register. All other Shares will be registered on the issuer sponsored sub-register.

Following Completion of the Offer, Shareholders will be sent a holding statement that sets out the number of Shares that have been allocated. This statement will also provide details of a Shareholder’s Holder Identification Number ( HIN ) for CHESS holders or, where applicable, the Securityholder Reference Number ( SRN ) of issuer sponsored holders. Shareholders will subsequently receive statements showing any changes to their Shareholding. Certificates will not be issued.

Rights and Liabilities attaching to Shares

The rights and liabilities attaching to Shares are detailed in Section 11 (Additional Information).

Taxation

The acquisition and disposal of Shares will have taxation consequences which will differ depending on the individual circumstances of each investor. All potential investors in the Company should seek their own independent advice in relation to taxation matters. However, general taxation information for Applicants is set out in Section 11 (Additional Information).

Each Applicant will be taken to have represented, warranted and agreed as follows:

(a) It understands that the Shares have not been, and will not be, registered under the US Securities Act 1933 or the securities law of any state of the United States and may

92 ESTRELLA RESOURCES

No Forecasts in Prospectus

The Directors believe that they do not have a reasonable basis to forecast any future earnings of the Company as the proposed exploration and mining activities carried on are subject to a substantial number of inherently uncertain influences. Although the Company will seek to ensure that strategies are pursued to ensure the success of its exploration and drilling programs, revenue generation cannot be reliably predicted. Accordingly, any forecast or projected financial information would contain such a broad range of potential outcomes and possibilities that it is not possible to provide a reliable estimate, forecast or prediction in this Prospectus.

Notwithstanding the above statement, to the extent that there may be matters discussed in this Prospectus that are forward-looking, such statements are only predictions and actual events or results may differ materially. In addition, there are statements in this Prospectus concerning the envisaged operations of the Company following the completion of the Offer. These forward-looking statements are subject to numerous risks. For a discussion of the important risk factors which could cause actual events or results to differ materially from such forward-looking statements, please refer to Section 5 (Risks).

Enquiries regarding the Offer

Privacy Disclosure

The Company collects information about each Applicant from the Application Form for the purposes of processing the Application and, if the Application is successful, to administer the Applicant’s security holding in the Company. By submitting an Application Form, each Applicant agrees that the Company may use the information in the Application Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the Share Registry, the Company’s related bodies corporate, agents, contractors and third party service providers, including mailing houses, ASX, ASIC and other regulatory authorities.

If an Applicant becomes a security holder in the Company, the Company is required to include information about the security holder (name, address and details of the securities held) in its register of members. Information contained in the Company’s register of members is also used to facilitate dividend payments and corporate communications (including the Company’s financial results, annual reports and other information that the Company may wish to communicate to its security holders) and compliance by the Company with legal and regulatory requirements. If an Applicant does not provide the information required on the Application Form, the Company may not be able to accept or process the Applicant’s Application.

If Applicants have any queries about the terms of the Offer or how to apply for Shares, Applicants should contact their financial adviser or the Company’s offer information line on +61 2 9993 4408. The Company is unable to advise Applicants on the suitability or otherwise of an investment in the Company, and for such advice Applicants must contact their own independent professional advisers.

Action by Applicants

Accompanying and forming part of this Prospectus is an Application Form for use by Applicants in applying for Shares. To participate in the Offer, the Application Form must be completed in accordance with the instructions on its reverse side. Applications must be for a minimum of 10,000 Shares ($2,000.00) and thereafter in multiples of 2,500 Shares ($500.00). Application Forms must be received by the Closing Date, together with the Application Monies, at the Share Registry at the following address:

Boardroom Pty Limited Level 7 207 Kent Street Sydney NSW 2000

Cheques must be in Australian currency and made payable to “Estrella Resources Limited” and crossed “Not Negotiable”.

SECTION 8 – DETAILS OF THE OFFER AND CAPITAL STRUCTURE 93

Section 9 Material Contracts

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Image: Example of IOCG mineralisation within veins at Agustina (Oct 2011)

94 ESTRELLA RESOURCES

Agustina Option Agreement

Estrella Chile entered into a unilateral option agreement ( Agustina Option Agreement ) with Inversiones y Mineria Andale Ltda ( Andale ) on 11 November 2011 for the option to purchase 100% of the Agustina Concessions (identification details of which are set out in the Independent Geologist’s Report in this Prospectus) located in the IV Region of central northern Chile, known as the Agustina Project ( Option ). The Agustina Option Agreement superseded an earlier exclusivity agreement dated 23 September 2011.

Estrella Chile may exercise the Option to acquire the 100% legal and beneficial interest in the Agustina Concessions at any time within 3 years from 1 January 2012 up to 1 January 2015, subject to a maximum 12-month extension if there is any force majeure event ( Option Period ). The amount payable by Estrella Chile to Andale upon valid exercise of the Option is in total US$3,000,000, less all Option Fees (defined below) paid up to the date of completion of the purchase. During the Agustina Option Agreement, Estrella Chile is required to pay to Andale, certain cash instalment payments totalling a maximum US$1,050,000 ( Option Fees ). As at the date of this Prospectus, Estrella Chile has paid to Andale, US$75,000 under the exclusivity agreement and a further US$75,000 as the first instalment of the Option Fees payable under the Agustina Option Agreement (that is, in total US$150,000 up to the date of this Prospectus). The remaining instalments of the Option Fees are payable to Andale on the following specified dates:

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Due Date Amount
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1	April 2012	US$75,000
1	July 2012	US$75,000
1	October 2012	US$75,000
1	January 2013	US$87,500
1	April 2013	US$87,500
1	July 2013	US$87,500
1	October 2013	US$87,500
1	January 2014	US$100,000
1	April 2014	US$100,000
1 1	July 2014 October 2014	US$100,000 US$100,000

During the Option Period, Estrella Chile has the exclusive rights to conduct exploration activities on all of the valid Agustina Concessions. Estrella Chile is responsible for all of the costs of such exploration and development, defending any third party claims and all statutory fees to maintain the Agustina Concessions and associated rights in good standing, including arranging easements and water rights. Andale is required to provide Estrella Chile with unfettered access to all the areas of the Agustina Concessions.

Upon exercise of the Option, in addition to the Agustina Concessions, the following rights will also be transferred by Andale to Estrella Chile:

Other essential terms of the Agustina Option Agreement:

(a) Should either party default on any of the conditions established in the Agreement, the other shall give written notification of the default and allow 30 days for its correction.
(b) If Estrella Chile does not correct the default within the stipulated period, it must give Andale a detailed report of all the technical information gathered as a result of the exploration or development programs of the Agustina Concessions. It must also leave Andale any improvements, construction, works on the Tenement Area (unless removed within 3 months of the Agustina Option Agreement dissolution).
(c) The Agustina Option Agreement also provides that during its term, Andale will not commit any act or omission in and around the Agustina Concessions that may, in the opinion of Estrella Chile prejudice the ownership, development or operation of the Agustina Concessions. If Andale breaches this term and does not rectify it within 30 days of receiving written notice, Estrella Chile shall immediately be entitled to seek injunctive relief and/or a claim for financial damages, costs and losses from Andale in respect of each breach.
(d) During the Option Period, Andale is prohibited from carrying out any exploration, mining activities or extraction of any production/ore from any of the Agustina Concessions. If Andale breaches this term, Andale is required to pay to Estrella Chile 200% of any and all revenues in respect of any production/ore extracted from the Agustina Concessions.
(e) If Estrella Chile does not exercise the Option during the Option Period or expressly states via Public Deed its intention not to continue with the Agustina Option Agreement, the Agustina Option Agreement shall be at an immediate end. In these circumstances, Estrella Chile is not required to pay any further Option Fees or other monies to Andale, Andale is not required to pay any refund to Estrella Chile of any amounts previously paid to Andale under the Agustina Option Agreement or exclusivity agreement and Andale will not have any rights to claim further payments for compensation as against Estrella Chile.

The Agustina Option Agreement contains additional provisions including warranties from Andale in favour of Estrella Chile including that each of the Agustina Concessions are and remains free from all liens and that this will be maintained throughout the Option Period. Estrella Chile may transfer any or all of its rights under the Agustina Option Agreement provided that the concessionary of such rights agrees to be bound by the same terms as those outlined in the Agustina Option Agreement.

Further details of the Agustina Option Agreement can be found in the Legal Tenement Report.

(a) All rights to use the water supply that correspond to the Agustina Concessions;
(b) The domain or easements that correspond to the Agustina Concessions; and

SECTION 9 – MATERIAL CONTRACTS 95

Inca Finder’s Fee Agreement

Estrella Chile entered into a finder’s fee agreement on 30 June 2011 in relation to the exploration and exploitation of the Inca Concessions. Under the agreement, the other party ( Discoverer ) is entitled to:

(a) A Finder’s Fee of progressive cash payments of an aggregate of US$400,000 payable subject to the progressive establishment of preferential rights over the Inca Concessions.
(b) A Net Smelter Royalty equivalent to 1.5% of the annual Net Operating Cashflow relating solely to the Inca Concessions.
(c) A Right of Participation equivalent to 8.5% of the Net Present Value of the Inca Concessions according to a Bankable Feasibility Study to commercially exploit the mineral reserves of the Inca Concessions.

Finder’s Fee payments

For the Discoverer to be entitled to the progressive Finder’s Fee cash payments, the following conditions must be met:

Estrella Chile acquires the preferential mining rights to explore and/or exploit the Inca Concessions;
Estrella Chile undertakes geological exploration of the Inca Concessions which indicates there is an economic interest from a geological perspective; and
Estrella Chile carries out a feasibility study which establishes that the Inca Concessions are viable for economic exploitation.

Further details of the Inca Finder’s Fee Agreement can be found in Section 13 (Legal Tenement Report).

Mandate Letter

The Company entered into the Mandate Letter with Helmsec on 22 August 2011, whereby Helmsec was appointed, inter alia, as the Lead Manager to the IPO of the Company on the ASX pursuant to this Prospectus.

Under the terms of the Mandate Letter, Helmsec agreed to provide advice and assistance in relation to:

The pricing, structure and timetable for pre-IPO capital raisings and the IPO;
The due diligence process; and
Co-ordination and management of the issue of Shares under the Offer.

Under the terms of the Mandate Letter, the Company agreed to pay the following fees to Helmsec:

Retainer Fee – a retainer fee of $20,000 (plus GST) per month payable until the date of listing the Company on the ASX;
Equity Raising Fees – an equity raising fee equal to 6% (plus GST) of all equity capital raised by the Company during the term of the Mandate Letter, payable on the date of allotment of securities the subject of the issue. All selling fees to third parties will be met by Helmsec out of any equity raising fee;
Options – such number of options equivalent to 5% of the number of Shares issued pursuant to all seed, IPO and further capital raisings during the term of the Mandate Letter. The options will expire 5 years from the date of issue with an exercise price of the lower of $0.25 or the issue price of the capital raising; and
After market strategy and support fees – a retainer of $8,000 (plus GST) per month payable for twenty four (24) months from the date of official listing of the Company on the ASX.

Under the Mandate Letter, Helmsec will provide after-market strategy and support for 24 months from the date of the Company’s official listing on the ASX. During this time, Helmsec will have first rights of refusal to be mandated on an exclusive basis, to assist the Company with all capital raisings, asset sales, mergers and acquisitions and other analogous corporate transactions.

The after market strategy and support services comprise the provision by Helmsec to the Company of office areas, reception, secretarial, boardroom, telephone, facsimile, photocopying, computer and internet services as well as ongoing research and equity market feedback and the management of investor roadshows to domestic and global investors.

Where any investment is made in the capital, equity or debt of the Company within 24 months of the date of the Mandate Letter by a party introduced to the Company by Helmsec during the term of the mandate ( Introduced Party ), the Company shall pay a fee of 6% (plus GST) of any capital invested to Helmsec resulting from the participation of the Introduced Party (which may be inclusive of the Equity Raising Fee described above). In the event the Company terminates the Mandate Letter, and the Company or a related entity of the Company executes a transaction with an Introduced Party within 12 months thereafter, the Company shall pay Helmsec a fee of 6% (plus GST) of any capital raised. The Mandate Letter contains indemnity and limitation of liability provisions from the Company in favour of Helmsec on standard industry terms.

Set out below are details of the financial benefits that the Company has provided or agreed to provide to Helmsec under the Mandate Letter:

Retainer Fees – a total of $180,000 (plus GST) has been paid or will be payable for the period of September 2011 to the end of May 2012 (assuming the Company lists on the ASX by the beginning of June 2012).
Equity Raising Fees – a total of $121,950 (plus GST) has been paid for capital raised prior to the Offer. $360,000 (plus GST) will be payable on completion of the Offer.
Options – in respect of pre-IPO capital raised, the value of the 600,000 options (exercise price $0.20) issued to Helmsec is $9,900 using the Black Scholes valuation methodology. The value of the 505,000 options (exercise price $0.20) issued to Helmsec is $16,665 using the Black Scholes methodology. In respect of the capital raised under the Offer, the value of the 1,500,000 options (exercise price $0.20) to be issued to Helmsec is $192,000 using the Black Scholes methodology.
After market strategy and support fees at $8,000 (plus GST) per month – a total of $192,000 (plus GST) is payable for the 24 months from the date of listing of the Company on the ASX.
Fees in respect of an Introduced Party – a fee of 6% (plus GST) where any Introduced Party makes any capital, equity or debt investment within 24 months of the date of the Mandate Letter.
Out of pocket expenses – all reasonable out of pocket expenses incurred by Helmsec under the Mandate Letter are reimbursed by the Company.

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Section 10 Corporate Governance

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SECTION 10 – CORPORATE GOVERNANCE 97

Corporate Governance

The Board has adopted the following corporate governance charters:

Board Charter;
Audit & Risk Committee Charter;
Code of Conduct – Obligations to Stakeholders;
Code of Conduct for Directors and Key Officers;
Continuous Disclosure Policy;
Health, Safety and Environment Committee Charter;
Remuneration Committee Charter;
Securities Trading Policy – Directors and Key Executives; and
Diversity Policy.

These policies set out the framework for the management of the Company and the standard of conduct expected of the Company, the Board and certain committees of the Board.

A summary of the key terms of each policy is set out below.

Board Charter

The Board has adopted a written charter to provide a framework for the effective operation of the Board. The charter addresses and details the functions and responsibilities of the Board together with the division of responsibility and any delegations of authority. The Board Charter, and the balance of responsibilities generally will be reviewed by the Board as appropriate to ensure that the divisions of functions and responsibilities remain appropriate to the needs and requirements of the Company.

Composition of the Board

The Board is to be comprised of a minimum of 3 and a maximum of 10 directors and whilst this may change from time to time, there must always be a minimum of 3 directors. A majority of the Directors on the Board should be independent Directors.

Expertise

The Board Charter ensures that the Board always has an appropriate range of skills and expertise to fulfill its responsibilities. The Board is to regularly review the range of expertise of its members to ensure it has the necessary, relevant knowledge.

Induction and Continuing Education

The Board Charter ensures that the Board has an induction and education process for all new Board members and senior executives to make sure they have a thorough understanding of their roles and responsibilities. The induction and education process also ensures that Board members and senior executives have a good understanding of the Company’s financial, strategic, operational and risk management position.

Roles and Responsibilities

The Board Charter provides a detailed explanation of the roles and responsibilities of the Chairman, individual directors, the Managing Director and the Company Secretary.

