UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~April~~October 3031, 2010

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from ~~__________ to ___________~~

Commission File number 0-51400

Stellar Resources Ltd.

(Exact name of registrant as specified in its charter)

Nevada	98-0373867
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

375 N. Stephanie Street, Suite 1411, Las Vegas, Nevada, 89014-1411

(Address of principal executive offices)

(702) 547-4614

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~x Yes o No~~

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No

x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non- accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company xo

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b(2) of the Exchange Act). ~~x Yes o No~~

o Yes x No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ~~x Yes o No~~

x Yes o No

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~The total number of shares of Common Stock, par value $0.001 per share, outstanding as of June 17, 2010 is 34,060,650.~~

The total number of shares of Common Stock, par value $0.001 per share, outstanding as of December 15, 2010 is 39,106,483.

Table of Contents

TABLE OF CONTENTS

Part I – FINANCIAL INFORMATION		3
Item 1.	Financial Statements:	3
	Balance Sheets	4
	Statements of Operations	5
	Statements of Cash Flows	6
	Notes to Financial Statements	78
Item 2.	Management’s Discussion and Analysis orof ~~Plan~~Financial Condition and Results of ~~Operations~~Operation	12
Item 3.	Quantitative and Qualitative ~~Disclosure~~Disclosures About Market Risk	16
Item 4T.	Controls and Procedures	17
Item 4.	Controls and Procedures	17
Part II – OTHER INFORMATION		20
Item 1.	Legal Proceedings	2018
Item 1A.	Risk Factors	2018
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2018
Item 3.	Defaults Upon Senior Securities	2018
Item 4.	Submission of Matters to Vote a of Security Holders	20
Item 5.	Other Information	18
Item 5.	Other Information	20
Item 6.	Exhibits	18
Item 6.	Exhibits	21
SIGNATURES		19
SIGNATURES		21

Table of Contents

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

STELLAR RESOURCES LTD.

(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL~~OCTOBER 3031, 2010

(Unaudited)

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

INTERIM CONSOLIDATED BALANCE SHEETS

(Unaudited)

	APRIL 30,			JULY 31,
	OCTOBER 31,			JULY 31,
	2010			~~2009~~2010
ASSETS
Current
Cash	$	725,~~692~~740		$	158,~~193~~300
Deposit (Note 4)		20,000			-
Amounts receivable (Note 8)		15,000			-
	$	92,692		$	1,193
Prepaid expenses		4,912			8,845
		25,652			67,145
Investment in EHHO (Note 5)		541,246			541,858
Oil and gas properties, unproven (Note 6)		132,080			128,000
	$	698,978		$	737,003
LIABILITIES
Current
Accounts payable and accrued liabilities	$	27,620		$	4,314
Accounts payable	$	38,401		$	3,592
Advances payable (Note 5)		172,690			182,356
Advances payable (Note 7)		108,346			108,346
Due to related parties (Note 6)		143,975			689
Due to related parties (Note 8)		36,810			35,121
Notes payable (Note 7)		29,280			26,722
Notes payable (Note 9)		24,145			23,702
		373,565			214,081
		207,702			170,761
STOCKHOLDERS’ DEFICIT
FUTURE INCOME TAX LIABILITY (Note 6)		30,000			30,000
Capital stock (Note 8)
		237,702			200,761
STOCKHOLDERS’ EQUITY
Capital stock (Note 10)
Authorized:
200,000,000 common shares with a par value of $0.001 per share
Issued and outstanding:
31,060,650 common shares (July 31, 2009: 31,060,650 common shares)		31,060			31,060
39,060,650 common shares (July 31, 2010: 39,060,650 common shares)		39,060			39,060
Additional paid-in capital		~~952~~2,059,142			~~952~~2,059,142
Deficit accumulated during the exploration stage		(1,~~256~~630,~~578~~296	)		(1,~~190~~555,~~833~~674	)
Accumulated other comprehensive loss		(76,~~497~~630	)		(56,~~257~~286	)
		(280,873	)		(212,888	)
		461,276			536,242
	$	92698,~~692~~978		$	1737,~~193~~003

The accompanying notes are an integral part of these financial statements

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

							CUMULATIVE RESULTS OF OPERATIONS FROM APRIL 9, 1999 (INCEPTION)						~~CUMULATIVE RESULTS OF OPERATIONS FROM APRIL 9, 1999 (INCEPTION)~~
	THREE MONTHS ENDED						~~NINE MONTHS ENDED~~TO						TO
	APRIL 30,			APRIL 30,			APRIL 30,			APRIL 30,			APRIL 30,
	OCTOBER 31,						OCTOBER 31,
	2010			2009			2010			~~2009~~			~~2010~~
Expenses
Consulting fees	$	-		$	-		$	-		$	-		$	27,780
General and administrative	$	26,759		$	2,510		$	188,413
Filing fees		2,776			1,297			5,485			4,425			44,399
Interest and finance fees (Notes 8 and 9)		642			107			18,280
Foreign exchange loss		2,644			157			2,846			426			16,670
Investor relations		-			-			17,989
General and administrative		6,872			298			7,251			618			28,504
Management fees (Note 8)		21,233			-			792,503
Interest expense		104			87			318			374			16,180
Professional fees		40,376			16,630			236,868
Investor relations		-						-			65			17,989
Property examination and expenditure costs		-			1,105			165,489
Professional fees		27,380			4,511			48,740			20,631			188,626
Loss before other items		(89,010	)	$	(20,352	)		(1,419,542	)
Stock-based compensation		-			-			-			39,700			750,000
Other Items
Resource property expenditures		-			-			1,105			-			150,114
Management fees (Note 8)		15,000						15,000
Property examination costs					1,635			-			1,635			15,375
Dilution loss from EHHO (Note 5)		-			-			(196,000	)
Travel and entertainment		-			-			-			-			941
Loss from equity interest in EHHO (Note 5)		(612	)		-			(29,754	)
Net Loss	$	(3974,~~776~~622	)	$	(720,~~985~~352	)	$	(651,~~745~~630,296	)	$	~~(67,874~~	)	$	~~(1,256,578~~	)
Basic and Diluted Net Loss Per Common Share	$	-(0.01	)	$	-(0.01	)	$	-		$	-
Weighted Average Number of Common Shares Outstanding – Basic and Diluted		3139,060,650			3031,~~387~~060,~~516~~650			~~31,060,650~~			~~29,336,046~~

The accompanying notes are an integral part of these financial statements

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

							CUMULATIVE RESULTS OF OPERATIONS FROM APRIL 9, 1999 (INCEPTION)
	NINE MONTHS ENDED						TO
	THREE MONTHS ENDED						TO
	APRIL 30,						APRIL 30,
	OCTOBER 31,						OCTOBER 31,
	2010			2009			2010
Cash Flows from Operating Activities
Net loss	$	(6574,~~745~~622	)	$	(6720,~~874~~352	)	$	(1,~~256~~630,~~578~~296	)
Adjustments to reconcile net loss to net cash used in operating activities:
Realized foreign exchange losses on settlement of notes payable		-			-			12,~~523~~518
Stock-based compensation		-			39,700			750,000
Unrealized foreign exchange		647						647
Accrued interest		318			375			18,168
Stock-based compensation		-			-			750,000
Accrued interest		641			107			18,812
Dilution loss					-			196,000
Share of loss of equity investment		612			-			29,754
Changes in operating assets and liabilities:
Prepaid expenses		-			(131	)		-
Amounts receivable		(15,000	)					(15,000	)
Deposit		(20,000	)		-			(20,000	)
Prepaid expenses		3,933			-			(4,912	)
Accounts payable and accrued liabilities		2334,~~306~~809			(18,~~378~~929	)		2738,~~620~~401
Net cash used in operating activities		(6248,~~121~~980	)		(2911,~~308~~316	)		(~~468~~604,~~267~~076	)
Cash Flows from Financing Activities
Proceeds from issuance of common stock		-			40,396			130,629
Increase (decrease) in bank indebtedness		-			-			-
Proceeds from notes payable		-			-			93,665
Proceeds from issuance of common stock		-			-			1,005,629
Advances payable		(9,666	)		8,542			172,690
Proceeds from (repayment of) notes payable		-			-			89,300
Advances and loans from related parties		143,286			-			143,975
Advances payable		-			13,060			108,346
Net cash provided by financing activities		133,620			48,938			540,959
Advances from related parties		500			(2,020	)		35,621
Net Increase in Cash		71,499			19,630			72,692
Net cash provided by financing activities		500			11,040			1,238,896
Cash, Beginning		1,193			(38	)		-
Cash Flows from Investing Activities
Cash, Ending	$	72,692		$	19,592		$	72,692
Oil and gas properties		(4,080	)		-			(254,080	)
Supplemental Disclosures of Cash Flow Information and Non-Cash Investing and Financing Activities
Investment in EHHO		-			-			(375,000	)
Interest paid	$	-		$	-		$	-
Net cash used in investing activities		(4,080	)		-			(629,080	)
Income taxes paid	$	-		$	-		$	-
Net Increase (Decrease) in Cash		(52,560	)		(276	)		5,740
Common shares issued on settlement of notes payable and accrued interest	$	-		$	-		$	102,573
Cash, Beginning		58,300			1,193			-
Cash, Ending	$	5,740		$	917		$	5,740
Continued…

