STELLAR RESOURCES LIMITED — Interim / Quarterly Report 2019

Mar 5, 2019

STELLAR RESOURCES LIMITED ABN 96 108 758 961

HALF YEAR FINANCIAL REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

Stellar Resources Limited Contents 31 December 2018

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Stellar Resources Limited Corporate directory 31 December 2018

Directors	Phillip Harman (Non-Executive Chairman)Peter Blight (Managing Director)Thomas Whiting (Non-Executive Director)Miguel Lopez de Letona (Non-Executive Director)
Company Secretary	Melanie Leydin
Registered Office	Level 17530 Collins StreetMelbourne VIC 3000Facsimile: (03) 9077 9233Telephone: (03) 9692 7222
Share register	Boardroom Pty LimitedLevel 12, 225 George StreetSydney NSW 2000Telephone: 1300 737 760
Auditor	Deloitte Touche Tohmatsu550 Bourke StreetMelbourne VIC 3000
Bankers	National Australia Bank800 Bourke StDocklands VIC 3008
Stock exchange listing	Stellar Resources Limited shares are listed on the Australian Securities Exchange(ASX code: SRZ and SRZO)
Website	www.stellarresources.com.au
Tax Agents and Advisors	Deloitte Private Pty Ltd550 Bourke StreetMelbourne VIC 3000

Stellar Resources Limited Review of operations 31 December 2018

REVIEW OF OPERATIONS

Stellar has continued to consolidate its land holdings over tin assets on the west coast of Tasmania and now owns 100% of six tin deposits and 6km of prime exploration strike length along tin mineralised structures. Two of the additional ore sources, St Dizier and Razorback provide an opportunity for low-cost open pit development and early entry to tin production. The flagship Heemskirk tin project remains the core asset of the company with its potential to deliver a long-life underground mine comparable to the tier-one Renison mine which lies 18km to the northeast of Zeehan.

Key Achievements

• December 2018, EL13/2018 Montana Flats covering extensions of the Heemskirk tin mineralisation to the north of ML2023P/M was secured
• December 2018, St Dizier ML10M/2017 granted for an initial term of 6 years
• January 2019, St Dizier Scoping Study updated for current tin price and exchange rates
• January 2019, exploration targets identified within the Montana Flats EL

Tenements Secured

Figure 1:

Assets

Montana Flats (EL13/2018) is a 24km2 tenement that lies immediately north of the Heemskirk tin deposits and provides tenure for 5 years. The strategically important tenement was granted in December 2018 following a competitive tender process that focused on Stellar's exploration model, work program and track record. Stellar has identified a number of exploration drill targets within the EL.

St Dizier (ML10M/2017) is a 2km2 mining lease that provides Stellar with unencumbered access to the St Dizier tin deposit for an initial period of 6 years. St Dizier is located 20km to the northwest of Zeehan along the all-weather Heemskirk Road.

Positive St Dizier Scoping Study

The updated St Dizier Scoping Study valuation has resulted in a base case NPV 10%, at current tin prices (US$20,000/t), determined to an accuracy of ±35%, of approximately A$10.4m, an IRR of approximately 166% and a payback period of approximately 8 months. The project has a low capital investment estimated at A$ 3.8m and can be bought into production within 3 months of receiving approvals, providing flexibility to ensure that it is developed in a supportive tin price environment (see Table 1).

Stellar Resources Limited Review of operations 31 December 2018

Technical & Financial	Units	Base Case
Parameters
Tin Price	US$/t	20,000
Realisation Cost	US$/t	2,500
Exchange Rate	US$/A$	0.72
Mine Life	months	30
Strip Ratio (dil)	x	4.7
Ore Mined (dil)	tonnes	409,179
Tin Grade (dil)	℅	0.90
Tin Recovery	%	50
Tin in Concentrate	tonnes	1,841
Unit Cash Cost	US$/t tin	10,539
Capital Expenditure	A$m	3.8
NPV 10% pre-tax	A$m	10.4
IRR	℅	166
Payback	months	8

Figure 2: St Dizier Long Projection Showing Planned Open Pit

The 2015 St Dizier Scoping Study was based on the following key parameters:

• Global Indicated Resource of 1.20mt @ 0.69% tin (0.3% tin cut-off grade) includes West and Central Lodes
• Open pit mine on the upper section of the Central Lode a mineable resource of 409,179t @ 0.90% tin was defined as the in-situ resource within a design pit shell (see Figure 2)
• Contractor mining pit dimensions set maximum annual ore mining rate at 163,000t
• Contractor ore haulage up to 20km to a processing plant
• Renison tin style processing flow sheet crush, grind, magnetic separation, sulphide float, gravity separation, tin float and concentrate dressing to >50% tin in concentrate
• Concentrate shipped to Asia for smelting under industry treatment and refining terms

Exploration

Exploration will focus on the Razorback and Montana Flats ELs (see Figure 1).

