UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
  FORM
10-Q
  x    
QUARTERLY REPORT UNDER SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the
quarterly period ended January 31,
2009


or




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


(Issuer’s
telephone number)




N/A


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




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





Indicate by 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
              oNon-
      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).    x Yes   o No




APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS





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





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
March  18,
2008 is
29,441,490.








1





TABLE OF CONTENTS








PART I – FINANCIAL INFORMATION
                                3Item 1.
                                Financial Statements:
                                3Balance Sheets
                                4Statements of Operations
                                5Statements of Cash Flows
                                6Notes to Financial Statements
                                7Item 2.
                                Management’s Discussion and Analysis or Plan of
      Operations
                                10Item 3.
                                Quantitative and Qualitative Disclosure About Market
      Risk
                                14Item 4.
                                Controls and Procedures
                                14Part II – OTHER INFORMATION
                                15Item 1.
                                Legal Proceedings
                                15Item 1A.
                                Risk Factors
                                15Item 2.
                                Unregistered Sales of Equity Securities and Use of
      Proceeds
                                16Item 3.
                                Defaults Upon Senior Securities
                                16Item 4.
                                Submission of Matters to a Vote of Security
      Holders
                                16Item 5.
                                Other Information
                                16Item 6.
                                Exhibits
                                16SIGNATURES
                                17







2
 Table of Contents




PART I – FINANCIAL INFORMATION
  Item 1.   Financial
Statements








STELLAR
RESOURCES LTD.


(An
Exploration Stage Company)








FINANCIAL
STATEMENTS








JANUARY
31, 2009


(Unaudited)


























3
 Table of Contents





STELLAR RESOURCES
LTD.


(An
Exploration Stage Company)





BALANCE SHEETS




JANUARY
      31
                                                  
                                                  
                                                  JULY
      312009
                                                  
                                                  
                                                  2008(Unaudited)ASSETSCurrentPrepaid
      expenses
                                                  
                                                  $
                                                  20
                                                  
                                                  
                                                  $
                                                  -$
                                                  20
                                                  
                                                  
                                                  $
                                                  -LIABILITIESCurrentBank
      indebtedness
                                                  
                                                  $
                                                  9
                                                  
                                                  
                                                  $
                                                  38Accounts
      payable and accrued liabilities
                                                  
                                                  
                                                  4,995
                                                  
                                                  
                                                  
                                                  4,940Notes
      payable (Note 4)
                                                  
                                                  
                                                  19,329
                                                  
                                                  
                                                  
                                                  22,837Due
      to related parties (Note 6)
                                                  
                                                  
                                                  189,134
                                                  
                                                  
                                                  
                                                  177,251213,467
                                                  
                                                  
                                                  
                                                  205,066STOCKHOLDERS’
      DEFICITCapital
      stock (Note 5)Authorized:200,000,000
      common shares with a par value of $0.001 per shareIssued
      and outstanding:29,441,490
      common shares (July 31, 2008: 28,640,196 common shares)
                                                  
                                                  
                                                  29,441
                                                  
                                                  
                                                  
                                                  28,640Additional
      paid-in capital
                                                  
                                                  
                                                  921,378
                                                  
                                                  
                                                  
                                                  914,166Deferred
      stock compensation (Note 6)
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  (39,700
                                                  )Deficit
      accumulated during the exploration stage
                                                  
                                                  
                                                  (1,161,866
                                                  )
                                                  
                                                  
                                                  (1,101,977
                                                  )Accumulated
      other comprehensive loss
                                                  
                                                  
                                                  (2,400
                                                  )
                                                  
                                                  
                                                  (6,195
                                                  )(213,447
                                                  )
                                                  
                                                  
                                                  (205,066
                                                  )$
                                                  20
                                                  
                                                  
                                                  $
                                                  -









The accompanying notes are
an integral part of these financial statements




4
 Table of Contents




STELLAR RESOURCES
LTD.