The accompanying notes are an integral part of these financial statements

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

~~NOTES~~INTERIM TOCONSOLIDATED ~~FINANCIAL~~ STATEMENTS OF CASH FLOWS (Continued)

APRIL 30, 2010

(Unaudited)

1. NATURE OF CONTINUED OPERATIONS AND BASIS OF PRESENTATION

					CUMULATIVE RESULTS OF OPERATIONS FROM APRIL 9, 1999 (INCEPTION)
	THREE MONTHS ENDED				TO
	OCTOBER 31,				OCTOBER 31,
	2010		2009		2010

Supplemental Disclosures of Cash Flow Information and Non-Cash Investing and Financing Activities

Cash paid for:
Interest	$	-	$	-	$	110
Income taxes	$	-	$	-	$	-

Common shares issued on settlement of notes payable and accrued interest	$	-	$	-	$	102,573

Common shares issued on acquisition of EHHO and FBHO	$	-	$	-	$	240,000

Future income tax liability on property acquisition	$	-	$	-	$	30,000

The ~~Company~~accompanying ~~was~~notes ~~incorporated~~are inan ~~the~~integral ~~State~~part of ~~Nevada~~these onfinancial ~~April 9, 1999 and is in the exploration stage of its resource property activities.~~statements

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. This contemplates that assets will be realized and liabilities and commitments satisfied in the normal course of business. To date, the Company has not generated any revenues from operations and had a working capital deficit of $280,873 and an accumulated deficit of $1,256,578 at April 30, 2010. The Company’s continuance of operations is contingent on raising additional working capital, and on the future development of its potential resource property interests. Accordingly, these factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently negotiating with several parties to provide equity financing sufficient to finance all corporate operations and provide working capital for the next twelve months. Although there is no assurance that management’s plans will be realized, management believes that the Company will be able to continue operations in the future. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue operating as a going concern.

Unaudited Interim Financial Statements

The accompanying unaudited interim financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q of Regulation S-K. They may not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the year ended July 31, 2009 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. The interim unaudited financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal and recurring adjustments have been made. Operating results for the nine months ended April 30, 2010 are not necessarily indicative of the results that may be expected for the year ending July 31, 2010.

2. RECENT ACCOUNTING PRONOUNCEMENTS

Accounting Standards Codification

The Accounting Standards Codification (ASC) has become the source of authoritative U.S. generally accepted accounting principles (“GAAP”). The ASC only changes the referencing of financial accounting standards and does not change or alter existing GAAP.

Recently Adopted Accounting Pronouncements

Effective August 1, 2009, the Company adopted ASC 855, Subsequent Events (formerly FAS No. 165 “Subsequent Events”). ASC 855 requires companies to recognize in the financial statements the effects of subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. An entity shall disclose the date through which subsequent events have been evaluated, as well as whether that date is the date the financial statements were issued. Companies are not permitted to recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date and before financial statements are issued. Some non recognized subsequent events must be disclosed to keep the financial statements from being misleading. For such events a company must disclose the nature of the event, an estimate of its financial effect, or a statement that such an estimate cannot be made. This Statement applies prospectively for interim or annual financial periods ending after June 15, 2009. The adoption of ASC 855 did not have a material impact on the Company’s results of operations and financial position.

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL~~OCTOBER 3031, 2010

(Unaudited)

21. ~~RECENT~~NATURE ~~ACCOUNTING~~OF ~~PRONOUNCEMENTS~~CONTINUED ~~(Continued)~~OPERATIONS AND BASIS OF PRESENTATION

~~Certain~~The ~~other~~Company ~~recent~~was ~~accounting~~incorporated ~~pronouncements~~in ~~have~~the ~~not~~State ~~been~~of ~~disclosed~~Nevada ason ~~they~~April ~~are~~9, ~~not~~1999 ~~applicable~~and tois in the ~~Company~~exploration stage of its resource property activities.

3On June 10, 2010, the Company completed the acquisition of 100% of Elk Hills Heavy Oil, LLC (“EHHO”) and Four Bear Heavy Oil, LLC. ~~RESOURCE~~(“FBHO”). EHHO’s ~~PROPERTIES~~assets consist of oil and gas leases in Carbon County, Montana, and FBHO’s assets consists of oil and gas leases in Park County, Wyoming. On July 7 2010, the Company’s interest in EHHO was diluted to 50% as a result of EHHO issuing 90,000 units of capital to Elk Hills Petroleum Canada Inc. (“EHPC”). As a result of the above transactions the Company’s focus has changed from the exploration of mineral properties to oil and gas exploration. On August 24, 2010, the Company completed the acquisition of 100% of Core54 Petroleum Canada Ltd, (“Core 54”). (Note 5)

~~Texada~~The ~~Island~~accompanying financial statements have been prepared assuming the Company will continue as a going concern. This contemplates that assets will be realized and liabilities and commitments satisfied in the normal course of business. To date, ~~British~~the ~~Columbia~~Company has not generated any revenues from operations and had a working capital deficit of $182,050 ~~Proposed~~and ~~Earn~~an Inaccumulated ~~Agreement~~deficit of $1,630,296 at October 31, 2010. The Company’s continuance of operations is contingent on raising additional working capital, and on the future acquisition and development of resource property interests. Accordingly, these factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently negotiating with third parties to provide equity financing sufficient to finance corporate operations and provide working capital for the next twelve months. Although there is no assurance that management’s plans will be realized, management believes that the Company will be able to continue operations in the future. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue operating as a going concern.

OnUnaudited ~~June~~Interim ~~15,~~Financial 2009, the Company entered into an Earn In Agreement with Zyrox Mining Company Ltd. (“Zyrox”), to further explore and develop Zyrox’s mineral tenures located on Texada Island, British Columbia. Under the terms of the Earn In Agreement, Zyrox agreed to make available to the Company its 250 ton per day processing plant, historical exploration data, its bulk test permit to extract 10,000 tons, reclamation bond and intellectual property pertaining to the mineral tenures which comprise 104 mining claims totaling 3,846 hectares. Zyrox also granted the Company the exclusive right to acquire a 70% working interest in the property on or before June 15, 2010.Statements

InThe ~~order~~accompanying tounaudited ~~acquire~~interim ~~its~~financial ~~70%~~statements ~~interest~~have been prepared in ~~the~~accordance ~~property~~with ~~the~~United ~~Company~~States ~~must~~generally ~~provide~~accepted ~~Cdn$1,000,000~~accounting ~~working~~principles ~~capital~~for ininterim ~~order~~financial toinformation ~~commission~~and with the ~~production~~instructions ~~facility~~to ~~and~~Form ~~commence~~10-Q ~~bulk~~of ~~testing,~~Regulation ~~explore~~S-K. They may not include all information and ~~bulk~~footnotes ~~test~~required ~~Zyrox’s~~by ~~portfolio~~United ofStates ~~mining~~generally ~~assets~~accepted ~~and~~accounting ~~commission~~principles afor ~~geological~~complete ~~report~~financial statements. ~~The~~However, ~~Company~~except as disclosed herein, there has ~~also~~been ~~agreed~~no tomaterial ~~pay~~changes ~~Cdn$4,000~~in ~~per~~the ~~month~~information disclosed in the notes to the financial statements for the ~~use~~year ofended July 31, 2010 included in the ~~processing~~Company’s ~~plant~~Annual ~~during~~Report on Form 10-K filed with the ~~life~~Securities ofand Exchange Commission. The interim unaudited financial statements should be read in conjunction with those financial statements included in the ~~agreement~~Form 10-K. ~~Within~~In 30the ~~days~~opinion of ~~receipt~~management, ofall adjustments considered necessary for a ~~third~~fair ~~party~~presentation, ~~evaluation~~consisting solely of normal and recurring adjustments have been made. Operating results for the ~~mineral~~three ~~interests~~months ~~and~~ended ~~pilot~~October ~~plant~~31, ~~the~~2010 ~~Company~~are ~~will~~not ~~negotiate~~necessarily indicative of the ~~definitive~~results ~~terms~~that tomay ~~acquire~~be aexpected ~~70%~~for ~~working~~the ~~interest~~year inending ~~the~~July ~~property~~31, 2011.

~~As of July 31, 2009 the Company has incurred property investigation costs amounting to US$14,270 (2008 - $nil) in relation to this agreement~~2. ~~During~~ ~~the~~SIGNIFICANT ~~nine~~ACCOUNTING ~~month period ended April 30, 2010 the Company incurred $1,105 in expenses pursuant to the agreement.~~POLICY

OnBasis ~~November~~of ~~10, 2009, the Company terminated the Earn In Agreement with Zyrox.~~Consolidation

~~Chunya~~The ~~Mining~~consolidated ~~District~~financial statements include the results of ~~Mbeya~~the ~~Tanzania,~~Company ~~Earn~~and the post acquisition results of its wholly-owned subsidiaries, FBHO, a company incorporated in ~~Agreement~~Washington State on February 28, 2010 and Core 54, a company incorporated in British Columbia, Canada on March 9, 2010.