At Razorback, the primary objective of the test-work is to determine whether a low-cost fine gravity separation process can produce a saleable tin concentrate from Razorback tailings. The secondary objective will be to calculate a theoretical overall recovery for Razorback ore that can be used in an economic review of the Razorback open pit.

An assessment of tin targets on the Montana Flats EL, focused on historical mines that have had little or no drilling at depth or in the case of silver mines no testing for associated tin lodes. The targets identified in Figure 3 are the Oonah, Montana No1 and Zeehan Western mines. (Other targets shown in Figure 3, occur to the south of EL11/2017 on Stellar's ML2023P/M)

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Stellar Resources Limited Review of operations 31 December 2018

Tin Market Outlook

The outlook for tin has steadily improved over the half year with steady demand growth and disrupted supply from Indonesia as authorities move to gain control over illegal production. An increase in the London Metal Exchange (LME) tin price from a low of US$18,425/t in late November 2018 to the current level of US$21,680/t in February 2019 reflects a response to restricted Indonesian supply and re-structuring of supply in China (see Figure 4). The tin price has out-performed all other LME metal prices in the period since November 2018.

• In December quarter 2018, Indonesian tin exports declined by 40% to 13,800t on the previous corresponding period as the industry restructured to meet permitting requirements.
• According to the International Tin Association (ITA), China's refined tin production declined by 29% in the December quarter 2018 due to disrupted production in Yunnan province and a shortage of tin concentrate.
• ITA estimates that shipments of tin in concentrate from Myanmar to China fell by 48% in December quarter 2018 due to declining grade and a reduction in government owned tin stocks.
• Research into tin use in rechargeable batteries is continuing to proliferate. ITA have identified nine tin-inanode technologies that could be commercialised. In addition, research at the University of Illinois has developed a nickel-tin 3D anode with significant advantages in energy intensity.

Figure 4: LME Tin Price (US/t, A$/t) Versus Exchange Stocks (t)

Stellar Resources Limited Directors' report 31 December 2018

The Directors of Stellar Resources Limited ("the Company") and its controlled entities ("the Consolidated Entity") submit herewith the financial report for the half-year ended 31 December 2018. 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 Harman Peter Blight Thomas Whiting Miguel Lopez de Letona

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

Principal activities

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

Dividends

There were no dividends paid, recommended or declared during the current or previous financial half-year.

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $240,888 (31 December 2017: $471,515).

Revenue during the period amounted to $10,925 (2017: $25,659) all of which was interest received.

Administration expenses amounted to $242,423 (2017: $339,009) resulting from continuing operations, the decrease was largely due to decreased corporate and exploration associated activities during the half-year. The Impairment loss on exploration and evaluation assets amounted to Nil (2017: $148,401).

Financial Position

The net assets of the consolidated entity decreased by $269,942 to $18,424,474 as at 31 December 2018 (30 June 2018: $18,694,416) which is largely due to the loss from continuing operations. The consolidated entity's working capital surplus, being current assets less current liabilities was $903,817 at 31 December 2018 (30 June 2018: $1,223,032). During the half-year the consolidated entity had a negative cash flow from operating activities of $262,463 (2017: $328,279).

Significant changes in the state of affairs

There were no significant changes in the state of affairs of the consolidated entity during the financial half-year.

Matters subsequent to the end of the financial half-year

No matter or circumstance has arisen since 31 December 2018 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Environmental Regulations

The consolidated entity'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 halfyear period covered by this report.

Auditor's independence declaration

The auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report.

