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Exhibit 10.1
 
 
 
 
 
 
CANAFRA MINERAL EXPLORATION CORP.
 
 
STELLAR RESOURCES LTD.
 
 
 
 
 
 
 
 
 
FARM-IN AGREEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 

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Table of Contents
 
 
TABLE OF CONTENTS
 
 

 1.             DEFINITIONS AND INTERPRETATIONS  2      2.             PARAMOUNT
AGREEMENT  5      3.             REGULATORY APPROVAL  5    
 4.             FARM-IN ASSIGNMENT  5      5.             CANAFRA’S OBLIGATIONS
 9      6.             OPERATOR  9      7.             INFORMATION  10    
 8.             CANAFRA WARRANTIES  11      9.             STELLAR WARRANTIES
 11      10.             ASSIGNMENT  12      11.             NOTICES  13    
 12.             STAMP DUTY AND COSTS  13      13.             GOVERNING LAW AND
JURISDICTION  14      14.             TERMINATION  14    
 15.             CUMULATIVE RIGHTS  14      16.             FURTHER ASSURANCE
 14      17.             EXECUTION BY COUNTERPARTS  14    
 18.             MERGER  15      19.             SOLE AGREEMENT  15    
 SCHEDULE "A"  17      SCHEDULE "B"  18      SCHEDULE "C"  21      SCHEDULE "D"
 22      SCHEDULE "E"  23      SCHEDULE "F"  24

 
 
 
 
 
 
 

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FARM-IN AGREEMENT
 
 
THIS AGREEMENT made on this __________ day of September, 2008:
 
 
BETWEEN:
 
Canafra Mineral Exploration Corp.
of 303-1030 Hamilton Street, Vancouver, BC, V6B2R9 and its Partner Two Drums G &
C
Company Limited of Mbeya Tanzania
(hereinafter called, "Canafra")
 
 
OF THE FIRST PART

 
And:
 
Stellar Resources Ltd.,
of 375 North Stephanie Street, Suite 1411, Henderson, NV 89014-8909
(hereinafter called, "Stellar")
 
 
OF THE SECOND PART

 
BACKGROUND
 
1.        Stellar has represented the following:
 

 
 A.
Stellar is a corporation incorporated under the laws of the State of Nevada, in
the United States of America;

 

 
 B.
Stellar is a reporting company in the State of Nevada, in the United States of
America;

 
 
C.
The common shares of Stellar are listed in the United States of America and on
the Over the Counter Bulletin Board (“OTCBB”);

 

 
 D.
Stellar has issued 28,640,196 of its common shares.

 
2.        Canafra has represented the following:
 

 
A.
That Canafra Mineral Exploration Corp. and Two Drums G & C are private
corporations incorporated under the laws of British Columbia and Tanzania
respectively with registered offices at 1681 West 7th Avenue Vancouver, British
Columbia V6J 1S4 and Mbeya Tanzania respectively;

 
 
B.
Canafra owns 100% of three Mining and Prospecting Licenses the Granted Mining
and Prospecting Concessions consisting of approximately 26 square kilometers
more or less, in the Chunya mining district Mbeya Tanzania which upon receipt of
the formal licensing documentation will form part of this Agreement free and
clear of all liens, charges and encumbrances.

 
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3.        Proposal
 
Subject to Canafra supplying to Stellar within 90 days of the execution of this
Agreement the Mining and Prospecting Licenses showing the geographic
coordinates, the parties agree as follows:
 

 
A.
The proposed terms of this Agreement are generally described as an aggregate
payment of $1,100,000.00 towards working capital and exploration expenditure,
and the issue of 4,000,000 restricted common shares.

 

 
B.
Canafra agrees to grant Stellar or its nominee the right to earn up to 50% Net
Profit Interest in the Granted Mining and Prospecting Concessions on and subject
to the terms and conditions contained in this Agreement

 
 
C.
Canafra and Stellar wish to execute this Agreement to record their entire
understanding of the basis upon which Stellar will Farm-In to the Granted Mining
and Prospecting Concessions.

