STELLAR RESOURCES LIMITED — Capital/Financing Update 2019

Dec 23, 2019

24 December 2019

Section 708A Notice and Appendix 3B

The Directors of Stellar Resources Limited (ASX: SRZ, "Stellar" or the "Company) advise that it has issued:

Capital Structure

Shares:	441,855,641
Share Price (SRZ):	A$0.011
Listed Options:	59,142,857
Option Price (SRZO):	A$0.001
Unlisted Options:	37,000,000

Commodity

Tin Price: US$17,250/t Exchange Rate US$ 0.69

Main Shareholders

European Investors	19.5%
Capetown SA	16.4%

Board & Management

Phillip G Harman Non-Executive Chairman Peter G Blight Managing Director Thomas H Whiting Non-Executive Director Gary Fietz Non-Executive Director

Melanie J Leydin Company Secretary

ASX Code: SRZ

ABN 96 108 758 961 Level 17, 530 Collins Street Melbourne Victoria 3000 Australia

Telephone +61 3 9692 7222 Facsimile +61 3 9077 9233

www.stellarresources.com.au

`

(a) 61,526,908 fully paid ordinary shares (Shares) out of which -

• i. 671,839 shares are issued at a deemed price of $0.014 (1.4 cents) and 855,069 shares are issued at a deemed issue price of $0.011 (1.1 cents) per share to the Directors of the Company for services provided for October and November 2019 as approved by shareholders at the 2019 Annual General Meeting; and
• ii. 60,000,000 Shares under a placement (Placement) to sophisticated investors at an issue price of $0.009 (0.9 cents) per share as announced on 17 December 2019.

The Company confirms that:

• (a) the Shares were issued by the Company without disclosure to investors under Part 6D.2 of the Corporations Act 2001 (Act);
• (b) this notice is being given under section 708A(5)(e) of the Act;
• (c) as at the date of this notice, the Company has complied with;
  • (i) the provisions of Chapter 2M of the Act, as they apply to the Company; and
  • (ii) section 674 of the Act; and
• (d) as at the date of this notice, there is no information that is 'excluded information' within the meanings of sections 708A(7) and 708A(8) of the Act.

An Appendix 3B relating to this issue is attached to this announcement.

This announcement is authorised for release to the market by the Board of Directors of Stellar Resources Limited.

Gary Fietz

Non-Executive Director

For further information, please contact Mr Fietz on +61 3 9692 7222

About Stellar:

Stellar Resources (SRZ) is an exploration and development company with assets in Tasmania. The company is rapidly advancing its high-grade Heemskirk Tin Project, located near Zeehan in Tasmania, and plans to become Australia's second largest producer of tin.

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 tobe issued	1. Fully Paid Ordinary Shares2. Fully Paid Ordinary Shares3. Unlisted Options4. Unlisted Options
2	Number of +securities issued ortobeissued(ifknown)ormaximum number which maybe issued	1. 1,526,9082. 60,000,0003. 30,000,0004. 5,000,000
3	Principaltermsofthe+securities(e.g.ifoptions,exercise price and expiry date; if+securities,partlypaidtheamount outstanding and duedatesforpayment;if+convertiblesecurities,theconversion price and dates forconversion)	1.Fully Paid Ordinary Shares2.Fully Paid Ordinary Shares3.Issue of onefree attaching unlisted optionexercisable at $0.015 (1.5 cents)for everytwoplacement sharessubscribedto, expiringon 24 December 20224.Issue ofunlisted broker options exercisableat$0.015 (1.5 cents), expiring on 24December 2022

+ 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 +securitiesdonot 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	1.Yes2.Yes3.No.However fully paid ordinary sharesissuedpursuant to conversion of unlistedoptions willrank in all respects pari passuwith existingshares at the date of issue.4.No.However fully paid ordinary sharesissuedpursuant to conversion of unlistedoptions willrank in all respects pari passuwith existingshares atthe date of issue.
5	Issue price or consideration	1.Deemed issue price of $0.014(1.4cents) and$0.011 (1.1 cents) per share pursuant to theVWAP's for October and November 2019respectively2.$0.009 (0.9 cents) per share3.Nil4.Nil
6	Purpose of the issue(Ifissued as considerationforthe acquisition of assets, clearlyidentify those assets)	1.Sharesissuedto theDirectors in lieu Salaryfor the monthsof October and November2019as approved by Shareholders on 26November 2019.2.Sharesissuedtosophisticatedinvestorsunder Placement announcedon 17 December2019.3.Issue of oneattachingfreeoptionfor everytwoplacement shares subscribedto4.Issue ofbroker optionsfor services providedundertaking the PlacementProceeds from the sharesissued in item twoabove will be utilisedfor general workingcapital requirements of the Company.
6a	Is the entity an +eligible entity	Yes
	thathasobtainedsecurityholder approval under rule 7.1A?
	If Yes, complete sections 6b – 6hin relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i

+ See chapter 19 for defined terms.

• 6b The date the security holder resolution under rule 7.1A was passed
• 6c Number of +securities issued without security holder approval under rule 7.1
• 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.

• See chapter 19 for defined terms.

The 15 day VWAP as calculated in accordance with ASX LR 7.1.A.3 and issue price of at least 75% was $0.008 (0.8 cents) per share. The price was set on 12 December 2019 and the shares were issued at $0.009 (0.9 cents) per share on 24 December 2019. The calculation of the 15 day VWAP was calculated by Orient Capital.