OnThe ~~September 9, 2008, the~~ Company ~~entered~~previously ~~into~~consolidated aits ~~Farm-In~~interest ~~Agreement~~in ~~with~~EHHO; ~~Canafra Mineral Exploration Corp.~~however, aon ~~Canadian~~July ~~private company~~7, ~~and~~2010 ~~Two Drums G & C Company Limited, a Tanzanian private company, (jointly “Canafra”), whereby~~ the Company’s ~~has the right to acquire a 50%~~ interest in aEHHO ~~mineral~~was ~~property~~reduced into ~~Tanzania. The~~the ~~property~~level ~~consists~~ of ~~three~~significant ~~Mining~~influence, and ~~Prospecting~~thus ~~Licenses~~effective ~~and~~July ~~the~~7, ~~Granted~~2010, ~~Mining~~the ~~and~~investment ~~Prospecting~~in ~~Concessions~~EHHO ~~comprising~~is ~~approximately~~recorded 26using ~~square kilometers, in~~ the ~~Chunya~~equity ~~mining~~method ~~district~~ of ~~Mbeya~~accounting ~~Tanzania. The~~(Note ~~operator of the property will be Canafra~~6).

~~The~~All ~~funding~~intercompany ~~provisions~~balances and ~~share~~transactions ~~issuance~~have ~~are~~been ~~subject~~eliminated toin the ~~Company receiving the Mining and Prospecting Licenses for the property, which to date have not yet been received~~consolidation.

In order to acquire its full interest in the property the Company will advance to Canafra $1,100,000 to fund exploration expenditures and provide working capital in phased payments and also issue 4,000,000 restricted common shares to Canafra in stages as described below. The Company will earn its interest at a vested rate of 10% based on its funding efforts until fully funded.

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL~~OCTOBER 3031, 2010

(Unaudited)

3. ~~RESOURCE~~RECENT ~~PROPERTIES~~ACCOUNTING ~~(Continued)~~PRONOUNCEMENTS

~~Chunya~~Recent ~~Mining~~Accounting ~~District~~Standards ofNot ~~Mbeya~~Yet ~~Tanzania, Earn-in Agreement (Continued)~~Adopted

			Common
	Cash		Stock to be
	Consideration		Issued
Phase I – Conditional upon receipt of Mining and
Prospecting Licenses
Within 30 days of receiving the Mining and Prospecting Licenses	$	60,000		-
Within 60 days of receiving the Mining and Prospecting Licenses		80,000		-
Within 90 days of receiving the Mining and Prospecting Licenses		80,000		-
Within 120 days of receiving the Mining and Prospecting Licenses		80,000		-
Within 150 days of receiving the Mining and Prospecting Licenses		80,000		-
		380,000		-
Phase II – Within 90 days of completion of Phase I
including geological work to be done by Canafra		380,000		2,000,000
Phase III – Within 90 days of completion of Phase II or
within a mutually agreed timeframe, including
further geological work done by Canafra		340,000		2,000,000
	$	1,100,000		4,000,000

The Company has reviewed issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any other pronouncements to have an impact on its results of operations or financial position.

4. ~~PROPOSED~~ AQUISITION ~~AND SALE AGREEMENTS~~

a)On ~~Acquisition~~August of24, ~~Elk~~2010, ~~Hills~~pursuant ~~Heavy~~to ~~Oil,~~an ~~LLC~~acquisition ~~and~~agreement ~~Four~~the ~~Bear~~Company ~~Heavy~~acquired ~~Oil~~100% of the outstanding share capital of Core54 for $6,300 ~~LLC~~cash.

OnCore54 ~~March~~had 3,no ~~2010~~assets ~~the~~or ~~Company~~liabilities ~~entered~~upon ~~into an agreement to acquire 100% of Elk Hills Heavy Oil, LLC (“EHHO”) and Four Bear Heavy Oil, LLC~~acquisition. ~~(“FBHO”) from a newly appointed director and his business associate.~~ The ~~EHHO~~excess ~~assets consists~~ of ~~more~~the ~~than~~purchase ~~20,000~~consideration ~~continuous~~over ~~acres~~the value of ~~oil~~net ~~and gas leases in Carbon County, Montana, and FBHO~~ assets ~~consists~~acquired of ~~more than~~ $6,~~400~~300 ~~acres~~was ofallocated ~~oil~~to ~~and~~legal ~~leases~~fees inupon ~~Park~~acquisition ~~County,~~and ~~Wyoming~~expensed to operations.

In5. ~~consideration~~INVESTMENT ~~for~~IN ~~the acquisitions the Company will:~~EHHO

~~a) issue~~Upon issuance of the 90,000 units of ownership capital by EHHO to EHPC on July 7, 2010, the Company’s equity holding of EHHO was reduced to 50% from 100% and the Company recorded a ~~total~~loss on dilution of ~~three~~$196,000. Of ~~million~~the ~~common~~90,000 ~~shares~~units of ownership capital issued to EHPC, 80,000 are held in escrow. Subsequent to the dilution of the Company’s investment in EHHO, management determined that the Company continued to hold significant influence over the activities of EHHO but did not exercise control. Accordingly from July 7, 2010, the Company has accounted for its 50% interest in EHHO as an equity investment.

b) make cash payments of $250,000 on or before December 31, 2011.

	OCTOBER 31,			JULY 31,
Investment in EHHO	2010			2010

90,000 units of ownership capital	$	392,000		$	392,000
Capital contribution		375,000			375,000
Non-cash loss on dilution of the Company’s interest		(196,000	)		(196,000	)
		571,000			571,000
Share of loss of significantly influenced investee		(29,754	)		(29,142	)

Investment in EHHO, end of period	$	541,246		$	541,858

~~c) grant~~Upon completion of a reserve report that concludes the ~~vendors~~lands held in EHHO do not indicate a ~~net~~reservoir ~~profit~~with commercial potential then 80,000 capital units of EHHO held in escrow, shall be released from escrow. If the report states the lands indicate a reservoir with commercial potential then EHPC shall make a US$1,750,000 loan (the "Loan") to EHHO within sixty days after EHPC has received a copy of the report. The Loan shall be non-interest bearing, and repayable only from revenue generated from the production of ~~five~~hydrocarbons ~~per~~from ~~cent~~lands. Starting onin the ~~properties~~second year of production of hydrocarbons from the lands, 20% of the net revenue from such production shall be applied to repayment of the Loan and will continue until the Loan is repaid. Should EHPC fail to provide the Loan to EHHO within the required sixty day period, then 80,000 ownership capital units held in escrow shall be cancelled.

As at April 30, 2010, the transaction had not closed and the Company had advanced $20,000 as a non-refundable deposit in connection with the acquisition. On June 10, 2010, the transaction closed.

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL~~OCTOBER 3031, 2010

(Unaudited)

46. ~~PROPOSED~~OIL ~~AQUISITION~~ AND ~~SALE~~GAS ~~AGREEMENTS (Continued)~~PROPERTIES

b) Sale of 50% interest in EHHO to Elk Hills Petroleum Canada Ltd.

	OCTOBER 31,		JULY 31,
	2010		2010

Unproved properties
Acquisition costs	$	128,000	$	128,000
Annual lease costs		4,080	$	-

	$	132,080	$	128,000

OnPark ~~March 8~~County, 2010 the Company entered into an agreement (amended April 13, 2010) with Elk Hills Petroleum Canada Ltd. (“EHPC”) whereby EHPC would acquire a 50% interest in EHHO for $3,000,000. The agreement requires EHPC to complete its due diligence on or before June 30, 2010.Wyoming

AsOn ~~consideration~~June ~~for~~10, 2010 the ~~sale~~Company acquired oil and leases in Park County, Wyoming, upon the acquisition of FBHO for $98,000. In addition, the Company ~~will~~recorded ~~receive~~a ~~staged~~future ~~payments~~income astax ~~follows:~~liability of $30,000 relating to the excess of book value over the tax value. The vendors retained a 5% overriding royalty interest in the property.

~~(i)~~7. AADVANCES ~~payment of $1,250,000 is due on or before June 30, 2010.~~PAYABLE

~~(ii)~~At AOctober ~~payment~~31, 2010, an amount of $1108,~~750,000~~346 is(July ~~due~~31, ~~within~~2010 ~~thirty~~- ~~days~~$108346) ~~after~~was ~~EHPC~~owing ~~has~~to ~~received~~ a ~~copy~~former president of athe ~~third~~Company ~~party~~for ~~prepared~~cash ~~report~~advances onand ~~drill~~expenses ~~cores~~paid ~~obtained~~on ~~from~~behalf of the ~~EHHO~~Company. The ~~leases~~amounts ~~and~~are ~~the~~unsecured, ~~reservoir~~non-interest ~~study~~bearing ~~conducted~~and onhave ~~the~~no ~~EHHO~~specific ~~leases~~terms of repayment.

