STELLAR RESOURCES LIMITED — Interim / Quarterly Report 2012

Feb 21, 2012

STELLAR RESOURCES LIMITED ACN 108 758 961 AND CONTROLLED ENTITIES

FINANCIAL REPORT Half-year report for the half-year ended 31 December 2011

This half-year report is to be read in conjunction with the financial report for the year ended 30 June 2011

Contents

	Page No.
Directors' report	1
Auditor's independence declaration	5
Condensed consolidated statement of comprehensive income	6
Condensed consolidated statement of financial position	7
Condensed consolidated statement of changes in equity	8
Condensed consolidated statement of cash flows	9
Notes to the condensed consolidated financial statements	10
Directors' declaration	15
Independent auditor's report	16
Corporate directory	18

This report does not include all the notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report. Accordingly, this report should be read in conjunction with the annual report of Stellar Resources Limited for the year ended 30 June 2011. It is also recommended that this financial report be considered together with any public announcements made by Stellar Resources Limited and its controlled entities during the period ended 31 December 2011, in accordance with the continuous disclosure requirements of the Corporations Act 2001, lodged with the Australian Securities Exchange ("ASX").

Directors' report For the half-year ended 31 December 2011

Your Directors submit their financial report on Stellar Resources Limited ("the Company") and its controlled entities ("the Group") for the half-year ended 31 December 2011. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:

Directors

The names of the Directors of the Company during or since the end of the half-year are:

Phillip G Harman Thomas J Burrowes David J Isles Thomas H Whiting

The above named Directors held office during and since the end of the half-year.

Principal activities

The principal activity of the Group during the half-year just ended continued to be mineral exploration with the objective of identifying and developing economic reserves.

Operating result

The net loss of the Group for the half-year period was $(502,093) (2010: $52,351 net loss after tax).

Review of operations

Exploration expenditure for the half-year just concluded was $0.89 million (2010: $0.72 million).

During the six months to 31 December 2011, the Consolidated Entity continued to focus its efforts on the Heemskirk Tin Project located near Zeehan in Tasmania. Exploration on licences to the north of Zeehan also continued during the period, as did the activity of joint venture partners on the Consolidated Entity's licences in Tasmania and South Australia.

Following completion of a positive scoping study in July 2011, negotiations commenced with the minority partner in the Heemskirk Tin Project, Gippsland Limited, to acquire that Company's 40% joint venture interest in the project. Agreement was reached with Gippsland Limited in November 2011 for Columbus Metals Limited, a wholly owned subsidiary of Stellar, to move to 100% ownership of the project. The 40% minority interest was acquired subsequent to period end on 31 January 2012, in exchange for 43.5 million shares in Stellar and a royalty of 1% of net smelter revenue upon the realized tin price reaching $25,000/tonne rising on a straight line basis to 2% at a realized tin price of $30,000/tonne. The royalty is capped at 2%.

Stellar Resources engaged independent experts who prepared reports for shareholders that indicated the transaction was not fair but reasonable. Shareholder approval for the transaction was gained by Stellar and Gippsland in January 2012.

During the period, drilling continued at the Severn deposit with diamond drill holes 107 and 107A testing the potential for tin mineralisation to continue at depths 120m below the deepest historical drill hole. Both holes intersected the sulphide alteration zone that characterizes the mineralisation closer to the surface. Drill hole107A provided the best result with a high grade intercept of 1.1% tin over 6m from 531m down hole.

Directors' report (cont'd)

Metallurgical testwork focused on tin float alternatives for Queen Hill mineralization and refinements to the gravity circuit and acid leach trials. Samples of Severn mineralisation were also submitted to Burnie Research Laboratory for initial testwork.

An environmental scoping study at Heemskirk provided the parameters for data collection and baseline studies. It also concluded that there are no major environmental hurdles for the project.

Regional exploration work was conducted in Tasmania on Ramsay licence (EL 1/2004) and on Whyte River joint venture property (EL 36/2003). Two geochemical targets worthy of follow-up exploration where identified on Ramsay.