Audit & Risk Committee Charter

The Audit & Risk Committee Charter governs the roles, responsibilities, composition and membership of the Audit & Risk Committee. The key terms of the Audit & Risk Committee Charter are listed below:

Functions of the Board

The Board Charter sets out the specific functions and responsibilities of the Board. Some of the main functions of the Board are as follows:

Approving the strategic objectives of the Company and establishing goals to promote their achievement;
Monitoring the operational and financial position and performance of the Company;
Establishing investment criteria including acquisitions and divestments, approving investments, and implementing ongoing evaluations of investments against such criteria;
Considering and approving the Company’s budgets;
Establishing written policies on compliance, risk oversight and management;
Reviewing and ratifying and monitoring systems of risk management and internal compliance and control, codes of conduct and legal compliance, in conjunction with the Board Committees, and ensuring they are operating effectively;
Ensuring that business risks facing the Company are, where possible, identified and that appropriate monitoring and reporting internal controls are in place to manage such risks;
Ensuring the Company complies with its responsibilities under the Act, the Company’s Constitution, the ASX Listing Rules and other relevant laws; and

Objectives

The purpose of the Audit & Risk Committee is to monitor and review the Company’s financial statements, risk management and the independence and competency of its internal and external auditors. The Audit & Risk Committee is also responsible for making recommendations to the Board in relation to the appointment and appropriate remuneration of the Company’s external auditors.

Members

The Audit & Risk Committee must only comprise of non-executive Directors and must have a minimum of three members.

Meetings

The Audit & Risk Committee must meet at least twice a year but is required to meet as frequently as required to undertake its role effectively.

Powers

The Audit & Risk Committee has broad powers and has unrestricted access to management, the Company’s internal and external auditors and all of the Company’s records. The Audit & Risk Committee will meet with the external auditors, in the absence of management, as often as required, but not less than once per year.

Exercising due care and diligence and sound business judgment in the performance of those functions and responsibilities.

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Risk Oversight

The Audit & Risk Committee is responsible for providing the Board with advice and recommendations regarding the risk oversight and management policies of the Company relating to the Board, the Audit & Risk Committee, management and the internal auditors. The Audit & Risk Committee is responsible for:

Maintaining an up-to-date understanding of areas in which the Company is exposed to risk to ensure that management is effectively managing those issues;
Receiving reports regarding material incidents and ensuring that macro risks are reported to the Board;
Reviewing the adequacy of the Company’s risk management and compliance policies and procedures;
Reviewing material documents and reports to be lodged with regulators;
Making recommendations to the Board on appropriate risk and risk management reporting requirements to the Board and the Audit & Risk Committee;
Providing advice to the Board on corporate level performance indicators and targets for risk management and compliance activities;
Undertaking an annual review of the Company’s risk management policy; and
Reviewing the adequacy of the Company’s insurance coverage.

Internal Audit Function

The Audit & Risk Committee is also responsible for establishing an internal audit function. In this regard, the Audit & Risk Committee must:

Review the internal auditor’s role and responsibilities;
Review the results and effectiveness of the internal audit programs;
Recommend the scope of the internal audit to the Board for approval;
Approve the appointment and dismissal of senior internal audit executives;
Review and approve the internal audit plan and work program;
Ensure that the internal auditor reports directly to the Managing Director or the Chief Financial Officer and the Audit & Risk Committee;
Ensure that no restrictions are placed on the internal auditors; and
Ensure that the internal auditors are adequately resourced.

External Auditors

In relation to the Company’s external auditors, the Audit & Risk Committee is responsible for:

Reviewing the performance and independence of the external auditors;
Reviewing procedures for the selection, appointment and rotation of the external auditors;
Agreeing on the terms of engagement of the external auditor before the commencement of each audit;
Reviewing the external auditor’s fee;
Reviewing and providing oversight of the audit reports prepared and issued by the external auditors;
Monitoring and examining management’s response to the external auditor’s findings and recommendations; and
Ensuring that no management or other restrictions are placed on the external auditors.

Financial Reports

The Audit & Risk Committee must review the Company’s financial statements for accuracy, adequacy and compliance with the accounting standards, ASX Listing Rules and the Act.

Related Party Transactions

The Audit & Risk Committee is responsible for reviewing and monitoring the propriety of all related party transactions.

The initial members of the Audit & Risk Committee of the Board are Gavin Solomon (Chairman), Julian Bavin and Simon Kidston.

Code of Conduct – Obligations to Stakeholders (Stakeholder Code)

The Stakeholder Code seeks to ensure that the Company maintains high standards of professional conduct and ethics in dealing with all of its stakeholders, and underlines its commitment to complying with all applicable state, national and international laws.

The Company considers that its stakeholders include employees, Shareholders, creditors, customers, suppliers, contractors, consultants, governmental and non-governmental organisations, the communities where the Company operates and other parties that have influence over or are influenced by the Company.

Principles

The Stakeholder Code sets out the following key principles:

In addition to complying with the requirements of the Company’s Constitution, the Act and the ASX Listing Rules, ensuring that all Shareholders of the Company are treated equally, and that the Company will make full, fair and timely disclosure of all relevant information to Shareholders and the ASX;
Encouraging diversity and equal opportunity at all levels of the Company whilst providing a safe and hazard free workplace;
Ensuring that employees do not use Company funds, property, equipment or other resources for their personal benefit or purposes;
Ensuring that proprietary, commercial and other information that is confidential to the Company and that of third parties to whom the Company owes a duty of confidentiality is protected, and ensuring information that is not publicly available is used only for authorised purposes;
Prohibiting the acquisition or sale of Shares in the Company by employees who are aware of material non-public information about the Company, and prohibiting them sharing that information with others;
Ensuring employees avoid actual and perceived conflicts of interest, both in the performance of their duties for the Company and their outside activities;

SECTION 10 – CORPORATE GOVERNANCE 99

Prohibiting employees from receiving payment or gifts in any form (or making such payments) for the purpose of obtaining or retaining business or to obtain any other favourable action;
Prohibiting employees from making formal or informal arrangements with competitors which seek to limit or restrict competition (including agreements which seek to fix or control prices, allocate products, markets or territories, or boycott certain customers or suppliers);
Prevention or minimisation of any harmful effects which its operations may have on the environment and ensuring compliance with all environmental laws and regulations;
Prohibiting employees from seeking confidential information in relation to its competitors from any new employee who recently worked for a competitor, or from misrepresenting their identity in order to obtain confidential information from a competitor; and
Compliance with both local and international laws.

Code of Conduct for Directors and Key Officers (Conduct Code)

The Conduct Code sets out the ethical standards for Directors and key officers of the Company, and sets out the principles which govern their conduct. The Conduct Code also takes into account recommendations of Principle 3 of the ASX Corporate Governance Council Principles of Good Corporate Governance and Best Practice Recommendations, Second Edition.

Must not use their position to seek personal gain from those doing business or seeking to do business with the Company, and must not accept payments, gifts or entertainment beyond normal business practice.

The Company’s Directors and key officers are also expected to report and record any behaviour that does not comply with the Conduct Code.

Continuous Disclosure Policy

The purpose of the Company’s Continuous Disclosure Policy is to impose obligations and procedures on all Directors, employees and consultants of the Company to ensure that all materials concerning the Company are disclosed in a timely and balanced way.

The objectives of the policy are to ensure that the Company is able to meet its continuous disclosure obligations under the ASX Listing Rules and the Act. In addition, the policy aims to establish internal procedures so that all Directors, employees and consultants understand their obligations to disclose material information ensuring:

All investors and participants in the market have equal and timely access to material information concerning the Company;
All Company announcements are factual and presented in a clear and balanced way; and
Only material information is disclosed to the market.

Policy

The key principles governing the conduct of the Company’s Directors and key officers are that they:

Will act with honesty and integrity in all their dealings for the Company;
Will be truthful, and not mislead or make false statements nor mislead by omission, and will not make promises or commitments the Company does not intend or would be unable to honour;
Will comply with the law at all times;
Will fully disclose any business interest (public or private) and any other matters which may lead to potential or actual conflicts of interest;
Will seek approval from the Chairman of the Company in relation to any other role outside their position as a Director or key officer of the Company which potentially conflicts with the Company’s interests;
Must maintain and observe their obligation of confidentiality to the Company even after leaving their position with the Company;
Must not use inside information (being price sensitive information, information not in the public domain or information about any entity related to the Company or a strategic partner of the Company which has come to their knowledge through their employment with the Company) for personal gain, and must not deal in that entity’s securities or pass information on to another person or encourage another person to deal in that entity’s securities; and

Under the Policy, the Board is required to appoint a Disclosure Officer to administer the Company’s continuous disclosure policy.

As soon as Directors, employees or consultants become aware of information:

(a) That is not generally available (i.e. the information in question has not been included in any annual report, ASX release or other publication of the Company); and
(b) Which may be price sensitive (i.e. it is likely to have a financial or reputation impact upon the Company that may be considered material),

they must provide to the Disclosure Officer the following information:

A general description of the matter;
Details of the parties involved;
The relevant date of the event or transaction;
The status of the matter (e.g. final / negotiations still in progress / preliminary negotiations only);
The estimated value of the transaction;
The estimated effect on the Company’s finances or operations; and
The names of any in-house or external advisers involved in the matter.

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Disclosure Officer

The role of the Disclosure Officer is to ensure the Company is compliant with its disclosure obligations, ensure relevant disclosures are made to the ASX and be responsible for all communications with the ASX in relation to ASX Listing Rule matters.

The role of the Disclosure Officer, in conjunction with the Managing Director includes:

Periodically monitoring disclosure processes and reporting and periodically reviewing the effectiveness of disclosure and materiality guidelines;
Deciding what information must be disclosed to the ASX;
Conducting all disclosure discussions with management;
Conducting all disclosure discussions with the ASX; and
Maintaining a disclosure file.

The Disclosure Officer must immediately decide in respect of information that comes to his or her attention (either directly or from a Director) whether:

The information must be disclosed to the ASX;
An exception which allows non-disclosure to apply; or
An alternative procedure, such as whether a notice pending, trading halt or suspension of shares is appropriate in all the circumstances.

The initial Disclosure Officer of the Board is Gavin Solomon.

Health, Safety, Environment and Community Committee Charter

The function of the Health, Safety, Environment and Community Committee (HSECC) is to assist the Company’s Board to recognise its legal and other obligations to all legitimate stakeholders from time to time where and to the extent appropriate. Stakeholders are defined in the HSECC Charter to include groups that are likely to feel a social, environmental or economic impact from the Company’s actions. They include Shareholders, employees, contractors, regulatory bodies and members of the communities where the Company operates and are affected by its activities.

The HSECC has the authority to seek any information it requires from any employee and all employees must comply with such requests. In carrying out their functions, the HSECC may take such independent legal, technical or other advice as it considers necessary, at the reasonable expense of the Company.

The HSECC will review the HSECC Charter annually.

Membership

The HSECC will comprise a minimum of two non-executive directors. To ensure effective communication between the HSECC and the Audit and Risk Management Committee, at least one member of the HSECC will also be a member of the Audit and Risk Management Committee.

Responsibilities

The responsibilities of the HSECC include, but are not limited to:

( Understanding the Business ) Using all reasonable endeavours to understand the Company’s business and operations in order to assess whether the significant operating risks faced by the Company have been

identified and appropriate mitigation plans have been implemented;

( Health and Safety ) The HSECC will use all reasonable endeavours in reviewing the processes in place so that safety is a priority at all Company operational sites and that there is compliance with all safety and occupational health related legal and regulatory requirements;
( Environment ) The HSECC will use all reasonable endeavours in reviewing the environmental risk management processes within the Company which are designed so that all high environmental risks are identified and that appropriate risk management processes are in place;
( Community ) Reviewing the processes in place which are designed so that there is appropriate responsibility to communities affected by the Company’s operations and where necessary remedial action taken;
( Operational Risk Management ) The HSECC will use all reasonable endeavours in overseeing the operational risk management system which is designed to identify, assess, monitor and manage operational risk and will assist the Board in developing appropriate processes in that regard; and
( Legal and Regulatory Compliance ) The HSECC will, in conjunction with the Board and Audit and Risk Management Committee, use all reasonable endeavours so that the Company complies with all relevant statutory and regulatory obligations and all internal policies and procedures.

Meetings

The HSECC will meet at least twice annually. Additional meetings may be called throughout the year by any member of the committee. The HSECC is to report on its meetings to the Board and also when major health safety environment or community issues arise.

The initial members of the HSECC of the Board are Julian Bavin (chairman), Gavin Solomon and Simon Kidston.

Remuneration Committee Charter

The purpose of the Remuneration Committee is to provide advice, recommendations and assistance to the Board in fulfilling its corporate governance and oversight responsibilities by:

(a) Putting in place remuneration policies which are designed to attract and retain senior managers and Directors with the expertise to enhance the performance and growth of the Company;
(b) Putting in place remuneration policies that clearly distinguish the structure of non-executive Directors’ remuneration from that of executive Directors and senior executives; and
(c) Ensuring that the level and composition of remuneration packages are fair, reasonable and adequate.

Ultimate responsibility for the Company’s remuneration policy rests with the full Board, notwithstanding the establishment of the Remuneration Committee. The Remuneration Committee must have a minimum of three members, with a majority of members being independent Directors. The Remuneration Committee should be chaired by an independent Director.

SECTION 10 – CORPORATE GOVERNANCE 101

Meetings

The Remuneration Committee will meet as frequently as required in order to undertake its role effectively but must, at a minimum, meet twice a year. A quorum for Remuneration Committee meetings will be at least 2 members.

A member of the Remuneration Committee is not entitled to be present at a Remuneration Committee meeting, nor give advice or recommendations to the Board, regarding:

The level or composition of his or her remuneration; and
The evaluation of his or her performance as a Director of the Company.

Other responsibilities of the Remuneration Committee

The Remuneration Committee is responsible for reviewing and providing recommendations to the Board with respect to the remuneration packages of senior management and executive Directors.

The Remuneration Committee is responsible for reviewing and providing recommendations to the Board with respect to the Company’s policies with respect to incentive schemes and the incentive schemes of senior managers and executive Directors. The Remuneration Committee will also assist the Board in the development of appropriate benchmarks for use in designing incentive schemes.

The Remuneration Committee is responsible for providing advice to the Board with respect to non-executive Directors’ remuneration.

The Remuneration Committee must review and make recommendations to the Board on the Company’s remuneration, recruitment, retention and termination policies and procedures for senior executives.

The Remuneration Committee is responsible for providing advice and recommendations to the Board on the Company’s termination and redundancy policies and the payments made to outgoing Directors and senior managers.

The Remuneration Committee must report to the Board, at the first Board meeting subsequent to each Remuneration Committee meeting, regarding the proceedings of each meeting, the outcomes of the Remuneration Committee’s reviews and recommendations and any other relevant issues.

The Remuneration Committee must provide the Board with advice and recommendations regarding the appropriate material and disclosures to be included in the corporate governance section of the Company’s annual report which relates to the Company’s remuneration policies and procedures, information concerning the Directors and the performance evaluation of the Board and senior executives.

The initial members of the Remuneration Committee of the Board are Simon Kidston (Chairman), Julian Bavin and Gavin Solomon.

Securities Trading Policy – Directors and Key Executives

The purpose of the Securities Trading Policy is to impose constraints on Directors and executives of the Company dealing in the Company’s Shares or options, warrants, futures or other derivative financial products issued over the Company’s Shares or options.

The objectives of the Policy are to minimise the risk of contravening insider trading laws, to ensure that the Company is able to meet its reporting obligations under the ASX Listing Rules and increase transparency with respect to trading in Securities of the Company by Directors and executives.

Dealing in Securities

Directors and executives should not deal in securities of the Company unless:

They have satisfied themselves that they are not in possession of any price sensitive information that is not generally available to the public;
They have contacted the Chairman or Managing Director (or, in their absence, the Company Secretary) and notified them of their intention to do so and the relevant party indicates that there is no impediment to them doing so; and
Where the Chairman wishes to deal in securities, he or she has contacted the Managing Director (or, in his absence, the Chair of the Audit and Risk Management Committee) and notified them of his or her intention to do so and the relevant party indicates that there is no impediment to him or her doing so.

