STELLAR RESOURCES LIMITED — Interim / Quarterly Report 2021

Jul 26, 2021

==> picture [594 x 97] intentionally omitted <==

----- Start of picture text -----

ASX ANOUNCEMENT l ASX: SRZ
27 July 2021
----- End of picture text -----

Report for the Quarter ended 30 June 2021

Highlights

Heemskirk Tin Project

• A 9-hole Phase 1 diamond drilling program (for ~4,900m) targeting new areas of high-grade tin mineralisation is underway at, and adjacent to, the Company’s flagship Heemskirk Tin Project including;

• 7 holes targeting depth extensions below key historic silver-lead mines with typical ore grades of 20 to 100 Oz/t silver. These holes target depths below the historically mined silver-lead lodes where transition to tin mineralisation is expected although there is also potential to intersect deeper highgrade silver-lead-zinc lodes.

• 2 holes targeting depth extensions ~100m below the Severn tin resource limit at a depth of ~600m from surface. It is hoped that mineralisation will continue and increase in grade towards the underlying granite contact.

• The Phase 1 program is being undertaken using 2 rigs with the first rig commencing on 4 June and the second rig commencing on 24 June. Subsequent to the quarter end, drilling is progressing well with the first two holes nearing target depths as shown below:

Hole	Deposit	Rig	Planned End of Hole Depth(m)	Depth at 22 July 2021 (m)
ZS140	Severn	Rig 8	750	520
ZM127A	Montana	Rig 6	500	305

• Stellar was awarded four Exploration Drilling Co-Funding grants in June totalling $185,000 under the Fifth Round of the Tasmanian Governments Exploration Drilling Grant Initiative (EDGI) program which will cofund direct drilling costs of holes included in the Phase 1 drilling program underway.

• Stellar is continuing review of a larger Phase 2 drilling program including:

• Indicated resource infill drilling program over key Heemskirk Tin Project deposits.

• A deep hole targeting the main conduit of mineralising fluids at Heemskirk.

• Stellar also continuing review of other project work streams / studies required to advance the Heemskirk Tin Project to PFS and BFS completion.

• Tin prices have continued to soar throughout the quarter with the LME spot process reaching US$35,101/t on 23 July 2021 as demand growth exceeds falling supply and stocks remain at near record lows.

• With the highest grade undeveloped tin resource in Australia & 2nd highest globally, a scoping study completed in 2019 confirming attractive economics, and drilling now restarted, the Heemskirk Tin Project is well positioned to take advantage of this year’s booming tin market.

Stellar Resources Limited ABN: 96 108 758 961

Level 4, 96-100 Albert Road, South Melbourne, Victoria, 3205, Australia T: +61 3 9692 7222 F: +61 3 9077 9233 E: srzinfo@stellarresources.com.au Web: www.stellar.com.au Twitter: @SRZ_Tin

Report for the Quarter ended 30 June 2021

North East Tasmania Gold Exploration Project

• NE Tasmania is a continuation of the Victorian Western Lachlan Fold Belt, which hosts the Fosterville Mine and other Tier 1 goldfields and has produced >80 MOz gold.

• NE Tasmania hosts the Beaconsfield Mine (2.3 MOz), Mathinna and Lefroy Goldfields and hundreds of smaller gold mines and occurrences.

• While Victoria is currently experiencing intense gold exploration activity, NE Tasmania has had very little modern gold exploration.

• Stellar holds 12 first in time Exploration Licence (EL) applications covering a large area of 2,534 km2 in NE Tasmania:

• 10 EL applications (2,295 km2) submitted in September 2020 - Processing of the first 8 of these EL’s (EL11/2020 to EL18/2020) by Mineral Resources Tasmania is now nearing completion and the Company expects these EL’s will be granted in early August 2021. Processing of EL10/2020 and EL19/2020 is also well advanced and the Company expects these 2 EL’s to be granted in September 2021.

• 2 EL applications (240 km2) submitted in March 2021 - Processing of these 2 ELA’s (EL2/2021 and EL3/2021) is expected to be completed by ~January 2022.

• Stellar’s ELAs are highly prospective for Victorian-style orogenic gold and Intrusion Related Gold Systems (IRGS) and has ~77 historic gold and ~25 tin occurrences recorded.

• Identification of desktop orogenic and IRGS gold exploration targets by Stellar’s technical team on its ELAs continued during the quarter using a full GIS capability for targeting including; recently reprocessed aeromagnetic, radiometric and gravity data, geology, recorded gold and tin occurrences, historic drilling and geochemical data.

• Commencement of site reconnaissance visits, rock chip and soil geochemistry sampling over identified desktop targets on granted EL’s is planned to commence in the second half of CY 2021.

Corporate

• $3.6m capital raising completed during the quarter.

• Binding Term Sheet signed in May with Alligator Energy Limited (ASX:AGE) to sell non-core Exploration Licence EL6350 in South Australia for a total consideration of 7,105,263 AGE shares (valued at $248,684 based on the $0.035 current AGE share price).

