STELLAR RESOURCES LIMITED — Interim / Quarterly Report 2012

Apr 23, 2012

Highlights

Heemskirk Tin Project (TAS)

• 10,000 metre diamond drilling program commenced in early March with two rigs on site.
• One infill diamond drill hole and one extensional drill hole were completed at Severn in April. Both holes intersected sulphides with assays due in late May.
• Aeromagnetic survey completed with additional drilling targets identified at Severn and Montana.

Exploration

High levels of copper and nickel in soil identified on the Heazlewood Hill prospect (EL 40/2010) in Tasmania.

Corporate

• Raised $5.7 million before costs through a share placement and underwritten rights issue to fund drilling and a prefeasibility study.
• Secured Resource Capital Funds as a substantial shareholder.
• Stellar held cash of $6.0 million at 31 March 2012.

ASX Code: SRZ

Targets for June Quarter 2012

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

24 April 2012

Telephone +61 3 9618 2540 Facsimile +61 3 9649 7200

www.stellarresources.com.au

Further drilling and assay results from the Heemskirk Tin Project.

About Stellar:

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.

ASX ReleaseQuarterly Report

HEEMSKIRK TIN PROJECT (100% Owned)

In early March, Stellar commenced a 10,000 metre diamond drilling program as outlined below. Two drilling rigs are currently on site and should complete the program over the next 12 months.

Drilling Plan

• Five holes totalling 3,000 metres will test the potential to extend the Severn deposit below known mineralisation to a depth of 650m from surface – current resource drilled to a depth of 350m.
• Seven holes totalling 2,000 metres of infill resource drilling at Severn to move from inferred to indicated resource.
• 1,000 metres of drilling planned to test geophysical targets identified by a recent aeromagnetic survey aims to add new resources to known deposits.
• 3,000 metres of infill and extensional drilling at the high grade Queen Hill and Montana resources.
• 1,000 metres of drilling at St Dizier to upgrade historic results to JORC status.

In addition to resource calculations, samples will be used to confirm metallurgical performance to better define the processing route.

Severn Drilling

The first of five diamond drill holes aimed at extending the Severn resource was completed (open circles in Figure 1) in April. This hole (ZS108) lies 50m to the southwest of historic drill hole ZS81 which intersected 10 metres grading 1.2% tin and 120 metres below ZS87 which intersected 2 metres grading 1.7% tin.

Diamond drill hole ZS109 is the first of the in‐fill holes to be completed and lies 30 metres to the southwest of historic drill hole ZS65 which provided two intersections ‐ the first grading 1.0% tin over 16 metres and the second grading 0.9% tin over 18.8 metres.

Samples have been despatched for assay from both holes with results due in late May. Both rigs are now drilling the second and third infill holes.

Figure 1 Schematic Long‐section Severn and Montana (oblique section) Tin Deposits

Aeromagnetic Survey

Stellar completed a high resolution aeromagnetic survey over the Heemskirk project area in March. The total magnetic intensity image, (shown in Figure 2), is more detailed and more complete than historic surveys and defines a tin bearing alteration zone that is 3.0 kilometres from north to south and 2.0 kilometres from east to west. The green shapes on the image represent surface projections of the known tin deposits.

The alteration zone is centred over the Severn deposit and suggests that Severn could be an order of magnitude larger than Queen Hill. In addition, the core of the alteration zone is largely untested by drilling to the east and south of the Severn deposit. Figure 2 also shows that the Montana deposit is likely to be contained within a northwest trending shear zone that may host additional mineralised blocks. A parallel shear zone appears to define the southwest edge of the image.

Inversion modelling of the magnetic image is underway and should define the shape and position of the magnetic source rocks and greatly improve targeting of drill holes to the east and south of Severn.

Figure 2 Aeromagnetic Total Magnetic Intensity Image

Stellar continues with planning the pre‐feasibility study which will be based on the expected improved resource position resulting from current drilling.