The Chairman and Managing Director will generally not allow Directors or executives to deal in securities of the Company as a matter of course in the following periods:

From balance date to the release of annual or half yearly results;
Within the period of 1 month prior to the issue of a prospectus; and
Where there is in existence price sensitive information that has not been disclosed because of an ASX Listing Rule exception.

Directors and executives should wait at least 2 hours after the relevant release before dealing in securities so that the market has had time to absorb the information. In specific circumstances however, such as financial hardship, the Chairman and/or Managing Director may waive the requirement of a Director or executive to deal in securities outside the above periods on the condition that the Director or executive can demonstrate to the Chairman and/or Managing Director that they are not in possession of any price sensitive information that is not generally available to the public.

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Additional policy requirements

Directors and executives must not at any time engage in short-term trading in securities of the Company.

Directors and executives must not communicate price sensitive information to a person who may deal in securities of the Company. In addition, a Director or executive should not recommend or otherwise suggest to any person (including a spouse, relative, friend, trustee of a family trust or directors of a family company) the buying or selling of securities in the Company.

Directors and executives must ensure that external advisers who may receive price sensitive information are bound by confidentiality agreements or other enforceable confidentiality obligations.

Notification of dealing in securities

Directors and executives must notify the Company Secretary immediately on acquiring or disposing of a relevant interest in any securities in the Company.

Confirmation of dealing

If a person covered by the Policy undertakes dealing then, within 2 days of the dealing taking place, they should provide the details of the dealing to the Company Secretary.

Penalties

A contravention of the Policy by an executive may result in summary dismissal.

Diversity Policy

The purpose of the Diversity Policy is to demonstrate a commitment by the Board to equality and respect and in recognising and valuing the unique contribution people can make because of their individual background and different skills, experiences and perspectives. The Company considers that fostering diversity improves workplace culture and leads to better company performance.

The Company recognises that a talented and diverse workforce is a key competitive advantage. The wide array of perspectives that results from such diversity promotes innovation and business success.

The Board is responsible for the selection of new board members and in accordance with its Board Charter and the ASX Corporate Governance Principles and Recommendations (including 2010 amendments), the Board must ensure that the selection process is formal and transparent. High quality female candidates will be considered as part of any recruitment process.

The Company will establish measurable objectives for achieving gender diversity when it has grown to a point where it is appropriate to do so.

SECTION 10 – CORPORATE GOVERNANCE 103

Section 11 Additional Information

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This Section of the Prospectus contains information which the Board considers material to the Offer including:

Rights and liabilities attaching to Shares;
Estrella Resources Employee Share Option Plan;
Summary of the terms of the Options issued by the Company;
Related party transactions;
Litigation;
Tax Considerations;
Consents to be named;
Remuneration of directors;
Director’s interests in securities;
Deeds of Access, Indemnity and Insurance; and
Non-executive director appointment letters.

Rights and Liabilities Attaching to Shares

A summary of the key rights attaching to the Shares is set out below. The provisions of the Constitution relating to the rights attaching to the Shares must be read subject to the Act, the ASX Listing Rules and ASX Settlement Rules. This summary is not intended to be exhaustive and does not constitute a definitive statement of the rights, liabilities and restrictions attaching to the Shares.

Ranking

The Shares issued pursuant to this Prospectus will be fully paid ordinary shares and will rank equally in all respects with the existing fully paid ordinary shares in the Company.

Reports and Notices

Members are entitled to receive all notices, reports, accounts and other documents required to be furnished to members under the Constitution and the Act.

General Meetings

Members are entitled to be present in person, or by proxy, attorney or representative (where the member is a body corporate) to speak and to vote at general meetings of the Company. Members may requisition general meetings in accordance with the Act and the Constitution.

Voting

Subject to any rights or restrictions attached to any class or classes of shares in the Company at any time (at present there is only one class of shares), at a general meeting of the Company:

Every ordinary member present in person, or by proxy, attorney or representative has one vote on a show of hands; and
Upon a poll every ordinary member present in person or by proxy, attorney or representative has one vote for every fully paid share held.

Dividends

The Directors may declare and authorise the distribution of dividends from the profits of the Company to members according to their rights and interests.

Winding Up

Members will be entitled in a winding up to share in any surplus assets of the Company in proportion to the Shares held by them respectively, less any amount which remains unpaid on their Shares at the time of any such distribution.

Transfer of Shares

Subject to the Constitution and to any restrictions attached to a member’s Shares at any point in time, a member may transfer any of the member’s Shares by way of a proper ASX Settlement transfer, a written transfer in any usual form or in any other form approved by the Directors.

The Directors may decline to register a transfer of Shares or apply for a holding lock to prevent a transfer in accordance with the Act or ASX Listing Rules in the event that:

the Company has a lien on the Shares the subject of the transfer;
the Company is served with a court order that restricts a member’s capacity to transfer the Shares;
registration of the transfer may break an Australian law;
the transfer is lodged during the escrow period for restricted securities;
the transfer is paper-based and either a law related to stamp duty prohibits the Company from registering it or the Company is otherwise allowed to refuse to register it under the ASX Listing Rules; or
if the transfer does not comply with the terms of any employee incentive scheme of the Company where applicable.

Future Increases in Capital

The allotment and issue of Shares is under the control of the Directors of the Company. Subject to the ASX Listing Rules, and restrictions on the allotment of Shares to Directors or their Associates contained in the Constitution and the Act, the Directors may allot or otherwise dispose of Shares on such terms and conditions as they see fit.

Variation of Rights

The rights, privileges and restrictions attaching to Shares can be altered with the approval of a resolution passed at a separate general meeting of the holders of Shares by a 75% majority of those holders who, being entitled to do so, vote at that meeting, or with the written consent of the holders of at least 75% of the Shares on issue.

Application of ASX Listing Rules

On admission to the Official List, despite anything in the Constitution, if the ASX Listing Rules prohibit an act being done, then the act must not be done. Nothing in the Constitution prevents an act being done that the ASX Listing Rules require to be done. If the ASX Listing Rules require an act to be done or not to be done, authority is given for that act to be done or not to be done (as the case may be). If the ASX Listing Rules require a constitution to contain a provision or not to contain a provision, the Constitution is deemed to contain that provision or not to contain that provision (as the case may be). If a provision of the Constitution is or becomes inconsistent with the ASX Listing Rules, the Constitution is deemed not to contain that provision to the extent of that inconsistency.

SECTION 11 – ADDITIONAL INFORMATION 105

Estrella Resources Employee Share Option Plan

The Company has in place an employee share option plan, being the Estrella Resources Employee Share Option Plan ( ESOP ) that is governed by the ESOP Rules.

The key terms of the Company’s ESOP are set out below:

Commencement of ESOP

The ESOP commenced on 8 March 2012. As at the date of this Prospectus no options have been issued under the ESOP.

ESOP Objects

The objects of the ESOP are to provide an incentive for employees to remain in their employment in the long term, recognise their ability, expected efforts and contribution as well as provide an opportunity to acquire options for Shares in the Company and ultimately Shares in the Company.

Administration of the ESOP

The ESOP is administered by the ESOP Committee, being a committee of the Board to which power to administer the ESOP has been delegated or absent of that delegation, the Board. In respect of the issue of Options, the ESOP Committee determines:

Which employees are to be issued Options under the ESOP;

Exercise Period

The exercise period:

Commences, unless otherwise determined by the ESOP Committee under the ESOP Rules or is otherwise specified in the particular Option certificate, on the earlier of the day after the vesting date (see below) and the date on which a special circumstance in respect of that employee arises (see below); and
Ends, unless otherwise determined by the ESOP Committee under the ESOP Rules or as otherwise specified in the particular Option certificate, on the date being 5 years after the issue of the Option, or if special circumstances arise, 12 months after the special circumstances arise or if a change of control event occurs, the date specified in the notice issued by the Board to a participant which must be prior to the completion of the relevant change of control event.

Vesting Date

The vesting date is the earlier to occur of the 3rd anniversary of the issue of the Option and if a change of control event will occur, the date on which the Board resolves that unvested Options will vest (which must be prior to the completion of the relevant change of control event). The Board must notify participants of the relevant change of control event, the date on which the Options vest and any change to the last exercise date.

The number of Options to be offered to an employee; and
The exercise price for the Options.

The ESOP Committee has broad powers to administer the ESOP which includes terminating or suspending the operation of the ESOP at any time provided that it does not adversely affect or prejudice the rights of the participants, resolve all issues arising in connection with the ESOP and make regulations for the operation of the ESOP.

The initial members of the ESOP committee are Simon Kidston (Chairman), Julian Bavin and Gavin Solomon.

Rights of Participant

Each Option held by an employee (i.e. a participant) entitles them to subscribe for and be issued one fully paid Share at the exercise price. No interest in the underlying Share subsists until it is issued following the exercise of the Option. The participant may not encumber or grant security interests over Options issued to them. Options may be transferred by the participant by an instrument of transfer in limited circumstances including: a transfer constituting the necessary transfer documents following an acceptance of an offer made under an off-market bid relating to Options, certain transfers under Division 3 of Part 6A.1, Division 2 of Part 6A.2 and Part 6A.3 of the Act or a transfer approved by the Board. A participant has no right to participate in new issues unless the participant has become entitled to exercise the Option. However, there are certain rights for bonus issues (other than an issue in lieu or in satisfaction of dividends or dividend reinvestment). Rights of a participant may be changed to the extent necessary to comply with the ASX Listing Rules in respect of a reorganisation of capital.

Consideration for grant of Option

Options are offered under the ESOP in consideration for the services provided to the Company and any transfer of intellectual property created by the employee and no other monetary consideration.

Exercise of Options

The participant may exercise the Option at any time during the exercise period by issuing a notice of exercise to the Company together with the Option certificate and a cheque payable to the Company in the amount of the product of the number of Options then being exercised and the exercise price for those Options. A participant may only exercise Options in multiples of 100 or as determined by the ESOP Committee unless all Options the subject of the certificate are exercised.

Lapse of Options

The Options will lapse if any conditions for vesting are not satisfied as at the vesting date (see above) or following the end of the exercise period. Rights of the Option holder in respect of an Option cease upon the lapse of that Option. Options will also lapse if in the ESOP Committee’s opinion the participant has been dismissed or removed from office for a reason that entitles such a dismissal without notice, has committed an act of fraud or gross misconduct or has done an act which brings the Company into disrepute and a date determined by the ESOP Committee being no more than 6 months after an employee is terminated (other than due to a special circumstance).

Conditions for Vesting

The Options will only vest if the employee is an employee of the Company at all times from the date of issue of the Option to the vesting date of the Option and meets key performance indicators to the satisfaction of the Board. Further conditions may also be included in the relevant Option certificate or as imposed by the Board under the ESOP Rules. The ESOP Committee may reduce or waive vesting conditions in whole or in part.

106 ESTRELLA RESOURCES

Accelerated Vesting

If an accelerated vesting event occurs while the participant is employed by the Company, the Board may at its discretion bring forward the vesting of all Options or waive or vary the vesting conditions. An accelerated vesting event is the occurrence of a special circumstance in respect of a participant or another event determined by the ESOP Committee.

Special Circumstance

In respect of a participant means total and permanent disablement, death, redundancy or any other circumstance determined by the ESOP Committee.

and dividends. Shares issued pursuant to the exercise of an Option under the ESOP are not transferable and may not be encumbered (other than an encumbrance in favour of the Company) for the holding lock period, which is 2 years from the date of exercising the Option.

Amendment to ESOP Rules

The Board may amend ESOP Rules or waive or modify the application in relation to a participant provided that if such an amendment would adversely affect the rights of participants the Board must obtain the consent of participants who between them hold not less than 75% of the Options held by those participants before making the amendment.

Change of Control Event

Means an acquisition by a person or entity (directly or indirectly) of not less than 50.1% of the issued Shares in the Company, or any other similar event (as the ESOP Committee may at any time determine).

Rights and Restrictions on Shares issued pursuant to Option exercise

Shares issued on the exercise of Options under the ESOP rank equally with all existing Shares on and from the date of issue in respect of all rights issues, bonus Share issues

Tax issues

The Company is not responsible for any tax which may become payable by a participant in connection with the issue of Shares pursuant to an exercise of Options or another dealing by a participant with the Options or Shares. The Company will issue information as required under the Taxation Administration Act (Cth) in respect of issues of Options to employees under this ESOP. Employees are to seek their own advice in respect of the ESOP.

Summary of the terms of Options issued by the Company

The Company has a total of 5,705,000 unlisted Options on issue as at the date of this Prospectus, with a further 1,500,000 unlisted Options to be issued on completion of the IPO to Helmsec under the Mandate Letter.

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Option Holder No. of Options Exercise Price Expiry
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Dr Jason Berton	3,000,0001	$0.25	12 September 2014
Juan Pablo Vargas de la Vega	500,0001	$0.25	12 September 2014
Justin Clyne	100,000	$0.25	12 September 2014
Julian Bavin	1,000,000	$0.25	25 October 2014
Helmsec and its nominees which may include entities	600,0002	$0.20	25 October 2016
controlled by Gavin Solomon and Simon Kidston and other directors/employees of Helmsec.	505,0002 1,500,0003	$0.20 $0.20	19 December 2016 5 years from the date
			of listing on the ASX
Total	7,205,000

Note 1. Vesting in three tranches and subject to exercise conditions. Note 2. Issued to Helmsec and its nominees in accordance with the Mandate Letter. Note 3. To be issued to Helmsec (or its nominees) upon Listing in accordance with the Mandate Letter.

Rights and Terms of Options Issued to the Managing Director

The options issued to Dr Berton are subject to certain exercise conditions, namely:

The occurrence of the Company’s IPO;
Certain JORC Inferred Resource being obtained.

The options vest in three tranches of 1,000,000 options each, the first of which vests on the date the Company is officially listed on the ASX, the second tranche on 12 March 2013 and the final tranche on 12 September 2013 (subject to Dr Berton being a full-time employee of the Company). Subject to the vesting and exercise conditions, each option issued to Dr Berton is exercisable at any time prior to 12 September 2014 with an exercise price of $0.25. In addition, the Options issued to Dr Berton are subject to the further terms and conditions summarised below.

Terms and conditions of all Options

The following is a summary of the terms and conditions of the Options granted to each Option Holder:

(a) Each unlisted Option entitles the holder to acquire one (1) ordinary fully paid share;
(b) Each unlisted Option is exercisable at any time on or prior to the relevant expiry date;
(c) Each unlisted Option is exercisable at the relevant exercise price;
(d) The unlisted Options are freely transferable in whole or part at any time prior to expiry;
(e) Each Option Holder will be entitled to participate in all new issues of securities in the Company upon the prior exercise of the unlisted Options in which case the Option Holder will be afforded a period of at least fourteen (14) days prior to and inclusive of the record date (to determine entitlements to the new issue) to exercise their unlisted Options;

SECTION 11 – ADDITIONAL INFORMATION 107

(f) In the event of any reconstruction of the issued capital of the Company, all rights attaching to the unlisted Options will be changed/varied to the extent necessary to comply with the Corporations Act and/or the ASX Listing Rules applying to the reconstruction of the capital at the time of the reconstruction;
(g) In the event there is a bonus issue to Shareholders, the number of shares over which each unlisted Option is exercisable may be increased by the number of share which the Option Holder would have received if the unlisted Option had been exercised before the record date for the bonus issue;
(h) The Company will not make an application for Official Quotation of the unlisted Options on ASX; and
(i) Each holder of unlisted Options has no right to any dividend nor any right to vote nor right to participate in the surplus profits or assets of the Company upon a winding up of the Company, until the unlisted Options are converted into Shares.

or administrative appeals, or criminal or governmental prosecutions of a material nature in which the Group is directly or indirectly concerned which are likely to have a material adverse effect on the business or financial position of the Company or the Group.

Dividend Policy

The Directors currently intend to use cash flow to fund the development of the Company’s projects.

The Directors intend to give priority to the development of the Company’s Projects. Accordingly, the Directors do not anticipate paying any dividends in the short term.