(An
Exploration Stage Company)





STATEMENTS OF OPERATIONS


(Unaudited)




CUMULATIVE
      RESULTS OF OPERATIONS FROM APRIL 9, 1999 (INCEPTION)THREE
      MONTHS ENDED
                                                                                      
                                                                                      
                                                                                      SIX
      MONTHS ENDED
                                                                                      
                                                                                      
                                                                                      TOJANUARY
      31,
                                                                                      
                                                                                      
                                                                                      JANUARY
      31,
                                                                                      
                                                                                      
                                                                                      JANUARY
      31,
                                                                                      
                                                                                      
                                                                                      JANUARY
      31,
                                                                                      
                                                                                      
                                                                                      JANUARY
      31,2009
                                                                                      
                                                                                      
                                                                                      2008
                                                                                      
                                                                                      
                                                                                      2009
                                                                                      
                                                                                      
                                                                                      2008
                                                                                      
                                                                                      
                                                                                      2009ExpensesConsulting
      fees
                                                                                      
                                                                                      $
                                                                                      -
                                                                                      
                                                                                      
                                                                                      $
                                                                                      -
                                                                                      
                                                                                      
                                                                                      $
                                                                                      -
                                                                                      
                                                                                      
                                                                                      $
                                                                                      -
                                                                                      
                                                                                      
                                                                                      $
                                                                                      27,780Filing
      fees
                                                                                      
                                                                                      
                                                                                      1,955
                                                                                      
                                                                                      
                                                                                      
                                                                                      1,871
                                                                                      
                                                                                      
                                                                                      
                                                                                      3,128
                                                                                      
                                                                                      
                                                                                      
                                                                                      3,677
                                                                                      
                                                                                      
                                                                                      
                                                                                      35,067Foreign
      exchange (gain) loss
                                                                                      
                                                                                      
                                                                                      160
                                                                                      
                                                                                      
                                                                                      
                                                                                      (133
                                                                                      )
                                                                                      
                                                                                      
                                                                                      269
                                                                                      
                                                                                      
                                                                                      
                                                                                      132
                                                                                      
                                                                                      
                                                                                      
                                                                                      14,215General
      and administrative
                                                                                      
                                                                                      
                                                                                      9
                                                                                      
                                                                                      
                                                                                      
                                                                                      435
                                                                                      
                                                                                      
                                                                                      
                                                                                      320
                                                                                      
                                                                                      
                                                                                      
                                                                                      1,006
                                                                                      
                                                                                      
                                                                                      
                                                                                      20,732Interest
      expense
                                                                                      
                                                                                      
                                                                                      126
                                                                                      
                                                                                      
                                                                                      
                                                                                      205
                                                                                      
                                                                                      
                                                                                      
                                                                                      287
                                                                                      
                                                                                      
                                                                                      
                                                                                      421
                                                                                      
                                                                                      
                                                                                      
                                                                                      15,691Investor
      relations
                                                                                      
                                                                                      
                                                                                      65
                                                                                      
                                                                                      
                                                                                      
                                                                                      77
                                                                                      
                                                                                      
                                                                                      
                                                                                      65
                                                                                      
                                                                                      
                                                                                      
                                                                                      4,577
                                                                                      
                                                                                      
                                                                                      
                                                                                      17,554Resource
      property expenditures
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      5,002
                                                                                      
                                                                                      
                                                                                      
                                                                                      150,114Professional
      fees
                                                                                      
                                                                                      
                                                                                      4,111
                                                                                      
                                                                                      
                                                                                      
                                                                                      3,160
                                                                                      
                                                                                      
                                                                                      
                                                                                      16,120
                                                                                      
                                                                                      
                                                                                      
                                                                                      20,017
                                                                                      
                                                                                      
                                                                                      
                                                                                      129,772Stock-based
      compensation
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      61,450
                                                                                      
                                                                                      
                                                                                      
                                                                                      39,700
                                                                                      
                                                                                      
                                                                                      
                                                                                      121,850
                                                                                      
                                                                                      
                                                                                      
                                                                                      750,000Travel
      and entertainment
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      941Net
      Loss
                                                                                      
                                                                                      $
                                                                                      (6,426
                                                                                      )
                                                                                      
                                                                                      $
                                                                                      (67,065
                                                                                      )
                                                                                      
                                                                                      $
                                                                                      (59,889
                                                                                      )
                                                                                      
                                                                                      $
                                                                                      (156,682
                                                                                      )
                                                                                      
                                                                                      $
                                                                                      (1,161,866
                                                                                      )Basic
      and Diluted Net Loss Per Common Share
                                                                                      
                                                                                      $
                                                                                      -
                                                                                      