58. ~~ADVANCES~~RELATED ~~PAYABLE~~PARTY TRANSACTIONS

~~Advances~~In ~~received~~addition ~~from~~to the ~~Company’s~~related ~~former~~party ~~president. The~~transactions ~~advances~~disclosed ~~are~~elsewhere ~~unsecured,~~in ~~non-interest~~these ~~bearing~~financial ~~and~~statements ~~have~~the noCompany ~~specific~~incurred ~~terms~~the offollowing ~~repayment.~~balances and transactions during the year:

6. DUE TO RELATED PARTIES

	OCTOBER 31,		JULY 31,
	2010		2010

i) Amounts receivable

Management fees due from EHHO	$	15,000	$	-

ii) Prepaid expenses

Amount advanced to a director for travel expenses	$	-	$	4,000

iii) Due to Directors

Amounts payable for reimbursement of corporate expenses	$	1,706	$	1,206

iv) Note Payable

Note payable (Cdn $35,000) including accrued interest to Director, unsecured bearing interest at 6% per annum.		35,104		33,915
	$	36,810	$	35,121

	APRIL 30,		JULY 31,
	2010		2009
			(Note 10)
i) Loan Payable
Loan from a company related by virtue of a common director. The amount is unsecured, bears no interest and falls due on June 30, 2010.	$	100,000	$	-
ii) Due to Directors
Advances received from two directors. The advances are unsecured, non-interest bearing and have no specific terms of repayment
Amounts payable for reimbursement of corporate expenses		43,975		689
	$	143,975	$	689

7. NOTES PAYABLE

As of April 30, 2010 the Company had received a total of $22,874 (Cdn$23,000), (July 31, 2009 -$21,181, Cdn$23,000) from unrelated third parties by way of unsecured demand promissory notes bearing interest at the Bank of Canada prime rate plus 2% (2.5% as of April 30, 2010). As at April 30, 2010 $6,406 (July 31, 2009 - $5,541) of accrued interest is payable. Of the notes payable, $4,975 (Cdn$5,000) are due to a director.

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL~~OCTOBER 3031, 2010

(Unaudited)

78. ~~NOTES~~RELATED ~~PAYABLE~~PARTY TRANSACTIONS (Continued)

During the nine months ended April 30, 2010, the Company recorded a foreign exchange transaction loss of $1,844 (April 30, 2009: gain of $3,461) in connection with these notes payable and accrued interest payable as a result of fluctuations in the foreign exchange rate.

	THREE MONTHS ENDED
	OCTOBER 31
	2010		2009
Interest paid

Interest accrued to a Director pursuant to promissory note	$	542	$	-

Management Fees

Charged to EHHO	$	15,000		-

Fees paid to three Directors for services rendered	$	21,233	$	-

89. ~~CAPITAL~~NOTES ~~STOCK~~PAYABLE

~~The~~As ~~Company’s~~at ~~capitalization~~October is31, ~~200~~2010 $17,~~000~~512 (July 31,~~000~~ ~~authorized~~2010: ~~common~~- ~~shares~~$17,442) ~~with~~was adue ~~par~~on third ~~value~~party demand promissory notes bearing interest at the Bank of $0Canada prime rate plus 2% (3.~~001~~00% ~~per~~as ~~share~~of October 31, 2010), and $6,630 (July 31, 2010 - $6,260) of accrued interest is payable.

AsDuring ofthe ~~April~~three ~~30,~~month ~~2010~~period ~~and~~ended ~~July~~October 31, ~~2009~~2010, the Company ~~has~~recorded a foreign exchange transaction gain of $344 (October 31,~~060,650~~ ~~common~~2009 ~~shares~~– ~~issued~~loss of $371) in connection with these notes payable and ~~outstanding~~accrued interest payable as a result of fluctuations in the foreign exchange rate.

As10. ofCAPITAL ~~April 30, 2010 and July 31, 2009, the Company has no outstanding stock options or warrants.~~STOCK

9The Company’s authorized share capitalization is 200,000,000 common shares with a par value of $0.001 ~~SUBSEQUENT~~per ~~EVENT~~share.

OnThe ~~June~~Company ~~10,~~did ~~2010,~~not ~~the~~issue ~~agreement~~shares toof ~~acquire~~its ~~100%~~common ofstock ~~EHHO~~during ~~and~~the ~~FBHO~~three ~~closed~~month period ending October 31, 2010.

~~The~~As ~~Company~~of ~~evaluated~~October ~~subsequent~~31, ~~events~~2010 ~~through~~and July 31, 2010 the ~~financial~~Company ~~statements~~has ~~filing~~no outstanding stock options or warrants.

11.	SUBSEQUENT EVENT

Subsequent to the period end, pursuant to a private placement, the Company issued 45,833 common shares at a price of $0.30 gross proceeds of US$13,750.

The Company evaluated subsequent events through the financial statements filing date.

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Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations

Our actual results could differ materially ~~from~~form those reflected in these forward-looking statements as a ~~result~~Statements ofwe ~~certain~~make ~~factors~~in the following discussion that ~~include~~express a belief, ~~but~~expectation or intention, as well as those that are not ~~limited~~historical fact, are forward-looking statements that are subject to risks, uncertainties and assumptions. Our actual results, performance or achievements, or industry results, could differ materially from those we express in the ~~risks~~following discussion as a result of a variety of factors, including general economic and business conditions and industry trends, the continued strength or weakness of the contract land drilling industry in the geographic areas in which we operate, decisions about onshore exploration and development projects to be made by oil and gas companies, the highly competitive nature of our business, the availability, terms and deployment of capital, the availability of qualified personnel, and changes in, or our failure or inability to comply with, government regulations, including those relating to the environment. We have discussed many of these factors in more detail elsewhere in this report, including under the ~~Section~~headings ~~entitled~~“Special Note Regarding Forward-Looking Statements” in the Introductory Note to Part I and “Risk Factors” in Item 1A. ~~Please~~ ~~see~~These factors are not necessarily all the important factors that could affect us. Unpredictable or unknown factors we have not discussed in this report or could also have material adverse effect on actual results of matters that are the subject of our forward-looking statements. ~~contained~~All ~~under~~forward-looking statements speak only as the ~~Section~~date ~~entitled~~on ~~“Forward~~which they are made and we undertake no duty to update or revise any forward-~~Looking~~looking ~~Statements”~~statements. We advise our shareholders that they should (1) be aware that important factors not referred to above could affect the accuracy of our forward-looking statements and (2) use caution and common sense when considering our forward-looking statements.

~~Except~~From ~~for~~inception ~~historical~~on ~~information~~April 9, ~~the~~1999 ~~following~~to ~~Management’s~~October Discussion and Analysis contains forward-looking statements based upon current expectations that involve certain risks and uncertainties. Such forward-looking statements include statements regarding31, ~~among~~2010 ~~other~~we ~~things,~~have ~~(a)~~expended ~~our estimates of mineral reserves and mineralized material~~$188,413 ~~(b)~~on ~~our~~general ~~projected sales~~ and ~~profitability,~~administrative ~~(c)~~costs; ~~our growth strategies~~$18,280 ~~(d)~~on ~~anticipated~~interest ~~trends~~and infinance ~~our~~charges; ~~industry~~$17,989 ~~(e)~~on ~~our~~investor ~~future~~relations; ~~financing plans~~$792,503 ~~(f)~~on ~~our~~management ~~anticipated~~fees ~~needs for working capital, (g) our lack~~ of ~~operational~~which ~~experience~~$750,000 ~~and~~relates ~~(h) the benefits related~~ to ~~ownership of our common~~ stock~~. Forwarding~~-~~looking~~based ~~statements~~compensation; $236,868 ~~which~~on ~~involve~~legal, ~~assumptions~~audit and ~~describe~~accounting ~~our~~fees ~~future plans, strategies,~~ and ~~expectations~~$165,489 are generally identifiable by use of the words “may,” “will,” “should,” “expect” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on ~~these~~resource ~~words~~property orexamination ~~comparable~~and ~~terminology~~exploration. ~~This~~The ~~information~~Company ~~may~~has ~~involve~~also ~~known~~incurred ~~and~~a ~~unknown~~loss ~~risks,~~on ~~uncertainties,~~dilution ~~and~~of ~~other~~its ~~factors~~equity ~~that~~interest ~~may~~in ~~cause~~Elk ~~our~~Hills ~~actual~~Heavy ~~results,~~Oil ~~performance, or achievements expressed or implied by any forward-looking statements~~:LLC. ~~These~~ ~~statements may be found under~~ (“~~Management~~EHHO’s) ~~Discussions~~to ~~and~~50% ~~Analysis~~ of ~~Financial~~$196,000 ~~Condition~~as ~~and~~a ~~Results~~result of ~~Operations”~~EHHO ~~and~~issuing ~~“Business”~~stock ~~as well as in this Form 10-K generally. Actual events or results may differ materially~~ from ~~those~~treasury ~~discussed~~to ina ~~forward-looking~~third ~~statements~~party; asrecorded a50% ~~result~~ of ~~various factors, including, without limitation,~~ the ~~risks~~losses ~~outlined~~of ~~under~~EHHO ~~“Risk~~amounting ~~Factors”~~to $29,754 and ~~matters~~finally ~~described~~recorded inmanagement ~~this~~fee ~~Form~~income ~~10-Q generally. In light~~ of ~~these risks and uncertainties~~$15,000 ~~there~~which ~~can~~was beearned nodirectly ~~assurance~~from ~~that~~EHHO ~~the~~for ~~forward-looking~~management ~~statements~~services ~~contained in this Form 10-Q will in fact occur as projected~~provided.