 

 
D.
The Parties hereby enter into this Agreement to set out the terms on which
Stellar may earn up to 50% Net Profit Internet in the Granted Mining and
Prospecting Concessions.

 
OPERATIVE PROVISIONS
 
1.
DEFINITIONS AND INTERPRETATIONS

 
 
 
1.1
Definitions

 
In this Agreement:
 
STELLAR Farm-In Interest means the Farm-In Agreement entered into between
Stellar and Canafra as identified in Recital B;
 
Act means the legislation and other laws, regulations or statutory instruments
of the Republic of Tanzania regulating the application, grant and working of
mining tenements and any amendment or statutory replacements of that.
 
Activities means mining exploration and exploitation (and any related)
activities within the tenements comprising the Granted Mining and Prospecting
Concessions.
 
Agreement means this Farm-In Agreement and includes any schedules or annexures.
 
Business Day means a day on which all the major trading banks are open for
business in New York.
 
Declared Encumbrances and Royalties means those royalties and other third party
interests relating the Granted Mining and Prospecting Concessions.
 
 
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Drilling means drilling, evaluation and completing for production or plugging
and abandoning.
 
Effective Date means the date of this Agreement.
 
Encumbrance means a mortgage, charge, bill of sale, lien, pledge, plaint, writ,
warrant, caveat, royalty interest, Net Profit interest or other third party
interest, right, claim or demand.
 
Farm-In Interest means 50% Net Profit Interest in the Granted Mining and
Prospecting Concessions.
 
Farm-In Obligations means the obligations to be assumed by the Operator under
this the Agreement, as set out under clause 4.4.
 
Farm-In Costs means the costs incurred by the Operator of the Granted Mining and
Prospecting Concessions, as set out under clause 4.5.
 
Granted Mining and Prospecting Concessions means the tenements relating to
mining exploration and exploitation concession listed in Schedule “A” and
including any part of, any and all renewals of, modifications to, conversions
of, substitutions for or any additions to those tenements.
 
JORC means the Joint Ore Reserve Committee code for reporting of mineral
resources and ore reserves as stated in appendix 5A of the Listing Rules.
 
Lease has the same meaning as in the Act
 
Operator for the sole purposes of the Farm-In Operations is Canafra Mineral
Exploration Corp.
 
Net Profit Interest means: - the net profit derived from the concession after
all the Hard and Soft costs have been paid.  Hard Cost include but are not
limited to equipment costs, mining costs, smelting costs, staff costs, labour
costs, exploration costs while Soft Costs include but are not limited to
royalties, administration costs, travel costs, interest, financing costs,
consulting costs and other allowable costs.
 
 
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Participating Interest means, in relation to a Party, the proportionate Net
Profit Interest expressed as a percentage of the Party.
 
 
(a)
a proportionate interest in any resources discovered or recovered from the
Granted Mining and Prospecting Concessions; and

 
and which Participating Interest carries with it the obligations expressed,
referred to or implied in this Agreement.
 
Party or Parties means a party or the parties to this Agreement.
 
Statutory Encumbrances and Royalties means the encumbrances and royalties
imposed under the Act;
 
 
1.2
Interpretation

 
In this Agreement:
 
 
(a)
reference to a person includes any other entity recognised by law;

 
 
(b)
the singular includes the plural and vice versa;

 
 
(c)
words importing one gender include every gender;

 
 
(d)
any reference to any of the Parties by their defined terms includes that party's
executors, administrators or permitted assigns or, being a company, its
successors or permitted assigns;

 
 
(e)
an agreement, representation, or warranty on the part of two or more persons
binds them jointly and severally;

 
 
(f)
an agreement, representation, or warranty in favour of two or more persons is
for the benefit of them jointly and severally;

 
 
(g)
clause headings are for reference purposes only;

 
 
(h)
references to currency are to American currency unless otherwise stated;

 
 
(i)
reference to an Annexure or Schedule is a reference to the corresponding
Annexure or Schedule to this Agreement;

 
 
(j)
reference to a statute, ordinance, code, or other law includes regulations and
other instructions under it and consolidations, amendments, re-enactments, or
replacements of it.

