STELLAR RESOURCES LIMITED — Capital/Financing Update 2006

Nov 7, 2006

discovery nickel limited

Copper Prices USS7852R Mekel Press US 311-2150 Silver Brice: USS12.51/oz

Eorificación de la cidad ORIGISTO CESSE INC. DISCOVER Nickel generally, please contacts

Urrem Atoria

Managing Director Pr: 07/3218 0202 Mobile 0409484322 letemy@discoverynickel.com.au

TARA

www.discoverynickel.com.au

13,1800

inio@diseoveryniekel.com.au

Granne Siarcholda wa mi through the discovery and development of nickel and cooper sulphide minoral .
स्वर्गल मस्बन्ध

SALE OF DUNDAS EL 21/2004

The Directors of Discovery Nickel Limited (ASX:DNL) are pleased to announce that terms have been agreed with Stellar Resources Limited for the sale of the Dundas Exploration Licence, EL 21/2004, situated in Western Tasmania.

Highlights

• Dundas EL 21/2004 to be sold to a wholly owned subsidiary of Stellar Resources Limited
• Consideration for EL 21/2004 is 300,000 Stellar Resources Shares (currently A\$0.32/share).
• DNL will retain a 2% Net Smelter Return royalty

Australian Exploration Portfolio

Due to initial success with the on-going drill program on DNL's 100% owned Maun Copper Project in NW Botswana, the Company has decided to joint venture or sell a number of its Australian exploration licences. This. rationalisation of the Australian exploration portfolio will allow DNL to focus on its core assets in Botswana, diverting greater resources to the development of these advanced projects, while decreasing the holding costs of DNL's Australian tenements. The rationalisation of DNL's Australian exploration portfolio will assist with the fast tracking of the assessment of the inferred copper resources on the Maun Copper Project.

Dundas EL 21/2004

The Dundas exploration licence, EL 21/2004, is an area of 12km² covering a discrete magnetic anomaly with strong similarities to the magnetic anomaly associated with the nickel mineralisation at the Avebury nickel deposit west of Zeehan in Western Tasmania. Stellar Resources will issue to DNL 300,000 Stellar shares in consideration for the purchase of EL 21/2004 and will grant DNL a 2% net smelter return rovalty over any production sourced from EL 21/2004.

Commenting on the sale of the Dundas EL Discovery's Managing Director. Mr Jeremy Read, said that DNL was looking to capture value from its Australian exploration portfolio, at a time of historically high commodity prices, while retaining exposure to exploration success through retained net smelter return rovalties.

"The Dundas tenement covers a quality Avebury nickel target and we are pleased to agree with Stellar the terms for the sale of the tenement," Mr Read said.

"We will continue to look to capture value from our Australian assets allowing us to increase our focus on our advanced Botswana projects" he said.

The sale of EL 21/2004 is subject to the approval of the Tasmania Mines Minister.

Further information about DNL's Australian exploration projects can be found at www.discoverynickel.com.au.

head and exploration office

Discovery Nickel Limited ABN 29 104 924 423 Level 8, 410 Queen Street, Brisbane QLD 4000 (GPO Box 3261, Brisbane QLD 4001) TELEPHONE +61 7 3218 0222 FACSMILE +61 7 3218 0233 EMAIL info@discoverynickel.com.au WEBSTE www.discoverynickel.com.au