To date, the Company has not generated any revenues from operations and had a working capital deficit of $182,050 and an accumulated deficit of $1,630,296 at October 31, 2010. The Company’s continuance of operations is contingent on raising additional working capital, and on the future development of its potential resource property interests. Accordingly, these factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently negotiating with several parties to provide equity financing sufficient to finance additional exploration work and provide working capital for the next twelve months. Although there is no assurance that management’s plans will be realized, management believes that the Company will be able to continue operations in the future.

OVERVIEW

~~Since~~We ~~our formation on April 9, 1999, we~~ have been in the pre-exploration stage since our formation on April 9, 1999, and are not operators of any mines or wells nor are we engaged in any mineral or oil and gas production or sales activities. We have a minimum amount of cash and have not yet developed any producing ~~mines~~resource properties. We have no history of any earnings. There is no assurance that we will be a profitable company. We presently operate with minimum overhead costs and need to raise additional funds in the next 12 months, either in the forms of loans or issuance of equity, in order to continue our operations. We ~~were~~are primarily ~~engaged~~an inoil ~~the acquisition~~ and ~~exploration~~gas ofproperty ~~mineral resource properties. We have recently focused our efforts on the~~ acquisition, ~~and further~~ exploration and development ~~of oil and gas properties~~company.

OnThe ~~December~~Company 6,follows ~~2009~~the ~~Mr.~~full ~~Lee~~cost ~~Balak~~method ~~tendered~~of ~~his~~accounting ~~resignation~~for asoil ~~our Chief Executive Officer~~ and ~~director. Mr.~~gas ~~Luigi~~operations ~~Rispoli~~whereby ~~was~~all ~~appointed~~costs asof ~~our~~exploring ~~Chief~~for ~~Executive Officer~~ and ~~Chief~~developing ~~Financial~~oil ~~Officer. On~~and ~~March~~gas ~~3rd~~reserves ~~2010~~are weinitially ~~announced~~capitalized ~~the~~on ~~appointment~~a ofcountry-by-country ~~Mr.~~(cost ~~Ray~~centre) ~~Jefferd to the Board of Directors~~basis. ~~Mr.~~Such ~~Jefferd~~costs ~~also~~include ~~took~~land ~~the~~acquisition ~~position~~costs, ofgeological ~~President~~ and ~~Chief~~geophysical ~~Executive~~expenses, ~~Officer. We~~carrying ~~also~~charges ~~welcomed~~on ~~Mr.~~non-producing ~~Panfilo~~properties, ~~Rosatone~~costs asof adrilling ~~director. Mr. Luigi Rispoli resigned his position as our President~~ and ~~Chief~~overhead ~~Executive~~charges ~~Officer,~~directly ~~Mr.~~related ~~Rispoli~~to ~~will~~acquisition ~~continue as a director~~ and asexploration ~~our Chief Financial Officer~~activities.

Concurrent to the above changes of our officers and directors, we announced entering into an agreement to acquire 100% of Elk Hills Heavy Oil, LLC ("Elk Hills") and Four Bear Heavy Oil, LLC (“Four Bear”) from Mr. Ray Jefferd and Mr. Glen Landry (the "Sellers"). The Elk Hills assets consists of more than 20,000 continuous acres of oil and gas leases in Carbon County, Montana, and Four Bear Heavy Oil, LLC assets consists of more than 6,400 acres of oil and leases in Park County, Wyoming. We will have an area of mutual interest with the Sellers to acquire additional leases within one mile of the borders of the existing oil and gas leases, excluding the properties in Big Horn County Montana.

We also announced that an agreement with Elk Hills Petroleum Canada Ltd. (EHPC) for an investment of $3,000,000 to acquire a 50% interest in our Elk Hills property.

Table of Contents

~~Results~~Costs capitalized, together with the costs of ~~Operations~~production ~~for~~equipment, are depleted and amortized on the ~~Three~~unit-of-production ~~Months~~method ~~Ended~~based ~~April~~on 30the estimated gross proved reserves. Petroleum products and reserves are converted to a common unit of measure, ~~2010~~using 6 MCF of natural gas to one barrel of oil.

WeCosts ~~have~~of ~~not~~acquiring ~~generated~~and ~~any~~evaluating ~~revenues~~unproved ~~from~~properties ~~operations~~are ~~since~~initially ~~our~~excluded ~~incorporation~~from ondepletion ~~April 9, 1999 through April 30, 2010~~calculations. ~~During~~These ~~the~~unevaluated ~~three~~properties ~~month~~are ~~period~~assessed ~~ended~~periodically ~~April~~to ~~30,~~ascertain ~~2010~~whether ~~the~~impairment ~~Company~~has ~~incurred a loss of $39,776~~occurred. ~~The~~When ~~loss~~proved ~~for~~reserves ~~the~~are ~~comparable~~assigned ~~three~~or ~~month period of~~ the ~~prior~~property ~~year~~is ~~was~~considered ~~$7,985. During the three month period ended April 30, 2010 professional fees, comprising legal, accounting and audit costs increased~~ to ~~$27,380~~be ~~(2009 - $4~~impaired,~~511)~~ ~~primarily as a result of legal fees incurred as a result due diligence on~~ the ~~potential~~cost ~~acquisition~~ of Elk Hills and Four Bear. Interest expense increased to $104 (2009 - $87) The interest is based on Canadian dollar denominated loans which has been reduced as a result of falling interest rates. General and administrative expenses increased to $6,872 (2009 - $298) as a result of the ~~Company~~property ~~renting~~or ~~premises in Vancouver BC, developing a Corporate Website and incurring other office related expenses in~~ the ~~current~~amount ~~quarter which were not experienced in the comparative quarter. We also experienced a foreign exchange loss~~ of ~~$2,644 (2009 – $157) as a result of foreign exchange changes during~~ the ~~quarter~~impairment ~~which~~is ~~affected~~added ~~transactions~~to ~~not~~costs ~~denominated~~subject ~~in the US dollar, and filing fees increased~~ to ~~$2,776~~depletion ~~(2009 - $1,297)~~calculations. ~~The Company incurred $nil (2009 - $1635) in property examination costs.~~

~~Sales~~If capitalized costs, less related accumulated amortization and ~~Marketing~~deferred ~~Expenses: We~~income ~~have~~taxes, ~~incurred~~exceed the “full cost ceiling” the excess is expensed in the period such excess occurs. noThe ~~sales~~“full ~~and~~cost ~~marketing~~ceiling” ~~expense~~is ~~since~~determined based on the ~~date~~present value of ~~inception~~estimated ~~due~~future net revenues attributed to ~~the~~proved ~~fact~~reserves, ~~that~~using wecurrent ~~are~~prices inless estimated future expenditures plus the ~~pre-exploration~~lower ~~stage~~of cost and fair value of ~~our~~unproved ~~business~~properties within the cost centre.

~~Our~~The ~~activities~~carrying ~~have~~value ~~been~~of ~~financed~~intangible ~~from~~assets ~~proceeds~~and ofother ~~shareholders,~~long-lived ~~related~~assets are reviewed on a regular basis for the existence of facts or ~~third~~circumstances ~~party~~that ~~loans~~may suggest impairment. WeThe doCompany ~~not~~recognizes ~~anticipate~~impairment ~~earning~~when ~~revenues~~the ~~until~~sum ~~such~~of ~~time~~the asexpected weundiscounted ~~have~~future ~~entered~~cash ~~into~~flows ~~commercial~~is ~~production~~less ofthan ~~any~~the ~~mineral~~carrying ~~claims~~amount of the asset. WeImpairment losses, if any, are ~~presently~~measured inas the ~~pre-exploration~~excess ~~stage~~of the carrying amount of ~~our~~the ~~business~~asset ~~and~~over weits ~~can~~estimated ~~provide~~fair novalue. Impairment ~~assurance~~on ~~that~~the weproperties ~~will~~with ~~discover~~unproved ~~commercially~~reserves ~~exploitable~~is ~~levels~~evaluated ofby ~~mineral~~considering ~~resources~~criteria onsuch ~~any~~as future drilling plans for the properties, orthe ifresults ~~such~~of ~~resources~~geographic ~~are~~and ~~discovered,~~geologic ~~that~~data werelated ~~will~~to ~~enter~~the ~~into~~unproved ~~commercial~~properties ~~production~~and the remaining term of ~~any~~the ~~claims~~property leases.

~~Net~~Asset ~~Loss~~retirement ~~for~~obligations (“ARO”) associated with the ~~Nine~~retirement ~~Month~~of ~~Period~~tangible ~~Ended~~long-lived ~~April~~assets, 30including natural gas and oil properties, ~~2010~~are recognized as liabilities in the period in which it is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated assets. The cost of tangible long-lived assets, including the initially recognized ARO, is depleted, such that the cost of the ARO is recognized over the useful life of the assets. The ARO is recorded at fair value, and accretion expense is recognized over time as the discounted fair value is accreted to the expected settlement value.

