STELLAR RESOURCES LIMITED — Investor Presentation 2017

Jun 4, 2017

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Highest grade undeveloped ASX-listed tin project

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Five reasons to own Stellar
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 Tin price has bottomed – multi-year market deficit

 High grade and locational advantages provide competitive costs in a low risk environment

 Significant improvement in NPV/Capex as development strategy optimised

 Strategy and timeline focused on low cost fast path to production

 Potential to be another Renison tin system with significant exploration upside

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Corporate overview
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Share price yet to reflect solid achievements at Heemskirk Tin Company overview

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• 100% owner of Heemskirk Tin Project, 150km south of Burnie, Tasmania

• Stand-out high grade resource (1.13% Sn) with vision to be a major Australian tin producer

• Metallurgical optimisation added to the project

• Fast start lowered capex and reduced time to first production

Financial information

	Share price (29-May-17)	A$0.022
	Number of shares	379.7m
	Market capitalisation Cash (31-Mar-17)	A$8.4m A$3.5m
	Debt (31-Debt-17)	No Debt
	Enterprise value	A$4.9m
	15m unlisted options (exercise prices A$0.06 to A$0.12,
	expiring on 20-Nov-19) and 59m A$0.05 options expiring on 18 May 2020

Ownership reflects strong tin investor support

Capetown S.A.	16.7%
Bunnenberg Family	11.9%
Directors & Management	2.1%
Top 20 Shareholders	52.2%

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Board of Directors
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Experienced and multi-disciplinary Board with strong global connections

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Phil Harman

Non-Executive Chairman

Geophysicist

• Over 30 years experience in BHP Billiton minerals exploration

• Past and present Director of several ASX listed companies

Peter Blight

Managing Director Geologist

• 30 years experience in exploration, mining and finance sectors

• Previously worked for UBS, UC Rusal and Rio Tinto

Miguel Lopez de Letona Non-Executive Director

Management Consultant

• Experience as a management consultant and banker with leading financial institutions

• Based in Belgium and advises on investment in the mining and oil and gas sectors

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Thomas Whiting Non-Executive Director

Geophysicist

• Former manager of BHP Billiton exploration

• Chairman of Deep Exploration Technologies Cooperative Research Centre

Christina Kemp Company Secretary

Accountant

• Over 30 years experience as an accountant and senior financial manager

• Has experience in the resources, manufacturing, retail and utility industries

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Heemskirk – Discovery to Development
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NW Tasmania – Australia’s largest and most productive tin field

Evolution of a world class tin project

• QH tin deposit discovered early 1960s by Gippsland Ltd

Aberfoyle jv with Gippsland in 1971 – discovered Montana and Severn deposits

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Tin deposits located within Tasmania’s most productive mineral field

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Renison, Australia’s oldest and largest tin mine is located 18km away to the NE of the Heemskirk project

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Stellar listed on ASX in 2005

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Stellar acquired Aberfoyle’s 60% interest for $1.2m in 2008

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Remaining 40% interest acquired from Gippsland Ltd in 2012 for $3.5m

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A$11m spent to date on drilling, geology, metallurgy, environment, mining and processing studies

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 Potential to develop another Renison

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Best location for a new mine
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West Coast Tasmania is a world-class tin jurisdiction

 Significant mining district

• Many historical and current operating mines across various commodities

 Supportive local community and skilled workforce

• Experienced workforce available with several mines in the region

• Established road and rail to port at Burnie, water readily available and power infrastructure in place

 Low political risk

• Tasmanian government supportive of Heemskirk

 Low environmental risk

• Project located outside of environmentally sensitive areas

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Mining Lease Granted
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Mining Lease grant is a significant project milestone that increases tenure and adds security over the right to mine tin

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ML 2023P/M granted to wholly owned subsidiary Columbus Metals Limited

Term is 12 years to 1[st] January 2029

Provides right to carry out mining operations in the lease area in accordance with the Mineral Resources Development Act 1995

Right to mine tin and all other metallic minerals

Staged provision of security deposits in accordance with a schedule of defined activities from exploration and feasibility (stage 1) to construction (stage 2) to operation (stage 3)

All conditions of the ML can be met through the existing schedule of activities planned by Stellar

No minimum expenditure commitments

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Heemskirk – a world class tin project
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Heemskirk is well placed on the grade tonnage curve - potential to increase grade and tonnes