The Directors can give no assurance as to the amount, timing, franking or payment of any future dividends by the Company. The capacity to pay dividends will depend on a number of factors including future earnings, capital expenditure requirements and the financial position of the Company.

Taxation considerations

Related Party Transactions

Australian Taxation Considerations

Chapter 2E of the Corporations Act governs related party transactions with respect to public companies. Related party transactions require shareholder approval unless they fall within one of the exceptions in Chapter 2E. The Company entered into the Mandate Letter with Helmsec prior to becoming a public company. The Mandate Letter was entered into on arms’ length and normal commercial terms. Estrella’s entry into the Mandate Letter was approved by the Shareholders on 22 August 2011.

Simon Kidston and Gavin Solomon, Directors of the Company, are also directors of Helmsec and their respective related entities are shareholders of Helmsec. Accordingly, Estrella and Helmsec are related parties.

The independent Directors of the Company and the then independent shareholders of the Company have approved the Mandate Letter including the payment of the fees payable and options granted to Helmsec and any other future fees payable to Helmsec under the Mandate Letter, which are considered reasonable and on arm’s length and standard industry terms. The nature and terms of the Mandate Letter and financial benefits payable to Helmsec are disclosed in Section 9.

As disclosed in Section 7, the Company has entered into an employment agreement with the Managing Director. Remuneration payable to the Managing Director is considered reasonable in the Company’s circumstances and falls within one of the exceptions of Chapter 2E.

As disclosed below, the Company has entered into nonexecutive director appointment letters with each of its nonexecutive directors. Annual fees payable to the non-executive directors are considered reasonable in the Company’s circumstances and fall within one of the exceptions of Chapter 2E.

Except as disclosed in this Prospectus, the Company is not a party to any other existing transactions with its related parties (as this term is defined in Chapter 2E of the Corporations Act).

Litigation

Except as disclosed in Section 5 and the Legal Tenement Report, as far as the Directors are aware, there are no current or threatened civil litigation, arbitration proceedings

This is a general summary of the Australian tax consequences for investors who acquire new Shares in the Company under this Prospectus.

Specifically, with reference to the allotment, ownership and disposal of Shares in the Company, this provides a summary of the Australian income tax implications for Australian tax resident individual shareholders, Australian tax resident complying superannuation fund shareholders and Australian tax resident corporate shareholder who hold the Shares acquired on capital account.

This summary does not address issues for non-Australian tax resident shareholders, those investors that do not hold their Shares on capital account or investors who hold their Shares through other types of entities.

Disclaimers

This advice is general in nature and the individual circumstances of each shareholder may affect the taxation implications of the investment for that shareholder. Shareholders should seek appropriate independent professional advice that considers the taxation implications in respect of their own specific circumstances. The Australian tax laws are complex and this is not an exhaustive analysis of all income tax consequences that could apply in all circumstances of any given shareholder. Special additional rules may apply to particular shareholders, such as insurance companies and financial institutions.

To the extent permitted by applicable law, the Company disclaims all liability to any shareholder or other party for all costs, loss, damage and liability that the shareholder or other party may suffer or incur arising from or relating to or in any way connected with the contents of this advice or the provision of this advice to the shareholder or other party or the reliance on this advice by the shareholder or other party.

The views expressed in this summary are based on the relevant Australian taxation, stamp duty and GST laws, as of the date of the Prospectus, all of which are subject to change. Unless otherwise stated, the tax, stamp duty and GST consequences do not take into account or anticipate any changes in law (by legislation or judicial decision) or any

108 ESTRELLA RESOURCES

changes in administrative practice or interpretation by the relevant authorities. If there is a change, including a change having retrospective effect, the tax, stamp duty and GST consequences would have to be re-considered in light of the changes. Other than as required by law, the Company has no responsibility to update this summary for events, transactions, circumstances or changes in any of the facts, assumptions or representations occurring after this date.

Taxation of Dividends

Australian Tax Resident Shareholders

Distributions of profit from the Company should constitute dividends for Australian tax purposes.

Dividends distributed by the Company on a Share will constitute assessable income of an Australian tax resident shareholder and will need to be included in their taxable income in the year in which the dividend is paid.

Individual shareholders will generally be taxed at their prevailing marginal rate on the dividend received. In general terms, superannuation funds treat the receipt of a dividend in the same way as individuals.

Corporate shareholders who are Australian residents for tax purposes will need to include dividends in their assessable income in the year the dividend is paid and will be taxed at the corporate tax rate on the dividend received. In the case that an Australian company holds greater than 10% of the voting power of the Company, dividends received should not be assessable.

Taxation of Future Share Disposals

Australian Tax Resident Shareholders

All Australian tax resident shareholders who hold their Shares on capital account must consider the impact of the Australian capital gains tax rules on the disposal of their Shares.

A Shareholder will derive a capital gain on the disposal of their Shares where the capital gains tax proceeds received on disposal exceed the capital gains tax cost base of those Shares. The capital gains tax cost base should generally be equal to the acquisition price of the Shares and, amongst other things, any incidental costs of acquisition.

A Shareholder will incur a capital loss on the disposal of their Shares where the capital proceeds received on disposal are less than the capital gains tax reduced cost base of their Shares.

All capital gains and losses for the income year are added together to produce a net capital gain for that income year. A net capital gain for an income year is included in the shareholder’s taxable income. A net capital loss is effectively quarantined and may generally be carried forward to the next income year to be deducted against future capital gains.

Individual shareholders may be entitled to a concession (referred to as the ‘CGT discount’) on the amount of capital gains tax assessed. The concession is available to all individual shareholders who hold their Shares for at least twelve months prior to disposal. The concession results in only 50% of any capital gain being taxable. Capital losses must be applied first to reduce capital gains before applying the discount.

The capital gains tax treatment of Australian tax resident complying superannuation funds is, in general, the same as

that set out for individuals, except that the capital gains tax discount is one-third rather than 50%.

Any capital gain derived upon a disposal of Shares by an Australian tax resident corporate Shareholder would generally be included in assessable income where the Shareholder held less than a 10% interest in the Company. The CGT discount is not available to corporate taxpayers.

In circumstances where an Australian tax resident corporate shareholder held at least 10% of the direct voting interest in the Company for a continuous period of 12 months in the two years before disposal, any capital gain or loss may be reduced by the ‘active business asset percentage’ for the Company.

Stamp Duty

No stamp duty will be payable by successful Applicants on the issue of Shares to them under the Offer. In addition, under current stamp duty legislation, no stamp duty would be payable on any subsequent transfer of Shares provided the Shares remain quoted on the ASX or, in the event that the Shares are no longer quoted on the ASX, the transfer is effected after 1 July 2012 on a register maintained in New South Wales.

GST

Under current Australian law, GST will not be payable in respect of any issue or transfer of Shares.

Photographs and Diagrams

Unless otherwise stated, assets and property portrayed in photographs in this Prospectus are owned by the Company.

Governing Law

This Prospectus is issued under and in accordance with the laws applicable in the State of NSW, Australia.

Consents to be named and disclaimers of responsibility

Interests of Directors

Other than as set out below or elsewhere in this Prospectus, no Director (whether individually or in consequence of a Director’s association with any company or firm or in any material contract entered into by the Company) has now, or has had, in the two year period ending on the date of this Prospectus, any interest in:

The formation or promotion of the Company;
Property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or
The Offer.

Except as disclosed in this Prospectus, no amounts of any kind (whether in cash, Shares, options or otherwise) have been paid or agreed to be paid to any Director or to any company or firm with which a Director is associated to induce him to become, or to qualify as, a Director, or otherwise for services rendered by him or his company or firm with which the Director is associated in connection with the formation or promotion of the Company or the Offer.

SECTION 11 – ADDITIONAL INFORMATION 109

Remuneration of Directors

The Constitution provides that the Non-Executive Directors may be paid for their services as Directors, however the sum payable must not exceed such fixed sum per annum as may be determined by the Company in general meeting, to be divided among the Directors and in default of agreement then in equal shares. The sum fixed by the Company as the aggregate limit for the payment of Non-Executive Directors is $380,000 per annum.

A Director may be paid fees or other amounts as the Directors determine where a Director renders or is called upon to

perform extra services or to make any special exertions in connection with the affairs of the Company. A Director may also be reimbursed for any disbursements or any other out of pocket expenses properly incurred as a result of their directorship or any special duties.

Directors’ Fees and Remuneration

Director fees paid since incorporation of the Company up to the date of this Prospectus, or payable annually to the Directors upon listing on the ASX as remuneration for their services as Directors are set out in the table below.

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Total fees paid from incorporation Annual fees to be
Director to the date of this Prospectus paid upon listing (ex GST)
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Gavin Solomon	–	$80,000
Dr Jason Berton	$124,000	$180,000
		(being the base salary payable to
		Dr Berton under his employment agreement
		referred to in Section 7 and not including any
		potential bonus payments under the Managing
		Director’s contract)
Julian Bavin	–	$60,000
Simon Kidston	–	$60,000
Total	$124,000	$380,000

Directors’ interests in securities

Details of the interests in securities of the Company held by the Directors and their related parties (either directly or indirectly) are set out below.

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Director Shares held directly or indirectly Options held directly or indirectly
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Gavin Solomon	4,825,000	143,650
Dr Jason Berton	1,000,000	3,000,000
		(subject to vesting conditions disclosed above)
Julian Bavin	500,000	1,000,000
Simon Kidston	4,825,000	143,650
Total	11,150,000	4,287,300

Deeds of Access, Indemnity and Insurance

The Company has entered into a Deed of Access, Indemnity and Insurance with each Director. Under each Deed, the Company indemnifies the Directors to the maximum extent permitted by law against legal proceedings, damages, losses, liabilities, costs, charges, expenses, outgoings or payments suffered, paid, or incurred by the Directors, in connection with their offices.

The Deed provides for advances to Directors to defend claims so that in the event that a Director incurs or is likely to incur legal costs in circumstances where the Company may be obliged to indemnify the Director for the legal costs, the Company must advance the money to the Director to enable him or her to pay for the legal costs. If the Company advances an amount to the Director and it is later established that the Director is not entitled to be indemnified in relation to those proceedings, the Director must repay the amount to the Company.

Also pursuant to each Deed, for a period of 7 years from the date that the Director ceases to be a Director, the Company must provide access to all Board papers relevant to defending

any claim brought against the Director in their capacity as an officer of the Company, and will obtain a contract of insurance to insure the Director against liabilities incurred in connection with their office, excluding prohibited liabilities associated with a breach of conduct.

Non-Executive Director Appointment letters

The Company has entered into appointment letters with each of Mr Gavin Solomon, Mr Simon Kidston and Mr Julian Bavin, under which each is appointed to act as a director. Under these letters the Company has agreed to pay each non-executive director the annual fees outlined above.

Consents

Each party referred to in this Section:

Does not make, or purport to make, any statement in this Prospectus or any statement on which a statement made in the Prospectus is based other than as specified in this Section; and

110 ESTRELLA RESOURCES

To the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this Section.

Each of the following parties has consented to being named in the Prospectus in the capacity as noted below and has not withdrawn such consent prior to the lodgement of this Prospectus with ASIC:

(a) SRK Consulting has given its consent to the inclusion of the Independent Geologist’s Report in the form and context in which it is included in this Prospectus and to all statements attributed to it in this Prospectus.
(b) Harris Gomez has given its consent to the inclusion of the Legal Tenement Report in the form and context in which it is included in this Prospectus and to all statements attributed to it in this Prospectus.
(c) Grant Thornton Corporate Finance Pty Ltd has given its consent to the inclusion of the Investigating Accountant’s Report in the form and context in which it is included in this Prospectus and to all statements attributed to it in this Prospectus.
(d) Grant Thornton Audit Pty Ltd has given its consent to be named as the Company’s auditor in Section 6 but it does not make any statement in this Prospectus and has not caused or authorised the issue of this Prospectus.
(e) Middletons as Australian solicitors to the Offer.
(f) Helmsec as Lead Manager to the Offer.
(g) Boardroom Pty Limited as the Share Registry.

Interests of advisors and named persons

This Section applies to persons named in the Prospectus as performing a function as a financial services licensee or in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus or promoters of the Company (collectively referred to as Prescribed Persons). Except as otherwise set out below or elsewhere in this Prospectus, no Prescribed Person has or during the last two years has had any interest in the formation or promotion of the Company, or any property proposed to be acquired by the Company in connection with its formation or promotion or the Offer.

Further, no sums have been paid or agreed to be paid to a Prescribed Person for services rendered by the Prescribed Person in connection with the promotion or formation of the Company or the Offer except as set out below.

The Company has engaged the following professional advisers and service providers:

Grant Thornton Corporate Finance Pty Ltd will receive professional fees of approximately $30,000 (plus GST) for accounting services in connection with this Prospectus including the provision of the Investigating Accountant’s Report.
Helmsec has in the past received fees and options in the Company in relation to professional services. Helmsec will receive professional fees of approximately $360,000 (plus GST) and 1,500,000 unlisted options exercisable at $0.20 each in connection with the Offer under the Mandate Letter as disclosed in Section 9 of the Prospectus.
Middleton’s will receive professional fees of approximately $120,000 (plus GST) for legal work undertaken in connection with this Prospectus and the Offer.
SRK Consulting will receive fees of approximately $37,170 (plus GST) for the provision of the Independent Geologist’s Report.
Harris Gomez will receive professional fees of approximately $9,500 (plus VAT) for legal work undertaken in connection with the preparation of the Legal Tenement Report.
Boardroom Pty Limited has been appointed as the Share Registry and will be paid for these services on normal commercial terms.
Justin Clyne will receive professional fees of approximately $27,500 (plus GST) for Company Secretarial services in connection with this Prospectus and the Offer.

Disclose any other interests of advisers/ named persons

These amounts, and other expenses of the Offer, will be paid by the Company out of funds raised under the Offer or available cash. Further information on the use of proceeds and payment of expenses of the Offer is set out in Section 2 and Section 6.

Costs

If the Offer proceeds, the total estimated costs of the Offer, including legal fees, registration fees, fees for other advisers, prospectus design, printing and advertising expenses and other miscellaneous expenses, will be approximately $650,000 (plus GST and VAT).

Statement of Directors

The Directors of the Company state that for the purposes of section 731 of the Corporations Act, they have made all enquiries that were reasonable in the circumstances and have reasonable grounds to believe that any statements by them in this Prospectus are true and not misleading or deceptive, and that with respect to any other statements made in this Prospectus by persons other than the Directors, the Directors have made reasonable enquiries and have reasonable grounds to believe that persons making the statement or statements were competent to make such statements, those persons have given the consent required by section 716(2) of the Corporations Act and have not withdrawn that consent before lodgement of this Prospectus with ASIC.

Each Director consents to the lodgement of this Prospectus with ASIC, and has not withdrawn that consent prior to this Prospectus being lodged.

This Prospectus is prepared on the basis that:

Certain matters may be reasonably expected to be known to professional advisers of the kind with whom Applicants may reasonably be expected to consult; and
Information is known to Applicants or their professional advisers by virtue of any legislation or laws of any State or Territory of Australia or the Commonwealth of Australia.

