For the period ended 30 September 2011

Highlights

Heemskirk Tin Project (TAS)

Drilling at Severn confirms continuation of tin mineralisation at depth.
Excellent Potential to expand the Severn Resource.
Environmental scoping study shows no significant issues for the project.

Exploration

Renaissance Uranium Limited is awaiting assay results after drilling an IOCGU target in the Southern Pirie Basin
AngloGold Ashanti has completed aeromagnetic surveys over IOCGU targets on Stellar's Gawler Craton licences.

Corporate

19 October 2011

Stellar held cash of $1.6 million at 30 September 2011.

Targets for December Quarter 2011

Heemskirk Tin Project
- 9 Assay results for ZS107A
- 9 Commence extensional drilling at Severn
- 9 Completion of Queen Hill metallurgical program
JV exploration results

ASX Code: SRZ About Stellar:

ABN 96 108 758 961 Level 7 Exchange Tower 530 Little Collins Street Melbourne Victoria 3000 Australia

Telephone +61 3 9909 7618 Facsimile +61 3 9909 7621

www.stellarresources.com.au

Stellar Resources (SRZ) is focusing on the development of its tin and base metal projects in Tasmania. The company holds a portfolio of tenements located in Tasmania, South Australia and New South Wales that have excellent development potential. Key projects include: Heemskirk Tin located near Zeehan in Tasmania and the Tarcoola Iron Ore Project in central South Australia. The company aims to create shareholder value by identifying and developing mature exploration properties.

[email protected] ASX ReleaseQuarterly Report

HEEMSKIRK TIN PROJECT

Drilling at Severn

The latest drilling (ZS107) focused on the deep northeastern margin of the Severn deposit. Of the three known deposits, Severn represents the best possibility of substantially increasing the Heemskirk resource. The purpose of the hole was to test for the presence of the mineralised lode 150m down‐ plunge, beyond the deepest historical drill holes (ZS81 and ZS84 in Figure 2).

Figure 2: Interpretative Long‐section, Showing Tin Mineralised Pierce Points, Severn Deposit

Historical diamond drill hole ZS84 terminated in the Oonah quartzite at a downhole depth of 471m. It intersected a sequence of black shale, siltstone and volcaniclastic shale. Tin mineralisation commenced at 407m and averaged 0.5% over 52m. Pyrrhotite/pyrite veining was strongly developed from 432m and from 433m down hole was associated with an increase in tin grade to 0.8% over a length of 10m.

Diamond drill hole ZS107 encountered a similar geological sequence of black shales and volcaniclastic sediments before terminating in the Oonah quartzite at 635m. The same pyrrhotite/pyrite zone was intersected in ZS107 over 20m from 546m.

Tin mineralisation occurred in two zones, 6m grading 0.2% from 437m and 17m grading 0.1% from 547m. Although the same mineralised zone as that in ZS84 was intersected, the lower tenor of the tin mineralisation suggests that the hole located the low‐grade halo surrounding the main body of mineralisation.

Wedge hole ZS107A intersected the zone 20m above ZS107. A similar geological sequence was encountered however an increase in pyrite relative to pyrrhotite in the sulphide zone was noted, along with increased chlorite alteration. The significance of these observations with respect to tin mineralisation will only be known once assay results are received in about three weeks.

Potential for Severn Resource Expansion

Holes ZS107 and ZS107A are interpreted to have defined the northeastern limit of tin mineralisation in the Severn deposit at depth. This has enabled Stellar to develop a clearer understanding of where further potential for a large extension to the Severn deposit exists at depth as shown in Figure 2.

Based on geological comparisons with the nearby Renison deposit, the source of tin mineralisation is most probably a tin bearing granite body, inferred at depth from a strong magnetic geophysical anomaly that is coincident with the Heemskirk deposits. The deposits were formed most probably by fluids escaping upwards along structures from the granite as it cooled. In similar situations elsewhere, grade and mineral coarseness increase closer to the granite source.

As demonstrated in Figure 2, ZS107 and ZS107A have put an eastern limit on the Severn tin mineralisation. Future drilling will be targeted to test the vertical extension below the highest grade mineralisation where there is potential to double the size of Severn. Four holes are planned to test this priority target in the next stage of drilling.

Environmental Scoping Study

An environmental scoping study was recently completed over the project area using existing data sources and following a site visit. No significant environmental impediments to mining were identified.

The study notes that "the Heemskirk Tin Project is located in the historic mine field of Zeehan on the West Coast of Tasmania. As such it is a brownfield site which has a long history of mining dating back to the 1800's and few natural values."

Proposed open pit and underground mining is "located in a disturbed catchment …… which has the capacity to be improved by modern mining practices."

