Unit 3, 136 Main Street,

Osborne Park WA 6917

PO Box 1520, Osborne Park WA 6916

Phone: 08 9242 5111

Fax: 08 9242 5677

Email: admin@fairstarresources.com

Web: www.fairstarresources.com

A.B.N. 38 115 157 689

8 September 2010

ASX/Media Release

Steeple Hill Iron Project - S H I P FAIRSTAR RESOURCES CONFIRMS MAIDEN RESOURCE IN ACCORDANCE WITH

JORC CODE AT STEEPLE HILL IRON PROJECT - S H I P

17 Million Tonnes of Direct Shippable Hematite Ore Product @ 58.40% Fe

Announcement

• FairStar's Maiden Indicated Resource Estimate, in accordance with the JORC Code, of93 Million Tonnes of Hematite rich detrital gravels has been confirmed at S H I P in WA’seastern goldfields. The Resource Estimate includes an average Hematite weightrecovery of 18%, producing 17.67 Million Tonnes of Hematite product @ 58.40% Fe,7.1% SiO2, 6.0% Al2O3 and 0.01% P.

• This Maiden Indicated Mineral Resource represents only a small part of the S H I P,which also has hard rock hematite and magnetite potential.

• The Maiden Mineral Resource at the project is in the Indicated Resource JORCcategory [alluvial iron ore resources are generally expressed as "indicated" and not"measured" due to variability of mineralisation] which provides a strong level ofcertainty on the project’s development potential,

• Having successfully defined and estimated this resource, FairStar can now define aProbable Reserve within 2 months, when associated studies are complete.

• The resource has been estimated from a total of 4,204 m of drilling across 450 holes at200 m grid spacing, for 1555 drill samples, and a program of 145 trenches.

• The shallow unconsolidated mineralisation occurs from surface and is free diggingdetrital hematite rich material, from which a direct shippable hematite concentrate canbe produced.

• The achievement of the Maiden Indicated Resource atthe S H I P is a major milestone in FairStar’s fast-trackdevelopment plans.

• Infrastructure developments are in progress with railand sea-freight transport corridors being established todeliver a balanced, FairStar controlled, end-to-endsupply chain.

• FairStar plans to commence a further phase of drilling in the near future with a 100 holeprogram to expand the Resource beyond its current Maiden Resource parameters.

• FairStar has also commenced discussions with Chinese and other Asian groupsregarding project funding, potential off take arrangements and prospective equityinvestment in the Company.

• FairStar plans to swiftly develop the S H I P into a unique and rapidly expanding exportgrade hematite iron mining operation.

• The S H I P is 100% owned by FairStar and is located close to major rail infrastructurewith Trans Australian Railway 23 km south of project area providing an expeditious andeconomic pathway to market over the deepwater Port of Esperance.

Australian multi-commodity exploration and development company FairStar Resources Limited(ASX: FAS) (FairStar) is pleased to announce details of the Company’s Maiden MineralResource Estimate of 17.67 Mt @ 58.4% iron (Fe) at its Steeple Hill Iron Project (S H I P) inWestern Australia’s eastern goldfields.

Table 1: Derived from AMC Consultants Pty Ltd document attached:

Total Mass Weight Recovery Rate Concentrate available to FairStar

93 million tonnes 18% 17 Million Tonnes

Aerial photo showing meandering ironcreek with surface iron rich gravel

The Mineral Resource is in the Indicated Resourcecategory but the Company believes that thealluvials have good continuity along 10 Kms ofthe valley, but with local variability due todeposition in a meandering creek environment.The alluvials were derived from erosion of anearby hematite BIF outcrop into a creek valley.The average width of the mineralized alluvialsis 1,040 m across the valley.

The Mineral Resource was confirmed from drillingprograms at the S H I P, which drilled a total of4,204 m across 450 holes, and also a program of145 trenches. A total of 1555 aircore samples,including 71 duplicate samples, were submittedfor processing by Nagrom MetallurgicalLaboratory. The samples were washed andscreened, and the +0.6mm fraction passedthrough a dense media separator at SG 3.4 toproduce a hematite concentrate. This concentratewas then analysed by XRF for the standard ironore suite of elements plus LOI.