Stellar Resources Limited Directors' report 31 December 2018

This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

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On behalf of the directors

___________________________

P Blight Managing Director

6 March 2019 Melbourne

Deloitte Touche Tohmatsu ABN 74 490 121 060

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

DX: 111 Tel: +61 (03) 9671 7000 Fax: +61 (03) 9671 7001 www.deloitte.com.au

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

6 March 2019

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 2018, 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

DELOITTE TOUCHE TOHMATSU

Ryan Hansen Partner Chartered Accountant

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

Stellar Resources Limited Statement of profit or loss and other comprehensive income For the half-year ended 31 December 2018

	Consolidated
	31 December2018$	31 December2017$
RevenueInterest received	10,925	25,659
ExpensesDepreciation and amortisation expensesExploration expenditure and other costs written offAdministration expenditure	(9,390)-(242,423)	(9,764)(148,401)(339,009)
Loss before income tax expense	(240,888)	(471,515)
Income tax expense	-	-
Loss after income tax expense for the half-year attributable to the owners of StellarResources	(240,888)	(471,515)
Other comprehensive income
Items that may not be transferred subsequently to income statementGain on the revaluation of financial assets at fair value through other comprehensiveincome, net of tax	(29,054)	37,166
Other comprehensive income for the half-year, net of tax	(29,054)	37,166
Total comprehensive income for the half-year attributable to the owners of StellarResources	(269,942)	(434,349)
	Cents	Cents
Basic earnings per shareDiluted earnings per share	(0.06)(0.06)	(0.12)(0.12)

Stellar Resources Limited Statement of financial position As at 31 December 2018

	Consolidated
		31 December
	Note	2018$	30 June 2018$
Assets
Current assets
Cash		898,226	1,222,238
Trade and other receivables		12,041	6,207
Other financial assetsOther assets	3	59,82619,665	88,88020,200
Total current assets		989,758	1,337,525
Non-current assets
Trade and other receivables		166,050	157,470
Property, plant and equipment		125,515	134,905
Exploration expenditure	4	17,233,225	17,188,699
Total non-current assets		17,524,790	17,481,074
Total assets		18,514,548	18,818,599
Liabilities
Current liabilities
Trade and other payables		33,045	60,538
Provisions		46,782	44,991
Other liabilities		6,114	8,964
Total current liabilities		85,941	114,493
Non-current liabilities
Provisions		4,133	3,574
Other liabilities		-	6,116
Total non-current liabilities		4,133	9,690
Total liabilities		90,074	124,183
Net assets		18,424,474	18,694,416
Equity
Issued capital	5	36,867,490	36,867,490
Reserves		1,725,535	1,754,589
Accumulated losses		(20,168,551)	(19,927,663)
Total equity		18,424,474	18,694,416

Stellar Resources Limited Statement of changes in equity For the half-year ended 31 December 2018

Consolidated	Issuedcapital$	Reserves$	Accumulatedlosses$	Total equity$
Balance at 1 July 2017	36,867,490	2,236,127	(19,734,597)	19,369,020
Loss after income tax expense for the half-yearOther comprehensive income for the half-year, net of tax	--	-37,166	(471,515)-	(471,515)37,166
Total comprehensive income for the half-year	-	37,166	(471,515)	(434,349)
Transactions with owners in their capacity as owners:Lapse of options	-	(497,426)	497,426	-
Balance at 31 December 2017	36,867,490	1,775,867	(19,708,686)	18,934,671
Consolidated	Issuedcapital$	Reserves$	Accumulatedlosses$	Total equity$
Balance at 1 July 2018	36,867,490	1,754,589	(19,927,663)	18,694,416
Loss after income tax expense for the half-yearOther comprehensive income for the half-year, net of tax	--	-(29,054)	(240,888)-	(240,888)(29,054)
Total comprehensive income for the half-year	-	(29,054)	(240,888)	(269,942)
Balance at 31 December 2018	36,867,490	1,725,535	(20,168,551)	18,424,474

Stellar Resources Limited Statement of cash flows For the half-year ended 31 December 2018

	Consolidated31 December31 December20182017$$
Cash flows from operating activitiesPayments to suppliers	(262,463)	(328,279)
Net cash used in operating activities	(262,463)	(328,279)
Cash flows from investing activities
Payments for security deposits	(8,580)	(9,400)
Interest received	12,496	39,071
Payments for exploration expenditure	(56,500)	(915,639)
Net cash used in investing activities	(52,584)	(885,968)
Cash flows from financing activities
Payments for finance lease	(8,965)	(8,485)
Net cash used in financing activities	(8,965)	(8,485)
Net decrease in cash and cash equivalents	(324,012)	(1,222,732)
Cash and cash equivalents at the beginning of the financial half-year	1,222,238	2,901,944
Cash and cash equivalents at the end of the financial half-year	898,226	1,679,212

Note 1. Significant accounting policies

These general purpose financial statements for the interim half-year reporting period ended 31 December 2018 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.