 
 
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2.
Paramount Agreement

 
 
2.1
Stellar Farm-in Agreement Paramount

 
The Parties acknowledge and agree that the Stellar Farm-In Agreement is
paramount to this Agreement and Stellar will remain responsible for ensuring
compliance thereunder.
 
 
2.2
Notices

 
Canafra will forward to Stellar immediately on receipt a copy of any notices,
reports or correspondence (including without limitation any Default Notice or
Notice of Termination) received by Canafra under this Farm-In Agreement.
 
If for any reason the Stellar Farm-In Agreement is terminated in accordance with
its terms prior to Stellar receiving an assignment and transfer of the 50% Net
Profit Interest, then this Agreement must terminate immediately.
 
Neither Party will be liable to the other for any failure of any provision of
this Agreement that is contingent upon the operation of a provision of the
Stellar Farm-In Agreement provided that Stellar must use every reasonable effort
to ensure that any such provision of the Stellar Farm-In Agreement is complied
with as required in clause 2.1.
 
3.
REGULATORY APPROVAL

 
 
3.1
Condition Subsequent

 
Any provision of this Agreement which constitutes regulatory approval will have
no force or effect until such regulatory approval has been obtained and, if
appropriate, so registered.
 
4.
FARM-IN ASSIGNMENT

 
 
4.1
Farm-In Consideration

 
The total value for 50% Net Profit Interest in the Canafra Concession is
US$1,100,000. Stellar will earn its actual Net Profit Interest at a vested rate
of 10% based on its funding efforts. Therefore, for example, if Stellar funds
Canafra US$550,000 and either party terminates the Agreement for any reason,
Stellar would have earned 2.5% Net Profit Interest in the Mining
 
 
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Concession., If Stellar fails to earn its full interest and the agreement
terminates, Canafra will have the option of purchasing Stellars’ vested interest
at a discount of 50% to the funds invested.
 
The project is broken down into three (3) major Phases. Descriptions of each
Phase, along with the obligations of both Parties, are in general
terms detailed: below.  Canafra will collaborate with Stellar on obtaining
technical expertise and equipment.
 
Phase I
 
The conditions outlined in Phase I are Subject to Canafra supplying to Stellar
within 90 days of the execution of this agreement the Mining and Prospecting
Licenses showing the geographic coordinates.  The time frames stated below will
begin upon this condition being met.
 
Canafra will perform the following work on the Mining Concession within 180 days
of execution of this Agreement or within a time frame that is mutually agreed
upon taking into consideration mobilization times and conditions.  Subject to
the advice of Canafra’s geologist and agreed to by all parties they could
include
 
(a)            Geologic Mapping and prospecting (rock sampling)
 
(b)            Soil Sampling
 
(c)            Trenching
 
(d)            Administrative activities
 
Stellar will provide to Canafra US, $380,000in the timeframe set forth below, as
part of the opportunity to earn its Farm-In Interest, as well as provide Canafra
the necessary financial resources to perform the above-mentioned work:
 
(a)            US $60,000 payable within 30 days of execution of this Agreement;
 
(b)            US $80,000 payable within 60 days of execution of this Agreement;
 
(c)            US $80,000 payable within 90 days of execution of this Agreement;
 
 
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(d)            US $80,000 payable within 120 days of execution of this
Agreement; and
 
(e)            US $80,000 payable within 150 days of execution of this
Agreement.
 