~~For~~The ~~the~~fair ~~nine~~value ~~month~~of ~~period~~the ~~ended~~ARO ~~April~~is ~~30,~~measured ~~2010,~~using weexpected ~~recorded~~future ancash ~~operating loss of $65~~flow,~~745~~ ~~compared~~discounted toat ~~a loss of $67,874, for~~ the ~~comparative~~Company’s ~~nine month period of the prior year. The loss consists of: management fee~~ credit-adjusted ~~stock based compensation of $nil, (2009~~ risk-free ~~$39,700) filing fees of $5,485 (2009 - $4,425);~~ interest ~~expense~~rate. As of ~~$318~~October ~~(2009~~31 ~~- $374)~~2010, ~~general~~the ~~and~~Company ~~administrative~~has ~~expenses~~determined ofthat ~~$7,251~~it ~~(2009~~does -not ~~$618),~~have ~~professional~~any ~~fees~~asset ofretirement ~~$48,740 (2009 - 20,631), investor relations of $nil (2009 - $65), resource property expenditures of $1,105 (2009 - $nil) and a loss on foreign exchange of $2,846 (2009 - $426)~~obligation.

~~Cumulative~~We ~~Loss~~currently todo ~~April~~not ~~30,~~have ~~2010~~any research and development activities planned for the next 12 months.

We ~~have~~currently ~~not generated any revenues from operations since our incorporation on April 9, 1999 through April 30, 2010. We~~ have ~~recorded~~no aplans ~~cumulative loss from Inception~~ to ~~April~~purchase ~~30,~~or ~~2010~~sell ~~totalling~~any ~~$1,256,578. This~~additional loss comprises the following: management fees - stock based compensation of $750,000; consulting fees of $27,780; filing fees of $44,399, foreign exchange losses of $16,670, general and administrative expenses of $28,504, interest expense of $16,180, investor relations charges of $17,989, professional fees of $188,626, resource property ~~expenditures~~or ofsignificant ~~$150,114;~~equipment ~~property~~in ~~examination~~the ~~costs~~next of12 ~~$15,375 and travel and entertainment charges of $941~~months.

~~There~~We ~~can~~do benot noexpect ~~assurance~~any ~~that~~significant wechanges ~~will ever achieve profitability or that revenues will be generated and sustained~~ in the ~~future. We~~number ~~are~~of ~~dependent~~employees ~~upon~~over ~~obtaining~~the ~~additional~~next ~~and~~12 ~~future financing to pursue our exploration activities~~months.

~~Liquidity~~On January 12, 2009 Ms. Kathy Whyte resigned her position as President and ~~Further~~Chief ~~Capital~~Financial ~~Resources~~Officer in the Company and Mr. Luigi Rispoli was appointed as President and Chief Financial Officer. On May 8, 2009 Mr. Lee Balak was appointed Chief Executive Officer of the Company. On December 6, 2009 Mr. Lee Balak tendered his resignation as our Chief Executive Officer and director. Mr. Luigi Rispoli was appointed as our Chief Executive Officer and Chief Financial Officer. On March 3, 2010 we announced the appointment of Mr. Ray Jefferd to the Board of Directors as well as his appointment as President and Chief Executive Officer. We also welcomed Mr. Panfilo Rosatone as a director and Mr. Luigi Rispoli resigned his position as our President and Chief Executive Officer. Mr. Rispoli continues to be a director and our Chief Financial Officer.

At April 30, 2010, we had assets of $92,692 consisting of cash of $72,692 and a non-refundable deposit of $20,000. Total stockholders’ deficit was $280,873 at April 30, 2010. We are a pre-exploration stage company and, since inception, have experienced significant changes in liquidity, capital resources and shareholders’ equity.

Table of Contents

ToConcurrent ~~finance~~to the ~~Company’s~~above ~~operations~~changes ~~the~~of ~~Company~~our ~~has~~officers ~~relied~~and ~~upon~~directors, ~~cash~~we announced on ~~hand~~March 3, ~~advances~~2010 entering into an agreement to acquire 100% of Elk Hills Heavy Oil, LLC and Four Bear Heavy Oil, LLC (“FBHO”) from ~~shareholders~~Mr. Ray Jefferd and ~~financing~~Mr. ~~via~~Glen ~~loans~~Landry. The assets of EHHO consist of more than 20,000 continuous acres of oil and ~~debt~~gas ~~financing~~leases in Carbon County, Montana. The assets of FBHO consist of more than 6,400 acres of oil and leases in Park County, Wyoming. We have an area of mutual interest with the Sellers to acquire additional leases within one mile of the borders of the existing oil and gas leases, excluding the properties in Big Horn County Montana.

AsOn ofJune ~~April 30~~14, 2010, we ~~have~~acquired ~~advances~~100% ~~payable~~of EHHO and 100% of ~~$172,690~~FBHO ~~(July~~from ~~31,~~Mr. ~~2009~~Ray -Jefferd ~~$182,356)~~and ~~relating~~Mr. Glen Landry. The Company has acquired these oil and gas leases as part of its strategic plan to ~~advances~~enter ~~received~~into ~~from~~the business of oil and gas production, development, exploration, and the ~~former~~accumulation ~~president~~of oil and gas reserves.

AsOn July 8 we announced the completion of ~~April~~a ~~30,~~non-brokered ~~2010~~private ~~amounts~~placement ~~owing~~with toElk ~~related~~Hills ~~parties~~Petroleum ~~totaled~~Canada ~~143,975~~Ltd. (~~July~~“EHPC”) 31for 5,000,000 ~~2010~~common -shares at $~~689)~~.175 ~~comprising~~per ~~the~~share ~~following:~~for gross proceeds of $875,000.

	APRIL 30,		JULY 31,
	2010		2009
i) Loan Payable
Loan from a company related by virtue of a common director. The amount is unsecured, bears no interest and falls due on June 30, 2010.	$	100,000	$	-
ii) Due to Directors
Advances received from two directors. The advances are unsecured, non-interest bearing and have no specific terms of repayment
Amounts payable for reimbursement of corporate expenses		43,975		689
	$	143,975	$	689

Concurrent with the private placement Stellar experienced a 50% dilution of its equity interest in EHHO as EHHO issued 90,000 Ownership Units to EHPC.

~~Debt financing received at April 30~~Further, ~~2010~~Stellar ~~from~~and ~~shareholders~~EHPC ~~secured~~have byeach ~~Promissory~~made ~~Notes~~$375,000 ~~together~~capital ~~with~~contributions ~~accrued~~(total ~~interest amounted to~~ $29750,~~280 (Cdn$29,442~~000)~~. Interest~~ isinto ~~calculated~~EHHO onenabling ~~the~~EHHO ~~basis~~to ofundertake aan ~~365~~exploration ordrilling ~~366~~program ~~day year~~ on the ~~unpaid~~EHHO ~~principal~~oil ~~balance from day to day~~ and ~~computed~~gas ~~from~~leases ~~the~~in ~~date~~Carbon ofCounty, ~~the Promissory Note until the principal amount is paid completely at Bank of Canada prime rate per annum plus two percent~~Montana. ~~These~~Additionally ~~notes~~EHPC ~~are~~has ~~payable~~agreed ~~upon~~in ~~demand. If~~principal ~~we are not able~~ to ~~get~~lend ~~further~~EHHO ~~financing~~$1,750,000 werepayable ~~may~~from ~~not~~future berevenue ~~able~~generated tofrom ~~continue~~hydrocarbons asproduced afrom ~~going~~the ~~concern~~EHHO ~~and~~leases. weThe ~~may~~loan ~~have~~obligation tois ~~delay~~conditional ~~exploration~~upon orsuccessful ~~cease~~results ~~our~~from ~~operations~~the ~~and~~$750,000 ~~liquidate~~exploratory ~~our~~drilling ~~business~~program.

During the three month period ended October 31, 2010, EHHO commenced its exploration of the property and expensed approximately $500,000 on drilling two exploratory wells and other exploration related costs. EHHO has since completed its third exploratory well. All three wells were logged, two wells were cored and completed.. The Company ~~has~~recovered ~~not~~150 ~~raised~~feet ~~any~~of ~~equity~~4” core from ~~stock~~two ~~issuances~~wells ~~during~~which had oil bearing material. The results of the ~~nine~~exploration ~~month~~activities ~~period~~undertaken ~~ended~~to ~~April~~date ~~30,~~are ~~2010~~currently being evaluated.

ToOn ~~date~~August 24th, 2010 the Company ~~has~~acquired ~~not~~100% ~~generated any revenues from operations and had a working capital deficit~~ of ~~$280,873~~Core54 ~~and~~Petroleum anCanada ~~accumulated~~Ltd. ~~deficit~~(“Core54”) offor $16,~~256,578~~300 ~~at April 30, 2010~~cash. ~~The~~Upon ~~Company’s~~acquisition ~~continuance~~Core54 ofhad ~~operations~~no isassets ~~contingent~~or ~~on raising additional working capital, and on the future development of its potential resource property interests~~liabilities. ~~Accordingly,~~This ~~these~~acquisition ~~factors~~was ~~raise~~completed ~~substantial~~for ~~doubt about~~ the ~~Company’s~~purpose ~~ability~~of toacquiring ~~continue~~oil ~~as a going concern. The Company is currently negotiating with several parties to provide equity financing sufficient to finance additional exploration work~~ and ~~provide~~gas ~~working~~properties ~~capital~~located ~~for~~within ~~the~~Canada ~~next twelve months. Although there is no assurance that management’s plans will be realized, management believes that the Company will be able to continue operations~~ in the future.