Signed on behalf of Estrella Resources Limited

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Gavin Solomon Non-Executive Chairman

SECTION 11 – ADDITIONAL INFORMATION 111

Section 12

Investigating Accountant’s Report

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Image: View of Venus terrain (Oct 2011)

112 ESTRELLA RESOURCES

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






  






  

 







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SECTION 12 – INVESTIGATING ACCOUNTANT’S REPORT 113

==> picture [131 x 59] intentionally omitted <==



   

     

  



   

   
  
    
       

    

  

114 ESTRELLA RESOURCES

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 
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 
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  
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 
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
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  


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

 
 
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SECTION 12 – INVESTIGATING ACCOUNTANT’S REPORT 115

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

            



       

           

     

     

116 ESTRELLA RESOURCES

                                  

SECTION 12 – INVESTIGATING ACCOUNTANT’S REPORT 117

Section 13 Legal Tenement Report

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Image: View of Agustina terrain (Feb 2012)

118 ESTRELLA RESOURCES

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LEGAL TENEMENT REPORT

'Independent Solicitors’ Report on Chilean Concessions and Estrella Chile' (as of 15 March 2012)

BACKGROUND

Purpose

As requested by Estrella Resources Limited (hereinafter, the “ Company ”), we hereby provide you with this legal opinion (hereinafter, the “Legal Opinion” or “Report” ), detailing, inter alia , the current status of (a) the Company’s Chilean subsidiary, Estrella Resources Chile SpA (hereinafter, “ Estrella Chile ”); (b) the Company’s and Estrella Chile’s material agreements subject to Chilean jurisdiction; (c) mining rights granted in an option agreement in favour of Estrella Chile; and (d) mining rights constituted by Estrella Chile.

This legal opinion has been prepared for inclusion in the prospectus to be issued by the Company in the forthcoming initial public offering on the Australian Stock Exchange (hereinafter, the “ Prospectus ”).

This legal opinion is given solely for the benefit of the Company and its Directors in connection with the issue of the Prospectus.

Scope:

This Legal Opinion encompasses all mining rights that the Company currently holds in Chile by means of its subsidiary, Estrella Chile, a limited liability company duly incorporated in accordance with Chilean law.

Estrella Chile currently has interests in four mining projects, known as “Agustina”, “Venus”, “Luna” and “Inca”.

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Av. Vitacura 5250, Oficina 802
Edificio Plaza Americas
Vitacura, Santiago – Chile
T: + 56 2 242 1157
www.hgomezgroup.com
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SECTION 13 – LEGAL TENEMENT REPORT 119

MINING PROPERTY LAW AND REGULATIONS IN CHILE

The 1980 Political Constitution of the Republic of Chile and the provisions of Chilean law make no distinction, in general terms, between Chileans and non-Chileans regarding the enjoyment of basic rights, the acquisition of property, and the carrying out of economic activities. It grants legal protection to mining property and the mining industry and Article 19 N°24 expressly recognises mining property. According to Article One of the Mining Code, Law N° 18,248 of 1983 (hereinafter the “ Mining Code ”) the State has the absolute, exclusive and inalienable dominion over all mines.

All mining legislation and its application are derived from the Mining Code and Regulations. The Mining Code establishes that to explore for, or to mine, any type of mineral substances, it is necessary to obtain the rights to pursue said activity from the State. To obtain these rights the state has defined certain legal procedures which upon compliance with, provide exclusive mining rights. Article 2 of the Mining Code grants the holder of any mining exploration rights the right to protect their rights whether against another individual or against the State itself.

Section 2 of the Organic Constitutional Law of Mining Concessions (hereinafter “ Law 18,097 ”) states that a mining Concession is “an in rem property right, different and independent from ownership of the surface land, even if it belongs to one and the same owner; enforceable against the State and any other person; transferable and transmissible; subject to mortgage and other in rem rights and, in general, to any act or contract”.

Rights granted by a mining Concession can be exercised in connection with all licensable mineral substances that exist within the leased area encompassed by the Concession, with the exception of liquid or gaseous hydrocarbons, surface clays and sands, rocks, lithium deposits in territorial waters and other substances that are used in construction works.

Mining Concessions are a right conferred by the State. They cannot be expropriated (neither the Concession nor any of its essential attributes) unless by law authorising same and with full compensation. They are granted by a judicial decree from a competent court of justice in the context of a non-contentious proceeding filed with said court, for any person, whether natural or corporate. The purpose of such a proceeding is to identify, define and create the Concession, whether for exploration or exploitation. Judicial intervention existent in the granting of mining Concessions and the judiciary’s strict compliance with legal procedures as set out in Articles 34 to 90 of the Mining Code, serves

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Av. Vitacura 5250, Oficina 802 Edificio Plaza Americas Vitacura, Santiago – Chile T: + 56 2 242 1157 www.hgomezgroup.com

120 ESTRELLA RESOURCES

as a reasonable guarantee to any potential investors of the Chilean legal system by limiting any discretional uncertainty. Rights over mining Concessions have complete security of tenure and are freely transferable and mortgageable.

The territorial extension of a mining Concession takes on the shape of a solid, the surface of which is a horizontal parallelogram of right angles, and the depth of which is indefinite within the vertical planes that establish its boundaries. Furthermore, two of its sides shall have a North-South orientation based on Universal Transverse Mercator coordinates, and the diagonal lines traced within the parallelogram shall meet in a central point.

Mining Exploration Concessions

Definition: A mining exploration Concession is a real property right. Of limited duration, it grants to its holder (within the limits of its territorial extension) the exclusive rights to investigate the existence of licensable mineral substances and the preferential rights to constitute mining claims on the mineral substances found. The Concession also grants to its holder the right to request one or more mining exploitation Concessions.

Duration: The term of an exploration Concession is finite, that is, two years from the date of the Chilean court decision establishing such a Concession. This term may be extended for another two years, provided that before the end of the first term the exploration Concession holder requests its extension and abandons concurrently at least fifty percent of the initial area granted. To maintain the property rights in good standing annual taxes must be paid.

Size of area: The horizontal sides of the exploration Concession shall measure a minimum of 1,000 metres or multiples of 1,000 metres, but shall not cover more than 5,000 hectares or less than 100 hectares.

Mining Exploitation Concessions

Definition: The mining exploitation Concession is a real property right. It grants to its holder (within the limits of its territorial extension) the exclusive rights to investigate the existence of licensable mineral substances, extracting such licensable mining substances and becoming the owner of these substances at the time of their extraction.

Duration: The term of an exploitation Concession (or “ pertenencia ”) is indefinite. To maintain the property rights in good standing annual taxes must be paid.

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Size of area: The horizontal sides of the exploitation Concession shall measure a minimum of 100 metres or multiples of 100 metres; and the surface thereof shall not cover more than 10 hectares or less than 1 hectare.

For exploitation Concessions, provided that they are in good standing, the legal framework exists to maintain the Concession in perpetuity.

Award of property title

The judicial award granting an exploration or exploitation Concession also grants possession and constitutes the property title over the particular Concession.

However, this title shall be subject to annulment if an excerpt of the award is not published in the Official Mining Bulletin and registered within 120 days of when the Concession was granted, in the Custodian of mines of the location where the Concession is situated.

Once the aforementioned procedures have been complied with, the mining Concession holder shall be entitled to all the rights that the law provides it (discussed further below).

Regime and Procedure of Assignment of Mining Rights

In Chile, the “registered possession regime” regulates the acquisition of property. This regime differentiates the property title from the means of acquisition.

The constitutive judgment that grants the corresponding Concession represents property title and the registration thereof in the respective Registry of the corresponding Mines Conservator represents the form of acquisition.

Similarly, this applies to mining rights resulting from a Concession that is in the process of being created.

A mining Concession is created by a judicial resolution from a civil court. The procedure is explained in further detail below.

Creation of Exploration Concessions

The procedure to create a mining exploration Concession commences with the filing of a document known as a “ pedimento ” (hereinafter, the “ Mining Petition ”) at the applicable local Civil Court ( Juzgado de Letras ). A Mining Petition is a document by which a natural or legal person requests the rights to a specific area with the objective of exploring licensable mineral substances. It includes details relating to the applicant and the location of the area requested.

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An exploration Concession that is in the process of being created is also referred to as a Mining Petition. A filed Mining Petition is a real property right, transferable and transmissible in accordance with the laws applicable to other real estate assets.

The Civil Court where the Mining Petition is lodged at may request the National Geology and Mining Service (hereinafter, “ SERNAGEOMIN ”) to review the technical aspects of the Mining Petition. The time take by the Civil Court and SERNAGEOMIN to review the Mining Petition is not regulated by law, but in practice generally takes approximately 4 working days.

Within 30 days of submitting the Mining Petition to the Civil Court, the applicant must pay a one-off fee (or “ tasa de pedimento ”) to the Treasury. This fee is calculated according to the area of hectares requested. Non-payment of this fee may give rise to the termination of the corresponding proceeding.

If upon review of the Mining Petition the judge considers that it satisfies the requirements of the Mining Code, he or she will order it be registered at the applicable Mining Registrar and published in the official gazette. This must be fulfilled within 30 days of the judge’s order.

If the judge’s report is unfavorable he or she will order the applicant correct any observations within 8 days of the judge`s order.

Once the Mining Petition is duly published and registered and the tasa de pedimento paid, and within 90 days of the judge`s order to register and publish the Mining Petition, the applicant must present itself at the Civil Court and request the judge issue his or her constitutive judgment of the exploration Concession.

The applicants request must consist of written document and a map and must be accompanied by the receipt of payment of the _tasa de pedimento_ , receipt of registration of the Mining Petition and copy of the publication of the Mining Petition in the official gazette. At this stage the applicant must also pay the first mining patent, further details of which are outlined below. The receipt of this payment must also be included in the applicants request.

Once the judge approves a Mining Petition by way of a constitutive judgment, it must be registered in the Discovery Registry of the applicable Mining Registrar and published in the official gazette within 120 days of the judge’s approval. Upon registration, a mining petition and a mining claim become a real property right, transferable and conveyable, and subject to any act or contract.

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The only grounds to prevent the approval of a Mining Petition from its lodgment to its constitutive judgment are technical mistakes on behalf of the applicant, such as details missing in forms or documents not being lodged on time.

Creation of Mining Exploitation Concession

The procedure to create a mining exploitation Concession commences with the filing of a document known as a “ Manifestación ” (hereinafter, the “ Mining Claim ”).

An exploitation Concession that is in the process of being created is also referred to as a Mining Claim. A filed Mining Claim is a real property right, transferable and transmissible in accordance with the laws applicable to other real estate assets.

The Civil Court where the Mining Claim is lodged may request the SERNAGEOMIN review the technical aspects of the Mining Claim. The time take by the Civil Court and SERNAGEOMIN to review the Mining Claim is not regulated by law, but in practice generally takes approximately 4 working days.

Within 30 days of submitting the Mining Claim to the Civil Court, the applicant must pay a one-off fee (or “ tasa de manifestación ”) to the Treasury. This fee is calculated according to the area of hectares requested. Non-payment of this fee may give rise to the termination of the corresponding proceeding.

If upon review of the Mining Claim the judge considers that it satisfies the requirements of the Mining Code, the judge will order the Mining Claim to be registered at the applicable Mining Registrar and published in the official gazette. This must be fulfilled within 30 days of the judge’s order.

If the judge’s report is unfavorable he or she will order the applicant correct any observations within 8 days of the judge`s order.

Once the Mining Claim is duly published and registered and the tasa de manifestación paid, and within 200 days of the applicant’s submission of the Mining Claim to the Civil Court, the applicant must present a Measurement Request ( Solicitud de Mensura ) to the Court.

The Measurement Request must consist of a written document and a map and must include, amongst other details, the name of the mining engineer who will carry out the measurement. It must also be accompanied by the receipt of payment of the tasa de manifestación , receipt of registration of the Mining Claim and copy of the publication of the Mining Claim in the official gazette. At this stage the applicant must also pay the first

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mining patent, further details of which are outlined below. The receipt of this payment must also be included in the applicant`s request.

Once the judge reviews the Measurement Request, he or she will order it be published. If the judge’s review is unfavourable he or she will order the registration of the Mining Claim be cancelled. The applicant shall have 8 days to correct any mistakes. The Measurement Request must be published within 30 days of the judge’s order to do so.

Any third party oppositions to the Measurement Request must be submitted within 30 days of the Measurement Request´s publication. The only grounds for third party oppositions are that the measurement will be over land included in an exploitation or exploration Concession, or that a previous manifestation exists with preferential measurement rights.

Once the 30 days are over, the applicant must present a document attaching the publication receipt and certifying that there was no opposition to the Measurement Request.

Measurement may only commence once the opposition period of 30 days is over and the above documents submitted.

Once measurement is complete, the commissioned engineer must create minutes clearly narrating the manner and form that the boundary Universal Transverse Mercator coordinates were obtained (hereinafter, the “ Measurement Minutes ”).

Within 15 months of the Mining Claim submission to the Civil Court, the applicant must submit to the Court three copies of the Measurement Minutes. This obligation does not apply to applications subject to opposition. At this time the engineer must also send the Measurement Minutes and other related documents to SERNAGEOMIN.

The judge will send the Measurement Minutes to SERNAGEOMIN for their review and report. SERNAGEOMIN has 60 days from receipt of said file to complete its report.

If SERNAGEOMIN’S report has no objections, the judge will deliver the constitutive judgment of the exploitation Concession.

If SERNAGEOMIN’S report contains objections, the judge will order it to notify the applicant. The applicant must disprove the objections within 8 days or correct them within 60 days.

Within 120 days of the judge`s constitutive judgment, the applicant must publish an extract of the constitutive sentence in the official gazette.

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A copy of the publication in the official gazette must be delivered to SERNAGEOMIN and then registered in the applicable mining Registrar within 120 days of the judge`s constitutive judgment.

Upon registration of the publication of the extract of the constitutive judgment, a mining claim becomes a real property right, transferable and conveyable, and subject to any act or contract.

Payment of annual mining patents

In general terms the government cannot unilaterally suspend or terminate mining Concession rights however current regulations require that the holder of a mining Concession, regardless of its nature, pay a mining patent (or “ patente minera ”) in order to maintain the ownership over such Concession (hereinafter, “ Mining Patent ”). The Mining Patent must be paid on a yearly basis and in advance. Fees due are determined according to whether it is an exploration or exploitation Concession and the number of hectares of surface area.

Article 142 of the Mining Code stipulates that holders of exploitation Concessions must pay a Mining Patent equivalent to one-tenth (1/10) of a monthly tax unit (hereinafter, “ UTM ”) for each hectare, whereas holders of exploration Concessions pay one fiftieth (1/50) of a UTM for each hectare (please note that as at 01 February 2012, 1 UTM = CLP$39,373, approximately USD$80.56). Such payments are due in March of each year.

Article 146 of the Mining Code states that if a Mining Patent is not paid within the term provided by the Mining Code, the Chilean Treasury has the right to commence legal proceedings to obtain the pending payment by selling the mining Concession by public auction to the highest bidder. Those Concessions that are not bought or paid for are then declared void and are available for re-acquisition in the normal manner. The limitation to pursue payment is three years counted from the 1[st] of April of the year in which the Mining Patent should have been paid.

Notwithstanding the foregoing, in accordance with Section 127 of the former Mining Code (the Chilean Mining Code of 1932), corresponding mining rights will be irrevocably terminated by operation of law if mining royalties remain in arrears for two consecutive months.

Granting of rights of way or easements

The owners of mining Concessions are entitled to request rights of way or easements over surface land and/or mining Concessions owned by third parties, for the exclusive purpose of undertaking mineral exploration and exploitation. Interested parties may be in

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agreement or it may be by virtue of a court decision. In either case a reasonable amount of compensation shall be awarded to the affected party. In the event of a disagreement between two legitimate rights (mining rights versus surface land rights), in order to resolve any conflict, the Mining Code has established a right in favour of the miner.

Easements in favor of mining Concessions may be expanded or restricted according to the development of the works involved and will cease when their utilisation is discontinued. They are usually granted by public deed or court order.

In matters regarding mining easements, concurrence of easements exists, whereby an easement established for a given aim in favour of one mining Concession holder could also benefit the other mining Concession holder so long as their dual use is not incompatible.

Water Rights

Legal guarantees exist so that water rights can be obtained and maintained, be it surface, underground or marine water. Mining industry is subject to, inter alia , the Waters Code (or “ Codigo de Aguas DFL 1122 ”) and all regulations governing water rights (including Decretos 46, 90 and 1220 ).