                                                                                      
                                                                                      $
                                                                                      -
                                                                                      
                                                                                      
                                                                                      $
                                                                                      -
                                                                                      
                                                                                      
                                                                                      $
                                                                                      (0.01
                                                                                      )Weighted
      Average Number of Common Shares Outstanding – Basic and
      Diluted
                                                                                      
                                                                                      
                                                                                      29,014,714
                                                                                      
                                                                                      
                                                                                      
                                                                                      28,640,196
                                                                                      
                                                                                      
                                                                                      
                                                                                      28,827,455
                                                                                      
                                                                                      
                                                                                      
                                                                                      28,640,196
          The
accompanying notes are an integral part of these financial
statements





5
 Table of Contents




STELLAR
RESOURCES LTD.


(An
Exploration Stage Company)





STATEMENTS OF CASH FLOWS





CUMULATIVE
      RESULTS OF OPERATIONS FROM APRIL 9, 1999 (INCEPTION)SIX
      MONTHS ENDED
                                      
                                      
                                      TOJANUARY
      31
                                      
                                      
                                      JANUARY
      31,2009
                                      
                                      
                                      2008
                                      
                                      
                                      2009Cash
      Flows from Operating ActivitiesNet
      loss
                                      
                                      $
                                      (59,889
                                      )
                                      
                                      $
                                      (156,682
                                      )
                                      
                                      $
                                      (1,161,866
                                      )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Realized
      foreign exchange losses on settlement of notes payable
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      12,523Stock-based
      compensation
                                      
                                      
                                      39,700
                                      
                                      
                                      
                                      121,850
                                      
                                      
                                      
                                      750,000Accrued
      interest
                                      
                                      
                                      287
                                      
                                      
                                      
                                      421
                                      
                                      
                                      
                                      17,679Changes
      in operating assets and liabilities:Prepaid
      expenses
                                      
                                      
                                      (20
                                      )
                                      
                                      
                                      900
                                      
                                      
                                      
                                      (20
                                      )Accounts
      payable and accrued liabilities
                                      
                                      
                                      55
                                      
                                      
                                      
                                      265
                                      
                                      
                                      
                                      4,995Net
      cash used in operating activities
                                      
                                      
                                      (19,867
                                      )
                                      
                                      
                                      (33,246
                                      )
                                      
                                      
                                      (376,689
                                      )Cash
      Flows from Financing ActivitiesProceeds
      from issuance of common stock
                                      
                                      
                                      8,013
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      98,246Proceeds
      from notes payable
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      89,300Advances
      from related parties
                                      
                                      
                                      11,883
                                      
                                      
                                      
                                      31,608
                                      
                                      
                                      
                                      189,134Net
      cash provided by financing activities
                                      
                                      
                                      19,896
                                      
                                      
                                      
                                      31,608
                                      
                                      
                                      
                                      376,680Net
      Increase (Decrease) in Cash
                                      
                                      
                                      29
                                      
                                      
                                      
                                      (1,638
                                      )
                                      
                                      
                                      (9
                                      )Cash
      (Bank Indebtedness), Beginning
                                      
                                      
                                      (38
                                      )
                                      
                                      
                                      159
                                      
                                      
                                      
                                      -Cash
      (Bank Indebtedness), Ending
                                      
                                      $
                                      (9
                                      )
                                      
                                      $
                                      (1,479
                                      )
                                      
                                      $
                                      (9
                                      )Supplemental
      Disclosures of Cash Flow Information and Non-Cash Investing and Financing
      ActivitiesInterest
      paid
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -Income
      taxes paid
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -Common
      shares issued on settlement of notes payable and accrued
      interest
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      102,573








The
accompanying notes are an integral part of these financial
statements





6
 Table of Contents
 STELLAR
RESOURCES LTD.
 (An
Exploration Stage Company)
 
 NOTES
TO FINANCIAL STATEMENTS
 JANUARY
31, 2009
 (Unaudited)





1.
            BASIS
      OF PRESENTATION





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 rules and regulations of the
Securities and Exchange Commission (“SEC”). They may not include all information
and footnotes required by United States generally accepted accounting principles
for complete financial statements. However, except as disclosed herein, there
has been no material changes in the information disclosed in the notes to the
financial statements for the year ended July 31, 2008 included in the Company’s
Annual Report on Form 10-KSB filed with the SEC. The interim unaudited financial
statements should be read in conjunction with those financial statements
included in the Form 10-KSB. 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 six
months ended January 31, 2009 are not necessarily indicative of the results that
may be expected for the year ending July 31, 2009.