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~~RESOURCES~~Results ~~PROPERTIES~~of Operations for the Three Months Ended October 31, 2010

~~Chunya~~We ~~Mining~~have ~~District~~not generated any revenues from operations since our incorporation on April 9, 1999 through October 31, 2010. During the three month period ended October 31, 2010 the Company incurred a loss of ~~Mbeya~~$74,622. The ~~Tanzania~~loss for the comparable three month period of the prior year was $20,352. During the three month period ended October 31, 2010 we incurred management fees of $21,233 (2009 - $nil). Professional fees, comprising legal, accounting and audit costs increased to $40,376 (2009 - $16,630) as a result of increased accounting and audit costs resulting from increased business activities and a larger group structure. Interest expense increased to $642 (2009 - $107) as the Company entered into new promissory notes during the latter part of the prior year and accrued interest has increased accordingly. The interest is based on Canadian dollar denominated advances and loans which has increased recently due to the increase in interest rates in Canada. General and administrative expenses amounted to $26,759 (2009 - $2,510). General and administrative fees now have been expanded to include filing fees, consulting fees, rent and other general costs which have all increased due to the increased business activities of the Company. Foreign exchange gains (losses) were consistent with the previous period and were also aggregated into general and administrative costs.

OnThe ~~September 9, 2008, the~~ Company ~~entered~~also ~~into~~recorded amanagement ~~Farm-In~~fee ~~Agreement~~income ~~with~~of ~~Canafra Mineral Exploration Corp.~~$15,000 a(2009 ~~Canadian~~- ~~private~~$nil) ~~company,~~which ~~and~~was ~~Two~~charged ~~Drums~~to GEHHO &for Cmanagement ~~Company~~services ~~Limited,~~provided aby ~~Tanzanian private company, (jointly “Canafra”), whereby~~ the Company, ~~has~~and ~~the~~finally ~~right~~recorded ~~to acquire~~ a ~~50%~~loss ~~net~~from ~~profit~~equity interest in ~~the~~EHHO ~~subject mineral property in Tanzania. The property consists~~ of ~~three~~$612 ~~Mining~~(2009 ~~and~~- ~~Prospecting Licenses and the Granted Mining and Prospecting Concessions comprising approximately 26 square kilometers, in the Chunya mining district of Mbeya Tanzania~~$nil). ~~The operator of the property will be Canafra.~~

			Common
	Cash		Stock to be
	Consideration		Issued
Phase I – Conditional upon receipt of Mining and
Prospecting Licenses
Within 30 days of execution of agreement	$	60,000		-
Within 60 days of execution of agreement		80,000		-
Within 90 days of execution of agreement		80,000		-
Within 120 days of execution of agreement		80,000		-
Within 150 days of execution of agreement		80,000		-
		380,000		-
Phase II – Within 90 days of completion of Phase I
including geological work to be done by Canafra		380,000		2,000,000
Phase III – Within 90 days of completion of Phase II or
within a mutually agreed timeframe, including
further geological work done by Canafra		340,000		2,000,000
	$	1,100,000		4,000,000

Sales and Marketing Expenses: We have incurred no sales and marketing expense since the date of inception due to the fact that we are in the pre-exploration stage of our business.

~~The~~Our ~~funding~~activities ~~provisions~~have been financed from proceeds of shareholders, related or third party subscriptions and loans. We do not anticipate earning revenues until such time as we have entered into commercial production of any mineral claims. We are ~~subject~~presently toin the ~~Company~~pre-exploration ~~receiving~~stage ~~the~~of ~~Mining~~our business and ~~Prospecting~~we ~~Licenses~~can ~~for~~provide ~~the~~no ~~subject~~assurance ~~property~~that we will discover commercially exploitable levels of mineral resources on any properties, ~~which~~or toif ~~date~~such ~~have~~resources ~~not~~are ~~yet~~discovered, ~~been~~that ~~received~~we will enter into commercial production of any claims.

InLiquidity ~~order to acquire its full interest in the property the Company will advance to the operator $1,100,000 to fund exploration expenditures~~ and ~~provide~~Further ~~working~~Capital capital in phased payments and also issue 4,000,000 restricted common shares to the operator in stages as described below. The Company will earn its interest at a vested rate of 10% based on its funding efforts until fully funded.Resources

~~The~~At ~~Company~~October ~~awaits~~31, ~~formal~~2010, ~~licensing~~we ~~documentation~~had ~~from~~assets ~~Canafra~~of ~~showing~~$698,978 ~~that~~comprising ~~the~~cash ~~Mining~~of ~~and~~$5,740, ~~Prospecting~~amounts ~~Licenses~~receivable ~~with~~of ~~the~~$15,000, ~~geographic~~prepaid ~~coordinates~~expenses ~~are~~of ~~100%~~$4,912, ~~owned~~an byequity ~~Canafra. The~~investment ~~delay~~in isEHHO asof a$541,246 ~~result~~and ofoil ~~Canafra~~and ~~experiencing~~gas ~~certain~~properties ~~setbacks,~~in ~~due~~Wyoming toof ~~the~~$132,080. Total ~~current~~stockholders’ ~~economic~~equity ~~conditions~~was $461,276 ~~and~~at ~~there~~October ~~can~~31, be2010. We noare ~~assurances~~a ~~that~~pre-exploration weand ~~will~~exploration bestage ~~able~~company toand, ~~obtain~~since ~~sufficient~~inception, ~~funding~~have inexperienced ~~order~~significant tochanges ~~complete~~in ~~our~~liquidity, ~~obligations~~capital ~~under~~resources ~~the~~and ~~agreement~~shareholders’ equity.

To finance the Company’s operations the Company has relied upon cash on hand, sources internally generated from management, advances from shareholders and financing via loans, debt and equity financing.

As of October 31, 2010, we have advances payable of $108,346 (July 31, 2010 - $108,346) relating to advances received from the former President.

At October 31, 2010 amounts owed to or from related parties totaled $36,810 (July 31, 2010 - $35,121) comprising the following:

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Texada Island British Columbia, Earn In Agreement

	OCTOBER 31,		JULY 31,
	2010		2010

i) Amounts receivable

Management fees due from EHHO	$	15,000	$	-

ii) Prepaid expenses

Amount advanced to a director for travel expenses	$	-	$	4,000

iii) Due to Directors

Amounts payable for reimbursement of corporate expenses	$	1,706	$	1,206

iv) Note Payable

Note payable (Cdn $35,000) including accrued interest to Director, unsecured bearing interest at 6% per annum.		35,104		33,915
	$	36,810	$	35,121

OnDuring ~~June 15, 2009,~~ the ~~Company~~three ~~entered~~month ~~into~~periods aended ~~proposed~~October ~~Earn In Agreement with Zyrox Mining Company Ltd. (“Zyrox”)~~31, to2010 ~~further explore~~ and ~~develop~~2009 ~~Zyrox’s~~the ~~mineral~~Company ~~tenures~~incurred ~~located~~the onfollowing ~~Texada~~transactions ~~Island,~~with ~~British~~related ~~Columbia.~~parties:

On November 10, 2009 the Company terminated the earn in agreement with Zyrox.

	THREE MONTHS ENDED
	OCTOBER 31
	2010		2009

Interest paid
Interest accrued to a Director pursuant to promissory note	$	542	$	-

Management Fee Income
Charged to EHHO for services rendered	$	15,000	$	-

Management Fee Expense
Fees paid to three Directors for services rendered	$	21,233	$	-

~~Acquisition~~Debt financing received at October 31, 2010 from third parties secured by Promissory Notes together with accrued interest amounted to $24,145 (Cdn$24,600). Interest is calculated on the basis of ~~Oil~~a 365 or 366 day year on the unpaid principal balance from day to day and ~~Gas~~computed ~~Properties~~from the date of the Promissory Note until the principal amount is paid completely at Bank of Canada prime rate per annum plus two percent. These notes are payable upon demand. If we are not able to get further financing, we may not be able to continue as a going concern and we may have to delay exploration or cease our operations and liquidate our business.

On March 3, 2010, we announced entering into an agreement to acquire 100% of Elk Hills Heavy Oil, LLC and Four Bear Heavy Oil, LLC from Mr. Ray Jefferd and Mr. Glen Landry. The Elk Hills assets consists of more than 20,000 continuous acres of oil and gas leases in Carbon County, Montana. The Four Bear Heavy Oil, LLC assets consists of more than 6,400 acres of oil and leases in Park County, Wyoming. We will have an area of mutual interest with the Sellers to acquire additional leases within one mile of the borders of the existing oil and gas leases, excluding the properties in Big Horn County Montana.

a) Acquisition of Elk Hills Heavy Oil, LLC and Four Bear Heavy Oil, LLC

On March 3, 2010 the Company entered into an agreement to acquire 100% of Elk Hills Heavy Oil, LLC (“EHHO”) and Four Bear Heavy Oil, LLC. (“FBHO”) from a newly appointed director and his business associate. The EHHO assets consists of more than 20,000 continuous acres of oil and gas leases in Carbon County, Montana, and FBHO assets consists of more than 6,400 acres of oil and leases in Park County, Wyoming.