EXPLORATION

Iron Ore (SA) (Stellar 100%)

The Tarcoola Iron Project is located 8 kilometres from the town of Tarcoola in South Australia. It also lies within 10 kilometres of the Trans‐Australia 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.

Land access issues related to the traditional owners, prevented further work during the quarter. AGAA is continuing to pursue a resolution of these issues.

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

Stellar has entered into 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.

No exploration 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 conducted on EL 4242 during the quarter. However, UraniumSA reported that a drilling program on its Samphire project immediately north of EL 4242 had identified high grade uranium in granite basement rocks underlying its Blackbush sedimentary uranium deposit. This outcome greatly upgrades the potential for higher grade uranium in the Pirie Basin.

EL 3978 Cowell (SA) (Stellar 100%)

Renaissance Uranium Limited has the right to earn a 75% interest in the tenement by sole funding $2.5 million of expenditure over four years.

Renaissance completed four diamond drill holes over untested magnetic and gravity targets in the Glensea area of the licence. All four holes intersected visible sulphides in narrow quartz veins within intrusive granites. Two of the intersections contained visible chalcopyrite and all had elevated gamma logs possibly reflecting uranium content. Assay results are pending.

EL 4579 Warrior (SA) (Stellar 100%)

No exploration was conducted during the quarter.

EL 4301 Pinding (SA) (Stellar 100%, USA earning 70%)

UraniumSA Limited withdrew from the Tarcoola Uranium joint venture during the quarter which included Pinding, Tarcoola (EL 4167), Carnding (EL 4707) and Cooladding (EL3799).

Lead/Zinc Goldfinger (NSW) (Stellar 80%)

Discussions are continuing with potential partners for the project.

Nickel

EL 49/2004 Rayne (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 on the west coast of Tasmania. The Rayne tenement is considered prospective for Voisey's Bay style nickel sulphide mineralisation.

No additional work was conducted by MMG following the completion of a 644m diamond drill hole in the previous quarter.

EL 40/2010 Heazlewood Hill (TAS) (Stellar 100%)

Stellar completed a soil sampling and mapping exercise during the quarter that defined anomalous copper and nickel in soil coincident with previously identified magnetic and electromagnetic targets. Stellar plans to define drill targets for the summer exploration season.

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 has released a total coal resource estimate of 352.4 million tonnes following a program of resource definition drilling. Southern Coal is currently investigating alternative approaches to advance the project.

CORPORATE

During the quarter, Stellar raised $5.7 million before costs through a share placement and underwritten rights issue to fund drilling for the next 12 months and to advance the Heemskirk Tin pre‐feasibility study.

Resource Capital Funds became a substantial shareholder by taking placement shares and partly underwriting the rights issue. It now holds 16.5% of Stellar's issued capital.

At the 31 March 2012, the company held cash and term deposits of $6.0 million. Stellar also has investments held in Hiltaba Gold Pty Ltd (a wholly owned subsidiary), notably 3.88 million shares in UraniumSA Limited valued at $465,600, 0.75 million shares and 0.75 million unlisted options in Renaissance Uranium Limited valued at $39,750.

TIN MARKET

The LME tin price commenced the quarter at US$19,450/t, rising rapidly to US$25,650/t on 8 February 2012. However, a modest rise in LME stocks to 13,080t and the perception of softer demand from China led to a price retreat to US$23,200/t by the end of the quarter. The International Tin Research Institute, in its recent update, indicated that a tin supply shortfall in 2012 should support higher tin prices as the year progresses.