Phase II
 
Canafra will perform the following work on the mining concessions with 90 days
of the completion of phase I or within a time frame that is mutually agreed upon
taking into consideration mobilization times and conditions.  Subject to the
advice of Canafra’s geologist and agreed to by all parties they could include
 
(a)            An induced polarization investigation
 
(b)            A gravity investigation
 
(c)            A magnetic investigation
 
(d)            Administrative activities
 
Additionally, Stellar will provide to Canafra 2,000,000 Rule 144 restricted
commons stock to secure its right to further earn its Farm-In Interest, subject
to the successful completion of Phase I.
 
Stellar will also provide to Canafra subject to the successful completion of
Phase II and geological reports rationalizing the expenditure. $380,000 to be
paid within 30 days of the presentation of the geological reports.
 
Phase III
 
Canafra will perform the following work on the mining concessions with 90 days
of the completion of phase II or within a time frame that is mutually agreed
upon taking into consideration mobilization times and conditions.  Subject to
the advice of Canafra’s geologist and agreed to by all parties they could
include
 
(a)            Diamond Drilling
 
 
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(b)            Administrative activities
 
Stellar will provide to Canafra a further 2,000,000 Rule 144 restricted common
stock to secure its right to further earn its Farm-In Interest, subject to the
successful completion of Phase II.
 
Stellar will also provide to Canafra US$340,000 subject to the successful
completion of Phase II and Geological Reports rationalizing the expenditure to
be paid within 30 days after the presentation of the Geological Reports.
 
 
4.2
Assignment

 
 
(a)
With effect from the Effective Date and upon Stellar paying all of the monies as
set out in clause 4.1 above, Canafra will assign to Stellar 50% Net Profit
Interest in the Granted Mining and Prospecting Concessions, free of any
Encumbrances (apart from Statutory Encumbrances and Royalties and the Declared
Encumbrances and Royalties).

 
 
4.3
Assumption

 
Stellar accepts the Farm-In Interest assigned to it under clause 4.1 and assumes
and agrees to be bound by the Farm-In Obligations which accrue, on or after the
Effective Date.
 
 
4.4
Scope of the Farm-In Obligations

 
With effect from the Effective Date, Canafra's Farm-In Obligations are:
 
 
(a)
to maintain the good standing of the Granted Mining and Prospecting Concessions;

 
 
(b)
Canafra to provide the legal description of the Mining Exploitation Concessions
within 90 days upon execution of this agreement, which will form part of the
attached Schedule “A” to this Agreement.

 
 
(c)
to undertake exploration activities as agreed between Canafra and Stellar and to
prove the resources in the Granted Mining and Prospecting Concessions to
compliant standards; and

 
 
4.5
Scope of the Farm-In Costs

 
 
(a)
Stellar is to fund 100% of the costs arising from the Farm-In Obligations;

 

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(b)
Stellar is to fund the budget for the basic administration of accounting records
in Vancouver, attached hereto as Schedule “C” to this Agreement;

 
 
(c)
Stellar is to fund the budget for the operation of an office in Dar es Salaam
and basic administration activities for such office.  The budget is attached
hereto as part of Schedule “C” to this Agreement.

 
5.
CANAFRA’S OBLIGATIONS

 
 
5.1
Canafra's obligations

 
Canafra must during the period from the Effective Date to the date upon which
the Farm-In Interest is assigned to Stellar, hold or ensure that a sufficient
undivided percentage interest in the Granted Mining and Prospecting Concessions
is kept free of all Encumbrances (other than the Statutory Encumbrances and
Royalties and the Declared Encumbrances and Royalties) so as to be able to
provide the Farm-In Interest to Stellar in accordance with this Agreement.
 
6.
OPERATOR

 
 
6.1
Appointment of Canafra Mineral Exploration Corp.

 
Canafra Mineral Exploration Corp. (“Canafra”) will be the Operator solely for
the purpose of carrying out the Activities and that Canafra will have the
exclusive right to conduct and manage the tenements comprising the Grant Mining
Concession and must perform any Activity in accordance with good mining
exploration practice and all applicable legislation, regulations and codes of
practice.
 
