STELLAR RESOURCES LIMITED — Investor Presentation 2017

Apr 5, 2017

Heemskirk Tin Project Highest grade undeveloped ASX-listed tin project

Mines and Money Asia 5th April 2017

www.stellarresources.com.au ASX: SRZ

Five reasons to own Stellar

• 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

Corporate overview

Share price recovery yet to reflect solid achievements at Heemskirk Tin

Company overview

• 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

Shareprice (24-Mar-17)	A$0.035
Numberof shares	374.5m
Marketcapitalisation	A$13.1m
Cash(31-Dec-16)	A$1.2m
Placement (1-Mar-17)	A$2.6m
Debt (31-Dec-16)	No Debt
Enterprise value	A$9.3m

15m unlisted options (exercise prices A$0.06 to A$0.12, expiring on 20-Nov-19). 5.2m shares and 59m A$0.05 three year options subject to shareholder approval

Ownership reflects strong tin investor support

CapetownS.A.	16.7%
BunnenbergFamily	11.9%
Resource Capital Funds	9.6%
Directors & Management	1.2%
Top20 Shareholders	60.0%

Board of Directors

Experienced and multi-disciplinary Board with strong global connections

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

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

Tin price recovery underway

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

Supply rationalisation underpinning price

• Supply restraint from largest producers China and Indonesia through 2016 and into 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

Tin demand – next growth phase?

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?

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

Rising tin market deficit?

World Supply/Demand Balances in Refined Tin
('000 tonnes)					Estimate
	2012	2013	2014	2015	2016
World
World Refined Production	334.7	340.1	369.2	333.0	336.1
DLA Sales	0.0	0.0	0.0	0.0	0.0
World Refined Consumption	339.4	349.0	357.8	345.7	347.8
Global Market Balance	$-4.7$	$-8.9$	11.4	$-12.7$	$-11.7$
Reported stocks
LME	12.8	9.7	12.1	6.1	3.0
SHFE	0.0	0.0	0.0	0.8	2.5
Producers	15.9	13.7	15.8	14.0	10.0
Consumer/other	10.7	10.9	11.2	11.3	9.0
Total	39.5	34.3	39.1	32.2	24.5
World Stock Ratio
(weeks consumption)	6.0	5.1	5.7	4.8	3.7

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Best location for a new mine

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

Mining Lease Granted

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

• ML 2023P/M granted to wholly owned subsidiary Columbus Metals Limited
• Term is 12 years to 1st 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

Heemskirk – a world class tin project

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

• Competitors either lower grade or in higher risk jurisdictions
• Competitors also 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

Attractive tin industry cost curve

Equilibrium Price = LME tin price at which supply = demand

• Industry cost curve provides attractive margin for low cost operations
• Heemskirk is likely to be placed at the 45th percentile
• No further costs to be removed from the industry – cost curve at a cyclical low
• Equilibrium price of US$22,500/t if all significant projects are in production by 2020
• Equilibrium price could rise to US$25,000/t if there is a shortfall in project development

Source: International Tin Research Institute (ITRI)

Development strategy optimised

Several studies completed - final feasibility remaining

Study	PFS (Prelim Feasibility)	OPFS (Optimisation)	Fast Start (Scoping)
		Increasing NPV/Capex
Completion	Jul-13	Nov-15	Sep-16
DevelopmentStrategy	underground mineall deposits concurrentlystandalone processing plant	underground mineall deposits concurrentlystandalone processing plant	underground minesequential developmentstandalone processing plant
Deliverables	Max throughputOp cost 60th percentilemining study - 7yr liferecovery 70%Renison - flow sheet adopted	third party processingMax throughputOp cost down 10% on PFSoptimised fill - 7 yr liferecovery up by 4.3% to 73%circuits optimised	third party processing1/3 Max throughputOPFS op costlower scale - 20yr mine liferecovery 73%modular smaller plant
EconomicsAssumptions	Capex - standalone plantNPV/capex = 0.5US$22,000/t Sn, 0.75USD/AUD	Capex reduced 12%gain on PFS: NPV/capex = 0.9US$22,000/t Sn, 0.75USD/AUD	Capex 50% of OPFSNPV/capex = 1.5US$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

Timeline – fast start feasibility

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

Renison provides exploration model

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

• 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 200kt 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

Five reasons to own Stellar

• 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

Disclaimer

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.

Appendix

Heemskirk History JORC 2012 Resource Process Plant Simplification PFS Mine Plan Drilling Program

Heemskirk – Discovery to Production

NW Tasmania – Australia's largest and most productive tin field QH tin deposit discovered early 1960s by

Evolution of a world class tin project

• Gippsland Ltd
• Aberfoyle jv with Gippsland in 1971 discovered Montana and Severn deposits
• Tin deposits located within Tasmania's most productive mineral field
• Renison, Australia's oldest and largest tin mine is located 18km away to the NE of the Heemskirk project
• Stellar listed on ASX in 2005
• Stellar acquired Aberfoyle's 60% interest for $1.2m in 2008
• Remaining 40% interest acquired from Gippsland Ltd in 2012 for $3.5m
• A$11m spent to date on drilling, geology, metallurgy, environmental, mining and processing studies
• Potential to develop another Renison

JORC 2012 confirms resource quality

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

Deposit						Pb	Zn	s	SG
	mt	%	Sn t	% of total Sn	%	%	%	%	mg/l
Upper Queen Hill	0.47	1.15	5,000	91	0.12	1.3	0.81	13.80	3.72
Lower Queen Hill	0.82	1.42	12,000	99	0.03	0.22	0.23	17.91	3.45
Total Indicated		1.32	17,000	96	0.06	0.61	0.44	16.55	3.55
Lower Queen Hill	0.35	1.50	5000	98	0.04	0.14	0.09	16.9	3.31
Severn	4.03	0.97	39000	99	0.06	0.03	0.05	8.34	3.18
Montana	0.68	1.56	11000	96	0.07	0.72	1.18	17.8	3.68
Total Inferred		1.09	55000	98	0.06	0.13	0.25	10.23	3.26
Total Indicated + Inferred		1.13	72,000	97	0.06	0.23	0.29	11.48	3.32
		1.295.066.35.			Tonnage Total Sn Contained Cassiterite +	Cu

Process plant simplified

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

Heemskirk PFS mine plan

9,000m drilling program – April start

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

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