UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~April~~October 3031, 2011

~~oTRANSITION~~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. Yes x No o

x 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). Yes o x No o

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

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	x

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

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. Yes x No o

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 December 15, 2011 is 70,712,451.

The total number of shares of Common Stock, par value $0.001 per share, outstanding as of June 17, 2011, is 39,344,051.

Table of Contents

TABLE OF CONTENTS

Part I – FINANCIAL INFORMATION		13
Item 1.	Financial Statements:	13
~~Balance Sheets~~	Balance Sheets	24
~~Statements of Operations~~	Statements of Operations	35
~~Statements of Cash Flows~~	Statements of Cash Flows	46
~~Notes to Financial Statements~~	Notes to Financial Statements	68
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	1114
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	1721
Item 4.	Controls and Procedures	18
Item 4	Controls and Procedures	21
Item 4T.	Controls and Procedures.	1822
Part II – OTHER INFORMATION		1823
Item 1.	Legal Proceedings	1823
Item 1A.	Risk Factors.	1823
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1823
Item 3.	Defaults Upon Senior Securities	1923
Item 5.	Other Information	1923
Item 6.	Exhibits	1923
SIGNATURES		2024

Table of Contents

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

STELLAR RESOURCES LTD.

(An Exploration Stage Company)

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL~~OCTOBER 3031, 2011

(Unaudited)

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

INTERIM CONSOLIDATED BALANCE SHEETS

	APRIL 30,			JULY 31,
	OCTOBER 31,			JULY 31,
	2011			~~2010~~2011
	(Unaudited)			~~(Audited)~~
ASSETS
Current
Cash	$	~~607~~3,474		$	581,~~300~~221
Prepaid expenses (Note 8)		-			8,845
Available for sale investment (Note 3)		151,320			330,000
		607			67,145
Note receivable (Note 4)		80,000			-
Investment in EHHO (Note 5)		540,231			541,858
		234,794			331,221
Oil and gas properties, unproven (Note 6)		134,720			128,000
Investment in EHHO (Note 8)		-			200,000
	$	675,558		$	737,003
Oil and gas properties, unproven (Note 6)		140,840			134,720
Intangible asset (Note 7)		40,091			40,091
	$	415,725		$	706,032
LIABILITIES
Current
Accounts payable	$	65103,~~010~~612		$	364,~~592~~292
Advances payable (Note 7)		108,346			108,346
Advances payable (Note 8)		108,346			108,346
Due to related parties (Note 8)		38,754			35,121
Due to related parties (Note 9)		42,529			46,559
Notes payable (Note 9)		26,188			23,702
Notes payable (Note 10)		25,400			54,338
		238,298			170,761
		279,887			273,535
Future income tax liability (Note 6)		30,000			30,000
FUTURE INCOME TAX LIABILITY		30,000			30,000
		268,298			200,761
		309,887			303,535
STOCKHOLDERS’ EQUITY
Capital stock (Note 10)
Capital stock (Note 11)
Authorized:
200,000,000 common shares with a par value of $0.001 per share
Issued and outstanding:
39,344,051 common shares (July 31, 2010: 39,060,650 common shares)		39,344			39,060
70,712,451 common shares (July 31, 2011: 69,344,051 common shares)		70,712			69,343
Additional paid-in capital		2,~~112~~165,~~251~~476			2,~~059~~119,~~142~~543
Deficit accumulated during the exploration stage		(12,~~735~~054,~~866~~197	)		(1,~~555~~778,~~674~~022	)
Accumulated other comprehensive loss		(876,~~469~~153	)		(68,~~286~~367	)
		407,260			536,242
		105,838			402,497
	$	~~675~~415,~~558~~725		$	~~737~~706,~~003~~032

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,
	2011			2010			2011			~~2010~~			~~2011~~
Expenses
General and administrative	$	159,~~045~~632		$	1226,~~292~~759		$	70248,~~386~~564		$	~~15,582~~		$	~~232,040~~
Interest and finance fees (Notes 8 and 9)		1,310			104			2,563			318			20,201
Interest and finance fees (Notes 10 and 11)		1,604			642			24,608
Investor relations		-			-			-17,989			-			~~17,989~~
Management fees (Note 8)		5,645			-			40,801			-			812,071
Management fees (Note 10)		3,000			21,233			825,410
Professional fees		1855,~~519~~648			2740,~~380~~376			79343,~~815~~846			~~48,740~~			~~276,307~~
Property examination and expenditure costs		-			-			-165,489			~~1,105~~			~~165,489~~
Loss before other items		(40,519	)		(39,776	)		(193,565	)		(65,745	)		(1,524,097	)
Consulting - stock based compensation		4,950			-			4,950
Other Items
Loss before other items		(74,834	)	$	(89,010	)		(1,630,856	)
Management fees (Note 8)		-			-			15,000			-			15,000
Other items
Dilution loss from EHHO (Note 5)		-			-			-			-			(196,000	)
Management fee income		-			15,000			15,000
Loss from equity interest in EHHO (Note 5)		(28	)		-			(1,627	)		-			(30,769	)
Loss on disposal of investment (Note 4)		(2,532	)		-			(2,532	)
Net Loss	$	(40,547	)	$	(39,776	)	$	(180,192	)	$	(65,745	)	$	(1,735,866	)
Loss on settlement of note payable (Note 10)		(78,809	)		-			(78,809	)
Basic and Diluted Net Loss Per Common Share	$	-		$	-		$	-		$	-
Gain (loss) on sale of EHHO (Note 5)		(120,000	)		-			184,689
Weighted Average Number of Common Shares Outstanding – Basic and Diluted		39,293,240			31,060,650			39,148,732			31,060,650
Dilution loss from EHHO		-			-			(196,000	)
Impairment loss on EHHO		-			-			(314,908	)
Loss from equity interest in EHHO		-			(612	)		(30,781	)
Net loss for the period		(276,175	)		(74,622	)		(2,054,197	)
Other comprehensive loss
Revaluation of available for sale investments to market value		(71,312	)		-			(71,312	)
Realized loss on sale of investment reclassified to income		2,532			-			2,532
Foreign currency translation adjustment		894			(344	)		(7,373	)
Comprehensive loss for the period	$	(344,061	)	$	(74,966	)	$	2,130,350
Basic and Diluted Net Loss Per Common Share	$	(0.01	)	$	(0.01	)
Weighted Average Number of Common Shares Outstanding – Basic and Diluted		69,577,841			39,060,650

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,
	2011			2010			2011
Cash Flows from (used in) Operating Activities
Cash Flows from Operating Activities
Net loss	$	(~~180~~276,~~192~~175	)	$	(6574,~~745~~622	)	$	(12,~~735~~054,~~866~~197	)
Adjustments to reconcile net loss to net cash used in operating activities:
Realized foreign exchange losses on settlement of notes payable		-(1,384	)		-647			1211,~~518~~134
Unrealized foreign exchange		~~2,051~~511			-			24,~~051~~456
Stock-based compensation		-4,950			-			~~750~~754,~~000~~950
Accrued interest		~~1,858~~627			~~318~~641			2023,~~029~~313
Gain on disposal of investments		2,532			-			2,532
Loss on settlement of note payable		78,809			-			78,809
Share of loss of equity investment		-			612			30,781
Gain (loss) on disposal of EHHO		120,000			-			(184,689	)
Impairment of EHHO		-			-			314,908
Dilution loss		-			-			196,000
Share of loss of equity investment		1,627			-			30,769
Changes in operating assets and liabilities:
Prepaid expenses		8,845			-			-
Amounts receivable					(15,000	)		-
Deposit		-			(20,000	)		-
Prepaid expenses		-			3,933			-
Accounts payable		61,445			23,306			65,037
Accounts payable and accrued liabilities		39,320			34,809			103,612
Net cash used in operating activities		(~~104~~30,~~366~~810	)		(6248,~~121~~980	)		(~~659~~718,~~462~~391	)
Cash Flows from Financing Activities
Proceeds from issuance of common stock, net		5342,~~393~~352			-			1,~~059~~101,~~022~~374
Proceeds from (repayment of) notes payable		-			-			89114,300
Advances payable		-			~~(9,666~~-	)		108,346
Advances from related parties		-(3,169	)		~~143,286~~500			3538,~~121~~485
Net cash provided by financing activities		5339,~~393~~183			~~133,620~~500			1,~~291~~362,~~789~~505
Cash Flows from (used in) Investing Activities
Cash Flows from Investing Activities
Oil and gas properties		(6,720	)		-			(256,720	)
Acquisition of oil and gas properties		(6,120	)		(4,080	)		(262,840	)
Acquisition of Intellectual property		-			-			(2,800	)
Investment in EHHO		-			-			(375,000	)
Net cash used in investing activities		(6,720	)		-			(631,720	)
		(6,120	)		(4,080	)		(640,640	)
Net Increase (Decrease) in Cash		~~(57~~2,~~693~~253	)		71(52,~~499~~560	)		~~607~~3,474
Cash, Beginning		581,~~300~~221			158,~~193~~300			-
Cash, Ending	$	~~607~~3,474		$	725,~~692~~740		$	~~607~~3,474

Continued…

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 (Continued)

(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,
	2011		~~2011~~2010		2011
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 intellectual property	$	-	$	-	$	37,291
Common stock of Deloro received as part proceeds on partial disposal of EHHO (Note 4)	$	-	$	-	$	330,000
Common shares issued on acquisition of EHHO and FBHO	$	-	$	-	$	240,000
Future income tax liability on property acquisition	$	-	$	-	$	30,000

The accompanying notes are an integral part of these financial statements

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL~~OCTOBER 3031, 2011

(Unaudited)

1.	NATURE OF CONTINUED OPERATIONS AND BASIS OF PRESENTATION

The Company was incorporated in the State of Nevada on April 9, 1999 and is in the exploration stage ~~of its resource property activities~~.