MMG Exploration Pty Ltd, under its joint venture agreement on Rayne licence (EL 49/2004) in Tasmania drilled a 644m deep diamond drill hole to test a magnetic anomaly. The drill hole intersected two zones of magnetite rich diorite with minor sulphide mineralisation over 2m from 446.6m and 6.5m from 595.9m down hole. Follow-up exploration will depend on the results of assays and down hole geophysics.

In South Australia, the search for a joint venture partner or a buyer of the tenements containing the Tarcoola Iron Ore Project still continues.

Exploration for sedimentary uranium in the Pirie Basin of South Australia was conducted by joint venture partner Renaissance Uranium Limited on Cowell (EL 3798). A program of rotary mud drilling identified a large extent of target Eocene sands with low level uranium anomalism. Followup diamond drilling on the northeastern edge of the licence also identified uranium mineralisation in weathered granites below the Eocene sands.

Activity by joint venture partner UraniumSA Limited on Midgee (EL 4242) in the northern Pirie Basin has been restricted by land access issues.

Regional drilling of sedimentary uranium targets by joint venture partner UraniumSA on Pinding (EL 4301) near Tarcoola in South Australia identified minor anomalism.

Joint venture partner AngloGold Ashanti Australia Pty Ltd, conducted airborne magnetic surveys over exploration licences 3752, 3753, 3655, and 4573 and ground gravity over 3655 and 4573. Follow-up work on 3752 and 3753 is currently delayed by Aboriginal land access issues.

The loss for the period was mainly attributable to $0.33 million (2010: $0.002 million) of write downs in the carrying values of the Group's exploration assets. Other notable impacts was the fair value decrement on shares in UraniumSA Limited, was recognised in the investments revaluation reserve for the half-year ended 31 December 2011 of $0.038 million. The fair value decrement in Renaissance Uranium Limited of $0.019 million on shares and $0.015 million on options was recognised in the statement of comprehensive income.

Directors' report (cont'd)

Contingencies and commitments

No contingent liabilities have arisen since the date of the last annual financial report issued as at 30 June 2011.

Dividends

No amounts have been paid or declared as dividends during the course of the half year period just concluded.

Environmental issues

The Group's exploration activities are subject to various environmental regulations under both state and federal legislation in Australia. The ongoing operation of these tenements is subject to compliance with the respective mining and environmental regulations and legislation.

Licence requirements relating to ground disturbance, rehabilitation and waste disposal exist for all tenements held. The Directors are not aware of any significant breaches of mining and environmental regulations and legislation during the half-year period covered by this report.

After balance date events

On 25 January 2012, at a General Meeting of shareholders, passed an ordinary resolution for the approval to issue 43,528,743 fully paid ordinary shares in the capital of the Company in accordance with the Joint Venture Interest Sale Agreement signed on 1 November 2011, between Stellar Resources Limited and Gippsland Limited which entitled Stellar to 100% project ownership of the "Heemskirk Tin Project".

On 31 January 2012, 43,528,743 fully paid ordinary shares were issued to Gippsland Limited.

On 6 February 2012, Stellar Resources Limited announced that it had placed 39,175,868 fully paid ordinary shares with institutional and sophisticated private clients of Taylor Collison Limited at a price of $0.08 per share to raise $3.1 million before costs.

On 6 February 2012, Stellar Resources Limited also announced a fully underwritten 1 for 6 nonrenounceable entitlement offer at $0.08 per share to raise an additional $2.6 million before costs.

The net funds raised by the placement and entitlement offer will be used principally to advance the Heemskirk Tin Project towards the completion of a bankable feasibility study.

On 15 February 2012, Stellar Resources Limited announced that the non-renounceable rights issue was open. The Offer Booklet, Entitlement and Acceptance form were despatched to eligible shareholders on that date.