Article 110 of the Mining Code provides that a mining Concession grants to its holder the right to use any water resources found while developing exploration and/or exploitation activities, whatever the case may be, but only for the purposes of such exploration and/or exploitation works. This is an inseparable right, in addition to and inseparable from the corresponding mining Concession. In the event that no water resources are found in the course of the exploration and/or exploitation activities, a water source shall be secured by incorporating water rights from the State of Chile, through the General Water Bureau (or “ Dirección General de Aguas ”), in accordance with the terms and conditions provided by law, or by purchasing said water rights from third parties.

Grounds for the Annulment of a Mining Concession

Article 95 of the Mining Code outlines certain grounds for the annulment of a mining Concession. An action to declare a mining Concession null and void may be filed by any person with an actual interest in the affected area, within four years from the date of publication in which the Concession was granted. A sole exception of the annulment grounds is set forth in Section 95 N.8 of the Mining Code (subject to special rules).

Should the four-year term elapse without an annulment action having been initiated, the right to pursue such action shall terminate by virtue of the Statute of Limitations.

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Sections 61 and 65 of the Mining Code impose an obligation on the holder of any mining petition, mining exploration Concession, mining claim or mining exploitation Concession, under certain circumstances, to oppose the constitution of any mining exploitation Concessions that overlap the above-mentioned rights. If such oppositions are not filed, the holder of any of the above mentioned rights will lose all preferential rights conferred on it by law in the corresponding area.

Agreements on Mining Rights

As outlined above, both mining exploration and mining exploitation rights in Chile, as well as mining petitions and mining claims, are real property rights, transferrable and conveyable, and subject to any acts or agreements. Section 169 of the Mining Code specifically provides that any option agreement can be granted on any right governed by the Mining Code, including mining rights and shares on mining rights.

Option agreements are granted by public deed and have to be registered in the corresponding Mines Conservator. Once an option agreement is granted, it must be respected by the offeror and any third parties. If the offeror executes any act or agreement affecting or limiting the tenure, possession or ownership of the assets granted in option while the option is pending, such act shall be considered null and void once the option is exercised. For all effects and purposes, an option agreement is considered an encumbrance over the assets granted in option.

No further consent from the offeror is needed in order to exercise the option in any option agreement.

Environmental Requirements, Rights and Procedures

Environmental matters are regulated by Law 19,300 (or ‘Ley del Medioambiente’ ). All mining development projects processing more than 5000 tonne per month of mineral substance or which produces significant changes to the area or that compels people living there to be relocated shall be obliged to submit an Environmental Impact Declaration (or 'Declaración de Impacto Ambiental' ). Article 11 of Law 19,300 provides for certain exceptions, for instance where there poses a health risk or the land is protected, in which case an Environmental Impact Assessment (or 'Estudio de Impacto Ambiental' ) is required. The Environmental Impact Assessment facilitates public participation and comment from affected parties.

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Environmental Impact Declarations and Environmental Impact Assessments both require the approval of the corresponding Regional Environmental Authorities (hereinafter, “ COREMA” ).

For projects less than the 5,000 tonne per month mark, the Environmental Impact Declaration is voluntary and replaces the need of permits otherwise required.

Mining exploration activities do not require neither an Environmental Impact Declaration nor an Environmental Impact Assessment unless they are performed in or around protected areas such as natural parks and archaeological sites, and if there is the possibility that it may cause adverse effects to natural resources or it represents a risk to the general population (in terms of health or quality of living). Where doubt arises as to whether either an Environmental Impact Assessment or an Environmental Impact Declaration is required, consultation should be made to the Environmental Evaluation Service.

Additionally, the National Service of Geology and Mining must be notified at the onset of any mining activities that involve exploration, mining or smelting minerals and the details of said activity.

All mining activities must comply with local labour law, occupational health and safety regulations and comply with municipal requirements with regards to industrial licenses and authorisations required to operate.

MINING RIGHTS OF THE COMPANY AND ESTRELLA CHILE

Estrella Chile currently has interests in four mining projects, known as “Agustina”, “Venus”, “Luna” and “Inca”.

Agustina Project

The Agustina Project is located in La Serena in Region IV of Chile.

The Project: 15 mining exploration Concessions, exploitation Concessions and mining petitions for exploration Concessions each with a surface area of 100, 200 or 300 hectares (hereinafter, “ Agustina Concessions ”), with a total application area of 2,500 hectares with a first preference surface area of 1850 hectares or 18.5km².

Agustina Option Agreement

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In relation to this Project, Estrella Chile entered into a unilateral option agreement (hereinafter, “ Agustina Option Agreement” ) with Inversiones y Mineria Andale Ltda (hereinafter, “ Andale” ) on 11 November 2011 for the option to purchase 100% of the Agustina Concessions (identification details of which are set out in the Independent Geologist's Report in this Prospectus) located in the IV Region of central northern Chile, known as the Agustina Project (hereinafter, “ Option ”).[1]

Andale has guaranteed that it is the exclusive owner of the Concessions and that all the Agustina Concessions are current and free from encumbrances.

The parties have agreed that the Agustina Option Agreement supersedes an earlier exclusivity agreement dated 23 September 2011 between Estrella Chile and Andale (hereinafter, “ Exclusivity Agreement ”) allowing Estrella Chile to explore the Agustina Concessions for the purposes of entering into the Agustina Option Agreement.

During the Agustina Option Agreement, Estrella Chile is required to pay to Andale, certain cash instalment payments totalling a maximum US$1,050,000 (hereinafter, “ Option Fees” ).

As at the date of this Prospectus, Estrella Chile has paid to Andale, US$75,000 under the Exclusivity Agreement and a further US$75,000 as the first instalment of the Option Fees payable under the Agustina Option Agreement (that is, in total US$150,000 up to the date of this Report).

1 On 25 November 2011 an Agreement to Complement the Agustina Option Agreement was entered into between Andale and Estrella to correctly individualise the Agustina Mining Concessions. Subsequently, on 12 January 2012 an Agreement to Rectify the Complementation to the Agustina Option Agreement was entered into between Andale and Estrella to amend an error in the Agreement to Complement the Agustina Option Agreement. No further modifications were made to the Agustina Option Agreement.

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The remaining instalments of the Option Fees are payable to Andale on the following specified dates:

DueDate	Amount
1 April 2012	US$75,000
1 July2012	US$75,000
1 October 2012	US$75,000
1January2013	US$87,500
1 April 2013	US$87,500
1 July2013	US$87,500
1 October 2013	US$87,500
1January2014	US$100,000
1 April 2014	US$100,000
1 July2014	US$100,000
1 October 2014	US$100,000

During the Option Period, Estrella Chile has the exclusive rights to conduct exploration activities on all of the valid Agustina Concessions. Estrella Chile is responsible for all of the costs of such exploration and development, defending any third party claims and all statutory fees to maintain the Agustina Concessions and associated rights in good standing, including arranging easements and water rights. Estrella Chile is also entitled to disclose the contents of the Agustina Option Agreement to potential investors.

Andale is required to provide Estrella Chile with unfettered access to all the areas of the Agustina Concessions.

Andale is entitled to visit the Agustina Concessions at its discretion and Andale has a right to receive from Estrella Chile certain information including an exploration plan, with an expected yearly budget and a yearly exploration report.

Upon exercise of the Option, in addition to the Agustina Concessions, the following rights will also be transferred to Estrella Chile:

(a) All rights to use the water supply that correspond to the Agustina Concessions;
(b) The domain or easements that correspond to the Agustina Concessions; and
(c) Any other mining rights in relation to the Agustina Concessions that Andale acquires during the Option Period.

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Andale must ensure that related parties that hold the above rights be transferred to Andale in order to satisfy the above clause of the Agustina Option Agreement.

Other essential terms of the Agustina Option Agreement:

(a) Should either party default of any of the conditions established in the Agreement, the other shall give written notification of the default and allow 30 days for its correction.
(b) If Estrella Chile does not correct the default within the stipulated period, it must give Andale a detailed report of all the technical information gathered as a result of the exploration or development programs of the Agustina Concessions. It must also leave Andale any improvements, construction, works on the Tenement Area (unless removed within 3 months of the Agustina Option Agreement dissolution).
(c) The Agustina Option Agreement also provides that during its term, Andale will not commit any act or omission in and around the Agustina Concessions that may, in the opinion of Estrella Chile prejudice the ownership, development or operation of the Agustina Concessions. If Andale breaches this term and does not rectify it within thirty days of receiving written notice, Estrella Chile shall immediately be entitled to seek injunctive relief and/or a claim for financial damages, costs and losses from Andale in respect of each breach.
(d) During the Option Period Andale is prohibited from carrying out any exploration, mining activities or extraction of any production/ore from any of the Agustina Concessions. If Andale breaches this term, Andale is required to pay to Estrella Chile 200% of any and all revenues in respect of any production/ore extracted from the Agustina Concessions.
(e) If Estrella Chile does not exercise the Option during the Option Period or expressly states via Public Deed its intention not to continue with the Agustina Option Agreement, the Agustina Option Agreement shall be at an immediate end. In these circumstances, Estrella Chile is not required to pay any further Option Fees or other monies to Andale, Andale is not required to pay any refund to Estrella Chile of any amounts previously paid to Andale under the Agustina Option Agreement or exclusivity agreement and Andale will not have any rights to claim further payments for compensation as against Estrella Chile.

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Estrella Chile may transfer any or all if it’s rights under the Agustina Option Agreement provided that the concessionary of such rights agrees to be bound by the same terms as those outlined in the Agustina Option Agreement

We confirm that the Agustina Option Agreement is registered in the Registry of Mines of La Serena to ensure that no other encumbrances can take priority over the Agustina Option Agreement.

Subject to the strict adherence to Mining Property Law and Regulations in Chile and its procedures (as outlined in this Report) we see no reason why an application for either of the following would be rejected in respect of those Agustina Concessions which expire in May 2012:

1) An extension request (provided that before the end of the first term the exploration Concession holder requests its extension and abandons concurrently at least fifty percent of the initial area granted); or

2) A mining claim (is lodged using the preferential rights given to the Concession holder to lodge a mining claim over an existing exploration Concession).”

Venus Project

The Venus Project is located in La Serena, in Region IV of Chile.

The Project: 46 Mining Petitions for exploration Concessions of total surface area of 100, 200 or 300 hectares (hereinafter, “ Venus Concessions ”). Total application area of 13,100 hectares with first preference surface area of 8,500 hectares or 85km².

All Mining Petitions were applied for in the name of Mr. Nicolas Coll Cervantes, lawyer, as ”[2] an Officious Agent (“ Agente Oficioso ) (hereinafter, “ Officious Agent ”) for Estrella Chile,

2 An Officious Agency (known in Chile as Agencia oficiosa or Gestion de negocios ajenos) is a quasi legal contract by which a person, without a formal power of attorney, manages one or more unrelated businesses, binding him or herself to the owner of the business and in some cases, generating obligations for the owner to third parties. Officious Agencies are regulated by Articles 2286-2294 of the Chilean Civil Code.

An Officious Agency’s (hereinafter “OA”) duties are identical to those of an official representative or authorised agent´s duties. In carrying out these duties, the OA is required to exercise the care a reasonable Pater Familia would take (that is, liable for ordinary negligence), but his or her level of liability shall depend on the circumstances in which the Official Agency took place. The liabilities, obligations, reimbursements, payments and prohibitions of an OA are all clearly outlined in the Chilean Civil Code.

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with all payments made by Estrella Chile. An Accountability Agreement (‘ Rendición de Cuentas de Agencia Oficiosa ´) was signed by Mr. Nicolas Coll Cervantes in favour of Estrella Chile on 12 January 2012.[3] Upon award of the Venus Concessions, Mr. Nicolas Coll Cervantes, must account pursuant to his Official Agent status, acting for and on behalf of Estrella Chile and undertake to transfer title of the Venus Concessions to Estrella Chile. The aforementioned Accountability Agreement was signed before the Notary Public of Santiago Mr. Hernán Cuadra Gazmuri and has been reduced to a filed public deed and is fully enforceable by Estrella Chile.

Luna Project

The Luna Project is located in the boroughs of Ovalle, Monte Patria and Vicuña, in the IV Region of Chile.

The Project: 89 Mining Petitions for Exploration Concessions (hereinafter, “ Luna Concessions ”) of total surface area of either 200 or 300 hectares. Total application area of 26,200 hectares with a first preference surface area of 20,800 hectares or 208km².

All Mining Petitions were applied for in the name of Mr. Sebastián Huidobro Carrere, lawyer, as an Officious Agent for Estrella Chile, with Estrella Chile funds. An Accountability Agreement was signed by Mr. Sebastián Huidobro Carrere in favour of Estrella Chile on 22 September 2011.[4] Upon award of the Luna Concessions, Mr. Sebastián Huidobro Carrere, must account pursuant to his Officious Agent status, acting for and on behalf of Estrella Chile and undertake to transfer title of the Luna Concessions to Estrella Chile. This Accountability Agreement was signed before the Notary Public of Santiago Mr. Hernán Cuadra Gazmuri and has been reduced to a filed public deed fully enforceable by Estrella Chile.

Inca Project

3 Rectification was made on 27 February 2012 to amend a typing error in the original Accountability Agreement with Mr. Nicolas Coll Cervantes. The typing error had no bearing on the validity of the Accountability Agreement but the rectification was made to keep the documentation in order.

4 Rectification was made on 27 February 2012 to amend a typing error in the original Accountability Agreement with Mr. Sebastián Huidobro Carrere. The typing error had no bearing on the validity of the Accountability Agreement but the rectification was made to keep the documentation in order.

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The Inca Project is surrounded by the Luna Project and is located within the boroughs of Ovalle, Monte Patria and Vicuña, in Region IV of Chile.

The Project: 19 exploration Concessions (hereinafter, “ Inca Concessions ”) of total surface area of either 200 or 300 hectares. Total surface area was 5,400 hectares or 54km². The Inca Concessions have been permitted to lapse in accordance with the Finder’s Fee Agreement (detailed below) such that the Inca Concessions are now within the Luna Concessions (that is, the Inca Concessions form part of the entire Luna Concessions).

Inca Finder’s Fee Agreement

Estrella Chile entered into a finder’s fee agreement (hereinafter, the “ Inca Finder´s Fee Agreement” ) with Mr. Juan A Bazan (hereinafter, the “ Discoverer ”) on 30 June 2011 in relation to the exploration and exploitation of the area covered by the Inca Concessions.

The Discoverer previously held the title to the Inca Concessions and recommended the area comprising the Inca Project to the Company but has allowed these to lapse to allow the Luna Mining Petitions (which cover the Inca Concessions area) to take preferential rights.

According to the Inca Finder’s Fee Agreement and it`s addendum signed on 10 February 2012, subject to certain conditions, the Discoverer is entitled to:

(a) A Finder’s Fee of progressive cash payments of an aggregate of USD$400,000 payable subject to the progressive establishment of preferential rights over the area covered by the Inca Concessions.
(b) A Net Smelter Royalty equivalent to 1.5% of the annual Net Operating Cashflow relating solely to the area covered by the Inca Concessions.
(c) A Right of Participation equivalent to 8.5% of the Net Present Value of the area covered by the Inca Concessions according to a Bankable Feasibility Study to commercially exploit the mineral reserves of the area covered by the Inca Concessions.

Details of the above points are as follows:

Finder’s Fee payments

Pursuant to Clause 3 of the Inca Finder’s Fee Agreement, for the Discoverer to be entitled to the progressive Finder’s Fee cash payments, the following conditions must be met:

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(a) Estrella Chile acquires the preferential mining rights to explore and/or exploit the area covered by the Inca Concessions, and
(b) Estrella Chile undertakes geological exploration of the area covered by the Inca Concessions which indicates there is an economic interest from a geological perspective, and
(c) Estrella Chile carries out a feasibility study which establishes that the area covered by the Inca Concessions is viable for economic exploitation.

As at the date of this Report, pursuant to the Inca Finder’s Fee Agreement, Estrella Chile has paid the Discoverer an aggregate of US$50,000.