• Mr Gary Fietz’s title was recently changed from Technical Director to Executive Director, reflecting his extended responsibilities with the Company.

• The Company Secretary was changed in June from Ms Melanie Leydin to Mr Mathew Watkins who are both employees of Leydin Freyer, a specialist Company Secretarial, Governance and Accounting firm which continues to undertake the Company Secretarial role for Stellar.

• Cash balance of $5.4m at 30 June 2021.

==> picture [83 x 20] intentionally omitted <==

2

Report for the Quarter ended 30 June 2021

Heemskirk Tin Project

Tin Market Outlook

Tin prices have soared since the start of this year exceeding 10-year highs. The LME spot tin price has averaged ~US$32,000/t for the June Quarter and reached US$35,101/t on 23 July 2021.

This is due to strong physical global tin demand growth which has exceed falling global tin supply and is creating an extremely tight market for tin with LME tin stocks remaining near record lows.

==> picture [490 x 362] intentionally omitted <==

LME Spot Tin Prices (1 Jan 2010 to 23 July 2021)[1]

Tin Demand

Physical tin demand is growing strongly as a result of:

• Covid and the rise of remote working has boosted demand for computers and other home electronics devices. As tin solder is the ‘glue’ connecting everything electronic, this means increased demand for tin.

• Continued demand for tin in traditional uses including tinplate, chemicals, lead-acid batteries, alloys and other uses.

Tin Supply

Global tin supply has fallen for each of the last 3 years. Falling global tin supply has been the result of:

==> picture [83 x 20] intentionally omitted <==

3

Report for the Quarter ended 30 June 2021

• China is the world’s largest miner of tin and smelter of tin metal and has also been a net tin importer this year. Production cuts have occurred in many Chinese tin smelters this year due to tin ore shortages. China is stockpiling tin to meet its goal of self-sufficiency in semiconductors.

• Indonesia (world’s 2nd largest producer) - production has fallen this year due to a poor monsoon season along with ongoing environmental controls and covid issues.

• Myanmar (world’s 3rd largest producer) - production has fallen this year due to the military coup and largely unreliable artisanal and small-scale mining.

• South America (world’s 4th largest producer) supply has been reduced this year due to Covid issues.

• Many existing tin mines now have lower grade and diminishing resources. Limited exploration or investment in new tin projects with many projects either in risky jurisdictions and/or low grade deposits.

Tin – The Number 1 New Technology Metal

Tin ranked as the No. 1 metal best placed to benefit from new technology according to a survey undertaken by Boston’s Massachusetts Institute of Technology (MIT) for Rio Tinto in 2018.

==> picture [494 x 317] intentionally omitted <==

~50% of all tin is used as solder in electronics. Solder is the ‘glue’ that connects everything electronic together.

Our clean, new technology future is being driven by robotics, advanced computing, EV’s, energy storage and renewables – these all require more electronics and semiconductors which all need more tin.

Growing research is also showing that tin may be a more effective anode material in Li-ion batteries.

With the highest grade undeveloped tin resource in Australia & 2nd highest globally, a scoping study completed in 2019 confirming attractive economics, and drilling now restarted, the Heemskirk Tin Project is well positioned to take advantage of this year’s booming tin market which is expected to continue to perform strongly.

==> picture [83 x 20] intentionally omitted <==

4

Report for the Quarter ended 30 June 2021

Overview of Stellar’s Tin Projects

Stellar’s 100% owned tin projects have an enviable location within the well-established mining district on the West Coast of Tasmania with access to established infrastructure including nearby water and renewable power, access to the port of Burnie 150km to the north via sealed highway for export of concentrate, and a competitive local market for services, mining and processing inputs and labour.

Stellar’s flagship Heemskirk Tin Project is just 18km to the southwest of the Renison tin mine, the largest and most productive tin mine in Australia. Including Renison, there are 5 major underground metal mines, 3 of which are operating, within 30km of the Heemskirk Tin Project.

==> picture [449 x 427] intentionally omitted <==

Location of Stellar’s Tin Projects – West Coast of Tasmania

The Heemskirk Tin Project includes 4 nearby tin deposits; Severn, Queen Hill, Montana and Oonah. Stellar holds secure Mining Leases over the Heemskirk Tin Project including the tailings pipeline route and tailings storage site and also over the St Dizier satellite tin deposit.

In addition to the Heemskirk Tin Project, Stellar owns a portfolio of nearby Exploration Licences including the Montana Flats and Mount Razorback EL’s which contain a number of historic silver-lead-zinc mines with associated tin mineralization, and the St Dizier and Mount Razorback satellite tin deposits.

==> picture [83 x 20] intentionally omitted <==

5

Report for the Quarter ended 30 June 2021

==> picture [469 x 310] intentionally omitted <==

Heemskirk Tin Project Deposits (blow up), Secure Mining Leases and a Large EL Package

Heemskirk Tin Resources

The Heemskirk Tin Project has a Total Mineral Resource of 6.6 Mt @ 1.1% Sn at a 0.6% Sn cut-off grade, of which 2.12 Mt is in the Indicated Mineral Resource Category and 4.48Mt is in the Inferred Mineral Resource Category[2] . All deposits have higher grade zones and are amenable to mining at higher cut-off grades. All deposits open at depth.