These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2018 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the policies stated below.

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 2018 comprises the Company and its subsidiaries (together referred to as the "Consolidated Entity").

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 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 2018 annual financial report for the financial year ended 30 June 2018, except for the impact of the of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

Amendments to AASBs and the new Interpretation that are mandatorily effective for the current reporting period

The Consolidated Entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current half-year.

All new accounting standards required, were adopted and they did not have a material impact.

The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the consolidated entity's accounting policies and has no effect on the amounts reported for the current or prior half-years.

The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity.

Note 1. Significant accounting policies (continued)

The following Accounting Standards and Interpretations are most relevant to the consolidated entity:

AASB 9 Financial Instruments

The consolidated entity has adopted AASB 9 from 1 July 2018. The standard introduced new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows which arise on specified dates and that are solely principal and interest. A debt investment shall be measured at fair value through other comprehensive income if it is held within a business model whose objective is to both hold assets in order to collect contractual cash flows which arise on specified dates that are solely principal and interest as well as selling the asset on the basis of its fair value. All other financial assets are classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading or contingent consideration recognised in a business combination) in other comprehensive income ('OCI'). Despite these requirements, a financial asset may be irrevocably designated as measured at fair value through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities designated at fair value through profit or loss, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected credit losses using a lifetime expected loss allowance is available. There will be no material impact on the carrying values. Changes in fair value are expected to continue being recorded through OCI, with the one-time election to record equity investments as such expected to be undertaken by the directors. Under AASB 9 the fair value gains/losses in relation to equity are not recycled to the Statement of Profit and Loss (even on disposal of the investment) and are not subject to impairment testing.

AASB 15 Revenue from Contracts with Customers

This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or implied) to be identified, together with the separate performance obligations within the contract; determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the performance obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied when the service has been provided, typically for promises to transfer services to customers. For performance obligations satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to understand the contracts with customers; the significant judgements made in applying the guidance to those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The consolidated entity has adopted this standard from 1 July 2018 but it has no material impact as there are no contracts with customers.

Note 1. Significant accounting policies (continued)

Amendments to AASBs and the new Interpretation that are mandatorily effective for the future reporting period:

AASB 16 Leases

This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position, measured at the present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. The consolidated entity will adopt this standard from 1 July 2019 but no material impact is expected as the consolidated entity currently has no material leases.

Going concern

Stellar Resources Limited's 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 2018, the consolidated entity recognised a loss of $240,888, had net cash outflows from operating activities of $262,463, payments for exploration activities of $56,500 and had an accumulated loss of $20,168,551 as at 31 December 2018. The continuation of the consolidated entity 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 2018, the consolidated entity had cash assets of $898,226, net working capital of $903,817, including investments in Twenty Seven Co. (formerly UraniumSA Limited) of $15,552, Samphire Uranium Limited of $21,774 and Renascor Resources Limited of $22,500 which can be liquidated if and when required.

The most recently prepared cash flow forecast prepared by management and reviewed by the Directors indicates that the consolidated entity will hold sufficient cash reserves to continue its current exploration programmes and other working capital requirements beyond twelve months from issuing these financial statements. The cash flow forecast takes into account the consolidated entity's implementation of cost reviews which includes exploration activity and overhead expenditure, as well as raising new equity capital in order for the consolidated entity to meet its planned exploration expenditure.

In the event that the consolidated entity is unsuccessful in the matters set out above, there is material uncertainty whether the consolidated entity will continue as a going concern and therefore whether it will realise its assets and discharge its liabilities in the normal course of business and at the amounts stated in the financial report.

Stellar Resources Limited Notes to the financial statements 31 December 2018

Note 2. Segment information

Identification of reportable operating segments

During the current financial year the consolidated entity operated in one segment being an explorer of tin.

AASB 8 requires operating segments to be identified on the basis of internal reports about the components of the consolidated entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. In the current year the board reviews the consolidated entity as one operating segment being mineral exploration within Australia.