On June 10, 2010, the Company completed the acquisition of 100% of Elk Hills Heavy Oil, LLC (“EHHO”) and Four Bear Heavy Oil, LLC. (“FBHO”). EHHO’s assets consist of oil and gas leases in Carbon County, Montana, and FBHO’s ~~assets~~asset ~~consist~~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”). AsOn aMay ~~result~~4, of2011, the ~~above~~Company ~~transactions~~entered ~~the~~into ~~Company’s~~a ~~focus~~letter agreement with Deloro Resources Ltd. (“Deloro”), EHPC and EHHO whereby Deloro may acquire up to a 1/3rd interest (being 60,000 ownership units) in EHHO. As at July 31, 2011 Deloro has ~~changed~~acquired ~~from~~a ~~the~~1/6 ~~exploration~~interest ofin ~~mineral~~EHHO ~~properties~~pursuant to ~~oil~~this agreement, and ~~gas~~the ~~exploration~~Company held a 41.67% interest in EHHO. On ~~August~~October 2425, ~~2010~~2011, the Company ~~completed~~disposed ~~the~~of ~~acquisition~~its ofremaining ~~100%~~75,000 units of ~~Core54~~capital ~~Petroleum~~in ~~Canada~~EHHO ~~Ltd~~to EHPC and received in exchange a non-interest bearing promissory note for $1,000,000 which falls due on April 30, 2012. (~~“Core~~Note ~~54”~~4).

~~The~~On ~~accompanying~~September ~~financial~~23, ~~statements~~2011 ~~have been prepared assuming~~ the Company ~~will~~entered ~~continue~~into as a ~~going~~binding ~~concern. This contemplates that assets will be realized and liabilities and commitments satisfied in the normal course of business. To date~~agreement, ~~the~~subject ~~Company~~to ~~has~~due ~~not generated any revenues from operations and had a working capital deficit of $237~~diligence,~~691~~ ~~and~~to anacquire ~~accumulated~~100% ~~deficit~~ of ~~$1,735,866~~American atMicrobial ~~April~~Labs ~~30, 2011~~LLC. ~~The~~ ~~Company’s~~which ~~continuance~~holds oftechnology ~~operations~~designed isfor ~~contingent~~cleaning onproduced ~~raising~~water ~~additional~~generated ~~working~~from ~~capital, and on~~ the ~~future~~recovery ~~acquisition and development~~ of ~~resource~~oil ~~property~~and ~~interests.~~gas ~~Accordingly,~~wells ~~these~~as ~~factors~~well ~~raise substantial doubt about the Company’s ability to continue~~ as aoil ~~going~~spills ~~concern.~~located ~~The~~both ~~Company~~on island ~~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~~water. 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.

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 $45,093 and an accumulated deficit of $2,054,197 at October 31, 2011. 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 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.

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 domay 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, ~~2010~~2011 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. The ~~interim~~ unaudited interim 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~~three months ended ~~April~~October 3031, 2011 are not necessarily indicative of the results that may be expected for the year ending July 31, ~~2011~~2012.

2.The ~~SIGNIFICANT~~consolidated ~~ACCOUNTING~~financial ~~POLICY~~statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States and are presented in United States dollars.

~~Basis~~The consolidated financial statements include the results of ~~Consolidation~~the Company and the results of its wholly-owned subsidiaries, FBHO, a company incorporated in Washington State on February 28, 2010 and Core54 Petroleum Canada Ltd. (“Core54”), a company incorporated in British Columbia on March 9, 2010. All intercompany balances and transactions have been eliminated in the consolidation.

The ~~consolidated~~Company ~~financial~~previously ~~statements~~recorded ~~include~~its ~~the~~interest ~~results~~in ofEHHO ~~the~~using ~~Company and~~ the ~~post~~equity ~~acquisition~~method ~~results~~ of ~~its~~accounting; ~~wholly-owned subsidiaries~~however, ~~FBHO, a company incorporated in Washington State~~ on ~~February~~October 2825, ~~2010~~2011 ~~and~~the ~~Core~~Company ~~54,~~disposed aof ~~company~~its ~~incorporated~~remaining ~~in British Columbia~~75,000 ~~Canada~~units onof ~~March~~capital 9,in ~~2010~~EHHO. (Note 5)

The Company previously consolidated its interest in EHHO; however, on July 7, 2010 the Company’s interest in EHHO was reduced to the level of significant influence, and thus effective July 7, 2010, the investment in EHHO is recorded using the equity method of accounting (Note 6).8

Intercompany balances and transactions have been eliminated in the consolidation.

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL~~OCTOBER 3031, 2011

(Unaudited)

32. RECENT ACCOUNTING PRONOUNCEMENTS

Recent Accounting Standards Not Yet Adopted

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.

43. ~~AQUISITION~~INVESTMENT

On August 24, 2010, pursuant to an acquisition agreement the Company acquired 100% of the outstanding share capital of Core54 for $1 cash.

	OCTOBER 31			JULY 31
	2011			2011

Deloro – 2,000,000 common shares at market value (July 31, 2011 – 3,000,000 common shares)		$	151,320		$	330,000

~~Core54~~Pursuant ~~had~~to noa ~~assets~~letter ~~but~~agreement ~~had~~dated ~~liabilities~~May of4, $62011 between the Company,~~300~~ ~~upon~~Deloro, ~~acquisition. The~~EHPC ~~excess~~and EHHO whereby Deloro can acquire up to a 1/3 ownership of EHHO (Note 5), the ~~purchase~~Company ~~consideration~~received ~~over~~3,000,000 ~~the~~common shares of Deloro with a fair value of ~~net~~$330,000. During ~~liability~~the ~~assumed~~three months ended October 31, 2011 the Company recorded an unrealized loss of $668,~~300~~680 ~~was~~in ~~expensed~~other oncomprehensive ~~acquisition~~income.

As at July 31, 2011 the Company had pledged 1,000,000 common shares of Deloro as security against a note payable which became due on September 1, 2011. On September 1, 2011, the Company was unable to repay the loan and the security of 1,000,000 common shares with a fair value of $107,468 was transferred to the noteholder in full and final settlement of the note, resulting in a loss of $2,532 on disposal of the shares. (Note 10)

4.	NOTE RECEIVABLE

	OCTOBER 31			JULY 31
	2011			2011

Promissory note receivable		$	80,000		$	-

On October 25, 2011, the Company transferred its remaining 75,000 units of capital in EHHO to EHPC in exchange for a non-interest bearing promissory note with a face value of $1,000,000 which falls due on or before April 30, 2012.

The purchaser holds 4,000,000 common shares of the Company, which have been pledged collateral for the promissory note. The 4,000,000 shares are the subject of an option agreement between the purchaser and a 3rd party, whereby the third party can acquire the shares, subject to certain conditions, in tranches of 1,000,000 shares at an exercise price of $0.25 per share. Should the option be exercised, the Company will receive the proceeds from the exercise of the option in satisfaction of the promissory note. On April 30, 2012, any remaining shares held as collateral will be transferred to the Company in full and final settlement of the promissory note. As a result, the initial recognition fair value of the promissory note has been estimated at $80,000 being the current market value of the underlying 4,000,000 shares of collateral, and the Company has recorded this amount as proceeds for this transfer.

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2011

(Unaudited)

5.	INVESTMENT IN EHHO

~~Upon~~On ~~issuance of 90,000 units of the capital of EHHO to EHPC on~~ July 7, 2010, the Company’s ~~equity~~entered ~~holding~~into ofan ~~EHHO~~agreement ~~was~~with ~~reduced~~EHPC, towhich ~~50%~~resulted ~~from~~in ~~100% and~~ the ~~Company recorded a loss on~~ dilution of ~~$196,000. Of~~ the ~~90,000~~Company’s ~~units~~interest ofin ~~capital~~EHHO ~~issued~~ to ~~EHPC,~~a ~~80,000~~50% ~~are~~equity ~~held in escrow~~holding. ~~Subsequent~~On toMay ~~the~~4, ~~dilution of the Company’s investment in EHHO~~2011, ~~management determined that~~ the Company ~~continued~~entered tointo ~~hold~~a ~~significant~~letter ~~influence~~agreement ~~over~~with ~~the~~Deloro, ~~activities~~EHPC ofand EHHO, ~~but~~allowing ~~did~~Deloro ~~not~~to ~~exercise~~acquire ~~control. Accordingly~~up ~~from~~to ~~July~~a 7,1/3rd ~~2010,~~interest ~~the~~(being ~~Company~~60,000 ~~has~~ownership ~~accounted~~units) ~~for~~in ~~its~~EHHO ~~50% interest~~ in ~~EHHO~~stages as ~~an equity investment.~~follows:

	APRIL 30,			JULY 31,
Investment in EHHO	2011			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		(30,769	)		(29,142	)
Investment in EHHO	$	540,231		$	541,858

On or before May 11, 2011, Deloro will issue 3,000,000 common shares each to the Company (received) and to EHPC. As consideration both the Company and EHPC will transfer 15,000 units of capital of EHHO to Deloro immediately and an aggregate of 30,000 ownership units of EHHO (15,000 from the Company and 15,000 from EHPC) will be placed into escrow until the completion of Deloro’s obligations described below.