Classification	Deposit	Tonnes (mt)	Sn (%)	Contained Sn (t)	Cassiterite % of Total Sn (%)	Cassiterite % of Total Sn (%)	Cu (%)	Pb (%)	Zn (%)
Indicated	Upper Queen Hill	0.32	1.0	3,230		87	0.2	2.1	1.0
	Lower Queen Hill	0.65	1.4	9,230		97	0.0	0.1	0.1
	Severn	1.15	1.0	11,500		99	0.1	0.0	0.1
Total Indicated		2.12	1.1	23,960		97	0.1	0.4	0.2
Inferred	Upper Queen Hill	0.11	1.6	1,760		94	0.2	1.9	0.7
	Lower Queen Hill	0.36	1.4	5,040		97	0.0	0.2	0.0
	Severn	2.74	0.9	24,660		99	0.0	0.0	0.0
	Montana	0.68	1.5	10,200		96	0.1	0.7	1.4
	Oonah	0.59	0.9	5,310		36	0.8	0.1	0.1
Total Inferred		4.48	1.0	46,970		90	0.1	0.2	0.3
Total Indicated + Inferred		6.60	1.1	70,930		92	0.1	0.3	0.3

==> picture [83 x 20] intentionally omitted <==

6

Report for the Quarter ended 30 June 2021

In addition, the St Dizier Tin deposit has a Total Mineral Resource of 2.26Mt @ 0.61% Sn of which 1.20 Mt in the Indicated Mineral Resource Category and 1.06 Mt is in the Inferred Mineral Resource Category[6] .

Heemskirk is the highest grade undeveloped tin resource in Australia and the second highest grade tin resource globally[3] .

==> picture [487 x 394] intentionally omitted <==

----- Start of picture text -----

Benchmarking –
World Tin Resources
----- End of picture text -----

2021 Phase 1 Drilling Program

A 9-hole Phase 1 diamond drilling program (for ~4,900m) targeting new areas of high-grade tin mineralisation is underway at, and adjacent to, the Company’s flagship Heemskirk Tin Project including;

• Part A - 7 holes targeting depth extensions below key historic silver-lead mines

• Part B - 2 holes targeting depth extensions ~100m below the Severn tin resource

The Phase 1 program is being undertaken using 2 rigs with the first rig commencing on 4 June and the second rig commencing on 24 June. Subsequent to the quarter end, drilling is progressing well with the first two holes nearing target depths as shown below:

Hole	Deposit	Rig	Planned End of Hole Depth(m)	Depth at 22 July 2021 (m)
ZS140	Severn	Rig 8	750	520
ZM127A	Montana	Rig 6	500	305

==> picture [83 x 20] intentionally omitted <==

7

Report for the Quarter ended 30 June 2021

Phase 1 Part A - Historic Silver-Lead Mines - Depth Extension Drilling[4,5]

The highly mineralised Zeehan mineral field contains many historically significant high-grade silver-lead mines which have a total recorded production of 26 MOz Silver & 190,000 t Lead and resulted in the development of a major town and smelters at Zeehan in the late 1800’s / early 1900’s.

Part A of the Phase 1 drilling program includes 7 planned holes (total of ~3,000m) aimed at identifying new areas of high-grade tin mineralisation below 4 of the largest historic silver-lead mines in the Zeehan mineral field (Montana No.1, Zeehan Western, Oonah & Zeehan Queen No. 4) which are located on Stellar’s licences and typically had:

• Ore grades of 20 Oz/t Silver to 100 Oz/t Silver

• Mining widths up to 2.7m (fissure veins)

• Mining lengths up to 300m

• Mining depths of 70m to 300m

Silver-Lead lodes typically transition into tin (with pyrite) lodes at depth. The 7 Phase 1 Part A holes target depths below the historically mined silver-lead lodes where transition to tin mineralisation is expected although there is also potential to intersect deeper high-grade silver-lead-zinc fissure lodes. No drilling ever done below these mines.

Tin mineralisation in the Zeehan district is generally associated with pyrite. Both the Queen Hill and Montana Deposits were recorded as “pyrite” lodes by the early silver-lead miners and considered worthless. Cassiterite (tin) mineralisation which was often fine grained was generally not recognised or assayed for by the early silver-lead miners. The Queen Hill tin deposit was discovered by Gippsland Minerals by sampling and then drilling of supposedly barren pyrite lodes exposed in the Zeehan Queen No. 4 silver-lead mine workings. Based on this Pyrite Lode model, Gippsland Minerals then drilled a reported pyrite lode associated with the silverlead lodes in the Montana No. 2 Mine thus discovering the Montana tin deposit. Pyritic lodes have also been recorded in the Oonah and Montana No. 1 historic silver-lead mines. These pyritic lodes are targets for tin mineralisation.