2.
            RESOURCE
      PROPERTIES





Chunya
      mining district of Mbeya Tanzania





On
September 9, 2008, the Company entered into a Farm-In Agreement with Canafra
Mineral Exploration Corp., a Canadian private company, and Two Drums G & C
Company Limited, a Tanzanian private company, (jointly “Canafra”), whereby the
Company has the right to acquire a 50% net profit interest in the subject
mineral property in Tanzania.  The subject property consists of three
Mining and Prospecting Licenses and the Granted Mining and Prospecting
Concessions comprising approximately 26 square kilometers, in the Chunya mining
district of Mbeya Tanzania.  The operator of the property will be
Canafra.





The
funding provisions are subject to the Company receiving the Mining and
Prospecting Licenses for the subject property, which to date have not yet been
received.





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





7
 Table of Contents
 STELLAR
RESOURCES LTD.
 (An
Exploration Stage Company)
 
 NOTES
TO FINANCIAL STATEMENTS
 JANUARY
31, 2009
 (Unaudited)




2.
            RESOURCE PROPERTIES(Continued)





Chunya mining district of Mbeya
      Tanzania (Continued)




CommonCash
                              
                              
                              Stock
      to beConsideration
                              
                              
                              IssuedPhase I –
      Conditional upon receipt of Mining and Prospecting
      LicensesWithin
      30 days of execution of agreement
                              
                              $
                              60,000
                              
                              
                              
                              -Within
      60 days of execution of agreement
                              
                              
                              80,000
                              
                              
                              
                              -Within
      90 days of execution of agreement
                              
                              
                              80,000
                              
                              
                              
                              -Within
      120 days of execution of agreement
                              
                              
                              80,000
                              
                              
                              
                              -Within
      150 days of execution of agreement
                              
                              
                              80,000
                              
                              
                              
                              -380,000
                              
                              
                              
                              -Phase
      II – Within 90 days of completion of Phase Iincluding
      geological work to be done by Canafra
                              
                              
                              380,000
                              
                              
                              
                              2,000,000Phase
      III – Within 90 days of completion of Phase II orwithin
      a mutually agreed timeframe, includingfurther
      geological work done by Canafra
                              
                              
                              340,000
                              
                              
                              
                              2,000,000$
                              1,100,000
                              
                              
                              
                              4,000,000








3.
            NOTES
      PAYABLE





As of
January 31, 2009 the Company had received a total of $14,632 (Cdn$18,000), (July
31, 2008 -$17,586, Cdn$18,000) from unrelated third parties by way of demand
promissory notes bearing interest at the Bank of Canada prime rate plus 2%
(3.25% as of January 31, 2009).  As at January 31, 2009 $4,697 (July
31, 2008 - $5,251) of accrued interest is payable.





During
the six months ended January 31, 2009, the Company recorded foreign exchange
transaction gains of $3,795 (January 31, 2008: loss of $1,635) in connection
with these notes payable and accrued interest payable as a result of
fluctuations in the foreign exchange rate.





4.
            CAPITAL
      STOCK





On
December 19, 2008, the Company issued 801,294 common shares at $0.01 for
aggregate proceeds of $8,103.




As of
January 31, 2009 the Company has 29,441,490 (July 31, 2008 - 28,640,196) common
shares issued and outstanding.





8
 Table of Contents




5.
            RELATED
      PARTY TRANSACTIONS





During
the six month period ended January 31, 2009, a former director advanced funds to
the Company totaling $11,883 (January 31, 2008 - $31,608).  At January
31, 2009, an amount of $189,134 (July 31, 2008 - $177,251) was owed to this
former director.  These advances are unsecured, non-interest bearing
and have no specific terms of repayment.




6.
            SUBSEQUENT
      EVENT





Subsequent
to the period end the Company commenced a non brokered private placement for the
issuance of up to 1,619,160 common shares at $0.02.  Pursuant to this
private placement the Company has received subscriptions for 1,619,160 common
shares for aggregate proceeds of $32,383.


