Other than stated, in the opinion of the Directors of the Company, there has not arisen in the interval between the end of the half-year and the date of this report any other item, transaction or event of a material and unusual nature likely to substantially affect the results of the Group during the remainder of the financial year.

Directors' report (cont'd)

Auditor's independence declaration

The auditor's independence declaration for the half-year ended 31 December 2011 has been received and can be found on page 5.

Signed in accordance with a resolution of Directors made pursuant to s.306(3) of the Corporations Act 2001 and dated this 22nd day of February 2012.

On behalf of the Directors

P G Harman Chairman Melbourne

Deloitte.

Deloitte Touche Tohmatsu A.B.N. 74 490 121 060

550 Bourke Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia

DX: 111 Tel: +61 (0) 3 9671 7000 Fax: +61 (0) 3 9671 7001 www.deloitte.com.au

The Board of Directors Stellar Resources Limited Level 17, 530 Collins Street Melbourne VIC 3000

22 February 2012

Dear Board Members

Stellar Resources Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Stellar Resources Limited.

As lead audit partner for the review of the financial statements of Stellar Resources Limited for the half-year ended 31 December 2011, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
• (ii) any applicable code of professional conduct in relation to the review.

Yours sincerely

Delotte Tarde Tohntha

DELOITTE TOUCHE TOHMATSU

lao Santa

Ian Sanders Partner Chartered Accountant

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

Condensed consolidated statement of comprehensive income for the half-year ended 31 December 2011

		Consolidated
		Half-year	Half-year
		ended	ended
		31 Dec 2011	31 Dec 2010
	Note	$	$
Revenue
Interest received – bank deposits		44,277	56,451
Other income	3	-	684,536
Administration expenditure		(41,070)	(5,410)
Employee expense		(136,755)	(783,215)
Depreciation and amortisation expense		(2,218)	(3,092)
Fair value loss on financial assets	4	(34,200)	-
Exploration expenditure and other costs written off	5	(332,127)	(1,621)
Loss before tax		(502,093)	(52,351)
Income tax expense		-	-
Loss for the period		(502,093)	(52,351)
Other comprehensive income
Net value gain/(loss) on available-for-sale financial assets taken to
equity	4	(38,882)	1,169,364
Recognition of profit on sale on available-for-sale financial assets
taken to income statement		-	(139,650)
Total other comprehensive income
		(38,882)	1,029,714
Total other comprehensive income for the period		(540,975)	977,363
Earnings per share
Basic (cents per share)		(0.46)	(0.05)
Diluted (cents per share)		(0.46)	(0.05)

Condensed consolidated statement of financial position as at 31 December 2011

31 December30 June20112011Note$$AssetsCurrent assetsCash and cash equivalents1,139,7522,287,745Trade and other receivables105,471113,315Other financial assets4587,868660,950Other33,07030,284Total current assets1,866,1613,092,294Non-current assetsProperty, plant and equipment94,03796,255Exploration expenditure57,039,2206,490,521Total non-current assets7,133,2576,586,776Total assets8,999,4189,679,070LiabilitiesCurrent liabilitiesTrade and other payables154,191284,330Provisions18,02026,558Total current liabilities172,211310,888Total liabilities172,211310,888Net assets8,827,2079,368,182EquityCapital and reservesIssued capital21,730,81621,730,816Reserves1,414,7821,453,664Accumulated losses(14,318,391)(13,816,298)			Consolidated
	Total equity	8,827,207	9,368,182

Condensed consolidated statement of changes in equity for the half-year ended 31 December 2011