==> picture [246 x 197] intentionally omitted <==

----- Start of picture text -----

Zeehan Western 2021 Phase 1 Drillholes (blue)
Oblique View looking NE (red = Ag-Pb historic mining
stopes, white = Ag-Pb historic underground development)
----- End of picture text -----

==> picture [250 x 195] intentionally omitted <==

----- Start of picture text -----

Zeehan Western Mine - 1896
----- End of picture text -----

==> picture [83 x 20] intentionally omitted <==

8

Report for the Quarter ended 30 June 2021

==> picture [492 x 640] intentionally omitted <==

Zeehan Mineral Field - Sn Deposits & Historic Ag-Pb-Zn Mines on simplified Geology

==> picture [83 x 20] intentionally omitted <==

9

Report for the Quarter ended 30 June 2021

Phase 1 Part B - Severn Resource Depth Extension Drilling[5]

Part B of the Phase 1 drilling program includes two ~750m holes with provision for wedging & daughter holes planned (total of ~1,900m) targeting depth extensions of the Severn tin resource.

Severn is the largest of the Heemskirk Tin Project deposits and has been drilled only to ~500m depth. The 2 holes planned target extension of the Severn deposit ~100m below the current resource limit at a depth of ~600m. Severn remains open at depth where it is hoped that mineralisation will continue and increase in grade towards the underlying granite contact, predicted to be >1,000m below the surface from geophysical surveys.

==> picture [493 x 352] intentionally omitted <==

Severn Long Projection showing existing drillholes, resource and proposed hole locations[5]

==> picture [83 x 20] intentionally omitted <==

10

Report for the Quarter ended 30 June 2021

Phase 1 Drilling Program Summary[5]

Target	No. Holes	Approx. Hole Length (m)	Historic Silver Production (MOz)	Description
Oonah Mine	2	400	2.0	Large historic Ag-Pb mine, worked to 120m with Inferred resource based on historic drilling below (0.59 Mt at 0.9% Sn, 0,8% Cu, 0.1% Pb, 0.1% Zn). Remains open at depth
Montana No. 1 Mine	2	500-600	7.1	The largest Ag-Pb mine in Zeehan Field. Worked to 200m depth on 6 lodes
Zeehan Western Mine	2	400	4.8	One of largest Ag-Pb mines in Zeehan Field. Worked to 300m depth
Zeehan Queen No. 4 Mine	1	300	2.0	Large historic mine, worked to 70m where lode had transitioned to pyrite and never assayed for tin
Severn Resource	2	700	None	Targeting ~100m below currently defined Severn tin resource at ~600m depth
Total	9	4,900

Stellar Awarded Four Exploration Drilling Co-Funding Grants

Stellar was awarded four Exploration Drilling Co-Funding grants in June totalling $185,000 under the Fifth Round of the Tasmanian Governments Exploration Drilling Grant Initiative (EDGI) program which will co-fund direct drilling costs of 7 of the holes included in the Phase 1 drilling program underway.

Stellar is pleased to have been awarded 4 out of a total of 16 EDGI Round 5 grants recently awarded by the Tasmanian Government. Stellar’s success reflects the Tasmanian Government’s belief in the Heemskirk Tin Project and its support for Stellar’s proposal to explore for extensions of known tin mineralisation.

Phase 2 Drilling Program

A Phase 2 diamond drilling program is currently under review by Stellar including:

Severn and Queen Hill Indicated Resource Infill Program

Severn and Queen Hill are the two largest Heemskirk Tin Project deposits with a combined total Mineral Resource of 5.33Mt @ 1.0% Sn, of which 40% is Indicated & 60% Inferred[2] .

The Phase 2 drilling program under review comprises Infill drilling to upgrade a significant part of the Severn and Queen Hill Inferred Resource to an Indicated Resource in order to support a PFS / BFS for the project.

1 Deep hole

A deep hole is being considered as part of a Phase 2 drilling program to target the main conduit of mineralising fluids into the Severn and Queen Hill deposits from the underlying interpreted granite.

==> picture [83 x 20] intentionally omitted <==

11

Report for the Quarter ended 30 June 2021

Advancement of Heemskirk Tin Project to PFS/BFS Completion

Other project work streams and studies required to advance the Heemskirk Tin Project to PFS and BFS completion are also now under review by Stellar.

Many of the project work streams and studies have already been completed to a PFS level.

Work towards completion of the DPEMP is well progressed with environmental assessment program agreed and stage 1 surveys completed.

The project has secure Mining Leases granted over mine site, tailings pipeline route and tailings dam site.

Heemskirk Tin Project Scoping Study

In October 2019, Stellar announced the results of its Heemskirk Tin Project Scoping Study[6] based on development of an underground mine, processing plant, tailings storage facility and surface infrastructure to mine ~ 350ktpa ore at a LOM head grade of ~ 0.95% tin from the Queen Hill and Severn tin deposits (2 of the 4 Heemskirk deposits) over a 10 year initial mine-life. The project also includes open-pit mining of the St Dizier satellite tin deposit and trucking of ore to the Heemskirk processing plant during year 11 of the mine plan.