9
 Table of Contents




Item 2.   Management Discussion and Analysis or Plan of
Operations





Our
actual results could differ materially form those reflected in these
forward-looking statements as a result of certain factors that include, but are
not limited to, the risks discussed in the Section entitled “Risk
Factors”.  Please see the statements contained under the
Section entitled “Forward-Looking
Statements”.





Except
for historical information, the following Management’s Discussion and Analysis
contains forward-looking statements based upon current expectations that involve
certain risks and uncertainties.  Such forward-looking statements
include statements regarding, among other things, (a) our estimates of mineral
reserves and mineralized material, (b) our projected sales and profitability,
(c) our growth strategies, (d) anticipated trends in our industry, (e) our
future financing plans, (f) our anticipated needs for working capital, (g) our
lack of operational experience, and (h) the benefits related to ownership of our
common stock.  Forwarding-looking statements, which involve
assumptions and describe our future plans, strategies, and expectations, are
generally identifiable by use of the words “may,” “will,” “should,” “expect”
“anticipate,” “estimate,” “believe,” “intend,”or“project”or the negative of
these words or other variations on these words or comparable
terminology.  This information may involve known and unknown risks,
uncertainties, and other factors that may cause our actual results, performance,
or achievements expressed or implied by any forward-looking
statements.  These statements may be found under “Management’s Discussions and
Analysis of Financial Condition and Results of Operations” and “Business” as well as in this
Form 10-KSB generally.  Actual events or results may differ materially
from those discussed in forward-looking statements as a result of various
factors, including, without limitation, the risks outlined under “Risk Factors” and matters
described in this Form 10-Q generally.  In light of these risks and
uncertaintities, there can be no assurance that the forward-looking statements
contained in this Form 10-Q will in fact occur as projected.





At
January 31, 2008, we had a working capital deficit of $213,447 and an
accumulated deficit during the exploration stage of $1,161,866 as of January 31,
2008.  From inception, April 9, 1999, we have expended $129,772 on
legal and audit and accounting fees; $15,691 on interest; $150,114 on resource
property expenses; $27,780 on consulting fees; $20,732 on office expense,
$35,067 on filing fees, $17,554 on investor relations, $941 on travel and
entertaining, and $750,000 on stock-based compensation.





OVERVIEW





We have
been in the pre-exploration stage since our formation on April 9, 1999, and are
not operators of any mines nor are we engaged in any mineral production or sales
activities.  We have a minimum amount of cash and have not yet
developed any producing mines.  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 engaged in the acquisition and exploration of resource
properties.





Pursuant
to EITF 04-2, the Company classified its mineral rights as tangible assets and
accordingly acquisition costs are capitalized as mineral property
costs.  Generally accepted accounting principles require that
long-lived assets be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable.  In performing the review for recoverability, the Company
is to estimate the future cash




10
 Table of Contents




flows
expected to result from the use of the asset and its eventual
disposition.  If the sum of the undiscounted expected future cash
flows is less than the carrying amount of the asset, an impairment loss is
recognized.  Mineral exploration costs are expensed as incurred until
commercially mineable deposits are determined to exist within a particular
property. To date the Company has not established any proven or probable
reserves.





The
Company has adopted the provisions of SFAS No. 143 “Accounting for Asset
Retirement Obligations” which establishes standards for the initial measurement
and subsequent accounting for obligations associated with the sale, abandonment,
or other disposal of long-term tangible assets arising from the acquisition,
construction or development and for normal operations of such assets. As of
January 31, 2009, the Company does not hold any mineral properties and therefore
there is no requirement for any asset retirement obligation
provision.




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





We
currently have no plans to purchase or sell any 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.




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





We
currently have no plans to purchase or sell any 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.





On
December 4, 2006 Michael Rezac resigned his respective position as Chief
Financial Officer in the Company.  However, Mr. Rezac continues to
maintain his current position as Secretary of the Company.  On January
12, 2009 Ms. Kathy Whyte resigned her position as President and Chief Financial
Officer in the Company and Mr. Luigi Rispoli was appointed as President and
Chief Financial Officer of the Company.