	Issuedcapital	Equitysettledemployeebenefitsreserve	Investmentsrevaluationreserve	Accumulatedlosses	Totalequity
	$	$	$	$	$
Balance at 1 July 2010	19,737,446	635,937	467,029	(12,829,830)	8,010,582
Gain on available-for-sale financialassets	-	-	1,169,364	-	1,169,364
Recognition of profit on sale on
available-for-sale financial assets	-	-	(139,650)	-	(139,650)
Other comprehensive income	-	-	1,029,714	-	1,029,714
Loss for the period	-	-	-	(52,351)	(52,351)
Total comprehensive income for
the period	-	-	1,029,714	(52,351)	977,363
Issue of share capital	2,100,000	-	-	-	2,100,000
Cost of share issues	(106,630)	-	-	-	(106,630)
Vesting of options under share option
plan	-	701,308	-	-	701,308
Balance at 31 Dec 2010	21,730,816	1,337,245	1,496,743	(12,882,181)	11,682,623
Balance at 1 July 2011	21,730,816	1,337,246	116,418	(13,816,298)	9,368,182
Loss on available-for-sale financial
assets	-	-	(38,882)	-	(38,882)
Other comprehensive income	-	-	(38,882)	-	(38,882)
Loss for the period	-	-	-	(502,093)	(502,093)
Total comprehensive income for
the period	-	-	(38,882)	(502,093)	(540,975)
Balance at 31 Dec 2011	21,730,816	1,337,246	77,536	(14,318,391)	8,827,207

Condensed consolidated statement of cash flows for the half-year ended 31 December 2011

	Consolidated
	Half-yearHalf-year
	ended	ended
	31 Dec 2011	31 Dec 2010
	$	$
Cash flows from operating activities
GST receipts from Australian Taxation Office	96,040	56,376
Payments to suppliers and employees	(187,597)	(95,601)
Net cash used in operating activities	(91,557)	(39,225)
Cash flows from investing activities
Interest received	55,371	44,608
Proceeds on sale investment securities	-	415,578
Payment for investment securities	-	(112,233)
Payments for property, plant and equipment	-	(2,000)
Payments for exploration expenditure	(1,101,807)	(833,695)
Proceeds from sale of exploration tenement	-	250,000
Security deposit payment	(10,000)	-
Proceeds security deposit	-	52,000
Net cash used in investing activities	(1,056,436)	(185,742)
Cash flows from financing activities
Proceeds from share issues	-	2,100,000
Payment for share issue costs	-	(106,630)
Net cash provided by financing activities	-	1,993,370
Net (decrease)/increase in cash and cash equivalents	(1,147,993)	1,768,403
Cash and cash equivalents at the beginning of the period	2,287,745	1,934,491
Cash and cash equivalents at the end of the period	1,139,752	3,702,894

Notes to the condensed consolidated financial statements

1. Significant accounting policies

Reporting entity

Stellar Resources Limited (the "Company") is a company domiciled in Australia. The consolidated interim financial statements of the Company as at and for the half-year ended 31 December 2011 comprises the Company and its subsidiaries (together referred to as the "Group").

Statement of compliance

The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 'Interim Financial Reporting'. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'. The half-year financial report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report.

Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Company's 2011 annual financial report for the financial year ended 30 June 2011, other than as detailed below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current reporting period.

(a) Going Concern

Stellar Resources Limited's condensed consolidated financial statements are prepared on a going concern basis which assumes continuity of normal business activities and the realisation of assets and settlement of liabilities and commitments in the normal course of business. During the half year ended 31 December 2011, the Group incurred a net loss of $502,093, had net cash outflows from operating activities of $91,557 and exploration activities of $1,101,807 and had an accumulated loss of $14,318,391 as at 31 December 2011. The continuation of the Group as a going concern is dependent upon its ability to generate sufficient cash from operating and financing activities and manage the level of exploration and other expenditure within available cash resources. The Directors consider that the going concern basis of accounting is appropriate for the following reasons:

• As at 31 December 2011, the Group had cash assets of $1,139,752, net working capital of $1,106,082, which excludes investments in ASX traded shares of $587,868 which could be sold if required.