 
6.2
Responsibilities of Canafra

 
Canafra must:
 
 
(a)
keep Stellar fully and immediately informed of all material matters concerned
with the undertaking of the Activities; and

 
 
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(b)
if required by Stellar, provide Stellar with such written reports concerning the
Activities and to keep the Granted Mining and Prospecting Concessions in good
standing.

 
 
6.3
Authority

 
Canafra must not bind or commit (or purport to bind or commit):
 
 
(a)
Stellar in any way whatsoever or hold (or purport to hold) it out as having
authority to do so, except in accordance with this Agreement or with Stellar’s
prior written consent; or

 
 
(b)
issue any public statement or communication in any way directly or indirectly
affecting Canafra other than with Stellar’s prior written consent.

 
 
6.4
Canafra’s liability

 
If Canafra incurs liability to a third party (other than Farm-In Costs incurred
in the discharge of its Farm-In Obligations), then Canafra must indemnify and
keep indemnified Stellar for all of that liability.
 
7.
INFORMATION

 
 
7.1
Provision of Information

 
Canafra will provide Stellar with all Activities information and copies of all
related statements, reports and records that are in possession, or under the
control, of Canafra as Stellar may reasonably require.
 
 
7.2
Confidentiality

 
All data, reports, records and other information relating to the Granted Mining
and Prospecting Concessions which is disclosed to either of the Parties will be
kept strictly confidential by the Party to which disclosure is made, except
where:
 
 
(a)
the other Party consents to the disclosure of that information to a third party;

 
 
(b)
a Party is required to disclose that information pursuant to any law;

 
 
(c)
it is necessary to disclose that information to the Party’s professional
advisors, bankers or to a bona fide potential assignee of that Party's
Participating Interest under this Agreement; or

 
 
(d)
the disclosure is necessary to a Related Body Corporate of the Party, a Party's
seed capitalists, substantial shareholders, underwriters or investors.

 
 
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8.
CANAFRA warranties

 
 
8.1
Warranties

 
Canafra represents and warrants to Stellar that as at the Effective Date:
 
 
(a)
Canafra has the necessary power and authority, and all necessary corporate and
other action has been taken to enable it, to enter into and perform its
obligations under this Agreement and each further document and assurance
required under Clause 16 of this Agreement;

 
 
(b)
this Agreement does not conflict with, constitute or result in a breach or
default of Canafra’s constituent documents, or the terms or provisions of any
agreement, writ, deed, order, injunction, judgement, law, rule or regulation to
which Canafra is a party or by which Canafra is bound;

 
 
(c)
Canafra will duly and punctually perform and discharge all of its obligations
imposed upon it under this Agreement;

 
 
(d)
Stellar, subject to the satisfaction of this Farm-In Agreement, will have a
right to a 50% Net Profit Interest in the Granted Mining and Prospecting
Concessions;

 
 
(e)
Stellar can assign to a third Party the Net Profit Interest to be earned by
Stellar in accordance with this Agreement, with written approval by Canafra such
approval not to be unreasonably denied other than in respect of:

 
 
(i)
Statutory Encumbrances and Royalties; and

 
 
(ii)
the Declared Encumbrances and Royalties;

 
 
and

 
 
(f)
no part of the area comprising the Granted Mining and Prospecting Concessions
has been relinquished or surrendered, and there are no circumstances or
occurrences of which Stellar is aware which may jeopardise Stellar's interest in
the Granted Mining and Prospecting Concessions other than disclosed in this
Agreement.

 
 
8.2
Indemnity

 
Canafra will indemnify Stellar and keep Stellar indemnified against all
liability, costs, losses and damage which Stellar suffers or incurs as a result
of a breach of any warranty referred to in clause 8.1, excluding any indirect or
consequential losses.
 