Details of the Indicated Resource estimate are shown in the attachment following thisannouncement.

The delivery of the Maiden Mineral Resource at S H I P represents a major milestone for theCompany in its plans to fast track the development of the project into a significant export-gradehematite iron mining operation. Having successfully concluded the resource estimate,FairStar can now define a Probable Reserve within 2 months, once other studies arecomplete.

FairStar’s initial focus is on developing a shallow alluvial iron mining operation at the S H I P(as Stage 1 of the project’s development). This will allow for an accelerated developmenttimeframe for the project due to the low extraction cost, increased speed of mining and ease oftreatment (in comparison to hard rock mining). The mineralisation occurs from surface withnegligible overburden and the alluvials are free digging saving on blast-hole drilling andexplosives.

The Company then plans to embark on further development at the project via a hard-rock ironmining operation, in what would be Stage 2 of the project.

The S H I P currently has a strike length of 10 km, and remains open in the south of the projectarea. This area will be the focus of the next phase of drilling, where the Company plans toundertake a program of up to 100 holes, to further expand the Resource base.

Commenting on the maiden Resource Estimate in accordance with the JORC Code FairStarResources managing director Kevin Robertson said: “The confirmation of our MaidenResource Estimate in accordance with the JORC Code at Steeple Hill is a major milestonein the development of the project. To achieve this result in such a short timeframe is atestament to the Company’s commitment to the development of the project. We lookforward to continuing the rapid development of the project into a significant iron oremining operation.”

The S H I P Indicated Resource estimate was completed by AMC Consultants Pty Ltd anddetails are provided in Appendix 1, attached to this announcement.

The Steeple Hill Iron Project is 100% owned by FairStar Resources and is located in WA’seastern goldfields, 110 km east of Kalgoorlie. The project is in close proximity to major railinfrastructure, with the Trans Australian Railway passing 23 km south of the project area.

As previously advised, the Company is making strong progress in its development plans for theS H I P.

Infrastructure developments are in progress, and rail and sea-bound transport corridors havebeen established. In addition, site infrastructure and other required licenses are currently beingaddressed. Ethno-graphic and noise surveys have been completed at the project, and fieldworkfor the environmental surveys has been completed (and is due for final reporting in October).Native title negotiations are well advanced and a positive outcome is expected in the near term.

FairStar has also commenced discussions with a number of Chinese groups and otherinterested parties from Asia on project funding for the S H I P, as well as potential off takearrangements and equity investment in the Company. It will advise the market further on thesematters in due course.

A pictorial essay of the Steeple Hill Iron Project Journey from July 2008 to September 2010follows.

ENDS

The information reported herein is based on information compiled by Mr Sheldon Coates who is a member of the Australasian Institution ofMining and Metallurgy. He has sufficient experience relevant to the style of mineralisation and deposit type under consideration, and to theactivity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code for the Reporting ofExploration Results, Mineral Resources and Ore Reserves”. Mr. Coates consents to the inclusion of this report of the matters based on hisobservations in the form and context in which it appears. Mr Coates has a B.Sc. Geology, MBA in Technology Management, and MSc in MineralEconomics. He has 13 years iron ore experience.

About the Steeple Hill Iron Project - S H I PThe S H I P was discovered by FairStar in July 2008. The project is located in Western Australia’s eastern goldfields, 110 kmeast of Kalgoorlie.

FairStar has undertaken comprehensive exploration programs at the project to confirm its potential to host a significant irondeposit. These programs have included a total of 4,204 m of drilling across 450 holes, and also a trenching program of 145trenches. The Company aims to fast track the development of the project into a significant export-grade iron (hematite) miningoperation. The next phase of exploration will be a further drill program of up to 100 holes to expand the JORC Resource anddefine the extent of mineralisation at the project.