Results
of Operations for the Three Months Ended January 31, 2009





We have
not generated any revenues from operations since our incorporation on April 9,
1999 through January 31, 2009.  During the three month period ended
January 31, 2009 we incurred non-cash management fees - stock based compensation
of $nil (2008 - $61,450 as a result of the stock award granted to the president
in October 2006).  Professional fees, comprising legal, accounting and
audit costs increased to $4,111 (2008 - $3,160).  Investor relations
costs decreased to $65 (2008 – $77).  Interest expense of $126 (2008 -
$205) based on a Canadian dollar denominated loan was reduced as a result of
falling interest rates.  General and administrative expenses amounted
to $9 (2008 - $435).  We also experienced a foreign exchange loss of
$160 (2008 – gain of $133) as a result of foreign exchange changes during the
quarter which affected transaction not denominated in the US dollar, and filing
fees increased to $1,955 (2008 - $1,871).





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





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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Net
Loss





For the
three month ended January 31, 2009, we recorded an operating loss of $6,426,
consisting of management fee - stock based compensation $nil, filing fees of
$1,955; interest of $126, general and administrative expenses of $9 professional
fees of $4,111, investor relations of $65 and a loss on foreign exchange of
$160.  There can be no assurance that we will ever achieve
profitability or that revenues will be generated and sustained in the
future.  We are dependent upon obtaining additional and future
financing to pursue our exploration activities.





Liquidity
and Further Capital Resources





At
January 31, 2009, we had assets of $20 consisting of prepaid
expenses.  Total stockholders’ deficit was $213,447 at January 31,
2009.  We are a pre-exploration stage company and, since inception,
have experienced significant changes in liquidity, capital resources and
shareholders’ equity.





The
Company has relied for cash on hand upon sources internally generated from
management, financing through funds made available via loans, as well as debt
financing.  As of January 31, 2009, we have  notes payable
of $14,632 (Cdn. $18,000) (July 31, 2008 - $17,586 (Cdn. $18,000) from unrelated
third parties by way of demand promissory notes bearing interest at Bank of
Canada prime rate plus 2% (3.25% as of January 31, 2009).  As of
January 31, 2009, $4,697 (July 31, 2008 $5,251) of interest has been
accrued.





The
Company issued on December 19, 2008, pursuant to a non-brokered private
placement 801,294 of its common shares for aggregate proceeds of
$8,103.





On
October 3, 2006, pursuant to two separate shares-for-debt agreements, the
company issued 1,230,876 common shares in settlement of notes payable totaling
$89,006 of principle and accrued interest of $13,567.





Under a
Restricted Stock Award agreement dated October 3, 2006, the Company
issued  6,000,000 shares of restricted stock to the President, Ms.
Kathy Whyte, (resigned January 12, 2009).  These shares had a vesting
provision as follows: 2,100,000 shares vest immediately, 1,950,000 vest as of
October 3, 2007 and the final 1,950,000 shares vest as of October 3, 2008. Upon
termination of employment between the Company and Ms. Whyte, any stock not
previously vested will be forfeited and returned to the Company’s
treasury.  At October 31, 2008 all 6,000,000 shares had
vested.





At
January 31, 2009 Ms. Kathy Whyte  was owed $189,134 (July 31, 2008 –
$177,251).





On
October 20, 2006 the Company forward split its shares of common stock on a ratio
of a six (6) new shares, for each one (1) old share currently held.





As a
result of the global economic crisis and potential impact on the price of our
stock, our ability to raise capital required to meet our daily needs through
sales of our securities in secondary offerings or private placements may be
heavily impacted.  We have no agreements in place to do this at this
time.  If we fail to raise sufficient funds, our plans may change
drastically.  Even if we do raise funds for operations, there is no
assurance that we will be able to maintain operations at a level sufficient for
an investor to obtain a return on his investment in our common
stock.  Further, we may continue to be unprofitable and we may have to
delay exploration or cease our operations and liquidate our
business.





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RESOURCE
PROPERTIES





Fort
St. John Region, British Columbia





By an
agreement dated June 28, 2002 with Diamant Resources Ltd., (a company with a
former director in common) the Company acquired an option to acquire a 50%
interest in certain mineral claims located in the Fort St. John region of
British Columbia Canada.  In order to earn a 50% interest, the Company
was required to pay $3,298 (Cdn.$5,000) by June 30, 2002, $3,619 (Cdn$5,000) by
June 30, 2003 and must incur certain other property expenditures.  As
of July 31, 2007, the Company decided not to pursue this property and has
abandoned it during the fiscal  year ended July 31,
2008.  All costs associated with this property have been fully
impared.