Revenue by geographical area

All assets and liabilities and operations are based in Australia.

Note 3. Current assets - Other financial assets

	Consolidated31 December
	2018$	30 June 2018$
Investment in Twenty Seven Co. (formerly UraniumSA Limited)Investment in Renascor Resources Limited	15,55222,500	31,10636,000
Investment in Samphire Uranium Limited	21,77459,826	21,77488,880

Reconciliation

Reconciliation of the fair values at the beginning and end of the current and previous financial half-year are set out below:

Opening fair value	88,880	72,991
Revaluation increments/(decrements)	(29,054)	15,889
Closing fair value	59,826	88,880

Shares in Twenty Seven Co. (ASX:TSC) (formerly UraniumSA Limited (ASX:USA)) (3,888,238 fully paid ordinary shares held) and Renascor Resources Limited (1,500,000 fully paid ordinary shares held) are held by Hiltaba Gold Pty Ltd (a wholly owned subsidiary) and are measured at fair value valued in accordance AASB 13 - Level 1 of the fair value hierarchy - quoted prices (unadjusted) in active markets for identical assets or liabilities. A revaluation decrement of $29,054 was recognised in other comprehensive income.

The valuation remains unchanged from 30 June 2018 in Samphire Uranium Limited (3,888,238 fully paid ordinary shares held).

Note 4. Non-current assets - exploration expenditure

	Consolidated31 December
	2018$	30 June 2018$
Exploration expenditure	17,233,225	17,188,699

Note 4. Non-current assets - exploration expenditure (continued)

Reconciliations

Reconciliations of the written down values at the beginning and end of the current financial half-year are set out below:

Consolidated	$
Balance at 1 July 2018Expenditure during the half-year	17,188,69944,526
Balance at 31 December 2018	17,233,225

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

Note 5. Equity - issued capital

	Consolidated
	31 December		31 December
	2018Shares	30 June 2018Shares	2018$	30 June 2018$
Ordinary shares - fully paid	379,713,489	379,713,489	36,867,490	36,867,490

Ordinary shares

Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held.

At shareholders meetings, each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

Note 6. Equity - dividends

There were no dividends paid, recommended or declared during the current or previous financial half-year.

Note 7. Commitments

		Consolidated31 December
	2018$	30 June 2018$
Exploration Commitments
Within one year	600,973	616,395
One to five years	1,855,650	1,489,211
	2,456,623	2,105,606

In order to maintain current rights to tenure to exploration and mining tenements, the consolidated entity has the above exploration expenditure requirements up until expiry of leases. These obligations, which may be varied from time to time and which are subject to renegotiation upon expiry of the lease are not provided for in the financial report and are payable. Current year commitments will be met on the assumption that additional funding and capital will be raised. However if it is not successful, management is confident that these commitments may be deferred with no consequences with maintaining the right to tenure the exploration and mining tenements.

Note 8. Events after the reporting period

No matter or circumstance has arisen since 31 December 2018 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Stellar Resources Limited Directors' declaration 31 December 2018

The Directors of the Company declare that:

• 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
• in the Directors' opinion, the financial statements and notes hereto 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 section 303(5)(a) of the Corporations Act 2001.

On behalf of the Directors

___________________________

P Blight Managing Director

6 March 2019 Melbourne

6,116

Deloitte Touche Tohmatsu ABN 74 490 121 060

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

Tel: +61 3 9671 7000 Fax: +61 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 2018, and the condensed consolidated statement of profit or loss and other 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, notes comprising a summary of significant accounting policies and other explanatory information, 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 halfyear.

Directors' Responsibility for the Half-Year Financial Report

The directors of the company 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 gives a true and fair view and 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 the consolidated entity's financial position as at 31 December 2018 and its performance for the half-year 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 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 review report.

Liability limited by a scheme approved under Professional Standards Legislation.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 in the financial report, which indicates that the Group incurred a net loss of $240,888, and had a net cash outflow from operating activities of $262,463 during the period ended 31 December 2018. As stated in the Note 1, these events or conditions, along with other matters set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt about the Group's ability to continue as a going concern. Our conclusion is not modified in respect of this matter.

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 the consolidated entity's financial position as at 31 December 2018 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.

DELOITTE TOUCHE TOHMATSU

Ryan Hansen Partner Chartered Accountants Melbourne, 6 March 2019