Refer to Annexure 1

24 December 2019

38,032,873 Fully Paid Ordinary Shares 1,526,908 Fully Paid Ordinary Shares

1. 21,967,127 Fully Paid Ordinary Shares

2. 30,000,000 Unlisted Options 4. 5,000,000 Unlisted Options

Nil

26 November 2019

N/A

		Number	+Class
8	+classNumberandofall+securitiesquotedonASX+securities(includingthein	441,855,641	Fully PaidOrdinaryShares
	section 2 if applicable)	59,142,857	Quoted OptionsExercise price of$0.05 (5 cents), expirydate 18 May 2020

		Number	+Class
9	+classNumberandofall+securities not quoted on ASX+securities(includingtheinsection 2 if applicable)	2,000,000	Unlisted Optionsexercisable at$0.02(2cents) vestingimmediately, expiring10 May 2022
		35,000,000	Unlisted OptionsExercise price of$0.015 (1.5 cents),expiring on 24December 2022

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

N/A

Part 2 - Pro rata issue

11	Issecurityholderapprovalrequired?	N/A
12	Is the issue renounceable or nonrenounceable?	N/A
13	+securitiesRatio in whichthewill be offered	N/A
14	+Class of +securities to which theoffer relates	N/A
15	+Recorddatetodetermineentitlements	N/A

+ See chapter 19 for defined terms.

16	Willholdingsondifferentregisters(orsubregisters)beaggregatedforcalculatingentitlements?	N/A
17	Policy for deciding entitlementsin relation to fractions	N/A
18	Names of countries in which theentity has security holders whowillnotbesentnewofferdocumentsNote: Security holders must be told how theirentitlements are to be dealt with.Cross reference: rule 7.7.	N/A
19	Closingdateforreceiptofacceptances or renunciations	N/A
20	Names of any underwriters	N/A
21	Amount of any underwriting feeor commission	N/A
22	Names of any brokers to theissue	N/A
23	Feeor commission payable tothe broker to the issue	N/A
24	Amountofanyhandlingfeepayable to brokers who lodgeacceptances or renunciations onbehalf of security holders	N/A
25	If the issue is contingent onsecurity holders' approval, thedate of the meeting	N/A
26	Date entitlement and acceptanceform and offer documents will besent to persons entitled	N/A

+ See chapter 19 for defined terms.

27	If the entity has issued options,andthe terms entitle optionholderstoparticipateonexercise,thedateonwhichnoticeswill be sent to optionholders	N/A
28	Date rights trading will begin (ifapplicable)	N/A
29	Date rights trading will end (ifapplicable)	N/A
30	How do security holders selltheir entitlements in full througha broker?	N/A
31	How do security holders sell partof their entitlements through abrokerandacceptforthebalance?	N/A
32	How do security holders disposeof their entitlements (except bysale through a broker)?	N/A
33	+Issuedate	N/A

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

+ See chapter 19 for defined terms.

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

Entities that have ticked box 34(b)

38	Number of +securities for which+quotation is sought	N/A
39	+Class of +securities for whichquotation is sought	N/A
40	Do the +securities rank equally inall respects from the +issue datewith an existing +class of quoted+securities?If the additional +securities donot rank equally, please state:•the date from which they do•theextenttowhichtheyparticipateforthenextdividend, (in the case of atrust, distribution) or interestpayment•the extent to which they donot rank equally, other than inrelation to the next dividend,distributionorinterest	N/A
41	paymentReason for request for quotation	N/A
	nowExample: In the case of restricted securities, endof restriction period(if issuedupon conversion ofanother +security, clearly identifythat other +security)

+ See chapter 19 for defined terms.

	Number	+Class
+class42Numberandofall+securitiesquotedonASX(including the +securities in clause38)

+ 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: 24 December 2019
	(Company secretary)

Print name: ....................Melanie Leydin.........................

= == == == ==

+ 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 capital
Step 1: Calculate"A", the base figurefrom which the placementcapacityis calculated
Insert number of fully paid +ordinarysecurities on issue 12 months before the+issue date or date of agreement to issue	379,713,489
Add the following:
Number of fully paid +ordinary•securitiesissued in that 12 month period under anexception in rule 7.2	615,244 –6 May 20191,526,908–24 December 2019
Number of fully paid +ordinary securities•issued in that 12 month period withshareholder approval
Number of partly paid +ordinary•securities that became fully paid in that12 month period
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 which
this 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"	381,855,641
Step 2: Calculate 15% of "A"
"B"	0.15

+ See chapter 19 for defined terms.

	[Note: this value cannot be changed]
Multiply "A" by 0.15	57,278,346
Step 3: Calculate "C", the amount of placement capacity under rule 7.1thathas already beenused
Insert number of +equity securities issuedor agreed to be issued in that 12 monthperiod not counting those issued:	21,967,127–24 December 2019(FPO's)30,000,000–24 December 2019(Options)5,000,000–24 December 2019(Options)
•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"	56,967,127
Step 4: Subtract "C" from ["A" x "B"] to calculateremainingplacement capacity under rule 7.1
"A" x 0.15	57,278,346
Note: number must be same as shown inStep 2
Subtract "C"	56,967,127
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	311,219
	[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 whichthe placementcapacity is calculated
"A"	381,855,641
Note: number must be same as shown inStep 1 of Part 1
Step2: Calculate 10%of "A"
"D"	0.10
	Note: this value cannot be changed
Multiply "A" by 0.10	38,185,564
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
+equity securities issuedInsert number ofor agreed to be issued in that 12 monthperiod under rule 7.1A	38,032,873 – 24 December 2019
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"	38,032,873

+ 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
Note: number must be same as shown inStep 2	38,185,564
Subtract "E"	38,032,873
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	152,691
	Note: this is the remaining placementcapacity under rule 7.1A

+ See chapter 19 for defined terms.