Chunya
Mining District of Mbeya, Tanzania





On
September 9, 2008, the Company entered into a Farm-In Agreement with Canafra
Mineral Exploration Corp., a Canadian private company, and Two Drums G & C
Company Limited, a Tanzanian private company, (jointly “Canafra”), whereby the
Company has the right to acquire a 50% net profit interest in the subject
mineral property in Tanzania.  The subject property consists of three
Mining and Prospecting Licenses and the Granted Mining and Prospecting
Concessions comprising approximately 26 square kilometers, in the Chunya mining
district of Mbeya Tanzania.  The operator of the property will be
Canafra.





The
funding provisions are subject to the Company receiving the Mining and
Prospecting Licenses for the subject property, which to date have not yet been
received.





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





CommonCash
                                    
                                    
                                    Stock
      to beConsideration
                                    
                                    
                                    IssuedPhase I –
      Conditional upon receipt of Mining and Prospecting
      LicensesWithin
      30 days of execution of agreement
                                    
                                    $
                                    60,000
                                    
                                    
                                    
                                    -Within
      60 days of execution of agreement
                                    
                                    
                                    80,000
                                    
                                    
                                    
                                    -Within
      90 days of execution of agreement
                                    
                                    
                                    80,000
                                    
                                    
                                    
                                    -Within
      120 days of execution of agreement
                                    
                                    
                                    80,000
                                    
                                    
                                    
                                    -Within
      150 days of execution of agreement
                                    
                                    
                                    80,000
                                    
                                    
                                    
                                    -380,000
                                    
                                    
                                    
                                    -Phase
      II – Within 90 days of completion of Phase Iincluding
      geological work to be done by Canafra
                                    
                                    
                                    380,000
                                    
                                    
                                    
                                    2,000,000Phase
      III – Within 90 days of completion of Phase II orwithin
      a mutually agreed timeframe, includingfurther
      geological work done by Canafra
                                    
                                    
                                    340,000
                                    
                                    
                                    
                                    2,000,000$
                                    1,100,000
                                    
                                    
                                    
                                    4,000,000





The
Company awaits formal licensing documentation from Canafra showing that the
Mining and Prospecting Licenses  with the geographic coordinates are
100% owned by Canafra.  The delay is as a result of Canafra
experiencing certain setbacks, due to the current economical conditions, and
there can be no assurances that we will be able to obtain sufficient funding in
order to complete our obligations under the agreement.








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Investor
Relations Service Contract





The
Company has no current investor relations contracts.




Item 3.   Quantative
and Qualitative Disclosure About Market Risk




Not
applicable




Item
4.Controls
and Procedures




Evaluation
of Disclosure Controls and Procedures




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as required by Sarbanes-Oxley (SOX) Section
404 A. Our internal control over financial reporting is a process designed under
the supervision of our Chief Executive Officer and Chief Financial Officer to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of our financial statements for external purposes in
accordance with U.S. generally accepted accounting principles.




As of
January 31, 2009, management assessed the effectiveness of our internal control
over financial reporting based on the criteria for effective internal control
over financial reporting established in Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”) and SEC guidance on conducting such assessments.  Based on that
evaluation, they concluded that, during the period covered by this report, such
internal controls and procedures were not effective to detect the inappropriate
application of US GAAP rules as more fully described below. This was due to
deficiencies that existed in the design or operation of our internal control
over financial reporting that adversely affected our internal controls and that
may be considered to be material weaknesses, and that the scale of operations
did not warrant a more elaborate system.  For a more complete description
of issues hereto, please refer to Form 10KSB filed on October 29, 2008 for the
year ended July 31, 2008.




We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to our management, including our president and our chief financial
officer to allow for timely decisions regarding required
disclosure.




As of
January 31, 2009, the end of our third quarter covered by this report, we
carried out an evaluation, under the supervision and with the participation of
our president and chief financial officer, of the effectiveness of the design
and operation of our disclosure controls and procedures. Based on the foregoing,
our president and chief financial officer concluded that our disclosure controls
and procedures were not effective owing to weaknesses described in our internal
control over financial reporting reported as at January 31, 2009 to provide
reasonable assurance in the reliability of our financial reports as of the end
of the period covered by this quarterly report.  Management believes that
the material weaknesses set forth in items above did not have an affect on our
financial results.