~~Under~~ii) ~~the~~On ~~agreement~~or ~~with~~before ~~EHPC,~~May ~~upon completion of a reserve report that concludes the lands held in EHHO do not indicate a reservoir with commercial potential~~13, ~~then 80~~2011,~~000~~ ~~capital~~Deloro ~~units of EHHO held in escrow~~ shall bemake ~~released from escrow. If the report states the lands indicate~~ a ~~reservoir~~capital ~~with~~contribution ~~commercial~~of ~~potential then EHPC shall make a US~~Cdn$1150,~~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 hydrocarbons from lands. Starting in the 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. Subsequent to April 30, 2011 the agreement was terminated and replaced with an agreement between Deloro Resources Ltd,, EHPC and EHHO. See Note 11.

7iii) On or before September 30, 2011, Deloro will make further capital contributions aggregating Cdn$450,000 to EHHO in either cash or approved exploration expenditures (not received).

Upon fulfilling the capital contribution obligations, Deloro will have earned the 30,000 ownership units held in escrow and they shall be released to Deloro.

In the event Deloro completes the share issuance component of the transaction but does not fully complete Cdn$600,000 in aggregate capital contributions then Deloro shall retain 30,000 ownership units in EHHO, and the ownership units held in escrow shall be returned to the Company and EHPC respectively.

Deloro completed conditions (i) and (ii) above, but not condition (iii), and accordingly Deloro earned an aggregate of 30,000 ownership units of EHHO and the Company’s interest in EHHO was reduced from 50% to 41.67%.As a result, during the year ended July 31, 2011, the Company recorded a gain on the disposal of 15,000 units of capital of EHHO amounting to $304,689, as follows:

Sale proceeds received
3,000,000 common shares of Deloro	$	330,000
Carrying value of 15,000 capital units sold to Deloro		(89,924	)
Gain on disposal of 15,000 capital units of EHHO		240,076

Share of capital contribution to EHHO by Deloro		64,613

Total gain on disposal of 15,000 capital units of EHHO	$	304,689

Transfer of remaining 75,000 capital units

On October 25, 2011, the Company transferred its remaining 75,000 capital units in EHHO to EHPC. Refer to Note 4. As a result, the Company recorded a loss on disposition of its interest of $120,000 as follows:

Initial recognition on promissory note	$	80,000
Carrying value of 75,000 capital units		(200,000	)

Total loss on disposal of 75,000 capital units of EHHO	$	(120,000	)

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL~~OCTOBER 3031, 2011

(Unaudited)

6.	OIL AND GAS PROPERTIES

	APRIL 30,		JULY 31,
	OCTOBER 31		JULY 31
	2011		~~2010~~2011
Unproved properties
Acquisition costs	$	128,000	$	128,000
Annual lease costs		612,~~720~~840		-6,720
	$	~~134~~140,~~720~~840	$	~~128~~134,~~000~~720

~~Park~~7. ~~County,~~INTANGIBLE ~~Wyoming~~ASSET

On ~~June~~July 1014, ~~2010~~2011, the Company ~~acquired~~purchased ~~oil~~from ~~and~~its ~~leases~~President inthe ~~Park~~rights ~~County,~~to ~~Wyoming,~~ZeroGap ~~upon~~Intellectual ~~the~~Property, ~~acquisition~~which ofcomprises ~~FBHO~~a ~~for~~patent ~~$98,000. In~~pending ~~addition,~~with the ~~Company~~US ~~recorded~~Patent aoffice. The ~~future~~Company ~~income~~has ~~tax~~acquired ~~liability~~all ~~of $30~~right,~~000~~ ~~relating~~title toand ~~the~~interest ~~excess~~in ~~of book value over~~ the ~~tax~~ZeroGap ~~value. The~~Intellectual ~~vendors~~Property, ~~retained~~free aof 5%any ~~overriding~~encumbrances ~~royalty~~or ~~interest in the property~~royalties.

7ZeroGap stands for “Zero Emission Refine Onsite with Gas Assisted Production”. The ~~ADVANCES~~technology ~~PAYABLE~~is still in the research and development stage, and is expected to have the potential to upgrade oil reserves in situ thereby potentially increasing the recovery and extraction of existing oil reserves.

AtThe ~~April~~Company issued 30, ~~2011~~000,000 ancommon ~~amount~~shares with a fair value of $~~108~~3,~~346~~000,000 ~~(July~~to ~~31,~~the ~~2010~~President -as ~~$108,346)~~consideration ~~was~~for ~~owing~~the toIntellectual Property. As this is a ~~former~~related ~~president~~party oftransaction, the ~~Company~~Intellectual ~~for~~Property ~~cash~~was ~~advances~~recorded ~~and~~at ~~expenses~~the ~~paid~~related onparty ~~behalf~~cost of ~~the Company~~$37,291. The ~~amounts~~difference ~~are~~between ~~unsecured,~~the ~~non-interest~~fair ~~bearing~~value of the shares issued and ~~have~~the norelated ~~specific~~party ~~terms~~cost, being $2,962,709, was recorded as a reduction of ~~repayment~~additional paid-in capital.

8. RELATED PARTY TRANSACTIONS

Related party transfer cost	$	37,291
Other costs		2,800

Balance July 31, 2011 and October 31, 2011	$	40,091

8.	ADVANCES PAYABLE

At October 31, 2011, an amount of $108,346 (July 31, 2011 - $108,346) was owing to a former president of the Company for cash advances and expenses paid on behalf of the Company. The amounts are unsecured, non-interest bearing and have no specific terms of repayment.

9.	RELATED PARTY TRANSACTIONS

In addition to the related party transactions disclosed elsewhere in these financial statements the Company incurred the following balances and transactions during the year:

	APRIL 30,		JULY 31,
	OCTOBER 31		JULY 31
	2011		~~2010~~2011
Balances:
Balance Sheet items
i) Prepaid expenses
i) Due to Directors
Amount advanced to a director for travel expenses	$	-	$	4,000
Amounts payable for reimbursement of corporate expenses	$	4,569	$	1,463
ii) Due to directors
Amounts payable for management fees		-		6,277
Amounts payable for reimbursement of corporate expenses	$	1,206	$	1,206
ii) Other
Note payable (Cdn $35,000) including accrued interest to Director, unsecured, bearing interest at 6% per annum and due July 25, 2011.		37,548		33,915
Note payable (Cdn$35,000) including accrued interest to Director, unsecured bearing interest at 6% per annum. The loan was due on July 25, 2011. There are no default charges and interest continues to accrue.		37,960		38,819
	$	3842,~~754~~529	$	3546,~~121~~559

811

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL~~OCTOBER 3031, 2011

(Unaudited)

89. RELATED PARTY TRANSACTIONS (Continued)

	NINE MONTHS ENDED
	THREE MONTHS ENDED
	APRIL 30
	OCTOBER 31,
	2011		2010
Transactions:
Income Statement Items
i) Interest accrued to a Director pursuant to promissory note	$	1,556	$	-
iii) Interest paid or accrued
ii) Management fees charged to EHHO	$	15,000		-
Interest accrued on promissory note owing to Director	$	523	$	542
iii) Fees paid to three Directors for services rendered	$	40,801	$	-
iv) Management fees
Charged to EHHO	$	-	$	15,000
Fees paid to two (2010 – three) Directors for services rendered	$	3,000	$	21,233

910. NOTES PAYABLE

As at ~~April~~October 3031, 2011 $18,~~941~~158 (July 31, ~~2010:~~2011 - $1718,~~442~~832) was due on third party demand promissory notes bearing interest at the Bank of Canada prime rate plus 2% (3.25% as of ~~April~~October 3031, 2011), and $7,~~247~~241 (July 31, ~~2010~~2011 - $67,~~260~~358) of accrued interest is payable.

During the ~~nine~~three month period ended ~~April~~October 3031, 2011, the Company recorded a foreign exchange ~~loss~~transaction gain of $~~2,182~~894 (~~April~~October 3031, 2010 – ~~loss of~~ $~~1,844~~344) in connection with these notes payable and accrued interest payable as a result of fluctuations in the foreign exchange rate.

10At October 31, 2011, $nil (July 31, 2011 - $28,148 (Cdn$26,905)) was due on a secured third party promissory note. The ~~CAPITAL~~Company ~~STOCK~~received a loan for Cdn$25,000 and provided the lender a promissory note redeemable on or before September 1, 2011 for Cdn$28,000 including loan fees and interest. The loan was settled through the security pledged. (Note 3)

~~The Company’s authorized share capitalization is 200,000,000 common shares with a par value of $0~~11.~~001~~ ~~per~~CAPITAL ~~share.~~STOCK

~~On November 19, 2010, the Company accepted~~ a) ~~share subscription for 45,833 common shares at $0.30 per share for aggregate proceeds of $13,750.~~Authorized

OnThe ~~February 11, 2011 the~~ Company’s ~~accepted~~capitalization ais ~~share subscription for 101~~200,~~215~~000,000 authorized common shares atwith ~~$0.20~~a ~~for~~par ~~aggregate~~value ~~proceeds~~ of $~~20,243~~0. ~~The~~001 ~~Company~~per ~~paid a finders fee of $1,026 in relation to this financing~~share.