The processing plant is expected to produce ~ 4,500 tpa of concentrate containing ~ 2,200tpa of tin. Concentrate produced will be trucked 150km to the north via sealed road to the Port of Burnie for export to smelters in Asia.

The scoping study mine plan contains 58% Indicated Resources and 42% Inferred Resources over the Life of Mine. The first 4 years are based on mining 100% Indicated Resource[6] .

The 2019 Scoping Study confirmed the Heemskirk Tin Project has attractive economics:

• With a low pre-production capital base of A$57m, the Heemskirk Tin Project generates a pre-tax NPV[10%] of approximately A$83m (post-tax NPV[10%] of approximately A$71m), at a tin price of US$20,000/t and 0.70 USD:AUD exchange rate, to an accuracy of ±35%. The pre-tax internal rate of return of the project is approximately 45%.

• A competitive All-In Sustaining Cost of ~US$13,100/t of tin generates ~34% operating margin based on US$20,000/t tin price and 0.70 USD:AUD exchange rate.

The Heemskirk Tin Project 2019 Scoping Study was undertaken for the purpose of ascertaining whether a business case can be made to proceed to more definitive studies on the viability of the Heemskirk Tin Project. It is a preliminary technical and economic study of potential project viability based on low level technical and economic assessments that are not sufficient to support the estimation of ore reserves. Further exploration and evaluation work and appropriate studies are required before Stellar will be in a position to estimate any ore reserves or to provide any assurance of an economic development case[6] .

==> picture [83 x 20] intentionally omitted <==

12

Report for the Quarter ended 30 June 2021

Heemskirk Tin Project – Key Results from 2019 Scoping Study[6]

Heemskirk Tin Project – Key	Results from 2019 Scopi	ng Study6
Total Ore Production(LOM)	(Mt)	3.70
Annual Ore Production(LOM Ave)	(Tonnespa)	354,000
Sn Grade(LOM Ave)	(%)	0.94
Tin Recovery (LOM Ave)	(%)	69.4
Total Tin Production(LOM)	(Tonnes)	24,000
Annual Tin Production(LOM Ave)	(Tonnespa)	2,342
Mine Life	(Yrs)	11
Tin Price(USD)	(US$/t)	20,000
Exchange rate	USD:AUD	0.70
Tin Price(AUD)	(A$/t)	28,571
Gross Revenue	(A$M)	691
Total OperatingCosts(AISC)	(A$M)	454
Total Operating Costs(AISC)	(US$/t Tin)	13,100
OperatingCash Flow	(A$M)	237
OperatingMargin	(%)	34%
Capital Cost	(A$M)	57
Net Cash Flow(Pre-Tax)	(A$M)	180
**Pre-Tax NPV10% **
	(A$M)	83
**Post-Tax NPV10% **
	(A$M)	71
IRR(Pre-Tax)	(%)	45
Payback Period	(Yrs)	3.0
		1.5
Pre-Tax NPV/Capex

==> picture [83 x 20] intentionally omitted <==

13

Report for the Quarter ended 30 June 2021

North East Tasmania Gold Exploration Project

NE Tas – A Continuation of Victorian Western Lachlan Fold Belt[8]

Gold deposits in North East Tasmania lie within a continuation of the Western Lachlan Fold Belt in Victoria – one of the world’s largest orogenic gold provinces.

The Western Lachlan Fold Belt in Victoria hosts the >3 MOz Fosterville Mine, Bendigo and other Tier 1 goldfields and has produced >80 MOz gold.

NE Tasmania hosts the Beaconsfield Mine (2.3 MOz), New Golden Gate Mine (0.3 MOz) and Lefroy Goldfield (0.2MOz), along with hundreds of smaller historic gold mines and occurrences.

While Victoria is currently experiencing intense gold exploration activity, NE Tasmania has had very little modern gold exploration undertaken.

==> picture [381 x 469] intentionally omitted <==

Continuation of Western Lachlan Fold Belt from Victoria into NE Tasmania[8]

==> picture [83 x 20] intentionally omitted <==

14

Report for the Quarter ended 30 June 2021

Gold deposits in NE Tasmania share the same geological setting as their Victorian counterparts:

• Ordovician turbiditic meta-sediments (Mathinna Super-Group).

• Ordovician to Devonian deformation and metamorphism (Western Lachlan Orogen).

• Associated with nearby Devonian granitoid intrusives.

• Gold commonly in quartz veins occupying dilational zones along large- scale faults related to folding and deformation during the Lachlan Orogen.

• Predominantly NW oriented lodes controlled by regional structures and rheological contrasts between sedimentary units.

• Intrusion Related Gold System (IRSG) deposits also occur in NE Tasmania.

