STELLAR RESOURCES LIMITED — Capital/Financing Update 2017

May 17, 2017

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

STELLAR RESOURCES LIMITED

ABN

96 108 758 961

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued Quoted Options

• 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued
• 3 Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

59,142,857 Quoted Options

Quoted Options exercisable at $0.05 (5 cents) expiry 18 May 2020

+ See chapter 19 for defined terms.

4	Do the +securities rank equallyin all respects from the +issuedate with an existing +classofquoted +securities?If the additional +securities donot rank equally, please state:the date from which they dothe extent to which theyparticipateforthenextdividend, (in the case of atrust,distribution)orinterest paymentthe extent to which they donot rank equally, other thaninrelationtothenextdividend,distributionorinterest payment	No. The Quoted Options will be a new class ofquoted securities.Each Quoted Option will entitle the holder toone Ordinary Share in the Company which willrank equally with existing Ordinary Shares onissue.The Quoted Options do not give the holder theright to participate in any future dividends orreceive interest payments.
5	Issue price or consideration	59,142,857 Quoted Options at an issue price ofNil.
6	Purpose of the issue(If issued as consideration forthe acquisition of assets, clearlyidentify those assets)	The purpose of the Quoted Options:-a)Under terms of the Placementannounced 1 March 2017, one (1) freeQuoted Option for every two (2) sharesreceived.b)Pursuant to the Placement, theCompany agreed to issue HunterCapital Advisors Pty Ltd 22,000,000Quoted Options in satisfaction ofcorporate advisory and capital raisingservices performed in relation to thePlacement.
6a	Is the entity an +eligible entitythathasobtainedsecurityholder approval under rule 7.1A?	Yes
	If Yes, complete sections 6b – 6hin relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i
6b	The date the security holderresolution under rule 7.1A waspassed	17 November 2016
	Number of +securities issued	Nil
6c	without security holder approvalunder rule 7.1

+ See chapter 19 for defined terms.

• 6d Number of +securities issued with security holder approval under rule 7.1A
• 6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)
• 6f Number of +securities issued under an exception in rule 7.2
• 6g If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation.
• 6h If +securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements
• 6i Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements

7 +Issue dates

Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

59,142,857 Quoted Options

At shareholder meeting held on 10 April 2017

None

Nil

Not applicable

Not applicable

LR 7.1 = 56,957,023 LR 7.1A = 37,971,348

18 May 2017

• See chapter 19 for defined terms.

	Number	+Class
+class8Numberandofall+securitiesquotedonASX	379,713,489	Ordinary shares
+securities(includingtheinsection 2 if applicable)	59,142,857	Quoted OptionsExercise price of$0.05 (5 cents), expirydate 18 May 2020
	Number	+Class
+class9Numberandofall+securities not quoted on ASX+securities(includingtheinsection 2 if applicable)	15,000,000	SRZAA

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests) Not Applicable

Part 2 - Pro rata issue

11	Issecurityholderapprovalrequired?	Not Applicable
12	Is the issue renounceable or nonrenounceable?	Not Applicable
13	Ratio in which the +securities willbe offered	Not Applicable
14	+Class of +securities to which theoffer relates	Not Applicable
15	+Recorddatetodetermineentitlements	Not Applicable
16	Willholdingsondifferentregisters(orsubregisters)beaggregatedforcalculatingentitlements?	Not Applicable
17	Policy for deciding entitlementsin relation to fractions	Not Applicable

+ See chapter 19 for defined terms.

18 Names of countries in which the entity has security holders who will not be sent new offer documents

Note: Security holders must be told how their entitlements are to be dealt with.

Cross reference: rule 7.7.

19 Closing date for receipt of acceptances or renunciations

Not Applicable

Not Applicable

+ See chapter 19 for defined terms.