Onb) ~~February 25, 2011 the Company accepted a share subscription for 136,353 common shares at $0.15 for aggregate proceeds of $20,426.~~Issued

AsOn ofAugust ~~April 30~~17, 2011 ~~and~~the ~~July~~Company 31accepted a share subscription for 187,300 ~~2010~~common ~~the~~shares ~~Company~~at ~~has~~$0.10 noper ~~outstanding~~share ~~stock~~for ~~options~~aggregate orproceeds ~~warrants~~of $18,730 (Cdn$18,000).

9On October 25, 2011 the Company accepted a share subscription for 1,181,100 common shares at $0.02 per share for aggregate proceeds of $23,622 (Cdn$24,000).

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STELLAR RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL~~OCTOBER 3031, 2011

(Unaudited)

11. ~~SUBSEQUENT~~CAPITAL ~~EVENT~~STOCK (Continued)

~~On May 4, 2011, the Company entered into a Letter agreement with Deloro Resources Ltd, (“Deloro”~~c), ~~EHPC~~Stock ~~and EHHO, whereby Deloro may acquire up to a 1/3rd interest (being 60,000 ownership units) in EHHO as follows:~~Options

i) On orOctober ~~before May 11~~5, 2011, ~~Deloro~~the ~~will~~Company ~~issue~~granted 3100,000~~,000~~ ~~common~~stock ~~shares~~options ~~each~~ to ~~the~~a ~~Company~~consultant ~~and~~with toan ~~EHPC.~~exercise Asprice ~~consideration~~of ~~both~~$0.10 ~~the~~per ~~Company~~share ~~and~~for ~~EHPC~~a ~~will~~term ~~transfer~~of ~~15,000~~three ~~ownership~~years ~~units~~and ofwhich ~~EHHO~~vested toimmediately. The ~~Deloro~~options ~~immediately~~have ~~and~~a anfair ~~aggregate~~value of 30$4,~~000~~950, ~~ownership~~as ~~units~~calculated ofby ~~EHHO~~the ~~(15,000~~Black-Scholes ~~from~~option ~~the~~pricing ~~Company~~model ~~and~~assuming ~~15,000~~an ~~from~~average ~~EHPC)~~expected ~~will~~remaining belife ~~placed~~of ~~into~~3 ~~escrow~~years, ~~until~~a ~~the~~risk-free ~~completion~~interest rate of ~~Deloro’s~~0.43%, ~~obligations~~a ~~described~~nil ~~below.~~dividend yield and an expected volatility of 257%. The ~~Deloro~~remaining ~~shares~~life ~~have~~is ~~been~~2.92 ~~issued~~years.

~~ii)~~The Onfollowing oris ~~before~~a ~~May~~summary ~~13,~~of ~~2011,~~the ~~Deloro~~stock ~~shall~~option ~~make~~activity aduring ~~capital~~the ~~contribution~~three ofmonth ~~Cdn$150~~period ended October 31,~~000~~ to2011 ~~EHHO~~and ~~(received)~~the year ended July 31, 2011.

iii) On or before September 30, 2011, Deloro will make further capital contributions aggregating Cdn$450,000 to EHHO in either cash or approved exploration expenditures.

	THREE MONTHS ENDED					YEAR ENDED
	OCTOBER 31, 2011					JULY 31, 2011
			Weighted					Weighted
	Number		Average			Number		Average
	of		Exercise			of		Exercise
	Shares		Price			Shares		Price

Outstanding, beginning of period		-		$	-		-		$	-

Granted		100,000			0.10		-			-

Outstanding, end of period		100,000		$	0.10		-		$	-

~~Upon~~12. ~~fulfilling~~PROPOSED ~~the capital contribution obligations, Deloro will have earned the 30,000 ownership units held in escrow and they shall be released to Deloro.~~ACQUISITION

InOn ~~the~~September ~~event~~23, ~~Deloro~~2011 ~~completes~~ the ~~share~~Company ~~issuance~~entered ~~component~~into ofa ~~the~~binding ~~transaction~~agreement, ~~but~~subject ~~does~~to ~~not~~due ~~fully~~diligence, ~~complete~~to ~~Cdn$600,000~~acquire in100% ~~aggregate~~of ~~capital~~American ~~contributions~~Microbial ~~then~~Labs ~~Deloro~~LLC ~~shall~~(“AML”) ~~retain~~which ~~30,000~~holds ~~ownership~~technology ~~units~~designed infor ~~EHHO,~~cleaning ~~and~~produced water generated from the ~~ownership~~recovery ~~units~~of ~~held~~oil inand ~~escrow~~gas ~~shall~~wells beas ~~returned~~well toas ~~the~~oil ~~Company~~spills located both on land and ~~EHPC~~in ~~respectively~~water.

AsThe ofCompany ~~the~~may ~~time~~acquire of100% ~~filing Deloro had completed conditions (i) and (ii) above, accordingly Deloro had earned an aggregate of 30,000~~ ownership ~~units~~ of ~~EHHO~~AML ~~and~~for the ~~Company’s~~following ~~interest in EHHO had been reduced from 50% to 41.67%.~~consideration:

~~On June 7, 2011 the Company received~~ a ~~loan for CAD$25~~) 500,000 ~~and~~common ~~provided~~shares of the ~~lender~~Company aat ~~Promissory Note redeemable on or before September 1, 2011 for CAD~~$~~28,000 including loan fees and interest~~0. ~~The~~25 ~~loan~~per ~~is secured by 1,000,000 common shares of Deloro.~~share;

10b) $150,000 cash to be paid out on the closing date.

On execution of a definitive asset purchase agreement, the Company will also enter into employment agreements with two parties on terms and conditions as shall be negotiated and agreed, including but not limited to the following matters:

a) Duration of the term;

b) Base salary not to exceed Cdn$60,000 per annum;

b) Incentive compensation not to exceed Cdn$200,000 including base salary for the first two years.

The agreement will close on or before January 31, 2012.

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

Our actual results could differ materially form those reflected in these forward-looking statements as a Statements we make in the following discussion that express a belief, expectation or intention, as well as those that are not 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 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 headings “Special Note Regarding Forward-Looking Statements” in the Introductory Note to Part I and “Risk Factors” in Item 1A. 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. All forward-looking statements speak only as the date on which they are made and we undertake no duty to update or revise any forward-looking 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.

From inception on April 9, 1999 to ~~April~~October 3031, 2011 we have expended $~~232~~248,~~040~~564 on general and administration expenses; $2024,~~201~~608 on interest and finance fees; $17,~~989~~898 on investor relations; $~~812~~825,~~071~~410 on management fees of which $750,000 relates to non-cash to stock-based compensation; $~~276~~343,~~307~~846 on legal, audit and accounting fees; ~~and~~ $165,489 on resource property examination and exploration and $4,950 on non-cash stock based compensation arising upon the valuation of stock options granted to a consultant. Stellar Resources Ltd. (the "Issuer") has also charged management fees of $15,000 to Elk Hills Heavy Oil LLC (“EHHO”) for services rendered,; incurred a loss on dilution of its equity interest in EHHO to 50% of $196,000 as a result of EHHO issuing stock from treasury to a third party; recorded a gain on sale of its holding of EHHO of $184,689; a loss on disposal of investments of $2,532; a loss on settlement of promissory note of $78,809, an impairment loss against EHHO of $314,908; and finally recorded ~~50%~~the ofCompany’s ~~the~~share of losses of EHHO amounting to of $30,~~769~~781. The Company has also unrealized losses on its investment of $71,312, and unrealized foreign currency translation losses of $7,373.

To date, we have not generated any revenues from operations and had a working capital deficit of $~~237~~45,~~691~~093 and an accumulated deficit of $12,~~735~~054,~~866~~197 at ~~April~~October 3031, 2011. Our 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 our ability to continue as a going concern. We are 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 we will be able to continue operations in the future.

OVERVIEW

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 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 are primarily an oil and gas ~~property~~technology ~~acquisition,~~and exploration and development ~~company.~~

We follow the full cost method of accounting for oil and gas operations whereby all costs of exploring for and developing oil and gas reserves are initially capitalized on a country-by-country (cost centre) basis. Such costs include land acquisition costs, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling and overhead charges directly related to acquisition and exploration activities.14

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company. We are committed to developing and acquiring oil and gas technologies that have high impact on the profitability of oil and gas projects. Our strategy is to apply these high profit impact technologies our own oil and gas exploration and production projects.

Costs capitalized, together with the costs of production equipment, are depleted and amortized on the unit-of-production method based on the estimated gross proved reserves. Petroleum products and reserves are converted to a common unit of measure, using 6 MCF of natural gas to one barrel of oil.

Costs of acquiring and evaluating unproved properties are initially excluded from depletion calculations. These unevaluated properties are assessed periodically to ascertain whether impairment has occurred. When proved reserves are assigned or the property is considered to be impaired, the cost of the property or the amount of the impairment is added to costs subject to depletion calculations.

If capitalized costs, less related accumulated amortization and deferred income taxes, exceed the “full cost ceiling” the excess is expensed in the period such excess occurs. The “full cost ceiling” is determined based on the present value of estimated future net revenues attributed to proved reserves, using current prices less estimated future expenditures plus the lower of cost and fair value of unproved properties within the cost centre.

The carrying value of intangible assets and other long-lived assets are reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. We recognize impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. Impairment on the properties with unproved reserves is evaluated by considering criteria such as future drilling plans for the properties, the results of geographic and geologic data related to the unproved properties and the remaining term of the property leases.

Asset retirement obligations (“ARO”) associated with the retirement of tangible long-lived assets, including natural gas and oil properties, 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.