==> picture [487 x 355] intentionally omitted <==

Timing of Geological Events in NE Tasmania vs Melbourne and Bendigo Zone of Western Lachlan Fold Belt in Victoria (after Bierlein et al, 2005)[8]

==> picture [83 x 20] intentionally omitted <==

15

Report for the Quarter ended 30 June 2021

NE Tasmania Exploration Licence Applications[7]

Stellar has 12 first-in-time Exploration Licence Applications (ELAs) covering an area of 2,534 km[2] in NE Tasmania which is highly prospective for Victorian-style and IRGS gold exploration and contains ~77 recorded historic gold occurrences and 25 recorded historic tin occurrences:

• 10 first-in-time ELAs were registered in September 2020 covering an area of 2,295 km[2] . Processing of the first 8 of these EL’s (EL11/2020 to EL18/2020) by Mineral Resources Tasmania is now nearing completion and the Company expects these EL’s will be granted in early August 2021. Processing of EL10/2020 and EL19/2020 is also well advanced and the Company expects these 2 EL’s to be granted in September 2021.

• 2 first-in-time ELAs were registered in March 2021 covering an area of 240 km[2] . Processing of these 2 ELA’s (EL2/2021 and EL3/2021) is expected to be completed by ~January 2022.

==> picture [497 x 339] intentionally omitted <==

Stellar ELA’s, NE Tasmania Geology and Mineral Occurrences

NE Tasmania Gold Exploration Targets[7,8]

Numerous gold exploration targets have been identified within Stellar’s ELA’s areas based on the following targeting criteria:

• Ordovician turbiditic meta-sediments (Mathinna Super-Group)

• Ordovician to Devonian deformation and metamorphism (Western Lachlan Orogen)

• Devonian granitoid intrusives nearby

==> picture [83 x 20] intentionally omitted <==

16

Report for the Quarter ended 30 June 2021

• Predominantly NW Regional scale structural trends/lineaments identified in aeromagnetic and gravity surveys and corresponding mapped faults. Intersecting NE trends/faults also identified in some of the ELA’s

• Intrusive Related Gold Style (IRSG) targets identified from aeromagnetic surveys on some ELA’s

• Location of recorded gold (and tin) occurrences

• Ground open for application

A number of desktop orogenic and IRGS gold exploration targets have already been identified using full GIS targeting capability developed by Stellar’s technical team including; recently reprocessed aeromagnetic, radiometric and gravity data, geology, recorded gold and tin occurrences, historic drilling and geochemical data. A summary of the gold exploration targets within each of Stellar’s 12 NE Tasmania ELA’s is shown in the table below.

Summary of Stellar NE Tasmania ELA Gold Targets

			Regional Structures
		Ordovician		Granitoid
	Application		(Magnetic		Gold	Tin
Application Name		Mathinna		Intrusions
	Number		Lineaments &		Occurrences	Occurrences
		Group		nearby
			Mapped Faults)
Beaconsfield	ELA 10/2020	Y	NW	Y	18
Bridport Rd	ELA 11/2020	Y	NW	Y	3
Pipers River	ELA 12/2020	Y	NW	Y	15
Lilydale	ELA 13/2020	Y	NW	Y	6
Nunamara	ELA 14/2020	Y	NW & NE	Y	3
Camden Road	ELA 16/2020	Y	NW & N	Y	3
Scottsdale	ELA 15/2020	Y	NW, N & NE & IRGS	Y	2	21
Mt Saddleback	ELA 17/2020	Y	NW & NE	Y	13	1
Peppermint Hill	ELA 18/2020	Y	NW	Y	6
Scamander	ELA 19/2020	Y	N & NE	Y	7	1
South Scamander & Pyengana
	ELA 2/2021	Y	NW, N,NE	Y	1	2
Quakers Ranges	ELA 3/2021	Y	NW	Y

==> picture [83 x 20] intentionally omitted <==

17

Report for the Quarter ended 30 June 2021

Proposed Exploration Program

A summary of the proposed work program for the North East Tasmania Gold Exploration Project is shown in the table below.

NE Tasmania Gold Exploration Project - Proposed Work Program Summary[3]

==> picture [491 x 240] intentionally omitted <==

----- Start of picture text -----

Year 1
Historic data capture - reprocessed aeromagnetic, radiometric and gravity data,
Desktop Phase
geology, recorded gold and tin occurrences, historic drilling and geochemical data
captured in GIS - largely completed
(Prior to Grant of
Desktop target generation (orogenic lineaments/faults and IRGS targets) using full EL's)
GIS targeting capability developed by Stellar’s technical team - well advanced with
a number of targets defined)
Fieldwork – soil and rock chip sampling and analysis over key targets. Other field
reconnaissance activities.
Ground Based
Generation of drill targets foy Year 2 (eg anomalous soil geochemistry results) Exploration Phase
Year 2
(To commence on
First phase of drilling on drill targets identified in Yr 1. Combination of aircore or RAB grant of EL's)
for initial shallow drilling of targets, with follow up deeper reverse circulation and
diamond drilling planned
----- End of picture text -----

Commencement of site reconnaissance visits, rock chip and soil geochemistry sampling over identified desktop targets on granted EL’s is planned to commence in the second half of CY 2021.