1. Significant accounting policies (cont'd)

Basis of preparation (cont'd)

• The most recently prepared cash flow forecast prepared by management and reviewed by the Directors indicates that the Group will hold sufficient cash reserves to continue its current exploration programmes and other working capital requirements beyond the end of the financial year 2012. Should additional funding be required the Group may attempt future equity capital raising initiatives, however, it should be noted that while this source of funding has been used in the past, any future capital raising would be dependent on financial market conditions at the time that any additional equity funds are being sought.

On 6 February 2012, Stellar Resources Limited announced that it had placed 39,175,868 fully paid ordinary shares with institutional and sophisticated private clients of Taylor Collison Limited at a price of $0.08 per share to raise $3.1 million before costs.

On 6 February 2012, Stellar Resources Limited also announced a fully underwritten 1 for 6 nonrenounceable entitlement offer at $0.08 per share to raise an additional $2.6 million before costs.

(b) Exploration, Evaluation and Development Expenditure

The Group's accounting policy in relation to exploration, evaluation and development expenditure is consistent with that disclosed in the 2011 annual report.

2. Segment information

The Group operates in the Australian mineral exploration sector where it is actively pursuing opportunities for a number of mineral targets through various tenements all of which are currently at exploration stage and require further funding to proceed to revenue generation stages. As such the Group is required to prioritise its funding allocation and does so based on the assessment of the market sentiment and the potential of finding a viable mineral resource. Each exploration licence may be identified as a separate business activity that has revenue earning potential. However, licences of the same mineral exploration targets have been aggregated into the same segment based on similar economic characteristic. Various corporate and investing activities have been allocated to a corporate operating segment of the Group.

31 December 2011	Corporate$	Iron Ore$	Tin/Nickel$	Uranium$	Copper/Gold$	Other$	Total$
Revenue
Interest income	44,277	-	-	-	-	-	44,277
Expenses
Other expenses	(212,025)	-	-	-	-	-	(212,025)
Depreciation and
amortisation	(1,593)	-	(625)	-	-	-	(2,218)
Exploration
expenditure and other
costs written off	-	(261,278)	-	(20,169)	(50,680)	-	(332,127)
Loss before tax	(169,341)	(261,278)	(625)	(20,169)	(50,680)	-	(502,093)

Stellar Resources Limited and Controlled Entities

ACN 108 758 961

2. Segment information (cont'd)

31 December 2011	Corporate$	Iron Ore$	Tin/Nickel$	Uranium$	Copper/Gold$	Other$	Total$
Current assetsExploration expenditure	1,866,161-	-1,598,228	-3,747,375	--	-1,319,472	-374,145	1,866,1617,039,220
Property, plant andequipmentAdditions to property,	17,620	-	76,417	-	-	-	94,037
plant and equipment	-	-	-	-	-	-	-
Current liabilities	(172,211)	-	-	-	-	-	(172,211)
Net assets	1,711,570	1,598,228	3,823,792	-	1,319,472	374,145	8,827,207
31 December 2010	Corporate$	Iron Ore$	Tin/Nickel$	Uranium$	Copper/Gold$	Other$	Total$
Revenue
Interest income	56,451	-	-	-	-	-	56,451
Other incomeExpenses	503,102	-	-	-	181,434	-	684,536
Other expenses	(788,625)	-	-	-	-	-	(788,625)
Depreciation andamortisationExploration	(2,246)	(221)	(625)	-	-	-	(3,092)
expenditure and othercosts written off	-	(316)	-	-	-	(1,305)	(1,621)
Profit/(loss) before tax	(231,318)	(537)	(625)	-	181,434	(1,305)	(52,351)
31 December 2010	Corporate$	Iron Ore$	Tin/Nickel$	Uranium$	Copper/Gold$	Other$	Total$
Current assetsExploration expenditure	5,770,253-	-1,787,435	-1,880,465	-939,781	-1,013,304	-282,990	5,770,2535,903,975
Property, plant andequipment	6,691	41,923	75,667	-	-	-	124,281
Additions to property,plant and equipment	-	-	2,000	-	-	-	2,000
	6,691	41,923	77,667	-	-	-	126,281
Current liabilities	(117,886)	-	-	-	-	-	(117,886)
Net assets	5,659,058	1,829,358	1,958,132	939,781	1,013,304	282,990	11,682,623