Existing underground producers San Rafael and Renison facing declining grade as are other producers

Many competitors either lower grade or in higher risk jurisdictions

Competitors with remote projects face higher infrastructure and service costs compared with Heemskirk

Source: public resource and reserve statements Producers are underground mines that are comparable with Heemskirk No tonnage and grade information available for underground mines in China and Bolivia or surface mines in Indonesia

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Attractive tin industry cost curve
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Current LME tin price
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• Industry cost curve provides attractive margin for low cost operations

• Heemskirk is likely to be placed at the 45[th] percentile

• No further costs to be removed from the industry – cost curve at a cyclical low

• ITRI equilibrium price of US$25,000/t if all significant projects are in production by 2021

Equilibrium Price = LME tin price at which supply = demand

Source: International Tin Research Institute (ITRI)

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Development strategy optimised
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	Several studies completed -	Several studies completed -	final feasibility remaining	final feasibility remaining
	Study	**PFS (Prelim Feasibility) **	OPFS (Optimisation)	Fast Start (Scoping)
		Increasing NPV/Capex
	Completion	Jul-13	Nov-15	Sep-16
	Development	underground mine	underground mine	underground mine
	Strategy	all deposits concurrently	all deposits concurrently	sequential development
		standalone processing plant	standalone processing plant	standalone processing plant
			third party processing	third party processing
	Deliverables	Max throughput	Max throughput	1/3 Max throughput
		Op cost 60th percentile	Op cost down 10% on PFS	OPFS op cost
		mining study - 7yr life	optimised fill - 7 yr life	lower scale - 20yr mine life
		recovery 70%	recovery up by 4.3% to 73%	recovery 73%
		Renison - flow sheet adopted	circuits optimised	modular smaller plant
	Economics	Capex - standalone plant	Capex reduced 12%	Capex 50% of OPFS
		NPV/capex = 0.5	gain on PFS: NPV/capex = 0.9	NPV/capex = 1.5
	Assumptions	US$22,000/t Sn, 0.75USD/AUD	US$22,000/t Sn, 0.75USD/AUD	US$22,000/t Sn, 0.75USD/AUD

Mining : MiningOne and Polberro Consulting Metallurgy : ALS Metallurgical and WorleyParsons Process Engineering: WorleyParsons, GR Engineering and Mincore Environmental: John Miedecke and Partners

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Recovery gains upgraded valuation
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Metallurgical optimisation led to smaller primary grind and elimination of heavy media separation and silica float circuits saving capex

• Removed heavy media separation

• Coarser grind size

• Increased to 250µ from 160µ

• Improved recovery from gravity circuit

 Optimised flotation circuits

• Reduced tin loss in sulphide float

• Removed silica float

• Increased slimes cut-off

• Tin float conditions improved

• Finishing circuit enhanced

• Process flow sheet developed by ALS and WorleyParsons

• Plant layout and imaging developed by GR Engineering and Mincore

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Fast Start = Sequential Development
Surface
Queen Hill
Long Hole Stoping
Montana
Long Hole Stoping
Severn
Drift & Fill
Severn
Long Hole Stoping
Open at depth
500m
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Timeline – fast start feasibility
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Stellar is poised to embark on a DFS for the Heemskirk project based on a fast start approach

• April 2017 - drilling commenced - significant news-flow to follow over the next 12 months

• Drilling targeting high-grade structures and testing exploration positions between deposits

• Mineral Resource update within 12 months

• Development Proposal and Environmental Management Plan within 12 months

DFS timeline from March Quarter 2017

DFS timeline from March Quarter 2017	DFS timeline from March Quarter 2017	DFS timeline from March Quarter 2017
MarQ JunQ SepQ DecQ MarQ JunQ SepQ DecQ MarQ JunQ 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019
Drilling
Environmental
Metallurgy
Resource modelling
Mining studies
Plant studies
Permitting
Marketing
DFS & Financing
Construction
Production

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Renison provides exploration model
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Comparison with Renison shows that known deposits at Heemskirk are just the start – mineralisation at Renison over 1200m vertically from surface

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known deposits
Heemskirk deposits (pink) 
superimposed over
Renison long section
Sn deposits from surface 
to 1200m depth unexplored domain
new Renison discoveries
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between north and south
deposits
source rocks
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Australia’s oldest and largest Sn mine is located 18km away to the NE of the Heemskirk Sn project