==> picture [83 x 20] intentionally omitted <==

18

Report for the Quarter ended 30 June 2021

Corporate

Payments to related parties of the entity and their associates during the quarter were $89k compromising Director and consulting fees as outlined in the Appendix 5B.

The Company’s major cashflow movements for the quarter included:

• Exploration & Evaluation expenditure - $157k;

• Employee, administration and corporate costs - $197k;

• Proceeds from sale of investments - $419k; and

• Proceeds from capital raisings - $1.58m.

$3.6M Capital Raising Completed

During the quarter, the Company completed a $3.6m capital raising (before costs) by way of a placement of 163,636,364 fully paid ordinary shares at $0.022 (2.2 cents) per share. The placement was completed in two tranches:

• Tranche 1 was completed on 24 March 2021 under the Company’s available 15% capacity pursuant to ASX Listing Rule 7.1 raising $2.0m (before costs) from the issue of 90,909,090 fully paid ordinary shares at $0.022 (2.2 cents) per share.

• Tranche 2 – was completed on 11 May 2021 raising a further $1.6m from the issue of 72,727,274 fully paid ordinary shares at $0.022 (2.2 cents) per share, following shareholder approval at a general shareholder meeting held on 4th May 2021.

Sale of Non-Core Exploration Licence to Alligator Energy

A Binding Term Sheet was signed in May to sell Stellar’s non-core Exploration Licence EL6350 in South Australia to Alligator Energy Limited (ASX:AGE or “Alligator”) for a total consideration of 7,105,263 AGE shares (valued at $248,684 based on the $0.035 current AGE share price).

EL6350 is located on Eyre Peninsular, South Australia which has been held by Stellar’s 100% owned subsidiary, Hiltaba Gold Pty Ltd since 2008. In 2010, intersections of paleochannel hosted uranium mineralisation were recorded in several holes drilled close to the northern boundary of EL6350 by Stellar’s Joint Venture partner, Gingertom Resources Pty Ltd, a 100% owned subsidiary of Uranium SA Ltd (ASX:USA). In 2016 USA changed its name to Twenty Seven Co (ASX:TSC) and soon after demerged its South Australian uranium interests into unlisted public company Samphire Uranium Limited. In late 2020, Alligator acquired Samphire Uranium Limited. Alligator now hold the adjacent Exploration Licence EL5926 to the north of EL6350 which contains the Samphire Uranium Project comprising of the northern Blackbush deposit and the southern Plumbush deposit. The Plumbush deposit on Alligator’s adjoining EL5926 may extend southwards into EL6350.

Key terms of the Binding Term Sheet include:

• Stellar’s 100% owned subsidiary, Hiltaba Gold Pty Ltd has agreed to sell EL6350 to Alligator’s 100% owned subsidiary, S Uranium Pty Ltd (SUPL) for a total consideration of 7,105,263 AGE shares.

• The transaction is subject to;

• Hiltaba completing all 2020/21 EL6350 compliance reporting obligations to SA DEM (completed May).

• Hiltaba providing Alligator copies of historical exploration data for EL6350 (completed in June).

==> picture [83 x 20] intentionally omitted <==

19

Report for the Quarter ended 30 June 2021

• The issue of AGE shares payable to Stellar under the transaction being approved by Alligator’s shareholders (obtained at Alligator’s General Meeting held on 29[th] June 2021).

• Approval of the EL6350 renewal application lodged on 19th February 2021 by the South Australian Department for Energy and Mining (DEM) – in progress.

• Ministerial approval of the transfer of EL6350 to SUPL.

• Alligator will assume all tenement expenditure commitments and liabilities in relation to EL6350 at the time the transaction completes and will also cover annual rentals and other costs from the date of executing the Binding Terms Sheet.

Change of Mr Gary Fietz’s Title to Executive Director

Mr Gary Fietz’s title was recently changed from Technical Director to Executive Director, reflecting his extended responsibilities with the Company.

Change of Company Secretary

In June, the Company announced a change of the Company Secretary from Ms Melanie Leydin to Mr Mathew Watkins. Both Ms Leydin and Mr Watkins are employees of Leydin Freyer, a specialist Company Secretarial, Governance and Accounting firm which continues to undertake the Company Secretarial role for Stellar.

Mr Watkins is a Chartered Accountant who has extensive ASX experience within several industry sectors including Biotechnology, Bioscience, Resources and Information Technology. He specialises in ASX statutory reporting, ASX compliance, Corporate Governance and board and secretarial support. Mr Watkins is appointed Company Secretary on several other ASX listed companies. Leydin Freyer have vast experience working with listed entities and a strong background of working with growing companies within the Resources sector.