The fair value of the ARO is measured using expected future cash flow, discounted at our credit-adjusted risk-free interest rate. As of ~~April~~October 3031 2011, we have determined that it does not have any asset retirement obligation.

We currently do not have any research and development activities planned for the next 12 months.

We currently have no plans to purchase or sell any additional property or significant equipment in the next 12 months.

We do not expect any significant changes in the number of employees over the next 12 months. During 2010 the Company’s focus changed to oil and gas property, exploration and development. 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 are primarily an oil and gas technology and exploration and development company. We are committed to developing and acquiring oil and gas technologies that have high impact on the profitability of oil and gas projects. Our strategy is to apply these high profit impact technologies our own oil and gas exploration and production projects.

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.15

Concurrent to the above changes of our officers and directors, we announced on March 3, 2010 entering into an agreement to acquire 100% of EHHO and Four Bear Heavy Oil, LLC (“FBHO”) from Mr. Ray Jefferd and Mr. Glen Landry. The assets of EHHO consist of more than 20,000 continuous acres of oil and gas 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.

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OnThe ~~June~~Company ~~14,~~has ~~2010~~focused weits ~~acquired~~oil ~~100%~~and gas operations principally approximately 6,400 acres of ~~EHHO~~oil and ~~100%~~gas ofleases ~~FBHO~~in ~~from~~Park MrCounty, Wyoming. Stellar ~~Ray~~plans ~~Jefferd~~to ~~and~~operate ~~Mr.~~a ~~Glen~~majority ~~Landry.~~of Weits ~~have~~projects ~~acquired~~through ~~these~~the ~~oil~~drilling and ~~gas~~production ~~leases~~phases. The asCompany ~~part~~intends ofto ~~its~~leverage ~~strategic~~the ~~plan~~risks associated with drilling by obtaining industry partners to ~~enter~~share ~~into~~in the ~~business~~costs of ~~oil~~drilling. However, ~~and~~in ~~gas~~some ~~production,~~cases ~~development,~~Stellar ~~exploration,~~will ~~and~~retain ~~the~~a ~~accumulation~~controlling ofinterest ~~oil~~in ~~and~~the ~~gas~~prospects ~~reserves~~it drills.

OnOil ~~July~~and 8Gas ~~we announced the completion of a non-brokered private placement with Elk Hills Petroleum Canada Ltd. (“EHPC”) for 5,000,000 common shares at $.175 per share for gross proceeds of $875,000.~~Technologies

~~Concurrent~~On ~~with~~July 14, 2011 the ~~private~~Company ~~placement~~acquired ~~Stellar~~from ~~experienced~~its’ aPresident, ~~50%~~Mr. ~~dilution~~Ray ofJefferd, ~~its~~all ~~equity~~right, ~~interest~~title inand ~~EHHO~~interest asto ~~EHHO~~the ~~issued~~ZeroGap 90intellectual property,~~000~~ ~~Ownership~~free ~~Units~~of toany ~~EHPC~~encumbrances or royalties.

~~Further,~~ZeroGap westands ~~and~~for ~~EHPC~~Zero ~~have~~Emission ~~each~~Refining ~~made~~Onsite ~~$375,000~~with ~~capital~~Gas ~~contributions~~Assisted ~~(total~~Production. ~~$750,000)~~The ~~into~~ZeroGap ~~EHHO~~technology ~~enabling~~is ~~EHHO~~still toin ~~undertake an exploration drilling program on~~ the ~~EHHO~~research ~~oil~~ and ~~gas~~development ~~leases~~stage inbut ~~Carbon~~shows ~~County,~~significant ~~Montana.~~promise ~~Additionally~~based ~~EHPC~~on ~~has~~existing ~~agreed~~proven intechnologies ~~principal~~of tohydrocracking ~~lend~~and ~~EHHO~~hydrotreating ~~$1,750,000~~for ~~repayable~~upgrading ~~from~~and ~~future~~refining ~~revenue~~crude ~~generated from hydrocarbons produced from the EHHO leases~~oil. ~~The loan obligation is has since been terminated by mutual agreement in order to enter into an agreement with Deloro Resources Ltd. (TSX-V:DLL “Deloro”).~~

~~Subsequent~~A tokey benefit of the ~~reporting~~ZeroGap ~~period~~technology ~~end,~~is onits ~~May~~promise ~~10,~~of ~~2011~~upgrading oil in-situ. The second key benefit is the potential to significantly increase the recovery of oil-in-place, weparticularly ~~announced~~low weAPI ~~have~~crude ~~entered~~oil. ZeroGap ~~into~~is also an ~~agreement~~environmentally friendly technology with ~~Deloro~~a small footprint and ~~EHPC~~potential ~~whereby~~for ~~Deloro~~near ~~can~~zero ~~acquire~~toxic upemissions. toThe technology involves the use of a ~~1/3~~gasifier ~~interest~~to inproduce ~~the~~injection ~gases ~~20,000~~that ~~acre~~will ~~Elk~~be ~~Hills~~used ~~Heavy~~to ~~Oil~~upgrade ~~Project~~underground incrude ~~Carbon~~oil ~~County,~~and ~~Montana~~enhance its extraction/recovery.

~~Under~~The ~~the~~purchase ~~terms~~price offor the ~~agreement,~~acquisition ~~Deloro~~had ~~can earn~~ a ~~1/3~~stated ~~interest~~valued ~~(60,000~~of ~~ownership units) in EEHHO from Stellar and EHPC by issuing~~ $3,000,000 ~~shares~~which tothe ~~Stellar~~Company ~~and~~has ~~3,000,000~~satisfied ~~shares~~by tothe ~~EHPC,~~issuance ~~making a capital contribution~~ of ~~Cdn$600~~30,000 ~~on or before September 11~~, ~~2011 ($450,~~000 ~~for~~of ~~approved~~its ~~exploration~~restricted ~~expenditures~~common ~~and~~shares ~~the balance of funds~~ to ~~meet current and operating liabilities of EHHO)~~Mr. ~~Deloro~~ ~~will become the Operator of the project~~Jefferd. The ~~Deloro~~ shares ~~issued~~have tobeen ~~Stellar~~recorded ~~and~~at ~~EHPC~~the ~~shall~~exchange beamount ~~subject~~of to$37,291 abeing ~~four~~the ~~month~~legal ~~and~~fees ~~one~~incurred ~~day~~by ~~hold~~Mr. ~~The~~ ~~TSX-V~~Jefferd ~~has~~in ~~approved~~developing ~~this transaction. Upon Deloro meeting all~~ the ~~terms~~Intellectual ~~and conditions of the acquisition Stellar shall retain a 1/3 interest in EHHO~~Property.

ToStellar ~~date~~has ~~Deloro~~acquired ~~has~~this ~~issued~~technology ~~the~~as ~~required~~part ~~shares~~of its ongoing strategic plan to ~~Stellar~~be ~~and~~in ~~EHPC~~the business of oil and ~~also~~gas ~~made~~exploration aand ~~Cdn$150~~production,~~000~~ ~~capital~~technological ~~contribution~~development, toand ~~EHHO~~the accumulation of oil and gas reserves. ~~Accordingly~~ toThe ~~date~~Company obtained an independent expert fairness opinion on July 11, ~~pursuant~~2011 prepared by Dr. Michael Tenhover prior to finalizing the ~~agreement~~acquisition ~~Deloro~~of ZeroGap outlining the inherent value and validity of the technology. Dr. Tenhover, has ~~earned~~over 30~~,000~~ ~~ownership~~years ~~units~~of (aexperience 16in the oil and gas industry and is the former chief scientist for advanced materials at BP.~~66%~~ Dr. ~~interest~~Tenhover )has 36 issued US patents, 3 invited review chapters for scientific books, 89 publications in ~~EHHO~~peer reviewed scientific publications and has given numerous invited scientific lectures at conferences and major universities around the world.

OnThe ~~August~~following ~~24th,~~are ~~2010~~excerpts wefrom ~~acquired~~the ~~100%~~Fairness ofOpinion ~~Core54~~written ~~Petroleum~~by ~~Canada Ltd~~Dr. ~~(“Core54”)~~Michael ~~for $6,300 cash~~Tenhover. ~~Upon acquisition Core54 had no assets or liabilities. This acquisition was completed for the purpose of acquiring oil and gas properties located within Canada in the future.~~

WeZeroGap ~~received~~is a ~~report~~“Platform onTechnology” ~~the~~– ~~EHHO lands summarizing~~ the ~~exploration~~various ~~activities~~embodiments onconstitute ~~the~~a ~~two~~wide range of ~~the~~uses, ~~three~~applications ~~test~~and ~~wells drilled in 2010~~methods.”

~~The~~In ~~Morris~~principal, ~~Block~~ZeroGap can address all the oil production opportunities mentioned in Enhanced Crude Oil Extraction. These relate to heavy and extra heavy crude oils.

~~From~~In ~~the~~addition, ~~introduction~~two ofother ~~the~~markets ~~Morris~~may ~~Block~~be ~~Evaluation~~of ~~Report~~interest ~~prepared~~for bythis ~~Glen~~technology. These ~~Landry~~may be of ~~Longshot~~near ~~Oil~~term interest since in these cases, the wells have already been drilled and ~~Ted~~production ~~Doughty~~is ofin ~~Prisem~~place. ZeroGap ~~Geoscience~~may ~~Consulting~~be able to recover and enhance their existing production.

~~Introduction~~1. Stranded oil – After production, a large amount of the oil remains in the formation. In North America as much as 60% of the oil will be left after conventional production. ZeroGap may be used here in mobilizing and in-situ upgrading this oil.