LME Tin Price versus Stocks

Competent Person Statement ‐ Exploration

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 9618 2540 Email: peter.blight@stellarresources.com.au 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 31 March 2012

Consolidated statement of cash flows

	Cash flows related to operating activities	Current quarter$A'000	Year to date(9 months)$A'000
1.1	Receipts from product sales and related debtors	–	–
1.2	Payments for(a) exploration and evaluation	(331)	(1,433)
	(b) development	–	–
	(c) production	–	–
	(d) administration	(287)	(475)
1.3	Dividends received	–	–
1.4	Interest and other items of a similar nature received	17	72
1.5	Interest and other costs of finance paid	–	–
1.6	Income taxes paid	–	–
1.7	Other – GST (paid)/recovered	15	111
	Net Operating Cash Flows	(586)	(1,725)
	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)
	Proceeds security deposits occupancy	2	2
	Net investing cash flows	2	(8)
1.13	Total operating and investing cash flows(carried forward)	(584)	(1,733)

+ See chapter 19 for defined terms. 120051SRL

1.13	Total operating and investing cash flows(brought forward)	(584)	(1,733)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	5,688	5,688
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	(341)	(341)
	Net financing cash flows	5,347	5,347
	Net increase (decrease) in cash held
		4,763	3,614
1.20	Cash at beginning of quarter/year to date	1,139	2,288
1.21	Exchange rate adjustments to item 1.20	–	–
1.22	Cash at end of quarter	5,902	5,902

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 53
• 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 $12k

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

On 31 January 2012, 43,528,743 shares were issued as consideration payable by Columbus Metals Limited (a wholly-owned subsidiary of Stellar Resources Limited) to Gippsland Limited for the purchase of the 40% interest of Gippsland Limited in the Heemskirk Tin Project.

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. 120051SRL.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	738
4.2	Development	–
4.3	Production	–
4.4	Administration	364
	Total	1,102

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	307	79
5.2	Deposits at call	5,595	1,060
5.3	Bank overdraft	–	–
5.4	Other	–	–
	Total: cash at end of quarter (item 1.22)	5,902	1,139

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		See attachment A
6.2	Interests in miningtenements acquired orincreased		See attachement A

+ See chapter 19 for defined terms. 120051SRL

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total number	Number quoted	Issue price persecurity (see note 3)(cents)	Amount paid up persecurity (see note 3)(cents)
7.1	Preference+securities(description)
7.2	Changes duringquarter(a) Increasesthrough issues
	(b) Decreasesthrough returns ofcapital, buy-backs,redemptions
7.3	+Ordinarysecurities	223,447,547	223,447,547
7.4	Changes duringquarter
	(a) Increasesthrough issues	43,528,74371,096,946	43,528,74371,096,946	Refer note 2.18 cents	Refer note 2.15,687,756
	(b) Decreasesthrough returns ofcapital, buy-backs
7.5	+Convertible debtsecurities(description)
7.6	Changes duringquarter
	(a) Increasesthrough issues(b) Decreases
	through securitiesmatured, converted
7.7	OptionsDirectorsExec & Employees	3,000,0003,125,000	NilNil	Exercise Price20 cents20 cents	Expiry DateSRZAK 30/11/2013SRZAI 26/11/2013
7.8	Issued duringquarter
7.9	Exercised duringquarter
7.10	Expired/cancelledduring quarter
7.11	Debentures(totals only)
7.12	Unsecured notes(totals only)

+ See chapter 19 for defined terms. 120051SRL.doc

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).
• 2 This statement does give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 23 April 2012 (Company Secretary)

Print name: Christina Kemp

Notes

• 1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
• 2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities*.*
• 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.
• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

== == == == ==

• See chapter 19 for defined terms. 120051SRL

Attachement A

		Tenementreference	Nature of interest(note (2))	Interest atbeginning ofquarter	Interest atend ofquarter
6.1	Interests in miningtenements relinquished,reduced or lapsed	EL3799	Exploration area reduced from58km2 to 45km2	100%	100%
6.2	Interests in miningtenements acquired orincreased	ELA2009/00339	Exploration Licence ApplicationLake Woorong, SA, applicationpending	Nil	Nil
		EL4707 (formerlyEL3369)EL3799 (formerlyEL2898)EL4167 (formerlyEL3089)EL4301 (formerlyEL3205)	Uranium or mainly uranium interestonly	Note 1	100%

Note 1 UraniumSA Limited has withdrawn from Joint Venture.

+ See chapter 19 for defined terms. 120051SRL.doc