3. Other income

	Half-year ended31 Dec 2011$	Half-year ended31 Dec 2010$
Gain recognised on disposal of available-for-sale investments	-	387,725
Gain recognised on acquisition of rights issue	-	114,477
Gain recognised on disposal of exploration tenements	-	181,434
Revenue from the rendering of services	-	900
	-	684,536

Stellar Resources Limited and Controlled Entities

ACN 108 758 961

4. Other financial assets

	$
Balance as at 30 June 2011	660,950
Fair value net decrement – shares UraniumSA Limited	(38,882)
Fair value net decrement – shares Renaissance Uranium Limited	(18,750)
Fair value net decrement – options Renaissance Uranium Limited	(15,450)
Balance as at 31 December 2011	587,868

Shares in UraniumSA Limited are held by Hiltaba Gold Pty Ltd (a wholly owned subsidiary of Stellar). At 31 December 2011, the investments in UraniumSA were restated to fair value. A revaluation decrement of $38,882 in relation to the available-for-sale shares in UraniumSA was recognised in the investments revaluation reserve during the half-year.

Shares and options in Renaissance Uranium Limited are held by Hiltaba Gold Pty Ltd. At 31 December 2011, the investments in Renaissance Uranium were restated to fair value. An impairment of $18,750 in relation to the available-for-sale shares was recognised in the statement of comprehensive income during the half year. The fair value of options held in Renaissance Uranium decreased by $15,450. The fair value decrement on options was recognised in the statement of comprehensive income.

	31 Dec 2011		30 Jun 2011
	Value		Value
	$	Number	$	Number
Available-for-sale investmentscomprise of the following:
UraniumSA Limited - shares	544,353	3,888,238	583,235	3,888,238
Renaissance Uranium Limited -
shares	36,000	750,000	54,750	750,000
Renaissance Uranium Limited -options	7,515	750,000	22,965	750,000
	587,868	5,388,238	660,950	5,388,238

5. Exploration expenditure

Carrying values

	$
Balance as at 30 June 2011	6,490,521
Expenditure incurred during the period	897,148
Expenditure written off during the period	(332,127)
Expenditure recoupment during the period	(16,322)
Balance as at 31 December 2011	7,039,220

Ultimate recovery of capitalised exploration expenditure is dependent upon success in exploration and development or sale or farm-out of the exploration interests.

6. Issuances, repurchases and repayments of equity securities

Issued capital as at 31 December 2011 amounted to $21,730,816 (108,821,858 ordinary shares). There were no movements in the issued capital of the Company in the current interim reporting period (2010: $2.1 million, 14,000,000 ordinary shares).

Options expired

During the half-year reporting period, there were no expired options (2010: 1,075,000 share options expired on 30 November 2010).

Options cancelled

During the half-year reporting period, 250,000 share options were cancelled due to the termination of an employee.

There were no other movements in the issued capital of the Company in either the current or the prior interim reporting periods.

7. Contingencies and commitments

There has been no material change in contingent liabilities and commitments since the last annual reporting date 30 June 2011.

8. Events subsequent to reporting date

On 25 January 2012, at a General Meeting of shareholders passed an ordinary resolution for the approval to issue 43,528,743 fully paid ordinary shares in the capital of the Company in accordance with the Joint Venture Interest Sale Agreement between Stellar Resources Limited and Gippsland Limited which entitles Stellar to 100% project ownership of the "Heemskirk Tin Project".

On 31 January 2012, 43,528,743 fully paid ordinary shares were issued to Gippsland Limited.

On 6 February 2012, Stellar Resources Limited announced that it placed 39,175,868 fully paid ordinary shares with institutional and sophisticated private clients of Taylor Collison Limited at a price of $0.08 per share to raise $3.1 million before costs.

