13 July 2007

Manager Announcements Companies Announcements Office Australian Stock Exchange Limited Level 4/20 Bridge Street SYDNEY NSW 2000

Dear Sir/Madam

SHORT FORM PROSPECTUS TO RAISE $6 MILLION

Please find attached short form prospectus and letter to shareholders in respect of a capital raising being undertaken by the Company for the offer of up to 5,000,000 shares at a price of $1.20 per share to raise $6,000,000.

The share offer is available to existing shareholders and the general public.

Yours sincerely

Anthony Ailakis Chairman

13 July 2007

Dear Shareholder

SHARE OFFER

On behalf of the directors of Redstone Resources Limited (Redstone or the Company), I am pleased to invite you to participate in Redstone's first share offering (Offer) since the successful listing of the company on the Australian Stock Exchange (ASX) in August 2006.

Although this Offer is open to the public, in recognition of the continued support for the Company from our existing shareholders, we propose to give priority allocation to those shareholders on Redstone's share register as at 5.00pm (WST time) on 12 July 2007 (Record Date).

The Company is seeking to raise a minimum of $3.0M with acceptance of over subscriptions up to a total of $6.0M.

You will have the opportunity to subscribe for a minimum of 2,500 shares at a price of $1.20 per share although you may apply for more shares if you wish.

The issue price of $1.20 per share, represents a discount of approximately 20% to the volume weighted average price (VWAP) of Redstone's shares on the ASX over the 10 trading days preceding this Offer.

ACHIEVEMENTS SINCE ASX LISTING

Since Redstone's successful listing on the ASX in August of 2006, the Company has achieved a number of important objectives. These include the following:

• Discovery of a major Copper-Nickel-Platinum group elements (Cu-Ni-PGE) mineralised system named Halleys prospect in the Blackstone Range project, West Musgrave Region in Western Australia.

Drilling results have identified a stand-out prospect at Halleys. This is a significant discovery of a major copper/platinum group elements/nickel mineralised system which preliminary shallow drilling has defined as a pipelike mineralised body up to 450 metres in diameter, and 250 metres thick. This large mineralised system is likely to be part of a much larger and richer system nearby. These results have confirmed the high prospectivity for the discovery of a world class mineral deposit.

Recently completed RAB drilling has demonstrated the platinum reef potential of the entire Saturn Complex, highlighting a 2.5 km long platinum group elements anomaly along the southern margin which is open to the north-west. This is part of a 9.5 km anomaly earlier identified by surface geochemistry.
Targeting and application for eight nickel properties and three iron-ore properties in Brazil which comprise 5 exploration projects. Redstone has an advanced geological understanding and extensive networks to acquire prospective projects for exploration in the Central Andes and Amazon Craton regions in South America.
Comprehensive sampling of over 1,300 sq km (representing approximately 15% of the Company's total Australian land holding) has been conducted in the West Musgrave Region. This has identified numerous mineralised areas throughout our projects, several of which have been followed up with more intensive sampling and preliminary drilling. The results of much of this drilling are still pending analysis and interpretation.
Acquisition of rights to earn up to a 75% interest in a prospective new project in the West Musgrave, through a farm-in with Discovery Metals Limited.
Acquisition of new exploration licence applications in the West Musgrave over ground with stand-out iron-oxide copper gold (IOCG) targets which were identified by the Company's detailed analysis of its high resolution aeromagnetic survey data.
Establishment of a close working relationship with traditional owners of our West Musgrave projects. This has enabled the Company to perform ground clearances quickly and efficiently, so as to allow the effective implementation of our exploration programme. We have now cleared more land for exploration than any other company in the region, paving the way for the Company's future plans.

PURPOSE OF THE OFFER

The purpose of this offer is to provide Redstone with funding to consolidate the above successes. Specifically this Offer is intended to fund:

Deep drilling of the highly prospective Halleys discovery outlined above;
Drilling and continued exploration of the Company's other projects in the West Musgrave region;
Exploration of the Company's nickel and iron-ore targets in Brazil, and acquisition of selected properties in the central Andean region of South America.

KEY DATES

If you wish to participate in this offer, please read the attached Short Form Prospectus which provides further detail on the company's activities and achievements, outlines the terms and conditions of the Offer and how to apply. If you have any queries regarding this Offer, please contact either Stephen Fountain or Miranda Conti during office hours.

•	Record date	12 July 2007
•	Closing date of offer	31 July 2007
•	Quotation of new shares on the ASX	3 August 2007

Note: these dates are indicative only, and may be varied by the Company without notice to shareholders

SUMMARY

Redstone is well on the way to achieving its primary objective to rapidly enhance the value of its existing assets and build shareholder wealth through the discovery of world class mineral deposits and the acquisition of new projects which have been identified by the Company's geological targeting team.

We look forward to advising you of future developments as Redstone embarks on an intensive drilling and exploration program of its Western Australian assets, and the implementation of an acquisition and growth strategy for its South American operations.

On behalf of the directors of Redstone I invite you to subscribe for shares in the Company and look forward to your participation.

Yours sincerely,

Anthony Ailakis Chairman

Investor Enquiries:

PO Box 8646, Perth Business Centre WA 6849

SHORT FORM PROSPECTUS

For the offer of up to 5,000,000 New Shares at an issue price of $1.20 per New Share to raise up to $6,000,000.

IMPORTANT NOTICE

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act 2001.

This Prospectus does not of itself contain all the information that is generally required to be set out in a document of this type but refers to other documents the information of which is deemed to be incorporated in this Prospectus.