The report also concludes that "the projects economic and social benefits are also likely to be welcomed by the local community and state and local governments."

Water sampling procedures were established in order to determine an environmental baseline for the project.

EXPLORATION

Iron Ore (SA) (Stellar 100%)

The Tarcoola Iron Ore Project is located 8 kilometres from the town of Tarcoola in South Australia. It also lies within 10 kilometres of the Trans‐Australian railway which links the project to the proposed bulk commodity export terminal at Port Bonython. The project comprises Coolybring, with an exploration target of 700 million tonnes of magnetite banded iron and Hicks Hill, a magnetite prospect.

No exploration was conducted during the period.

Copper/Gold

AngloGold Ashanti Joint Venture (SA)

In October 2010, AngloGold Ashanti Australia Ltd (AGAA) agreed to joint venture into four Stellar exploration licences (ELs 3752, 3753, 3655, and 4573) in the Gawler Craton of South Australia to explore for world‐class iron oxide copper gold mineralisation. Under the terms of the agreement, AGAA has to spend $5 million within six years to earn a 75% interest in the tenements.

During the quarter, airborne magnetic surveys were completed over the Gairdner and Coronation Bore Prospects. AGA is currently awaiting the data but anticipate review and in‐house processing to be completed late‐October. Mining Act Part 9b negotiations continue, with execution of the Gawler Ranges agreement nearing execution. AGA is still awaiting the approved Commonwealth Deed of Access documents.

EL 36/2003 Whyte River (TAS) (Stellar earnings 75%)

Stellar has entered a joint venture with Bass Metals Limited on EL36/2003 Whyte River. Under the terms of the joint venture, Stellar can earn a 75% interest in all minerals apart from tin, tungsten and iron by sole funding the first $500,000 of exploration over the next three years.

Plans were developed during the quarter for geochemical sampling and geological mapping of the project area. These plans are currently awaiting government approval.

Gourlays (TAS) (Stellar 100%)

No work was conducted during the quarter.

Uranium

EL 4242 Midgee (SA) (Stellar 100%)

Joint Venture partner UraniumSA Limited can earn a 73% interest in 40% of the tenement by identifying a JORC resource before September 2012.

No exploration was undertaken during the quarter.

EL 3978 Cowell (SA) (Stellar 100%)

Under the terms of a joint venture agreement, Renaissance Uranium Limited has the right to earn a 75% interest in the tenement by sole funding $3.5 million of expenditure over five and a half years.

Diamond drilling focused on the Glensea area and anomalous copper mineralisation identified in the earlier program of rotary mud drilling. Renaissance have indicated that diamond drill hole 11RPBR006 intersected a zone of hematite altered granodiorite suggesting that the copper anomalism from earlier drilling may be related to near‐by IOCGU mineralisation. Subject to assay results, Renaissance plans to follow up gravity and magnetic anomalies to the east of the diamond drill hole.

EL 4579 Warrior (SA) (Stellar 100%)

Stellar is looking for a uranium focused joint venture partner for this project.

Lead/Zinc

Goldfinger (NSW) (Stellar 80%)

Stellar is considering options to advance the project by bringing in a partner. Discussions are currently at an early stage.

Nickel (TAS) (Stellar 100%)

MMG Exploration Pty Ltd, a wholly owned subsidiary of Minmetals Resources Limited (HKEX: 1208), is farming into Stellar's Rayne exploration licence 49/2004 on the west coast of Tasmania. The Rayne tenement is considered prospective for Voiseys Bay style nickel sulphide mineralisation.

During the quarter our joint venture partner commenced diamond drill hole RYN001 on the Rayne geophysical target. The hole was completed after the end of the quarter and reached a total depth of 644 metres. Results for the hole are pending and will be reported when they come to hand.

Penrhyn Coal Royalty

Stellar holds a royalty of $0.60/tonne of coal or iron ore mined from EL 4525 located south of Coober Pedy in South Australia. Southern Coal Holdings Pty Ltd is the holder of this tenement and recently released a total coal resource estimate of 352.4 million tonnes following a program of resource definition drilling. Southern Coal Holdings is considering the application of clean coal upgrading technology as part of a development strategy for the Penrhyn deposit.

CORPORATE

At the 30 June 2011, the company held cash and term deposits of $1.6 million. Stellar also has investments held by Hiltaba Gold Pty Ltd (a wholly owned subsidiary); notably 3.88 million shares in UraniumSA Limited valued at $601,400; 0.75 million escrowed shares in Renaissance Uranium Limited valued at $36,000 and 0.75 million escrowed unlisted options in Renaissance Uranium Limited.