Subject to certain conditions, Estrella Chile shall pay to the Discoverer up to a further aggregate of US$350,000, comprising:

(a) US$75,000 12 months after the establishment of the Preferential Mining Rights in relation to the area covered by the Inca Concessions;
(b) US$125,000 18 months after the establishment of the Preferential Mining Rights in relation to the area covered by the Inca Concessions; and
(c) US$150,000 30 months after the establishment of the Preferential Mining Rights in relation to the area covered by the Inca Concessions.

Net Smelter Royalty

Once the conditions (a), (b) and (c) outlined in 3.4.1.1 above are complied with, Estrella Chile shall pay the Discoverer a Net Smelter Royalty equivalent to 1.5% of the annual Net Operating Cashflow of the area covered by the Inca Concessions (hereinafter, “ NSR ”).

“Net Operating Cashflow” is defined as being all the net revenue from sales of production directly and solely from the area covered by the Inca Concessions, less:

(a) All Concession operating expenses;
(b) All Concession exploration expenses;
(c) All Concession development expenses;
(d) Any production taxes/royalties; and
(e) Any other local and state taxes.

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136 ESTRELLA RESOURCES

The NSR will be payable upon the following conditions being met:

(a) Estrella Chile constructs a mine which includes area covered by the Inca Concessions and commercial production commences;
(b) ores are extracted from the area covered by the Inca Concessions up to the point where they are in the condition of concentrates and/or precipitates; and
(c) the concentrates from the area covered by the Inca Concessions are sent to a smelting plant or the precipitates are sold and the Company receives a NSR.

The NSR Royalty shall be paid from time to time for a period of five years commencing from the time concentrates or precipitates are produced at the mine.

Throughout the five year period during which the Royalty applies, Estrella Chile has a preferential right to buy-back the Royalty for US$1,000,000 (hereinafter, “ Buy-Back Price” ).

In the event that Estrella Chile decides to exercise the preferential right to buy-back the NSR Royalty, the Buy-Back Price will be less any NSR already paid to the Discoverer under the NSR Royalty.

Right of Participation

Estrella Chile has agreed to give the Discoverer 8.5% of the perceived economic benefit of the Inca Project.

The “perceived economic benefit” is defined as the Net Present Value of the project as determined by a Bankable Feasibility Study to commercially exploit the Ore Reserves of the area covered by the Inca Concessions.

“Ore Reserves” are defined as those portions of Mineral Resources which, after the application of all mining factors, result in an estimated tonnage and grade which, in the opinion of the Competent Person making the estimates, can be the basis of a viable project, after taking account of all relevant modifying factors.

The Discoverer must contribute 8.5% to the costs and expenses of developing/exploring the Inca Project.

In the event that the Discoverer does not contribute 8.5% of the costs and expenses of developing/exploring the Inca Project, the Discoverer’s 8.5% interest in the area covered

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SECTION 13 – LEGAL TENEMENT REPORT 137

by the Inca Concessions will be reduced to reflect the proportion that has not been contributed.

Obligations

The Inca Finder´s Fee Agreement also requires the Discoverer to cooperate with Estrella Chile to ensure all acts necessary for the successful development of the Inca Project are undertaken.

Further, the Discoverer shall inform and give preferential rights to Estrella Chile with respect to any Mining Petitions or Claims or Mining Concessions located within a 10 kilometre radius of the Inca Project.

COMPANY STRUCTURE OF ESTRELLA CHILE

Estrella Resources Chile Sociedad Anónima (hereinafter, “Estrella Resources Chile S.A.” ) was established as a limited liability stock corporation ( Sociedad Anónima ) incorporated under Chilean law by virtue of public deed granted 23 June 2011, before the Notary Public of Santiago, Mr. Hernán Cuadra Gazmuri. The corresponding bylaws are registered on page 36,021, number 26,970 of 2011 Commercial Registry of the Real Estate Conservator of Santiago, with all relevant amendments having been annotated at the margin therein.

Estrella Resources Chile S.A.’s equity capital was held by the Company with 90% participation and by Helmsec Nominees Pty Limited with 10% participation therein (subject to a Deed of Bare Trust whereby Helmsec Nominees Pty Limited held such 10% of Estrella Chile for and on behalf of the Company). Estrella Chile has held all necessary meetings of Directors and Shareholders to subsequently change Estrella Resources Chile S.A. to become Estrella Resources Chile SpA.

Accordingly, Estrella Resources Chile S.A.’s company structure has changed from a stock corporation ( Sociedad Anónima , or “S.A.” ) to a joint stock company ( Sociedad por Acciones, or “SpA” )[5] by the name of Estrella Resources Chile SpA. This restructure was for the purposes of allowing the totality of the shares to be held by one shareholder (the

5 The Sociedad por Acciones (“SpA”) is a relatively new type of entity to Chile. It is similar to a Sociedad Anonima (“S.A.”) but can be established with just the one shareholder. The SpA was created in response to a need for a corporate vehicle to encourage the establishment and growth of small and mid-sized businesses. It seeks to combine the flexibility in management with the structure of rights and obligations prevailing in a S.A. SpAs have greater autonomy as to what their by-laws may provide as compared with the S.A.

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138 ESTRELLA RESOURCES

Company). Subsequently, Estrella Chile now has only one shareholder, namely the Company.

LEGAL OPINION

The legal opinions stated in this document are subject to the following qualifications:

First: Only the laws of Chile have been considered in this opinion;

Second: The following points have been assumed, without verification or independent investigation, of all the documents reviewed for the purposes of this legal opinion:

(a) the legal capacity of all natural persons;
(b) the genuineness of all signatures thereon;
(c) the authenticity of all the documents and records presented as originals and the conformity with the originals of all documents and records presented as copies; and
(d) the due authorisation, execution and delivery of all documents by the parties thereto.

Third: With respect to technical information provided herein, we have relied upon information provided by third parties, including that of Mines and Investment Chile S.A. and its representatives, Mr. Juan Bedmar, Mr. Juan Bazan and that of Agents in the city of La Serena. We have also relied upon the aforementioned information being accurate, complete and up to date at the date of its receipt.

Fourth: We have assumed that all instructions or information which we have received from the Company, including its subsidiaries, and any of its officers, agents or representatives is accurate and complete in all respects.

Fifth: We express no opinion upon whether the mining property currently under constitution proceedings (mining petitions and mining claims) will ultimately be granted in whole or in part notwithstanding that should the steps required by the holder of such mining property be accomplished within the timeframe provided by the law for each of such steps, the final exploration or exploitation Concessions are to be granted.

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SECTION 13 – LEGAL TENEMENT REPORT 139

Sixth: We express no opinion whether the mining property currently under constitution proceedings (mining petitions or mining claims) and the mining property already constituted as mining exploration Concessions and mining exploitation Concessions will continue to be valid and binding in those cases in which the holder of such rights will have to exercise the corresponding actions provided by Chilean law with the purpose of avoiding overlaps.

Seventh: We express no opinion on surface rights, easements, water rights or any overlapping interests.

Based on the information reviewed by us, we are of the legal opinion that:

(a) Estrella Chile has been duly incorporated in accordance with the laws of Chile, it legally exists and is in good standing;
(b) Andale has been duly incorporated in accordance with the laws of Chile, it legally exists and is in good standing;
(c) The Agustina Option Agreement is valid and binding and all obligations stipulated therein are enforceable against the parties respectively bound thereby;
(d) The Inca Finder’s Fee Agreement is valid and binding and all obligations stipulated therein are enforceable against the parties respectively bound thereby;
(e) No mining-related laws have come into effect or are scheduled to come into effect in the next 6 months that would affect foreign ownership of mining interests, royalties, land access, labour relations/employment, the grant or maintenance of exploration Concessions, the assignment of mining rights (eg. any stamp duty or taxes to transfer Concessions) or that will affect the Company's conduct of exploration activities or environmental requirements at its projects in Chile.
(f) As regards the legal status of the Mining Property, we are of the opinion that:

In connection with the Agustina Project:

Agustina Uno and Agustina Cuatro: are validly constituted exploration Concessions registered in the name of Andale. Both must be renewed before 15 July 2012.

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140 ESTRELLA RESOURCES

Garrafon, Violeta Uno, Violeta Dos and Violeta Tres: are validly constituted and registered under the name of Andale. We note that some of these Concessions are due to expire in May 2012 and others in July 2012 and must be renewed before their expiry date.

Violeta Cuatro (Application area of 100 hectares): appears to be constituted but no details to confirm were found at the Mines Registry. Estrella Chile has instructed us to continue with our investigations in this regard.

Agustina Mining Claims:

Agustina Dos 1 - 20 and Agustina Dos 21 - 40: all have been lodged to create exploitation Concessions and all are registered in the name of Andale. Measurement Requests have been lodged for both Mining Claims and are under industry standard review by SERNAGEOMIN. Both have application areas of 100 hectares.

Garrafal 1 – 60: has been lodged to create an exploitation Concession and is registered in the name of Andale (Application area of 300 hectares).

Tina 1 - 20: has been lodged to create an exploitation Concession and is registered in the name of Andale (Application area of 100 hectares). According to information available on the Court’s website the Measurement Request for this Claim was lodged, processed and carried out and the Court delivered its constitutive Judgment. At present, this information cannot be re-confirmed until access to Court files is available to us.

Agustina Exploitation Concessions:

– –
(a) Agustina 1 20, Agustina 41 60, Agustina Dos 41 60 and Agustina Cuatro 1 - 20: are all validly constituted exploitation Concessions duly registered under the name of Andale.
(b) The Mining Patents of the Agustina Concessions have all been paid up until the date of this Legal Opinion, and
(c) None of the Agustina Concessions are subject to liens, prohibitions, embargoes or lawsuits of any kind.

In connection with the Venus Project

In relation to the Venus Concessions (being Venus Mining Petitions 1 to 46 inclusive) (hereinafter, “ Venus Mining Petitions ”) all these were presented to the Page | 23

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SECTION 13 – LEGAL TENEMENT REPORT 141

local Civil Court of La Serena on 06 October 2012 and are being processed for constitution.

Venus Mining Petitions 6, 7, 14, 15, 28, 29, 31, 43, 44 and 46 appear to have 100% preferential rights over the totality of their respective areas (that is there are no overlaps with any third party Concessions).

Venus Mining Petitions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 30, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42 and 45 are all subject to partial overlaps with third parties. Those parts of the Venus Concessions that have prior ranking or overlapped areas are subject to the later lapsing of such first preferential Concessions before Estrella Chile can be granted first preference rights to such areas. Areas within the Venus Concessions that do not have any first preference or overlapped areas remain available to be immediately granted first preference to Estrella Chile.

As outlined above, all Venus Mining Petitions have been applied for under the name of Mr. Nicolas Coll Cervantes, lawyer, as an Officious Agent of Estrella Chile. Mr. Nicolas Coll Cervantes executed an Accountability Agreement (‘ Rendicion de Cuentas ´) on 12 January 2012 to Estrella Chile, which document is valid and binding and all obligations stipulated therein are enforceable against the parties respectively bound thereby.

(a) All mining patents of the Venus Mining Petitions have been paid up until the date of this Legal Opinion, and
(b) The judicial constitution process for the formal granting of the Venus Concessions is subject to a pending decision from the Court of Appeal of La Serena.

On 23 November 2011 an independent third party individual submitted an invalidity request to the Civil Court of La Serena to declare each of the Venus Mining Petitions invalid. The grounds presented for this request were that the Mining Petitions did not include the applicant’s nationality as stipulated in Article 43 Number 1 of the Mining Code. The request also included a request for it to be referred as a “Consultation” to the Court of Appeals should it be rejected by the Civil Court.

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142 ESTRELLA RESOURCES

On 29 November 2011 the Civil Court of La Serena issued written notice rejecting the request to declare the Mining Petitions invalid. This decision means the Mining Petitions are to proceed to be processed within the usual judicial constitution process.

The Civil Court decision may be referred to the Court of Appeals. Our opinion is that it is most likely that the Courts of Appeal will also reject the invalidity request. This may, however, delay the constitutional judgment of the Venus Mining Petitions.

Our opinion regarding the Court of Appeal Outcome:

Whilst Article 43 of the Mining Code states that, amongst other information, a Mining Petition must include the nationality of the applicant, it does not indicate a penalty for failing to include this information. Furthermore, Article 49 states that if a Mining Petition does not include the dispositions outlined in Articles 43, 44 and 45, the Court of Appeal judges shall identify the defects and instruct the applicant to correct these within 8 days. In the case of the Venus Mining Petitions, the Civil Court Judge did not request the applicant to correct the defects, nor did he trigger a timeline to do so. The Civil Court Judge rejected the request to declare the Mining Petitions invalid.

We note that the Mining Code imposes sanctions where fatal timelines were not abided by. No sanction was imposed by the Civil Court judge in the case of the Venus Mining Petitions.

Following the logical reasoning in the Mining Code as to what is considered fatal, and the fact that the applicant’s nationality is not an element included in constitutive sentences (Article 87 of the Mining Code), we are of the opinion that the Court of Appeal will confirm the decision of the Civil Court and reject the request to declare the Venus Mining Petition void.

As no resolution from the judge has ever been issued regarding the lack of nationality on the manifestación, it is highly unlikely that an objection based on the failure to include the nationality can be accepted, as was the case in the first instance. All issues, apart from those of a technical nature (for example, the area of the manifestación), are subject to be corrected upon the judge’s request.

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SECTION 13 – LEGAL TENEMENT REPORT 143

No further actions/appeals can be lodged against the Court of Appeal’s final decision. Therefore the Court of Appeal resolution will be final and binding. We are currently waiting for the Court of Appeal’s final decision.

In connection with the Luna Project

In relation to the Luna Concessions (being Luna exploration Concessions 1 to 89 inclusive):

(a) Luna Concessions 9, 10, 18, 19, 20, 32, 33, 34, 35, 36, 37, 38, 39 and 52 have all been duly constituted and are currently in force.
(b) Luna exploration Concessions 1 to 8, 11, 12, 14 to 17, 21, 23 to 31, 40 to 51 and 53 to 89 were all presented to the applicable Civil Court of Ovalle on 07 June 2011 and, in our opinion, are being processed satisfactorily for constitution as exploration Concessions. We are of the opinion that there appears to be no impediment to formal grant of exploration Concessions.
(c) Luna 13 and 22 are subject to a small, partial overlap (totaling 0.25 km[2.] ) with an exploitation permit already held by an independent third party, that is Estrella Chile will not be granted first preference rights to these overlapped areas.
(d) As outlined above the Luna Mining Petitions have been applied for under the name of Mr. Sebastián Huidobro Carrere, lawyer, as an Officious Agent of Estrella Chile. Mr. Sebastián Huidobro Carrere executed an Accountability Agreement on 22 September 2011 in favour of Estrella Chile, which document is valid and binding and all obligations stipulated therein are enforceable against the parties respectively bound thereby. Title to the Luna Concessions shall be transferred once these have been validly constituted.
(e) The Mining Patents of the Luna Concessions have all been paid up until the date of this Legal Opinion, and
(f) None of the Luna Concessions are subject to liens, prohibitions, embargoes or lawsuits of any kind.

In connection with the Inca Project

(a) The Inca Concessions had originally been constituted and registered under the name of entities related to Juan A Bazan but have been allowed to lapse. The Inca Concessions have been allowed to lapse to allow the Luna Mining Petitions (which include the areas previously known as the Inca Concessions area) to take preferential rights.

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144 ESTRELLA RESOURCES

(b) The Mining Patents of the Inca Concessions have been allowed to lapse, and
(c) The Inca Finder’s Fee Agreement is binding upon Estrella Chile and Mr. Juan A Bazan.