~~The~~2. ~~15-13~~Transition ~~Bauwens~~zone ~~was~~oil ~~drilled~~– asA anlot ~~exploration~~of ~~well~~oil tois ~~evaluate~~left behind at the ~~Tensleep~~oil-water ~~sands~~interface. inDue to the ~~hanging~~higher ~~wall~~mobility of ~~the~~water, ~~Bluewater~~recovery ~~fault~~is difficult. ~~This~~ ~~location~~ZeroGap ~~was~~may ~~determined~~be useful here to beapply the ~~highest~~appropriate ~~structural~~gas ~~position~~chemistry ~~along~~to ~~approximately~~increase ~~8.5~~the ~~miles~~mobility of the ~~Bluewater~~oil ~~fault~~phase and decrease the mobility of the water phase”.

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~~The~~American ~~Tensleep~~Microbial sandstone was encountered approximately 54 feet high to the prognosis at a depth of 1350 feet KB. After encountering the oil shows at this point, it was determined that the core point was too high in perhaps the Crow Mountain sand and that we should drill ahead to the prognosticated top. The decision was reversed but 16 feet of the top of the Tensleep has already been cut.Labs

AOn ~~total~~September of26, 932011 ~~feet~~Stellar ofentered 4into ~~inch~~a ~~core~~binding ~~was~~agreement, ~~cut~~subject ~~and~~to ~~recovered. The~~due ~~top~~diligence, ~~3-4~~to ~~feet~~acquire ~~were~~100% ~~oil~~of ~~saturated. Logs~~American ~~confirm~~Microbial ~~the~~Labs ~~water~~LLC ~~line. Approximately~~(“American ~~20 feet of oil column is present~~Microbial).

The ~~volume~~Company ofmay ~~oil~~acquire ~~can~~100% beownership ~~calculated~~of ~~from~~AML ~~the~~for ~~Anderson photo interpretation or from surface measurements of~~ the ~~Gray~~following ~~bull sands by Ted Doughty.~~consideration:

~~Conclusion~~a) 500,000 common shares of the Company at $0.25 per share;

~~The~~b) $150,000 ~~15-13~~cash ~~Bauwens was drilled~~ to ~~evaluate~~be ~~the~~paid ~~idea~~out ~~that oil would accumulate~~ on the ~~downdip~~closing ~~or hanging wall of the Bluewater fault~~date. ~~It was hoped that the commercial oil leg would extend downdip as much as one mile or more from the drill site.~~

~~The~~On ~~oil~~execution ~~leg~~of isa ~~very~~definitive ~~commercial.~~asset purchase agreement, the Company will also enter into employment agreements with two parties on terms and conditions as shall be negotiated and agreed, including but not limited to the following matters:

Morris Block	High	Most Likely	Low
Oil in Place	15,000,000	10,000,000	5,000,000
Recovery Factor	60%	50%	40%
Oil in Tanks	9,000,000	5,000,000	2,000,000
Total Net Profit	372,960,000	207,200,000	82,880,000

a) Duration of the term;

Itb) Base issalary ~~hard~~not to ~~believe~~exceed ~~that~~CDN$60,000 ~~the~~per ~~vertical column in the 15-13 Bauwens is not larger. Several theories may explain the size of the reservoir in the Morris Block as follows:~~annum;

~~Limiting~~b) Incentive ~~reservoir~~compensation ~~parameters~~not to exceed CDN$200,000 including base salary for the first two years.

~~1. There may be leakage across the fault.~~ The ~~Loma~~agreement ~~Oil~~will #1close ~~just~~on ~~two~~or ~~miles~~before toJanuary ~~the~~31, ~~northeast was drilled across the fault and an accumulation of 20 feet is present~~2012. ~~This suggests that some leakage is present along the fault. The oil column in the Morris Block stops at 1350 or +3270.~~

2.American ~~All~~Microbial ~~oil~~has ~~fields~~33 ~~around~~species ~~the flank~~ of ~~the~~specialized ~~Pryor~~microbes. ~~Mountains~~These microbes have aan ~~tilted~~affinity ~~water~~for ~~table.~~hydrocarbons ~~While~~such ~~the~~as ~~bottom~~crude ofoil, ~~the~~diesel ~~column~~fuel inand ~~the~~kerosene. ~~Morris~~They ~~Block~~are isparticularly effective at ~~+3279~~consuming wehydrocarbons ~~will~~in ~~likely~~both ~~find~~waters and soils. American Microbial Labs has the ~~column~~proven technology to begrow, ~~much~~harvest, ~~lower~~stabilize ~~further~~and ~~down~~package the ~~flank~~microbes ofin ~~the~~commercial ~~trap~~quantities.

3. The ~~various~~Company, ~~blocks~~upon ~~may~~closing, ~~carry~~intends ~~separate~~to ~~water~~increase ~~lines from~~ the ~~sealing~~production ~~along~~of ~~their~~the ~~flanks.~~microbes Weby ~~have~~adding annew ~~apparent~~production ~~waterline~~equipment ~~at +2963~~ in ~~the~~Alabama. ~~Barber~~The #1company ~~located~~intends into ~~the~~build ~~northwest~~a ofservices ~~section~~business ~~one~~based ofon using the ~~Jim~~microbes ~~and~~for ~~Mary~~cleaning ~~Block,~~produced ~~located~~water ~~two~~and ~~miles~~for ~~north.~~oil ~~Numerous~~spill ~~waterlines are depicted in the fault blocks on the original cross section~~clean-up.

~~The~~Produced ~~oil leg is expected to be thicker and wider as we explore to the north. Development drilling should follow the handing wall with adequate setback so as to not cut the fault.~~Water

~~Summary~~Stellar sees a large and growing market for produced water clean-up in the oil and gas business. Many oil wells produce more water than oil, often a lot more water than oil. Regulatory bodies worldwide are tightening rules on the disposal of produced water. New regulations are planned throughout the world and when they come into effect the current practice of simply pumping untreated produced water into disposal wells will be severely curtailed. Meeting new standards for treating and disposing of produced water will demand new solutions. Without cost effective methods and technologies for treating produced water many existing mature oil fields will simply become uneconomical to operate.

The core in the 15-13 revealed limited permeability in the upper portion of the core samples. Porosity improves in the lower wet section. The offsetting updip development wells will be oil wet in this section, with 64 feet of pay likely. Permeability may or may not be adequate for commercial production with steam. We think commercial viability is likely. Based upon our evaluation, the Morris Block should produce in excess of 5 mmbo.Testing

14The Company sees the Alberta Oil Sands as a large potential market to utilize the microbes to treat the tailings ponds from heavy oil recovery and upgrading facilities. Further, the microbes have proven effective in cleaning up oil spills on land. Clean-up can be achieved in-situ without the requirement of excavating the soil, allowing for better and lower cost clean-up for large and small oil spills.

Oil and Gas Properties

Elk Hills, Montana

In the spring of 2011 Loring Tarcore of Calgary, AB completed its testing of the cores from the Bauwens and Paugh wells. Notwithstanding earlier positive analysis the Company concluded that the low gravity of the oil and porosity and permeability were not sufficient to justify continued investment in the project by the Company.

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~~Two~~On ~~options~~October 25, 2011, the Company transferred its remaining 75,000 units of capital in EHHO to EHPC in exchange for a non-interest bearing promissory note with a face value of $1,000,000 which falls due on or before April 30, 2012. The purchaser holds 4,000,000 common shares of the Company, which have been pledged as collateral for the promissory note. The 4,000,000 shares are ~~available:~~the subject of an option agreement between the purchaser and a 3rd party, whereby the third party can acquire the shares, subject to certain conditions, in tranches of 1,000,000 shares at an exercise price of $0.25 per share. Should the option be exercised, the Company will receive the proceeds from the exercise of the option in satisfaction of the promissory note. On April 30, 2012, any remaining shares held as collateral will be transferred to the Company in full and final settlement of the promissory note. As a result, the initial recognition fair value of the promissory note has been estimated at $80,000 being the current market value of the underlying 4,000,000 shares of collateral, and the Company has recorded this amount as proceeds for this transfer. Should the Company receive payments on the promissory note in excess of the $80,000 such excess will be recorded as a gain on settlement at the time of receipt. As a result, the Company recorded a loss on disposition of its interest in EHHO during the period of $120,000.

1.Four ~~Drill~~Bear ~~additional~~Property, ~~updip wells to further block reserves and provided additional baseline data for the reservoir engineer.~~Wyoming

2.Four ~~Retain~~Bear ~~the~~Heavy ~~reservoir~~Oil ~~engineer~~LLC, ~~KADE~~a ~~Technologies~~wholly owned subsidiary of Stellar, toowns ~~model~~more ~~the~~than ~~reserves~~5,800 acres of oil and ~~producibility~~gas ofleases ~~the~~in ~~field~~Park ~~from~~County, ~~the~~Wyoming, ~~15-13~~USA. There ~~Bauwens~~are ~~alone~~three potential drilling areas on the property.

~~Glen~~1. Willow ~~Landry,~~Draw ~~Longshot Oil, LLC~~Field

~~Ted~~The ~~Doughty~~Willow Draw field is adjoining one of the Four Bear leases. Within 500 meters of the Four Bear Leases more than 150,000 ~~Prisem~~barrels ~~Geoscience~~of ~~Consulting~~oil has been produced from three wells. On March 23, 2011, Legacy Energy as subsidiary of Nimin Energy Corp, the operators of the Willow Draw field received permits to drill three additional new wells all with 1000 meters of the Four Bear Leases. Geological work indicates that the Willow Draw field continues onto the Four Bear leased property. Four Bear has potentially at least one and as many as ten offsetting wells that can be drilled on the Four Bear Leases that adjoin the Legacy Energy leases.