9.
STELLAR WARRANTIES

 
 
9.1
Warranties

 
Stellar represents and warrants to liability that:
 
 
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(a)
Stellar has the necessary power and authority, and all necessary corporate and
other action has been taken to enable it, to enter into and perform its
obligations under this Agreement and each further document and assurance
required under Clause 16 of this Agreement;

 
 
(b)
this Agreement does not conflict with, constitute or result in a breach or
default of Stellar’s constituent documents, or the terms or provisions of any
agreement, writ, deed, order, injunction, judgement, law, rule or regulation to
which Stellar is a party or by which Stellar is bound; and

 
 
(c)
Stellar will duly and punctually perform and discharge all of its obligations
imposed upon it under this Agreement.

 
 
(d)
Stellar will submit all press releases for approval to Canafra to assure
acceptance by the authorities in Tanzania.  Approval will not be unreasonably
withheld.

 
 
9.2
Indemnity

 
Stellar will indemnify Canafra and keep Canafra indemnified against all
liability, costs, losses and damage which Canafra suffers or incurs as a result
of a breach of any warranty referred to in clause 9.1, excluding any indirect or
consequential losses.
 
10.
ASSIGNMENT

 
Stellar may, with the consent of Canafra, assign all or part of its Farm-In
interest under this Agreement to a third party but in any case, shall not be
entitled to sell or transfer all or any part of its interest in this Agreement
prior to becoming entitled to the Farm-In Interest.  
 
 
(a)
In this clause, the expressions "consideration, "input tax credit", "supply",
"tax invoice", "recipient" and "taxable supply" have the meanings given to those
expressions in accordance with Nevada State Tax.

 
 
(b)
Unless otherwise expressly stated, all amounts, prices and other sums stated in
and consideration to be provided under or in accordance with this Agreement are
exclusive of tax.

 
 
(c)
If GST is imposed on any supply of services in British Columbia, under or in
connection with this Agreement, the recipient of the taxable supply must pay to
the supplier an additional amount equal to the GST payable on or for the taxable
supply subject to the recipient receiving a valid tax invoice in respect of the
supply at or before the time of payment. Payment of the additional amount must
be made at the same time as payment for the taxable supply is required to be
made in accordance with this Agreement.

 
 
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11.
NOTICES

 
 
11.1
Service

 
Any notice, approval, request, demand or other communication (notice) to be
given for the purposes of this Agreement must be in writing and must be served
personally or sent by ordinary or registered mail (airmail if overseas) to the
address of the Party specified in Schedule “A” Item 2, or any other address as
that Party may notify the other parties, in writing, from time to time or by
facsimile transmission to the facsimile number of that Party specified in
Schedule “A” Item 2 (if any) or any other facsimile number as that Party may
notify the other Parties, in writing, from time to time.
 
 
11.2
Receipt

 
A notice given:
 
 
(a)
personally is served upon delivery;

 
 
(b)
by post (other than overseas airmail) is served three business days after
posting;

 
 
(c)
by overseas airmail is served seven business days after posting;

 
 
(d)
by facsimile transmission is served upon receipt of a transmission report by the
machine from which the facsimile was sent indicating that the facsimile had been
sent in entirety to the facsimile number of the receiving Party specified in
Schedule “A” Item 2 or any other number as may have been notified by the
receiving Party to the other Party and if the facsimile has not been completely
transmitted by 5.00 pm (determined by reference to the time of day at the
recipient's address) it is deemed served on the next business day.

 
12.
STAMP DUTY AND COSTS

 
 
12.1
Stamp Duty

 
Stellar must pay any stamp duty (if necessary) on or arising in connection with
this Agreement and any other related documentation.
 
 
12.2
Costs

 
Each Party must bear its own legal and other costs and expenses arising directly
or indirectly with respect to the preparation, execution, completion and
performance of this Agreement or any other related documentation.
 
 
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13.
GOVERNING LAW AND JURISDICTION

 
This Agreement is governed by and must be construed in accordance with the laws
of the State of Nevada, Canada and of the United Republic of Tanzania for the
time being in force, and the parties agree to submit to the non-exclusive
jurisdiction of the courts of that jurisdiction.
 