Yours faithfully

HARRIS GOMEZ GROUP

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Harris Gomez

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SECTION 13 – LEGAL TENEMENT REPORT 145

Section 14 Glossary

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Image: Dr Jason Berton mapping Agustina (Oct 2011)

146 ESTRELLA RESOURCES

Glossary

Terms defined in the independent experts’ reports have the same meanings ascribed to them throughout this Prospectus unless otherwise stated or unless inconsistent with the context in which the expression is used. Other expressions are used throughout this Prospectus that are not defined in the various independent experts’ reports and, unless otherwise stated or unless inconsistent with the context in which the expression is used, each of the following expressions have the meaning set out below:

Term	Defnition
$orA$orAUD	means references to dollar amounts in Australian currency.
Act	means the_Corporations Act 2001(Cth)_as in force within Australia.
AEDT	means Australian Eastern Daylight Saving Time.
AEST	means Australian Eastern Standard Time.
Agustina Option Agreement	means the agreement between Estrella Chile and Inversiones y Mineria Andale Ltda,
	details of which are summarised in Section 9 of the Prospectus.
Agustina Project	means the exploration project known as the ‘Agustina Project’ located in Central Chile,
	details of which are indicated in the Independent Geologist’s Report.
Applicant	means a person who makes an application for Shares.
Application	means an application for Shares under this Prospectus made by an Applicant under an
	Application Form.
Application Form	means the form accompanying this Prospectus after this Section 14 by which an
	Applicant may apply for Shares under the Offer.
Application Monies	means monies received by the Company from Applicants with respect to Applications.
ASIC	means the Australian Securities and Investments Commission.
ASX	means ASX Limited ACN 008 624 691.
ASX Settlement	means ASX Settlement Pty Limited ACN 008 504 532.
ASX Settlement Rules	means the operating rules of ASX Settlement from time to time.
Closing Date	means 5.00pm (AEDT) on the date the Offer closes, which is set out in the “Important
	Information” Section and may be varied by the Company.
Company	means Estrella Resources Limited ACN 151 155 207.
Concession	means an exploitation and/or exploration mining concession in Chile.
DirectorsorBoard	means the board of directors of the Company.
Estrella	means the Company.
Estrella Chile	means Estrella Resources Chile SpA.
Finder’s Fee Agreement	means the agreement between the Company and the discoverer, details of which are
	summarised in Section 9 of the Prospectus.
Group	means the Company and its subsidiary, Estrella Chile.
GST	means goods and services tax.
Helmsec	means Helmsec Global Capital Limited ACN 129 825 798.
Independent Geologist	means SRK Consulting (Australasia) Pty Ltd ACN (074 271 720).
Independent Geologist’s Report	means the independent geologist’s report prepared by SRK Consulting (Australasia) Pty
	Ltd dated April 2012, as set out in Section 4 of this Prospectus.
Inca Project	means the exploration project known as the ‘Inca Project’ located in Central Chile,
	details of which are indicated in the Independent Geologist’s Report.
IPO	means the initial public offering of the Company’s Shares under the Offer in this
	Prospectus and subsequent listing on the ASX.
(IOCG) Iron Oxide Copper Gold	means deposits that contain Iron, copper and gold.
Issue Date	means 11 April 2012.

SECTION 14 – GLOSSARY 147

Term	Defnition
JORC	means the Joint Ore Reserves Committee.
Lead Manager	means Helmsec.
Legal Tenement Report	means the legal tenement report prepared by Harris Gomez Lawyers as set out in
	Section 13 of this Prospectus.
Listing Rules	means the listing rules of ASX.
Luna Project	means the exploration project known as the ‘Luna Project’ located in Central Chile,
	details of which are indicated in the Independent Geologist’s Report.
Mandate Letter	means the agreement dated 22 August 2011 as detailed in Section 9 of this
	Prospectus.
Mt	means million tonnes.
Offer	means the offer to the public to apply for 30,000,000 Shares under this Prospectus.
Offer Price	means $0.20 per Share.
Offcial List	means the offcial list of ASX.
Offcial Quotation	means offcial quotation of the Shares on the Offcial List.
Opening Date	means the date the Offer opens, which is set out in the “Important Information” Section
	and may be varied by the Company.
Option	means an unlisted option to acquire a Share.
Option Holder	means a person who holds one or more Options.
Projects	mean each of the Agustina Project, the Venus Project, the Luna Project and the
	Inca Project.
Prospectus	means this prospectus as modifed or varied by any supplementary prospectus made
	by the Company and lodged with ASIC from time to time.
Share	means a fully paid ordinary share in the issued capital of the Company.
Share Registry	means Boardroom Pty Limited ACN 003 209 836.
Shareholder	means a person who holds one or more Shares.
SRK	means the Independent Geologist.
Venus Project	means the exploration project known as the ‘Venus Project’ located in Central Chile,
	details of which are indicated in the Independent Geologist’s Report.

148 ESTRELLA RESOURCES

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Application Form

Fill out this Application Form if you wish to apply for Shares in Estrella Resources Limited (ACN 151 155 20).

(ACN 151 155 20). Broker Reference – Stamp Only Please read the Prospectus dated 11 April 2012. Broker Code Advisor Code Follow the instructions to complete this Application Form (see reverse). Print clearly in CAPITAL LETTERS using black or blue pen. A Number of shares you are applying for BB Total amount payable

Please read the Prospectus dated 11 April 2012.
Follow the instructions to complete this Application Form (see reverse).
Print clearly in CAPITAL LETTERS using black or blue pen.

x $0.20 per share =

Minimum of 10,000 Shares ($2,000.00) to be applied for and thereafter in multiples of 2,500 Shares ($500.00).

C Write the name(s) you wish to register the Shares in (see reverse for instructions)

Applicant 1

Name of Applicant 2 or

Name of Applicant 3 or

D Write your postal address here

Number/Street



Suburb/Town	State	Postcode

E CHESS participant – Holder Identification Number (HIN)

X

Important please note: If the name and address details above in Sections C and D do not match exactly with your registration details held at CHESS, any Securities issued as a result of your application will be held on the Issuer Sponsored subregister.

F Enter your Tax File Number(s), ABN, or exemption category

Applicant #1 Applicant #2

Applicant #3

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

G Cheque payment details –  PIN CHEQUE(S) HERE
Please enter details of the cheque(s) that accompany this application.
Name of drawer of cheque Cheque No. BSB No. Account No. Cheque Amount A$
H Contact telephone number (Daytime/Work/Mobile) II Email address
----- End of picture text -----

By submitting this Application Form, I/We declare that this Application is completed and lodged according to the Prospectus and the instructions on the reverse of the Application Form and declare that all details and statements made by me/us are complete and accurate. I/We agree to be bound by the constitution of Estrella Resources Limited (the Company ). I/We was/ were given access to the Prospectus together with this Application Form. I/We represent, warrant and undertake to the Company that our subscription for the above Shares will not cause the Company or me/us to violate the laws of Australia or any other jurisdiction which may be applicable to this subscription for Shares in the Company.

Guide to the Application Form

yOU SHOULD READ THE PROSPECTUS CAREFULLy BEFORE COMPLETING THIS APPLICATION FORM.

Please complete all relevant sections of the appropriate Application Form using BLOCK LETTERS.

These instructions are cross-referenced to each section of the Application Form.

Instructions

(A) If applying for Shares insert the number of Shares for which you wish to subscribe at Item A (not less than 10,000 and then in multiples of 2,500 multiplied by A$0.20 to calculate the total for Shares and enter the $amount at Item B .
(B) Write your full name . Initials are not acceptable for first names.
(C) Enter your postal address for all correspondence. All communications to you from the Company will be mailed to the person(s) and address as shown. For joint Applicants, only one address can be entered.
(D) If you are sponsored in CHESS by a stockbroker or other CHESS participant, you may enter your CHESS HIN if you would like the allocation to be directed to your HIN.

NB: your registration details provided must match your CHESS account exactly.

(E) Enter your Australian tax file number (“ TFN ”) or ABN or exemption category, if you are an Australian resident. Where applicable, please enter the TFN /ABN of each joint Applicant. Collection of TFN’s is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application Form.
(F) Complete cheque details as requested. Make your cheque payable to “Estrella Resources Limited”, cross it and mark it “ Not negotiable ”. Cheques must be made in Australian currency, and cheques must be drawn on an Australian bank.
(G) Enter your contact details so we may contact you regarding your Application Form or Application Monies.
(H) Enter your email address so we may contact you regarding your Application Form or Application Monies or other correspondence.

Correct Forms of Registrable Title

Note that ONLY legal entities can hold the Shares. The Application must be in the name of a natural person(s), companies or other legal entities acceptable to the Company. At least one full given name and surname is required for each natural person.

Examples of the correct form of registrable title are set out below.

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

Type of Investor Correct Form of Registrable Title Incorrect Form of Registrable Title
Individual Mr John David Smith J D Smith
Company ABC Pty Ltd ABC P/L or ABC Co
Joint Holdings Mr John David Smith & John David &
Mrs Mary Jane Smith Mary Jane Smith
Trusts Mr John David Smith John Smith Family Trust

Deceased Estates Mr Michael Peter Smith John Smith (deceased)

Partnerships Mr John David Smith & Mr Ian Lee Smith John Smith & Son
Clubs/Unincorporated Bodies Mr John David Smith Smith Investment Club

Superannuation Funds John Smith Pty Limited John Smith Superannuation Fund
X
----- End of picture text -----

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Lodgement

Mail your completed Application Form with cheque(s) attached to the following address:

Mailing address:

Estrella Resources Limited C/- Boardroom Pty Limited GPO Box 3993 SYDNEY NSW 2001

Delivery address:

Estrella Resources Limited C/- Boardroom Pty Limited Level 7 207 Kent Street SYDNEY NSW 2000

It is not necessary to sign or otherwise execute the Application Form.

If you have any questions as to how to complete the Application Form, please contact Boardroom Pty Limited on 1300 737 760.

Privacy Statement:

Boardroom Pty Limited advises that Chapter 2C of the Corporations Act 2001 (Cth) requires information about you as a shareholder (including your name, address and details of the shares you hold) to be included in the public register of the entity in which you hold shares. Information is collected to administer your shareholding and if some or all of the information is not collected then it might not be possible to administer your shareholding. Your personal information may be disclosed to the entity in which you hold shares. You can obtain access to your personal information by contacting us at the address or telephone number shown on the Application Form.

Our privacy policy is available on our website (http://www.boardroomlimited.com.au/help/share_privacy.html).

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Application Form

Fill out this Application Form if you wish to apply for Shares in Estrella Resources Limited (ACN 151 155 20).

(ACN 151 155 20). Broker Reference – Stamp Only Please read the Prospectus dated 11 April 2012. Broker Code Advisor Code Follow the instructions to complete this Application Form (see reverse). Print clearly in CAPITAL LETTERS using black or blue pen. A Number of shares you are applying for BB Total amount payable

Please read the Prospectus dated 11 April 2012.
Follow the instructions to complete this Application Form (see reverse).
Print clearly in CAPITAL LETTERS using black or blue pen.

x $0.20 per share =

Minimum of 10,000 Shares ($2,000.00) to be applied for and thereafter in multiples of 2,500 Shares ($500.00).

C Write the name(s) you wish to register the Shares in (see reverse for instructions)

Applicant 1

Name of Applicant 2 or

Name of Applicant 3 or

D Write your postal address here

Number/Street



Suburb/Town	State	Postcode

E CHESS participant – Holder Identification Number (HIN)

X

F Enter your Tax File Number(s), ABN, or exemption category

Applicant #1 Applicant #2

Applicant #3

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Guide to the Application Form

yOU SHOULD READ THE PROSPECTUS CAREFULLy BEFORE COMPLETING THIS APPLICATION FORM.

Please complete all relevant sections of the appropriate Application Form using BLOCK LETTERS.

These instructions are cross-referenced to each section of the Application Form.

Instructions

(A) If applying for Shares insert the number of Shares for which you wish to subscribe at Item A (not less than 10,000 and then in multiples of 2,500 multiplied by A$0.20 to calculate the total for Shares and enter the $amount at Item B .
(B) Write your full name . Initials are not acceptable for first names.
(C) Enter your postal address for all correspondence. All communications to you from the Company will be mailed to the person(s) and address as shown. For joint Applicants, only one address can be entered.
(D) If you are sponsored in CHESS by a stockbroker or other CHESS participant, you may enter your CHESS HIN if you would like the allocation to be directed to your HIN.

NB: your registration details provided must match your CHESS account exactly.

(E) Enter your Australian tax file number (“ TFN ”) or ABN or exemption category, if you are an Australian resident. Where applicable, please enter the TFN /ABN of each joint Applicant. Collection of TFN’s is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application Form.
(F) Complete cheque details as requested. Make your cheque payable to “Estrella Resources Limited”, cross it and mark it “ Not negotiable ”. Cheques must be made in Australian currency, and cheques must be drawn on an Australian bank.
(G) Enter your contact details so we may contact you regarding your Application Form or Application Monies.
(H) Enter your email address so we may contact you regarding your Application Form or Application Monies or other correspondence.

Correct Forms of Registrable Title

Examples of the correct form of registrable title are set out below.

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Lodgement

Mail your completed Application Form with cheque(s) attached to the following address:

Mailing address:

Estrella Resources Limited C/- Boardroom Pty Limited GPO Box 3993 SYDNEY NSW 2001

Delivery address:

Estrella Resources Limited C/- Boardroom Pty Limited Level 7 207 Kent Street SYDNEY NSW 2000

It is not necessary to sign or otherwise execute the Application Form.

If you have any questions as to how to complete the Application Form, please contact Boardroom Pty Limited on 1300 737 760.

Privacy Statement:

Our privacy policy is available on our website (http://www.boardroomlimited.com.au/help/share_privacy.html).

CORPORATE DIRECTORY

DIRECTORS

Mr Gavin Solomon (Non-Executive Chairman) Dr Jason Berton (Managing Director) Mr Julian Bavin (Non-Executive Director) Mr Simon Kidston (Non-Executive Director)

COMPANy SECRETARy

Mr Justin Clyne

REGISTERED OFFICE

Level 17, 15 Castlereagh Street Sydney NSW 2000 Telephone: +61 2 9993 4408 Facsimile: +61 2 9993 4433

WEBSITE

www.estrellaresources.com.au

PROPOSED ASX CODE

AUSTRALIAN SOLICITORS TO THE COMPANy

Middletons

Level 26, 52 Martin Place Sydney NSW 2000

Telephone: +61 2 9513 2300 Facsimile: +61 2 9513 2399 Website: www.middletons.com.au

TENEMENT LAWyER AND CHILEAN LAWyERS TO THE COMPANy

Harris Gomez

Av. Vitacura 5250 Of. 802 Santiago Chile Telephone: +56 2 2421157 Website: www.hgomezgroup.com

INDEPENDENT GEOLOGIST

ESR

SRK Consulting

LEAD MANAGER TO THE OFFER

Level 1, 10 Richardson Street West Perth WESTERN AUSTRALIA 6005

Helmsec Global Capital Limited

Level 17, 15 Castlereagh Street Sydney NSW 2000 Telephone: +61 2 9993 4444 Facsimile: +61 2 9993 4433 Website: www.helmsec.com.au

Telephone: +61 8 9288 2000 Facsimile: +61 8 9288 2001 Website: www.srk.com.au

SHARE REGISTRy

Boardroom Pty Limited

INVESTIGATING ACCOUNTANT

Grant Thornton Corporate Finance Pty Ltd

Level 17, 383 Kent Street Sydney NSW 2000 Telephone: +61 2 8297 2400 Facsimile: +61 2 9299 4445 Website: www.grantthornton.com.au

Level 7, 207 Kent Street Sydney NSW 2000

Telephone: +61 2 9290 9600 Facsimile: +61 2 9279 0664 Website: www.registries.com.au

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Chile’s star in copper-gold

AI assistant

ESTRELLA RESOURCES LIMITED — Capital/Financing Update 2012

64878_rns_2012-04-11_8a61cab1-76a0-441e-bf44-d2e5955a99e6.pdf

PROSPECTUS