Appendix 3B New issue announcement

20	Names of any underwriters	Not Applicable
21	Amount of any underwriting feeor commission	Not Applicable
22	Names of any brokers to theissue	Not Applicable
23	Fee or commission payable to thebroker to the issue	Not Applicable
24	Amountofanyhandlingfeepayable to brokers who lodgeacceptances or renunciations onbehalf of security holders	Not Applicable
25	If the issue is contingent onsecurity holders' approval, thedate of the meeting	Not Applicable
26	Date entitlement and acceptanceform and offer documents will besent to persons entitled	Not Applicable
27	If the entity has issued options,andthe terms entitle optionholderstoparticipateonexercise,thedateonwhichnotices will be sent to optionholders	Not Applicable
28	Date rights trading will begin (ifapplicable)	Not Applicable
29	Date rights trading will end (ifapplicable)	Not Applicable
30	How do security holders selltheir entitlements in full througha broker?	Not Applicable
31	How do security holders sell partof their entitlements through abrokerandacceptforthebalance?	Not Applicable

+ See chapter 19 for defined terms.

32 How do security holders dispose of their entitlements (except by sale through a broker)?

33 +

Not Applicable

Issue date Not Applicable

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of +securities (tick one)
• (a) +Securities described in Part 1
• (b) All other +securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the +securities are +equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders
• 36 If the +securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000

100,001 and over

37 A copy of any trust deed for the additional +securities

+ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

• 38 Number of +securities for which +quotation is sought
• 39 +Class of +securities for which quotation is sought
• 40 Do the +securities rank equally in all respects from the + issue date with an existing +class of quoted +securities?

If the additional +securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another + security, clearly identify that other +security)

42 Number and +class of all +securities quoted on ASX (including the +securities in clause 38)

+Class

+ See chapter 19 for defined terms.

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
• 2 We warrant the following to ASX.
  • The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those +securities should not be granted +quotation.
  • An offer of the + securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.
• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ............................................................ Date: 18 May 2017 (Company secretary)

Print name: Christina R Kemp

== == == == ==

+ See chapter 19 for defined terms.

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 –Issues exceeding 15% of capitalStep 1: Calculate "A", the base figure from which the placementcapacity is calculated
Add the following:
Number of fully paid +ordinary securities•issued in that 12 month period under anexception in rule 7.2	-
Number of fully paid +ordinary securities•issued in that 12 month period withshareholder approval	74,285,714 Appendix 3B 10 March 2017 andratified on 10 April 2017 at a generalmeeting.
Number of partly paid +ordinary•securities that became fully paid in that12 month period	5,200,000 approved by shareholder atgeneral meeting 10 April 2017-
Note:•Include only ordinary securities here –other classes of equity securities cannotbe added•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
Subtract the number of fully paid +ordinarysecurities cancelled during that 12 monthperiod	-
"A"	379,713,489

+ See chapter 19 for defined terms.

Step 2: Calculate 15% of "A"
"B"	0.15
	[Note: this value cannot be changed]
Multiply "A" by 0.15	56,957,023
Step 3: Calculate "C", the amount of placement capacity under rule7.1 that has already been used
Insert number of +equity securities issuedor agreed to be issued in that 12 monthperiod not counting those issued:
•Under an exception in rule 7.2
•Under rule 7.1A
•With security holder approval under rule7.1 or rule 7.4
Note:•This applies to equity securities, unlessspecifically excluded – not just ordinarysecurities•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
"C"	0
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1
"A" x 0.15	56,957,023
Note: number must be same as shown inStep 2
Subtract "C"	0
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	56,957,023
	[Note: this is the remaining placementcapacity under rule 7.1]

+ See chapter 19 for defined terms.

Part 2

Rule 7.1A –Additional placement capacity for eligible entities
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
"A"	379,713,489
Note: number must be same as shown inStep 1 of Part 1
Step 2: Calculate 10% of "A"
"D"	0.10
	Note: this value cannot be changed
Multiply "A" by 0.10	37,971,348
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
Insert number of +equity securities issuedor agreed to be issued in that 12 monthperiod under rule 7.1A
Notes:•This applies to equity securities – notjust ordinary securities•Include here – if applicable – thesecurities the subject of the Appendix3B to which this form is annexed•Do not include equity securities issuedunder rule 7.1 (they must be dealt within Part 1), or for which specific securityholder approval has been obtained•It may be useful to set out issues ofsecurities on different dates as separateline items
"E"	-

+ See chapter 19 for defined terms.

Step 4: Subtract "E" from ["A" x "D"] to calculate remainingplacement capacity under rule 7.1A
"A" x 0.10	37,971,348
Note: number must be same as shown inStep 2
Subtract "E"	-
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	37,971,348
	Note: this is the remaining placementcapacity under rule 7.1A

+ See chapter 19 for defined terms.