WAIVER:  The failure or omission of a Party at any time to:
 
 
(a)
enforce or require the strict observance of or compliance with any provision of
this Agreement; or

 
 
(b)
exercise any election or discretion under this Agreement, will not operate as a
waiver of them or of the rights of a Party, whether Stellar or implied, arising
under this Agreement.

 
14.
TERMINATION

This agreement may be terminated by either party if the other party is in breach
of any of the clauses of this agreement.  If a party is in breach the second
party may in writing within 30 days of the breach give notice under section 11
of this agreement to the party in breach that they wish to terminate the
agreement.  The agreement will be terminated upon the party in breach receiving
notice under section 11 of the wish to terminate by the second party.
 
15.
CUMULATIVE RIGHTS

 
The rights or remedies conferred on any Party by this Agreement are in addition
to all rights and remedies of that Party at law or in equity.
 
16.
FURTHER ASSURANCE

 
Each Party must sign, execute and complete all such further documents as may be
necessary to effect, perfect or complete the provisions of this Agreement and
the transactions to which it relates.
 
17.
EXECUTION BY COUNTERPARTS

 
 
(a)
This Agreement may consist of one or more counterpart copies.

 
 
(b)
All counterparts of this Agreement, when taken together, constitute the one
document.

 
 
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18.
MERGER

 
This Agreement remains and continues in full force and effect after the
Effective Date in respect of any matters, agreements, rights, obligations and
warranties contained in this Agreement.
 
19.
SOLE AGREEMENT

 
 
(a)
This Agreement constitutes the sole understanding of the Parties with respect to
its subject matter and with respect to the rights and obligations of the Parties
and replaces all other agreements with respect thereto.

 
 
(b)
No modification or alteration of the terms of this Agreement is binding unless
made in writing dated subsequent to the date of this Agreement and duly executed
by the Parties.

 
EXECUTED as an agreement on this _______ day of August, 2008.
 
 
Executed by CANAFRA MINERAL
EXPLORATION CORP.
 
 
 
 
)
)
 
Authorized Signatory
 
 
 
 
Witness
Name
 
Per:

 
Executed by TWO DRUM G & C
COMPANY LIMITED
 
 
 
 
)
)
 
Authorized Signatory
 
 
 
Witness
Name
 
Per:

 
 

     
Authorized Signatory
 
 
 
Witness
Name
 
Per:

 
 
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Executed by STELLAR RESOURCES
LTD.
 
 
 
 
)
)
 
Authorized Signatory
 
 
 
Witness
Name
 
Per:

 
 
 
 
 
 
 
 
 
 
 
 
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SCHEDULE “A”
 
1.
GRANTED MINING AND PROSPECTING CONCESSIONS

 
 
Mining and Prospecting Licenses of the Granted Mining and Prospecting
Concessions consisting of approximately 26 square kilometers more or less, in
the Chunya Mining District, Mbeya, Tanzania.

 
2.
ADDRESS FOR NOTICES

 
  To:
Canafra Mineral Exploration Corp.

 
 & Two Drum G & C Company Limited:

 
 
303-1030 Hamilton Street

 
Vancouver, British Columbia

 
Canada V6C 1E1

 
Fax: (604) 734-7601

 
Email: canafra@shawcable.com

 
  And To:
 
 Stellar Resources Ltd.:
 375 North Stephanie Street, Suite 1411
 Henderson, NV 89014-8909
 U.S.A.
 Fax: (702) 547-3552
 Email: info@stellar-resources.com
 
 
 
 
 
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SCHEDULE “B”
Deed of Assignment
 
THIS DEED is made on the _______ day of August, 2008
 
BETWEEN:
 
Canafra Mineral Exploration Corp.,
& Two Drum G & C Company Limited,
303-1030 Hamilton Street, Vancouver, BC, V6B 2R9, Canada
 
("Canafra").
 
 
And:

 
Stellar Resources Ltd.,
375 North Stephanie Street, Suite 1411, Henderson, NV 89014-8909, USA
 
("Stellar").
 