In consideration for the acquisitions the Company will:

a) issue of a total of three million common shares

b) make cash payments of $250,000 on or before December 31, 2011.

c) grant the vendors a net profit interest of five per cent on the properties

As at April 30, 2010, the transaction had not closed and the Company had advanced $20,000 as a non refundable deposit in connection with the acquisition. On June 10, 2010, the transaction closed.

b) Sale of 50% interest in EHHO to Elk Hills Petroleum Canada Ltd.

On March 8, 2010 the Company entered into an agreement (amended April 13, 2010) with Elk Hills Petroleum Canada Ltd. (“EHPC”) whereby EHPC would acquire a 50% interest in EHHO for $3,000,000. The agreement requires EHPC to complete its due diligence on or before June 30, 2010.

As consideration for the sale the Company will receive staged payments as follows:

(i) A payment of $1,250,000 is due on or before June 30, 2010.

(ii) A payment of $1,750,000 is due within thirty days after EHPC has received a copy of a third party prepared report on drill cores obtained from the EHHO leases and the reservoir study conducted on the EHHO leases.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Not applicable.

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Item 4T3. ~~Controls~~ Quantative and ~~Procedures~~Qualitive Disclosures About Market Risk.

AsNot of April 30, 2010, the end of our third fiscal quarter covered by this report, we carried out an evaluation, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of April 30, 2010applicable. This evaluation was carried out under the supervision and with the participation of our Chief Financial Officer, Mr. Luigi Rispoli. Based upon that evaluation, our Chief Financial Officer concluded that, as of April 30, 2010, our disclosure controls and procedures are satisfactory. There have been no changes in our internal controls over financial reporting during the quarter ended April 30 2010. Effective June 1, 2010 the Company adopted an Audit Committee Charter and formed an Audit Committee comprised of Ray Jefferd, Luigi Rispoli and Panfilo Rosatone. The Audit Committee Charter as adopted follows below.

~~STELLAR~~Item ~~RESOURCES LTD~~4. Controls and Procedures

~~AUDIT~~As ~~COMMITTEE~~of ~~CHARTER~~October 31, 2010, the end of our first fiscal quarter covered by this report, we carried out an evaluation, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) as of October 31, 2010. This evaluation was carried out under the supervision and with the participation of our Chief Financial Officer, Mr. Luigi Rispoli. Based upon that evaluation, our Chief financial Officer concluded that, as of October 31, 2010, our disclosure controls and procedures are satisfactory. There have been no changes in our internal controls over financial reporting during the quarter ended October 31, 2010. Effective June 1, 2010, the Company adopted an Audit Committee Charter and formed an audit Committee comprised of Ray Jefferd, Luigi Rispoli and Panfilo Rosatone.

~~Purpose~~Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures, designed to ensure that information required to be disclosed in our reports filed under the Exchange Act in accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

To assist the board of directors in fulfilling its oversight responsibilities for the financial reporting process, the system of internal control over financial reporting, the audit process, and the company’s process for monitoring compliance with laws and regulations and the code of conduct.

Authority

The audit committee has authority to conduct or authorize investigations into any matters within its scope of responsibility. It is empowered to:

● Retain outside counsel, accountants or others to advise the committee or assist in the conduct of an investigation

● Seek any information it requires from employees –all of whom are directed to cooperate with the committee’s requests –or external parties

● Meet with company officers, external auditors or outside counsel, as necessary

Composition

The audit committee will consist of at least three and no more than six members the majority of which shall also be members of the board of directors. The board or its nominating committee will appoint committee members and the committee chair. Each committee member will be financially literate, as defined by applicable regulation and the board of directors. At least one member shall have expertise in financial reporting.

Meetings

The committee will meet at least four times a year, with authority to convene additional meetings, as circumstances require. All committee members are expected to attend each meeting, in person or via tele –or video-conference. The committee will invite members of management, auditors or others to attend meetings and provide pertinent information, as necessary. It will hold private meetings with auditors (see below) and executive sessions. Meeting agendas will be prepared and provided in advance to members, along with appropriate briefing materials. Minutes will be prepared.

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Responsibilities

The committee will carry out the following responsibilities:

Financial Statements

● Review significant accounting and reporting issues, including complex or unusual transactions and highly judgmental areas, and recent professional and regulatory pronouncements, and understand their impact on the financial statements

● Review with management and the external auditors the results of the audit, including any difficulties encountered

● Review the annual financial statements, and consider whether they are complete, consistent with information known to committee members, and reflect appropriate accounting principles

● Review other sections of the annual report and related regulatory filings before release and consider the accuracy and completeness of the information

● Review with management and the external auditors all matters required to be communicated to the committee under generally accepted auditing standards

● Understand how management develops interim financial information, and the nature and extent of internal and external auditor involvement

● Review interim financial reports with management and the external auditors, before filing with regulators, and consider whether they are complete and consistent with the information known to committee members

Internal Controls

● Consider the effectiveness of the company’s internal control over annual and interim financial reporting, including information technology security and control

● Understand the scope of internal and external auditors’ review of internal control over financial reporting, and obtain reports on significant findings and recommendations, together with management’s responses

Internal Audit

● Determine annually whether the company should establish an internal audit function.

● Currently the company does not have an internal audit function.

External Audit

● Review the external auditors’ proposed audit scope and approach, including coordination of audit effort with internal audit

● Review the performance of the external auditors, and exercise final approval on the appointment or discharge of the auditors

● Review and confirm the independence of the external auditors by obtaining statements from the auditors on relationships between the auditors and the company, including non-audit services, and discussing the relationship with the auditors

● On a regular basis, meet separately with the external auditors to discuss any matters that the committee or auditors believe should be discussed privately

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Compliance

● Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of management’s investigation and follow-up (including disciplinary action) of any instances of noncompliance

● Review the findings of any examinations by regulatory agencies, and any auditor observations

● Review the process for communicating the code of conduct to company personnel, and for monitoring compliance therewith

● Obtain regular updates from management and company legal counsel regarding compliance matters

Reporting Responsibilities

● Regularly report to the board of directors about committee activities, issues and related recommendations

● Provide an open avenue of communication between internal audit, if any, the external auditors and the board of directors

● Review any other reports the company issues that relate to committee responsibilities

Other Responsibilities

● Perform other activities related to this charge as requested by the board of directors

● Institute and oversee special investigations as needed

● Confirm annually that all responsibilities outlined in this charter have been carried out

● Evaluate the committee’s and individual members’ performance on a regular basis

Effective

● This Audit Committee Charter is effective as of June 1, 2010.

● Review and assess the adequacy of the committee charter annually, requesting board approval for proposed changes

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

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Limitations on effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer conclude that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance within the policies or procedures may determine.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not aware of any pending litigation nor do we have any reason to believe that any such litigation exists. Further, our officers and directors know of no legal proceedings against us, or our property contemplated by any governmental authority.

Item 1A. Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~None~~On June 10, 2010 the Company issued 1,500,000 Common shares to Mr. Ray Jefferd as part of the acquisition cost of the Elk Hills and Four Bear Properties.

On June 10, 2010 the Company issued 1,500,000 Common shares to Mr. Glen Landry as part of the acquisition cost of the Elk Hills and Four Bear Properties.

On July 7, 2010 the Company entered into a private placement with Elk Hills Petroleum Canada and sold 5,000,000 of its common shares at US$.175 per share for net proceeds of $875,000.

On December 1, 2010 the Company issued 45,833 common shares at $0.30 for aggregate proceeds of $13,750.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to Vote a of Security Holders

No matters were submitted to a vote of the Company's shareholders during the three months ended April 30, 2010.

Item 5. Other Information

~~Reports~~No reports were filed by the Issuer ~~March 4th and 10th 2010 respectively~~.

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Item 6. Exhibits

31.1 Certification of Ray Jefferd, Chief Executive Officer of Stellar Resources Ltd. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.1	Certification of Ray Jefferd, Chief Executive Officer of Stellar Resources Ltd. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of Luigi Rispoli, Chief Financial Officer of Stellar Resources Ltd. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of Ray Jefferd, Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.2	Certification of Luigi Rispoli, Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

~~31.2 Certification of Luigi Rispoli, Chief Financial Officer of Stellar Resources Ltd. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002;~~18

~~32.1~~Table ~~Certification~~ of ~~Ray Jefferd, Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~Contents

32.2 Certification of Luigi Rispoli, Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: ~~June 17~~ December 15, 2010

STELLAR RESOURCES LTD.

By: /s/ Ray Jefferd Ray Jefferd President and Chief Executive Officer By: /s/ Luigi Rispoli Luigi Rispoli Director and Chief Financial Officer By: /s/ Michael Rezac Michael Rezac Director

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