The project is 100% owned by FairStar and situated in close proximity to major rail infrastructure, with the Trans AustralianRailway passing 23 km south of the project area. The Company has previously stated that it is of the view that the project areahas the potential to produce Direct Shipping Ore (DSO).

About FairStar ResourcesFairStar Resources is a Perth-based multi-commodity exploration company which listed on the ASX in October 2006. TheCompany has direct and indirect project interests in Iron, Gold, Base metals, and Uranium.

The Company currently has five core projects; Lindsays Dam (S H I P) Kurnalpi-Randalls gold project, Spinifex Well gold projectand other base metals and gold projects in the Eastern Goldfields of Western Australia, and the Mt Padbury uranium projectnear Meekatharra in the Murchison region of WA.

Initial rock chip sampling July 2008 Hematite on ground

Geological team at hematite outcrop Heritage Survey

Heritage Team Fugro Plane - Magnetic Survey

Dramatic Magnetic Result

Steeple Hill 2

Steeple Hill

STEEPLEHILL

SYNCLINE

HEMATITERICH

DETRITALGRAVELS

November - December 2009 - drilling

S H I P - Discovery to Resource

Trenching January - February 2010 Iron rich gravel from trenching

Walls of trenches showing iron gravel Environmental survey being conducted by Coffey team

Intensive drilling to confirm resource in accordance withJORC code

Samples being processed by Nagrom July 2010

S H I P - Discovery to Resource

JORC Mineral Resource Estimate Sep 2010

17 Million Tonnes @ 58.40% Fe

AMC Consultants Pty Ltd ABN 58 008 129 164

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www.amcconsultants.com.au

7 September 2010

Mr Kevin Robertson Managing Director Fairstar Resources Ltd PO Box 1520 OSBORNE PARK WA 6916 Dear Mr Robertson

STEEPLE HILL HEMATITIC GRAVEL ALLUVIAL IRON PROJECT MINERAL RESOURCE ESTIMATE

AMC REFERENCE NUMBER: 210061

AMC Consultants Pty Ltd (AMC) has completed a Mineral Resource estimate of the Steeple Hill hematite gravel deposit for Fairstar Resources Ltd (Fairstar) as summarized below. The Mineral Resource estimated is listed in Table 1 at a 10% recovery cut-off. The Mineral Resource estimate has been classified and reported in accordance with the JORC Code1.

Table 1 Steeple Hill Hematitic Gravel Mineral Resource Estimate at 10% Recovery Cut-off

Geological Domain

Tonnes

(Mt)

Concentrate Recovery

(%)

Fe*

(%)

SiO2*

(%)

Al2O3 *

(%)

P*

(%)

MnO

(%)

LOI

(%)

Surface Layer 24 12 59 6.7 6.0 0.02 0.01 0.06

Gravel 57 22 58 7.2 6.0 0.01 0.01 0.06

Alluvial Clay 13 16 58 7.3 5.8 0.01 0.02 0.10

Total Indicated Resource 93# 18 58 7.1 6.0 0.01 0.01 0.07

* Concentrate grade # Totals may not appear to be the sum of data due to rounding

The Steeple Hill hematitic gravel deposit is located about 110 km east of Kalgoorlie in Western Australia. Hematitic gravel sourced from adjacent Archaean banded iron formation has accumulated in alluvial channels.

1 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code 2004 Edition, Effective December 2004, Prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC).

FAIRSTAR RESOURCES LTD Fairstar Mineral Resource Estimate

AMC210061_ltr_100907 2

Data Collection

Air core drilling of 450 holes has tested the alluvial gravel over an area of about 11 km long and 1.4 km wide. Hematitic gravel and gravel-bearing alluvial clays have been intersected in drillholes from surface to 9m below surface with an average thickness of 3m. A surface layer of soil, transported overburden and disturbed gravel reaches a depth of up to one metre.