RECITALS
 

 
A.
Canafra along with its Partner Two Drum G&C Company limited is the beneficial
owner of a 100% interest in certain mining and prospecting Licenses which shall
part of this Agreement “the Granted Mining and Prospecting Concessions”.

 

 
B.
Pursuant to the terms of a farm-in agreement between Canafra and Stellar,
Canafra agrees to assign to Stellar, upon Stellar discharging certain financial
obligations required under that Agreement, a 50% Net Profit Interest in the
Granted Mining and Prospecting Concessions.

 

 
C.
Stellar agrees to discharge the financial obligations required under the Stellar
/ Canafra Farm-In Agreement, entitling it to the 50% Net Profit Interest in the
properties described herein and accordingly the parties have entered into this
deed in order to effect the above assignment.

 
THE PARTIES AGREE as follows:
 
1.
INTERPRETATION

 
 
1.1
Definitions

 
In this Deed, words have the same meaning as defined in the Stellar / Canafra
Farm-In Agreement and:
 
 
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'Assigned Interest' means the 50% Net Profit Interest in the Granted Mining and
Prospecting Concessions.
 
 
1.2
Interpretation Rules

 
In this deed, unless the context otherwise requires:
 
 
(a)
a word importing the plural includes the singular and vice versa;

 
 
(b)
a reference to either of the parties includes its permitted successors and
assigns;

 
 
(c)
a reference to any statute includes any proclamations, declarations, regulations
and other instruments made or issued under that statute;

 
 
(d)
headings are for convenience only and do not affect the interpretation of this
Deed; and

 
 
(e)
references to clauses, paragraphs and schedules are references to clauses,
paragraphs and schedules of this Deed.

 
 
1.3
No Partnership

 
Nothing in this Deed, or in the relationship between Canafra and Stellar, will
be construed as creating a partnership in any sense between them.
 
2.
ASSIGNMENT

 
With effect from the Effective Date, Canafra assigns and transfers Following the
completion by Stellar of its financial obligations as set out above to Stellar a
50% Net Profit Interest in and to the Assigned Interest, and Stellar accepts
that assignment.
 
3.
ASSUMPTION

 
 
(a)
Stellar accepts the Assigned Interest assigned to it and assumes and agrees to
be bound by all of the obligations which accrue, on or after the Effective Date,
in relation to the Assigned Interest in every way as if Stellar had held that
Assigned Interest at all time in lieu of Canafra.

 
 
(b)
Canafra to the extent that the obligations relate to the Assigned Interest in
and to the Granted Mining and Prospecting Concessions, assigned and transferred
to Stellar, hereby consents to such assignment and transfer to Stellar.

 
 
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4.
COSTS AND STAMP DUTY

 
 
(a)
The parties will bear their own legal costs arising out of the preparation,
negotiation and execution of this Deed.

 
 
(b)
Stellar will bear all stamp duty and registration fees payable on this Deed (if
necessary).

 
5.
MISCELLANEOUS

 
 
(a)
This Deed will be binding upon and inure for the benefit of the parties and
their respective successors.

 
 
(b)
This Deed will be governed by and construed in accordance with the laws of
Tanzania, Canada and the State of Nevada.

 
 
(c)
The parties submit to the non-exclusive jurisdiction of the courts of Tanzania,
Canada and the State of Nevada and all courts competent appeals therefrom.

 
 
(d)
This Deed may be executed in any number of counterparts and all such
counterparts taken together will be deemed to constitute one and the same
instrument.

 
 
(e)
Each of the parties will take such steps, execute all such documents and do all
such acts and things as may be reasonably required by any other party to give
effect to the intent of this Deed.

 
 
(f)
Each of the parties agrees to forward a copy of any notice issued or received to
each of the other parties.

 
 
(g)
Each attorney executing this deed states that he has no notice of the revocation
of his power of attorney.

 
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY
 
 
 
 
 
 
 
 
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