Same geology and structural setting for Heemsksirk and Renison

Renison started with a 5 year mine life in 1965 producing 5ktpa Sn – ie an ore reserve of 25kt

Renison has now produced over 250kt Sn in the 50 years since it started and has 166kt Sn in resources

New ore is being discovered at Renison today between the north and south deposits

The Heemskirk deposits are shown superimposed on the Renison long section and at 72kt Sn represent just 20% of the Sn found at Renison

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Five reasons to own Stellar
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 Tin price has bottomed – multi-year market deficit

 High grade and locational advantages provide competitive costs in a low risk environment

 Significant improvement in NPV/Capex as development strategy optimised

 Strategy and timeline focused on low cost fast path to production

 Potential to be another Renison tin system with significant exploration upside

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Disclaimer
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Forward Looking Statement

This presentation 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 is this report, words such as “could”, “plan”, “estimate”, “expert”, “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 report 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.

Competent Persons Statement – Resources

The information in this report that relates to Mineral Resources was prepared in accordance with the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code) by Tim Callaghan of Resource and Exploration Geology. Tim Callaghan is a Member of The Australasian Institute of Mining and Metallurgy (“AusIMM”), has a minimum of five years’ experience in the estimation, assessment and evaluation of Mineral Resources of this style and is the Competent Person as defined in the JORC Code. This report accurately summarises and fairly reports his estimations and he has consented to the resource report in the form and context in which it appears.

Competent Persons Statement – Exploration

The drill and exploration results reported herein, insofar as they relate to mineralisation, are based on information compiled by Mr R.K. Hazeldene who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Hazeldene has sufficient experience relevant to the style of mineralisation and type of deposits being considered to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Mr Hazeldene consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears.

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A endix pp

Tin Price Recovery Tin Demand Rising Tin Market Deficit JORC 2012 Mineral Resource Drilling Program ASX: SRZ Drilling Result – Queen Hill

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Tin price recovery underway
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LME tin price is up 50% from its mid-January 2016 low

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Supply rationalisation underpinning price
 Supply restraint from largest producers China and
Indonesia through 2016 and China in 2017
 Growth of new supply from Myanmar accommodated
by China cutbacks
 Exchange stocks at historically low levels – industry
stocks are moderate
 Demand growth returning after two years of decline
Four countries control 80% of mine supply
 Largest tin mining countries are China (30%),
Indonesia (24%) Myanmar (18%) and Peru (7%)
 Global mine supply peaked in 2005 and has declined
by 12% in the period to 2016
 Since 2013, Myanmar has emerged as the third
largest supplier of tin ore – all trucked to China
Source: ITRI
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Tin demand – next growth phase?
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Tin demand – long-periods of strong growth

• Tin demand characterised by long periods of above trend growth driven by new uses

• Emergence of tin in lead acid batteries one example of a new use that could gain more traction

• Current growth pause is mature (8 years)

• Potential for a cyclical recovery in 2017?

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Solder still the major end-use

• Growth in consumer electronics a major plus for solder

• Chemicals was a strong growth sector in 2016

• LAB use has captured 8% of the market in 5 years

• New energy capture and storage technologies may be the game changer for tin

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Rising tin market deficit?
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In 2015/2016, supply did the heavy lifting – will 2017 be characterised by an increased market deficit driven by stronger demand growth?

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JORC 2012 confirms resource quality
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Mineral Resource estimate more robust following JORC 2012 upgrade

• 6.35mt @ 1.13% Sn or 72,000t of contained Sn

• 97% of contained Sn is in the form of cassiterite – the most readily recoverable Sn mineral

• 64% of Indicated Resource in Lower Queen Hill – first deposit in development queue

• LQH Indicated Resource of 0.82mt @ 1.42% Sn is particularly high grade

• All Sn deposits at Zeehan are open at depth and have significant exploration potential

• Next step is infill drilling with a focus on high grade zones

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9,000m drilling program underway
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Cassiterite SnO2
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Interpretative Regional Geology - Zeehan

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Good start - 6m @ 0.84% Sn (ZQ133)
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Queen Hill Interpretative Cross-section

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Queen Hill Long-section

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Stellar Resources Limited Level 17, 530 Collins Street Melbourne VIC 3000 Phone +61 3 9618 2540 Fax +61 3 9649 7200 www.stellarresources.com.au