Drilling has been completed at a nominal 200m x 200m spacing with some lines infilled to 100m spacing. Drillhole collars were surveyed by differential global positioning system. No downhole surveys were completed but significant deviation is unlikely in the shallow vertical drillholes.

Geological and sample information from 146 trenches were used for validation of the interpretation but the trench data were not used directly in the estimation of recovery or grades. Nine drillholes were twinned by closely-spaced holes to examine short range variability.

All drillholes were vertical and most sampling is at one metre intervals. The entire sample was bagged at the drill site for processing at a commercial laboratory. The sample processing protocol is outlined below.

• Weigh the sample.

• Screen the sample at 6 mm.

• Crush the oversize fraction to less than 3 mm, and add back into the <6 mm fraction.

• Wet screen at 0.6 mm, and save both the <0.6 mm and >0.6 mm fractions.

• Attrition the >0.6 mm fraction to remove adhering clay and surface alumina.

• Dry and weigh the clean >0.6 mm fraction.

• Pass the >6 mm fraction through dense media separation (DMS) at density of 3.4 t/m3.

• Dry and weigh the underflow fraction.

• Split out a sub-sample for X-ray fluorescence (XRF) analysis.

• Report dry underflow mass as percentage of the total sample.

XRF analyses were completed for iron, silica, alumina, phosphorus and other trace elements and oxides.

A total of 48 density determinations were completed by inserting a tube of known volume into in situ alluvial material exposed in trenches and weighing the sample. Densities were determined separately for each material type (Surface Layer, Gravel and Alluvial Clays). Duplicate determinations at an umpire laboratory that included sample drying indicated negligible contained moisture.

FAIRSTAR RESOURCES LTD Fairstar Mineral Resource Estimate

AMC210061_ltr_100907 3

Quality control protocols were in place as outlined below:

• Repeat analyses at the primary laboratory.

• Repeat analyses at an umpire laboratory.

• Duplicate sample preparation and analysis at an umpire laboratory.

• Duplicate density determinations at an umpire laboratory.

Quality control results show acceptable precision in recovery determination, analyses and density determination.

Fairstar provided AMC with digital topographic contours which AMC modified over the drilled area by incorporating the drillhole collars.

Mineral Resource Estimation

The Steeple Hill Mineral Resource estimate is based on the interpretation of the contacts between hematitic gravel, gravel-bearing alluvial clays and weathered bedrock. The top one metre in all drillholes has been interpreted as the Surface Layer. Digital terrain models (DTMs) of the geological contacts were developed from the downhole intersections. The DTMs were extended 100m beyond the limit of drilling.

The Mineral Resource estimate was completed using Datamine mining industry software. A volume model was developed with a 100m east x 100m north parent cell split to 25m x 25m to delineate the near-horizontal geological boundaries and topography. The volume model formed a single cell across the thickness of each geological domain.

Assays were composited across the geological domains such that each drillhole had a single composite for each geological domain that it intersected.

Estimation of concentrate recovery and concentrate iron, silica, alumina, phosphorus and manganese oxide grades were completed using ordinary kriging with parameters derived from a study of variography. The average of the density determinations within each geological domain were assigned to the model.

The model was validated by statistical and visual comparison of data and estimated grades and by alternate estimates.

AMC considers that the data spacing, data quality and geological interpretation are appropriate for classification of the estimate as Indicated Mineral Resource. AMC considers that this classification is appropriate when the estimate is considered in its totality. On a local scale the thickness of Gravel and gravel-bearing Alluvial Clay and the recovery of gravel from those sediments could be highly variable.

FAIRSTAR RESOURCES LTD Fairstar Mineral Resource Estimate

AMC210061_ltr_100907 4

JORC Code Compliance

The information in this report that relates to Mineral Resources is based on information compiled under the supervision of Sharron Sylvester, who is a full-time employee of AMC Consultants Pty Ltd and is a Member of the Australian Institute of Geoscientists. Sharron Sylvester has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Sharron Sylvester consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.

Yours sincerely

Dean Carville Principal Geologist