The ~~Paugh~~following ~~Block~~is except from an announcement by Nimin Energy:

~~The~~ “Nimin ~~2-25~~Energy ~~Paugh was drilled to explore the reserve potential of the Tensleep Sandstone~~Corp. ~~Cuttings~~owns and ~~core~~operates ~~suggest~~at aan ~~very~~average ~~large~~97 ~~reserve~~percent ~~potential~~working ~~subject~~interest toin ~~the~~four ~~results~~mature ofheavy ~~the~~oil ~~core~~fields ~~analysis.~~located ~~Only~~in 40Park ~~feet~~County ofWyoming ~~core~~which ~~survived~~it ~~the~~acquired ~~trip~~in toDecember ~~Calgary~~of ~~but the analysis was revealing~~2009. ~~Oil~~The ~~saturations~~fields which were indiscovered ~~the~~between ~~30%~~1966 -and ~~45% range~~1971, ~~below~~have ~~the~~produced ~~saturation~~over tonine bemillion ~~commercial.~~barrels ~~Updip~~of ~~drilling should increase the~~ oil ~~saturation~~since ~~significantly~~discovery. ~~The northeast of section 36 should be adequately updip to attain commercial oil saturations.~~

~~Permeability~~The isfields aare ~~problem.~~part ~~Originally~~of the ~~risk~~Basin inMargin ~~the~~Anticline ~~project~~play ~~was~~on ~~adequate~~the ~~permeability.~~Western ~~There~~side ~~was~~of ~~some concern that~~ the ~~core~~Big ~~lab~~Horn ~~could~~Basin ~~not~~and ~~get~~produce ~~the crude flushed~~ from the ~~plugs~~Tensleep toSandstone ~~adequately~~of ~~determine~~Pennsylvanian ~~the~~age ~~permeability.~~and ~~As can be seen by~~ the ~~charts~~Phosphoria onlimestone ~~the~~of ~~following~~Permian ~~page the permeability is primarily 1 – 5 millidarcies~~age. ~~This~~Oil ~~analysis~~gravities isrange ~~likely~~from ~~close~~14 to ~~the~~18 ~~truth~~degrees ~~but~~API ~~note~~from ~~that~~an ~~the~~approximate ~~permeability~~reservoir ~~does~~depth ~~not~~of ~~track~~3,500 ~~with~~to ~~the porosity~~4,500 ~~but instead is “flatline”~~feet. ~~One can question whether we got the bitumen out of the pore space before the calculation was made.~~

~~Summary~~The Company believes the fields to have significant infill drilling potential and plan to drill multiple development wells in the fields. Offset fields in the basin have already been infill drilled and have shown a significant increase in oil recovery and production rates due to the drilling. The company anticipates several years of drilling activity as it develops this core set of assets. While drilling these development wells the company will be studying the feasibility of implementing its CMD technology (see technology section) on the fields for future enhanced oil recovery.”

~~In summary, a significant amount of oil was observed in the Paugh~~ 2~~-25~~. A Section ~~shift of a few points in saturation and permeability would make the prospect a world class deposit. More drilling is recommended.~~2

InSection ~~future~~2 ~~the~~is ~~porosity~~558 ~~core~~Acres ~~data~~(225 ~~from~~hectares) ~~this well will be overlain atop the electric logs as was done~~ in ~~the~~Township ~~Bauwens. The~~47 ~~log~~North, ~~calculations~~Range ~~for~~103 ~~porosity~~West, ~~and~~Section ~~oil~~2, ~~saturation~~Park ~~will~~County, ~~be qualified with the core~~Wyoming. ~~Logging on new wells will be calibrated from the core to approximately the true porosity and oil saturation with the need for new cores.~~

~~Subsequent~~Four ~~Events~~wells with cumulative production of 361,000 barrels of oil from three producing zones are located within one mile of the Project. The nearest well to the proposed drilling location is 0.6 miles (1 kilometer) distant. Total production within five miles (8 kilometers) is more than 5 million barrels from more than 50 wells.

On May 10, 2011, we announced we have entered into an agreement with Deloro and EHPC whereby Deloro can acquire up to a 1/3 interest in the ~ 20,000 acre Elk Hills Heavy Oil Project in Carbon County, Montana.18

Under the terms of the agreement, Deloro can earn a 1/3 interest (60,000 ownership units) in EHHO from Stellar and EHPC by issuing 3,000,000 shares to Stellar and 3,000,000 shares to EHPC, making a capital contribution of Cdn$600,000 on or before September 11, 2011 ($450,000 for approved exploration expenditures and the balance of funds to meet current and operating liabilities of EHHO.) Deloro will become the Operator of the project. The Deloro shares issued to Stellar and EHPC shall be subject to a four month and one day hold. The TSX-V has approved this transaction. Upon Deloro meeting all the terms and conditions of the acquisition Stellar shall retain a 1/3 interest in EHHO.

To date Deloro has issued the required shares to Stellar and EHPC and also made a Cdn$150,000 capital contribution to EHHO. According, pursuant to the agreement Deloro has earned 30,000 ownership units (a 16.66% interest) in EHHO.

On June 7, 2011 we issued a promissory note for CAD$28,000 to a private lender.

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~~Results~~3. Undrilled ofStructures ~~Operations for the Nine Months Ended April 30, 2011~~nearby

WeFour ~~have~~Bear ~~not~~also ~~generated~~owns ~~any~~leases ~~revenues~~covering ~~from~~more ~~operations~~than ~~since our incorporation on April 9~~1,500 ~~1999~~acres ~~through~~that ~~April~~is ~~30,~~approximately ~~2011. During~~two ~~the~~kilometers ~~nine~~to ~~month period ended April 30, 2011~~ the ~~Company~~east ~~incurred~~this is a ~~loss~~potential ~~of $180~~structure,~~192. The~~ ~~loss for the comparable nine month period of the prior year was $65~~undrilled,~~745. During~~ ~~the~~similar ~~nine~~in ~~month~~size ~~period ended April 30, 2011 we incurred management fees of $40,801 (2010- $nil). Professional fees, comprising legal, accounting and audit costs increased~~ to ~~$79,815 (2010 - $48,740). Interest expense increased to $2,563 (2010 - $318). The interest increased due to~~ the ~~Company~~Willow ~~being~~Draw ~~charged~~field ~~late payment interest on overdue accounts payable~~ and the ~~Company~~original ~~taking~~Four onBear ~~an additional loan from a Director with an interest rate of 6% in the latter part of the prior year which is denominated in Canadian dollars~~Field. The interest on the notes payable is based on a Canadian dollar denominated loan and interest charges have increased slightly as a result of increasing foreign exchange rates General and administrative expenses which include travel, filing fees, office expenses and foreign exchange gains and losses amounted to $70,386 (2010 - $15,582).

~~The~~Results ~~Company also recorded management fee income~~ of ~~$15,000~~Operations ~~(2010 - $nil) which was charged to EHHO~~ for ~~management services provided by~~ the ~~Company,~~Three ~~and~~Months ~~finally~~Ended ~~recorded~~October ~~a loss from equity interest in EHHO of $1~~31,~~627~~ ~~(2010 - $nil).~~2011

~~Results~~We have not generated any revenues from operations since our incorporation on April 9, 1999 through October 31, 2011. During the three month period ended October 31, 2011 the Company incurred a net loss of ~~Operations~~$276,175, and a comprehensive loss of $344,061. The loss for the ~~Three~~comparable ~~Months~~three ~~Ended~~month ~~April~~period 30of the prior year was $74,622 and the comprehensive loss was $74,966. During the three month period ended October 31, 2011 we incurred management fees of $3,000 (2010 - $21,233). Professional fees, comprising legal, accounting and audit costs increased to $55,468 (2010 - $40,376). Interest expense increased to $1,604 (2010 - $642). The interest increased due to the Company being charged late payment interest on overdue accounts payable and the Company taking on an additional loan from a Director with an interest rate of 6% in the latter part of the prior year which is denominated in Canadian dollars. The interest on the notes payable is based on a Canadian dollar denominated loan and interest charges have increased slightly as a result of increasing foreign exchange rates Stock based compensation of $4,950 (2010 - $nil) was recorded as a result of valuing stock options granted to a consultant in the period. General and administrative expenses which include travel, filing fees, office expenses and realized foreign exchange gains and losses amounted to $9,632 (2010 - $26,759).