Inherent
limitations on effectiveness of controls




Internal
control over financial reporting has inherent limitations which include but is
not limited to the use of independent professionals for advice and guidance,
interpretation of existing and/or changing rules and principles, segregation of
management duties, scale of organization, and personnel factors. Internal
control over financial reporting is a process which involves human diligence and
compliance and is subject to lapses in judgment and breakdowns resulting from
human failures. Internal control over financial reporting also can be
circumvented by collusion or improper management override. Because of its
inherent limitations, internal control over financial reporting




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may not
prevent or detect misstatements on a timely basis, however these inherent
limitations are known features of the financial reporting process and it is
possible to design into the process safeguards to reduce, though not eliminate,
this risk. Therefore, even those systems determined to be effective can provide
only reasonable assurance with respect to financial statement preparation and
presentation. Projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.




Changes
in Internal Control over Financial Reporting




We are
committed to improving our financial organization. We will continue to monitor
and evaluate the effectiveness of our internal controls and procedures and our
internal controls over financial reporting on an ongoing basis and are committed
to taking further action and implementing additional enhancements or
improvements, as necessary and as funds allow.




There has
been no change in the Company’s internal control over financial reporting during
fiscal year 2008 that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.






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.





Item 1A.  Risk Factors





Forward
Looking Statements. - This following information specifies certain
forward-looking statements of management of the company. Forward-looking
statements are statements that estimate the happening of future events and are
not based on historical fact.  Forward-looking statements may be
identified by the use of forward-looking terminology, such as “may”, “shall”,
“will”, “could”, “expect”, “estimate”, “anticipate”, “predict”, “probable”,
“possible”, “should”, “continue”, or similar terms, variations of those terms or
the negative of those terms.  The forward-looking statements specified
in the following information have been compiled by our management on the basis
of assumptions made by management and considered by management to be reasonable.
Our future operating results, however, are impossible to predict and no
representation, guaranty, or warranty is to be inferred from those
forward-looking statements.





The
assumptions used for purposes of the forward-looking statements specified in the
following information represent estimates of future events and are subject to
uncertainty as to possible changes in economic, legislative, industry, and other
circumstances. As a result, the identification and interpretation of data and
other information and their use in developing and selecting assumptions from and
among reasonable alternatives require the exercise of judgment. To the extent
that the assumed events do not occur, the outcome may vary substantially from
anticipated or projected results, and, accordingly, no opinion is expressed on
the achievability of those forward-looking statements. No assurance can be given
that any of the assumptions relating to the forward-looking statements specified
in the following information are accurate, and we assume no obligation to update
any such forward-looking statements.




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





Effective
October 20, 2006, the Company completed a forward split of its shares of common
stock at a ratio of a six (6) new shares for each one (1) old share currently
held.





On
October 3, 2006, under a restricted stock award agreement, the Company issued
6,000,000 post-split shares of restricted common stock with a fair value of
$750,000 to the Company’s President.





On
October 3, 2006, pursuant to two separate share-for-debt agreements, the Company
issued 1,230,876 post-split common shares in settlement of notes payable
amounting to $89,006 and accrued interest of $13,567.





Stock-based compensation expense
recognized during the three months ended January 31, 2009 totaled $nil (three
months ended January 31, 2008 - $61,450).  As at January 31,
2009 the deferred stock compensation has been fully expensed and $nil (July 31,
2008 - $39,700) remaining as the unearned amount has been recorded as deferred
stock compensation.





Item 3.   Defaults Upon Senior Securities





None.





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





No
matters were submitted to a vote of the Company's shareholders during the three
months ended January 31. 2009.





Item 5.   Other Information




No
Reports were filed by the Issuer during this period.





Item 6.   Exhibits





31.1
            Certification of Chief Executive Officer
      pursuant to Section 302 of the Sarbanes-Oxley Act of
    2002.





31.2
            Certification of 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.




STELLAR
      RESOURCES LTD.Dated:  
      March 18, 2009
                By:
                /s/ Luigi
      RispoliLuigi
      RispoliPresident,
      and Chief Executive Officer

























17