Change of Principal Place of Business

In June, the Company announced a change of its Principal Place of Business to:

Level 4, 96-100 Albert Road

South Melbourne, Victoria, 3205 Telephone +613 9692 7222 Facsimile +613 9077 9233

==> picture [83 x 20] intentionally omitted <==

20

Report for the Quarter ended 30 June 2021

Tenements

Description	Tenement Number	Interest Owned (%)
Mining Lease - Zeehan, Tasmania	ML 2023P/M	100
Mining Lease - Tailing Dam, Zeehan, Tasmania	ML 2M/2014	100
Mining Lease – Pipeline Route, Zeehan, Tasmania	ML 2040P/M	100
Retention Licence - Zeehan, Tasmania	RL 5/1997	100
Mining Lease - St Dizier, Tasmania	ML 10M/2017	100
Exploration Licence - Mt Razorback	EL 11/2017	100
Exploration Licence - Montana Flats, Zeehan, Tasmania	EL 13/2018	100
Exploration Licence - Midgee, South Australia*1	EL 6350	100

*1 The initial 2-year term of EL 6350 expired on 25 March 2021. An application for renewal was lodged on 19 February 2021, prior to the required date for renewal applications. The renewal application is currently being processed by SA DEM.

==> picture [83 x 20] intentionally omitted <==

21

Report for the Quarter ended 30 June 2021

Footnotes / Live Links

1 westmetall.com tin prices

2 SRZ Announcement, 16 May 2019, “Updated Heemskirk Resource Increases Indicated Category and Confidence in the Project”

3 SRZ Announcement, 12 April 2021, “Investor Presentation” – See page 11 Benchmarking Assumptions

4 SRZ Announcement, 18 February 2021, “Restart of Tin Exploration Drilling”

5 SRZ Announcement, 26 March 2021, “Expanded Tin Exploration Drilling Program at Heemskirk Tin”

6 SRZ Announcement, 1 October 2019, ”Heemskirk Tin Scoping Study Confirms Attractive Economics”

7 SRZ Announcement, 4 March 2021, “Additional NE Tasmania Gold EL Applications”

8 SRZ Announcement, 10 September 2020, “NE Tasmania Gold EL Applications”

Forward Looking Statements

This report may include forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning Stellar Resources Limited’s planned activities and other statements that are not historical facts. When used in this report, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should” and similar expressions are forward-looking statements. In addition, summaries of Exploration Results and estimates of Mineral Resources and Ore Reserves could also be forward-looking statements. Although Stellar Resources Limited believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. The entity confirms that it is not aware of any new information or data that materially affects the information included in this announcement and that all material assumptions and technical parameters underpinning this announcement continue to apply and have not materially changed. Nothing in this report should be construed as either an offer to sell or a solicitation to buy or sell Stellar Resources Limited securities.

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

For further details please contact:

Gary Fietz Executive Director Stellar Resources Limited Tel: 0408 489 957 Email: gary@widerange.net.au

==> picture [83 x 20] intentionally omitted <==

22

Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Name of entity

STELLAR RESOURCES LIMITED

ABN 96 108 758 961

Quarter ended (“current quarter”) 30 June 2021

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	- (10) - - (54) (143) - 1 - - - -	- (180) - - (122) (420) - 1 - - - -
	(206)	(721)
2. Cash flows from investing activities 2.1 Payments to acquire or for: (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation (e) investments (f) other non-current assets	- - (2) (147) - -	- - (2) (207) - -

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 1

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
2.2 Proceeds from the disposal of: (a) entities (b) tenements (c) property, plant and equipment (d) investments (e) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - - 419 - - - (129)	- - - 419 - - - (129)
	141	81
3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	1,580 - - (98) - - - - (4)	5,888 - - (354) - - - - (11)
	1,478	5,523
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above)	3,996 (206) 141 1,478	524 (719) 81 5,523

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 2

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	-	-
	5,409	5,409
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	2,909 2,500 - -	2,996 1,000 - -
	5,409	3,996

6. Payments to related parties of the entity and their associates	6. Payments to related parties of the entity and their associates	6. Payments to related parties of the entity and their associates	Current quarter $A'000
6.1 Aggregate amount of payments to related parties and their associates included in item 1 63 6.2 Aggregate amount of payments to related parties and their associates included in item 2 26 Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.			63
			26
7. 7.1 7.2 7.3 7.4 7.5 7.6	Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 Loan facilities - - Credit standby arrangements - - Other (please specify) - - Total financing facilities - - Unused financing facilities available at quarter end - Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-	-
		-	-
	N/A

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 3

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

8.	Estimated cash available for future operating activities	$A’000
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8	Net cash from / (used in) operating activities (item 1.9) (206) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (147) Total relevant outgoings (item 8.1 + item 8.2) (353) Cash and cash equivalents at quarter end (item 4.6) 5,409 Unused finance facilities available at quarter end (item 7.5) - Total available funding (item 8.4 + item 8.5) 5,409 Estimated quarters of funding available (item 8.6 divided by item 8.3) 15.3 Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. If item 8.7 is less than 2 quarters, please provide answers to the following questions: 8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?	(206) (147) (353) 5,409 -
		5,409
		15.3
	Answer: N/A
	8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?
	Answer: N/A
	8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?
	Answer: N/A
	Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Date: 27 July 2021

Authorised by: The Board.

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash

ASX Listing Rules Appendix 5B (17/07/20)

Page 4

• See chapter 19 of the ASX Listing Rules for defined terms.

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

1. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

2. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

3. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 5