On 6 February 2012, Stellar Resources Limited also announced a fully underwritten 1 for 6 nonrenounceable entitlement offer at $0.08 per share to raise an additional $2.6 million before costs.

The net funds raised by the placement and entitlement offer will be used principally to advance the Heemskirk Tin Project toward the completion of a bankable feasibility study.

On 15 February 2012, Stellar Resources Limited announced that the non-renounceable rights issue was open. The Offer Booklet, Entitlement and Acceptance form were despatched to eligible shareholders on that date.

Other than stated, in the opinion of the Directors of the Company, there has not arisen in the interval between the end of the half-year and the date of this report any other item, transaction or event of a material and unusual nature likely to substantially affect the results of the Group during the remainder of the financial year.

Directors' declaration

The Directors of the Company declare that:

• (a) in the Directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and
• (b) in the Directors' opinion, the financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Consolidated Entity.

Signed in accordance with a resolution of the Directors made pursuant to s.303(5) of the Corporations Act 2001.

On behalf of the Directors

P G Harman Chairman Melbourne Dated this 22nd February 2012.

Deloitte

Deloitte Touche Tohmatsu A.B.N. 74 490 121 060

550 Bourke Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia

DX 111 Tel: +61 (0) 3 9671 7000 Fax: +61 (0) 3 9671 7001 www.deloitte.com.au

Independent Auditor's Review Report to the Members of Stellar Resources Limited

We have reviewed the accompanying half-year financial report of Stellar Resources Limited, which comprises the condensed consolidated statement of financial position as at 31 December 2011, and the condensed consolidated statement of comprehensive income, the condensed consolidated statement of cash flows and the condensed consolidated statement of changes in equity for the half-year ended on that date, selected explanatory notes and, the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year as set out on pages 6 to 15.

Directors' Responsibility for the Half-Year Financial Report

The directors of Stellar Resources Limited are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of Stellar Resources Limited's financial position as at 31 December 2011 and its performance for the halfvear ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Stellar Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Auditor's Independence Declaration

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the

Deloitte

Page 2 22 February 2012

Corporations Act 2001, which has been given to the directors of Stellar Resources Limited, would be in the same terms if given to the directors as at the time of this auditor's report.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Stellar Resources Limited is not in accordance with the Corporations Act 2001, including:

• (a) giving a true and fair view of Stellar Resources Limited's financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and
• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Delatte Tarde Tahinta

DELOITTE TOUCHE TOHMATSU

lai Santé

Ian Sanders Partner Chartered Accountants Melbourne, 22 February 2012

CORPORATE DIRECTORY

Directors

Phillip G Harman (Non-executive Chairman) Thomas J Burrowes (Non-executive) David J Isles (Non-executive) Thomas H Whiting (Non-executive)

Company Secretary Christina R Kemp

Chief Executive Officer Peter G Blight

Registered Office

Level 17 530 Collins Street Melbourne VIC 3000

Telephone: (03) 9618 2540 Facsimile: (03) 9649 7200 E-mail: srzinfo@stellarresources.com.au Website: www.stellarresources.com.au

Registers of unlisted director and employee options held at this address

Tax Agents and Advisors

Deloitte Private Pty Ltd 550 Bourke Street Melbourne VIC 3000

Auditor

Deloitte Touche Tohmatsu 550 Bourke Street Melbourne VIC 3000

Legal Advisor Bryan D Cumming 21 Adam Street Indented Head VIC 3223

Bankers

National Australia Bank Limited Level 2, 330 Collins Street Melbourne VIC 3000

Bank West Level 6, Bourke Place 600 Bourke Street Melbourne VIC 3000

Home Stock Exchange

Australian Securities Exchange Level 4, Rialto North Tower 525 Collins Street Melbourne VIC 3000

ASX code for shares: SRZ

Share Registry

Boardroom Pty Limited Level 7, 207 Kent Street Sydney NSW 2000

Register of listed ordinary shares held at this address