MARKETS

Tin

The London Metal Exchange tin price declined from US$25,900/t at the end of June to a low of US$19,100/t on 23 September 2011. The price has since rallied 19% to US$22,750/t following an announcement by the Governor of Bangka Belitung of Indonesia (the largest exporter of tin in the world) that exports would be suspended until prices moved back above US$25,000/tonne. LME stocks have declined by 13% to 20,250 tonnes since 19 August 2011 indicating that demand growth remains healthy despite concerns about economic growth in Europe and the USA. Stock reduction is expected to accelerate as exports from Indonesia diminish.

Figure 3: London Metal Exchange Tin Stocks Versus Price

The drill and exploration results reported herein, insofar as they relate to mineralisation, are based on information compiled by Mr R K Hazeldene (Member of the Australasian Institute of Mining and Metallurgy and Member of the Australian Institute of Geoscientists) who is a Consultant of the Company. Mr Hazeldene has sufficient experience relevant to the style of mineralisation and type of deposits being considered to qualify as a Competent Person as defined by the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2004 Edition). Mr Hazeldene consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. It should be noted that the abovementioned exploration results are preliminary.

For further details please contact:

Peter Blight CEO Tel: 03 9909 7618 Email: [email protected] or visit our Website at: http://www.stellarresources.com.au

Rule 5.3

Appendix 5B Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 1/6/2010.

Name of entity

STELLAR RESOURCES LIMITED

ABN Quarter ended ("current quarter")

96 108 758 961 30 September 2011

Consolidated statement of cash flows

	Cash flows related to operating activities	Current quarter$A'000	Year to date(3 months)$A'000
1.1	Receipts from product sales and related debtors	–	–
1.2	Payments for(a) exploration and evaluation	(730)	(730)
	(b) development	–	–
	(c) production	–	–
	(d) administration	(84)	(84)
1.3	Dividends received	–	–
1.4	Interest and other items of a similar nature received	36	36
1.5	Interest and other costs of finance paid	–	–
1.6	Income taxes paid	–	–
1.7	Other – GST (paid)/recovered	63	63
	Net Operating Cash Flows	(715)	(715)
	Cash flows related to investing activities
1.8	Payment for purchases of:(a) prospects	–	–
	(b) equity investments	–	–
	(c) other fixed assets	–	–
1.9	Proceeds from sale/deposit of: (a) prospects	–	–
	(b) equity investments	–	–
	(c) other fixed assets	–	–
1.10	Loans to other entities	–	–
1.11	Loans repaid by other entities	–	–
1.12	Other: Payment security deposits on prospects	(10)	(10)
	Net investing cash flows
		(10)	(10)
1.13	Total operating and investing cash flows(carried forward)	(725)	(725)

+ See chapter 19 for defined terms. 110105SRL

1.13	Total operating and investing cash flows(brought forward)	(725)	(725)

	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	–	–
1.15	Proceeds from sale of forfeited shares	–	–
1.16	Proceeds from borrowings	–	–
1.17	Repayment of borrowings	–	–
1.18	Dividends paid	–	–
1.19	Other: Payment for share issue costs	–	–
	Net financing cash flows	–	–
	Net increase (decrease) in cash held	(725)	(725)
1.20	Cash at beginning of quarter/year to date	2,288	2,288
1.21	Exchange rate adjustments to item 1.20	–	–
1.22	Cash at end of quarter	1,563	1,563

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 Aggregate amount of payments to the parties included in item 1.2 50
1.24 Aggregate amount of loans to the parties included in item 1.10 –
1.25 Explanation necessary for an understanding of the transactions Directors fees and remuneration $41k; rent/office support, Melbourne, paid to Mineral Deposits Limited $9k

Non-cash financing and investing activities

–

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Current quarter $A'000

+ See chapter 19 for defined terms. 110105SRL.doc

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available$A'000	Amount used$A'000

3.1	Loan facilities	–	–

3.2	Credit standby arrangements	–	–

Estimated cash outflows for next quarter

		$A'000
4.1	Exploration and evaluation	250
4.2	Development	–
4.3	Production	–
4.4	Administration	220
	Total	470

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown inthe consolidated statement of cash flows) to the related itemsin the accounts is as follows.		Current quarter$A'000	Previous quarter$A'000
5.1	Cash on hand and at bank	73	218
5.2	Deposits at call	1,490	2,070
5.3	Bank overdraft	–	–
5.4	Other	–	–
	Total: cash at end of quarter (item 1.22)	1,563	2,288

Changes in interests in mining tenements

		Tenementreference	Nature of interest(note (2))	Interest atbeginning ofquarter	Interest atend ofquarter
6.1	Interests in miningtenements relinquished,reduced or lapsed	–	–	–	–
6.2	Interests in miningtenements acquired orincreased	ELA2009/00339	Exploration Licence ApplicationLake Woorong, SA, applicationpending	Nil	Nil