WeThe ~~have~~Company ~~not~~also ~~generated~~recorded ~~any~~management ~~revenues~~fee ~~from~~income ~~operations~~of ~~since~~$nil ~~our~~(2010 ~~incorporation~~- ~~on April 9~~$15,000) ~~1999~~which ~~through~~in ~~April 30, 2011. During~~ the ~~three~~comparative ~~month~~ period ~~ended~~was ~~April~~charged ~~30,~~to ~~2011~~EHHO ~~we incurred a loss of $40,547. The loss~~ for ~~the~~management ~~comparable~~services ~~three~~provided ~~month~~by ~~period of~~ the ~~prior~~Company; ~~year~~recorded ~~was~~a ~~$39,776. During~~loss ~~the~~on ~~three~~sale ~~month~~of ~~period~~its ~~ended~~holding ~~April~~of ~~30,~~EHHO ~~2011 we incurred management fees~~ of $5120,~~645~~000 (2010$ - $nil)~~. Professional~~ ~~fees,~~as ~~comprising~~the ~~legal,~~Company ~~accounting~~disposed ~~and~~of ~~audit~~its ~~costs~~remaining ~~decreased to $18~~75,~~519~~000 ~~(2010~~capital -units ~~$27,380). Interest~~of ~~expense~~EHHO ~~increased~~ to ~~$1,310~~EHPC ~~(2010~~in ~~- $104). The interest increased due to~~ the ~~Company~~period; ~~being~~a ~~charged~~loss ~~late~~on ~~payment~~disposal ~~interest~~of oninvestments ~~overdue~~of ~~accounts~~$2,532 ~~payable.~~(2010 ~~The~~- ~~Company~~$nil); ~~also~~a ~~took~~loss on ansettlement ~~additional~~of ~~loan~~promissory ~~from~~note aof ~~Director~~$78,809 ~~with~~( an2010 ~~interest~~- ~~rate~~$nil), ofand 6%finally inrecorded the ~~latter~~Company’s ~~part~~share of ~~the~~losses ~~prior~~EHHO ~~year~~amounting ~~which~~to isof ~~denominated~~$nil in(2010 ~~Canadian~~- ~~dollars~~$612). ~~The~~An ~~interest~~unrealised onloss ~~the notes payable is based~~ on aits ~~Canadian~~investment ~~dollar~~of ~~denominated~~$71,312 ~~loan~~(2010 ~~and~~- ~~interest~~$nil) ~~charges~~arose ~~have~~in ~~increased~~the ~~slightly~~period ~~as a result of increasing foreign exchange rates. General~~ and ~~administrative~~the ~~expenses~~Company ~~which~~experienced ~~include~~unrealized ~~travel, filing fees, office expenses and~~ foreign exchange gains ~~and~~of ~~losses amounted to~~ $~~15,045~~894 (2010 - loss of $~~12,292~~344) in the period.

We also recorded a loss from equity interest in EHHO of $28 (2010 - $nil).

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

Our activities 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 presently in the pre-exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on any properties, or if such resources are discovered, that we will enter into commercial production of any claims.

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Liquidity and Further Capital Resources

At ~~April~~October 3031, 2011, we had assets of $~~675~~415,~~558~~725 comprising cash of $~~607~~3,474, an ~~equity~~ investment inof ~~EHHO~~2,000,000 common shares of Deloro Resources Ltd. valued at $~~540~~151,~~231~~320; ~~and~~a note receivable recorded at $80,000, oil and gas properties in Wyoming of $~~134~~140,~~720~~840 and an investment in the ZeroGap technology recorded at $40,091. Total stockholders’ equity was $~~407~~105,~~260~~838 at ~~April~~October 3031, 2011. We are a pre-exploration and exploration stage company and, since inception, have experienced significant changes in liquidity, capital resources and shareholders’ equity.

To finance our operations we have relied upon cash on hand, sources internally generated from management, advances from shareholders and financing via loans, debt and equity financing.

As of ~~April~~October 3031, 2011, we have unsecured, non-interest bearing advances payable of $108,346 (~~July 31,~~ 2010 - $108,346) relating to advances received from the former President.

	APRIL 30,		JULY 31,
	2011		2010
Balances:
i) Prepaid expenses
Amount advanced to a director for travel expenses	$	-	$	4,000
ii) Due to directors
Amounts payable for reimbursement of corporate expenses	$	1,206	$	1,206
Note payable (Cdn $35,000) including accrued interest to Director, unsecured, bearing interest at 6% per annum and due July 25, 2011.		37,548		33,915
	$	38,754	$	35,121

As at October 31, 2011, the Company had the following balances owing to related parties:

During the nine month periods ended April 30, 2011 and 2010 the Company incurred the following transactions with related parties:

	OCTOBER 31		JULY 31
	2011		2011
Balance Sheet items

i) Due to Directors
Amounts payable for reimbursement of corporate expenses	$	4,569	$	1,463
Amounts payable for management fees		-		6,277

ii) Other
Note payable (Cdn$35,000) including accrued interest to Director, unsecured bearing interest at 6% per annum. The loan was due on July 25, 2011. There are no default charges and interest continues to accrue.		37,960		38,819
	$	42,529	$	46,559

	NINE MONTHS ENDED
	APRIL 30
	2011		2010
Transactions:
i) Interest accrued to a Director pursuant to promissory note	$	1,556	$	-
ii) Management fees charged to EHHO	$	15,000		-
iii) Fees paid to three Directors for services rendered	$	40,801	$	-

During the three month periods ended October 31, 2011 and 2010 the Company incurred the following transactions with related parties:

Debt financing received at April 30, 2011 from third parties secured by Promissory Notes together with accrued interest amounted to $26,188 (Cdn$23,702). Interest is calculated on the basis of a 365 or 366 day year on the unpaid principal balance from day to day and computed 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.

	THREE MONTHS ENDED
	OCTOBER 31,
	2011		2010
Income Statement Items

iii) Interest paid or accrued
Interest accrued on promissory note owing to Director	$	523	$	542

iv) Management fees
Charged to EHHO	$	-	$	15,000

Fees paid to two (2010 – three) Directors for services rendered	$	3,000	$	21,233

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Debt financing received at October 31, 2011 from third parties secured by Promissory Notes together with accrued interest amounted to $26,099 (Cdn$26,190). Interest is calculated on the basis of a 365 or 366 day year on the unpaid principal balance from day to day and computed 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.

During the period from August 1, 2011 to date the Company has raised the following amounts by way of equity issuances:

On August 17, 2011 the Company accepted a share subscription for 187,300 common shares at $0.10 for aggregate proceeds of $18,730.

On October 25, 2011 the Company accepted a share subscription for 1,181,100 common shares at $0.02 for aggregate proceeds of $23,622.

On October 5, 2011, the Company granted to a consultant 100,000 stock options exercisable at $0.10 per share until October 5, 2014, which vested immediately.

Item 3. Quantative and Qualitive Disclosures Above Market Risk.

Not applicable.

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Item 4. Controls and Procedures

As of ~~April~~October 3031, 2011, 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~~October 3031, 2011. 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~~Financial Officer concluded that, as of ~~April~~October 3031, 2011, our disclosure controls and procedures are satisfactory for the size and nature of the company, although such controls may not be sufficient for complex areas of GAAP, disclosures and certain fair value determinations. In such instances the Company seeks external advice and expertise as considered necessary. There have been no changes in our internal controls over financial reporting during the quarter ended ~~April~~October 3031, 2011. Effective June 1, 2010, we adopted an Audit Committee Charter and formed an ~~audit~~Audit Committee comprised of Ray Jefferd, Luigi Rispoli and Panfilo Rosatone.

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.

Effective October 5, 2011 the Company formed its Technical Advisory Board comprised of Ray Jefferd, Luigi Rispoli, Panfilo Rosatone and Dr. Michael Tenhover.

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Technical Advisory Board Charter

PURPOSE

The primary function of the Technical Advisory Board (TAB) is to provide advice and input to the executive on technology issues and opportunities relating to the oil and gas business. The TAB shall be an advisory committee and shall not have any authority to act on behalf of the Company.

COMPOSITION AND TERM

The TAB shall consist of at least one member appointed by the Board of Directors of the Company and two or more persons who may be staff or consultants to the Company. All members of the TAB shall be appointed by the Chief Executive Officer of the Company. Term of membership shall be for one year with the expectation that additional annual appointments.

MEETINGS

The TAB shall meet at least annually, although meeting may be scheduled as deemed necessary or useful by the Chief Executive Officer of the Company. Meeting may be held electronically, voice and video conferences, so long as all members can communicate with each other during the meeting. The TAB shall keep minutes of its meetings and report regularly about its activities to the executive and the board of directors of the Company. Members shall be expected to make themselves generally available for discussions through electronic means at other times.

KEY RESPONSIBILITIES

The TAB is expected to:

1. Provide advice and feedback to the Executive of the Company on technology plans and projects;

2. Make the Company aware of technology opportunities related to the Company’s core mission;

3. Promote and advocate for Company’s technologies and mission.

REMUNERATION

The Chief Executive Officer shall set the remuneration for the members of the TAB consistent with the member’s qualifications and expected contributions in assisting the Company achieve its key goals and objectives. Remuneration may be in the form of per diem fees or stock based compensation or both.

Item 4T. Controls and Procedures

Not applicable.

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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

On June 10, 2010 we 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 we 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 we 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 we issued 45,833 common shares at $0.30 for aggregate proceeds of $13,750.

On February 11, 2011 we issued 101,215 common shares at $0.20 for aggregate proceeds of $20,243. The Company paid a cash finders fee of $1,026 pursuant to this financing.

On February 25, 2011 we issues 136,353 common shares at $0.15 for aggregate proceeds of $20,453.

18On July 14, 2011, the Company issued 30,000,000 common shares to the President in consideration for the acquisition of the Zerogap Intellectual Property.

~~Table~~On August 15, 2011 the Company issued 187,300 common shares at $0.10 per share for aggregate proceeds of ~~Contents~~$18,730.

On October 25, 2011, the Company entered into a subscription agreement for 1,181,100 common shares at $0.02 per share for aggregate proceeds of $23,622.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

~~Report filed by the Issuer May 12, 2011~~None

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~~23

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

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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~~ December 20, 2011

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

2024

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