An Investment in the New Shares offered by this Prospectus should be considered speculative.

You should consult your stockbroker, accountant or other professional advisor before accepting this offer.

Redstone drilling programme in the West Musgrave region in May 2007

1.	Important Notice1
2.	Corporate Directory3
3.	Timetable and Important Dates4
4.	Details of the Offer5
5.	Information Deemed to be incorporated in this Prospectus9
6.	Company Overview14
7.	Effect of the Issue on the Company26
8.	Rights Attaching to New Shares29
9.	Additional Information32
10.	Consents34
11.	Authority and Consent of Directors35
12.	Glossary36

1. Important Notice

This Prospectus is dated 12 July 2007.

A copy of this Prospectus was lodged with the ASIC on 13 July 2007. Neither ASIC nor ASX takes any responsibility for the contents of this Prospectus.

No New Shares will be issued on the basis of this Prospectus later than thirteen (13) months after the date of this Prospectus. Application will be made within seven (7) days after the date of this Prospectus for permission for the New Shares offered by this Prospectus to be listed for Quotation.

Applicants should read this document in its entirety and, if in any doubt, consult with their professional advisors before deciding whether to apply for New Shares. There are risks associated with an investment in Redstone Resources Limited and the New Shares offered under this Prospectus must be regarded as a speculative investment. The New Shares offered under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or the future value of the New Shares.

Certain abbreviations and other defined terms are used throughout this Prospectus. Defined terms are generally identifiable by the use of an upper case first letter. Details of the definitions and abbreviations used are set out in section 12 of this Prospectus.

Short Form Prospectus

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act 2001. This means that this Prospectus does not of itself contain all the information that is generally required to be set out in a document of this type. Rather, the Prospectus incorporates by reference information contained in a document that has been lodged with the ASIC.

This Prospectus refers to the disclosure document lodged by the Company with the ASIC on 8 June 2006 for the offer of 22,000,000 Shares at an issue price of 25 cents each to raise a total of $5,500,000 (June 2006 Prospectus), the Annual Financial Report for the year ended 30 June 2006 (2006 Financial Report), the Consolidated Financial Report for the half-year ended 31 December 2006 (2006 Half-Year Financial Report), the Quarterly Activities Report and Quarterly Cash flow Report for the quarter ended 31 March 2007, the Quarterly Activities Report and Quarterly Cash flow Report for the quarter ended 31 December 2006, the Quarterly Activities Report and Quarterly Cash flow Report for the quarter ended 30 September 2006 (Quarterly Reports), and the ASX announcements referred to in section 5 of this Prospectus (ASX Announcements). In referring to the June 2006 Prospectus, the 2006 Financial Report, the Quarterly Reports and the ASX Announcements the Company:

(a) identifies the June 2006 Prospectus, the 2006 Financial Report, the 2006 Half-Year Financial Report, the Quarterly Reports and the ASX Announcements as being relevant to the offer of New Shares under this Prospectus and containing information that will provide investors and their professional advisors information to assist them in making an informed assessment of:
- (i) the rights and liabilities attaching to the New Shares;
- (ii) the capacity of the Company to issue the New Shares; and
- (iii) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company;
(b) refers investors and their professional advisors to section 5 of this Prospectus which summarises the information in the June 2006 Prospectus, the 2006 Financial Report, the 2006 Half-Year Financial Report, the Quarterly Reports and the ASX Announcements deemed to be incorporated in this Prospectus;
(c) informs investors and their professional advisors that they are able to obtain, free of charge, a copy of the June 2006 Prospectus, the 2006 Financial Report, the 2006 Half-Year Financial Report, the Quarterly Reports and the ASX Announcements by contacting the Company at its registered office during normal business hours during the Offer Period; and
(d) advises that the information in the June 2006 Prospectus, the 2006 Financial Report, the 2006 Half-Year Financial Report, the Quarterly Reports and the ASX Announcements will be primarily of interest to investors and their professional advisors or analysts.

Electronic Prospectus

A copy of this Prospectus can be downloaded from the website at www.redstone.com.au. Any person accessing the electronic version of the Prospectus within Australia or anywhere outside of Australia should note that this Prospectus does not constitute an offer of securities in any jurisdiction where, or to any person to whom, it would not be lawful to issue the Prospectus or make the Offer. It is the responsibility of any investor outside Australia to ensure compliance with all laws of any country relevant to their application, and any such applicant should consult their professional advisors as to whether any government or other consents are required or whether any formalities need to be observed to enable them to apply for and be allotted any securities.

The Corporations Act prohibits any person passing on to another person an Application Form unless it is attached to a hard copy of the Prospectus or it accompanies the complete and unaltered version of this Prospectus. Any person may obtain a copy of this Prospectus free of charge by contacting the Company.

2. Corporate Directory

DIRECTORS

Anthony Alexander Ailakis Chairman

Juan Carlos Olivero Non-Executive Director

Stephen George Fountain Executive Director and General Manager

COMPANY SECRETARY Miranda Conti

CHIEF GEOLOGICAL ADVISOR Professor David Ian Groves

REGISTERED OFFICE

Suite 3, 110-116 East Parade EAST PERTH WA 6004 Telephone: (08) 9328 2552 Facsimile: (08) 9328 2660

WEBSITE

www.redstone.com.au

SOLICITORS TO THE COMPANY

DLA Phillips Fox Level 32 44 St Georges Terrace PERTH WA 6000

AUDITORS

Butler Settineri (Audit) Pty Ltd Level 1, 35-37 Havelock Street WEST PERTH WA 6005

SHARE REGISTRY

Computershare Investor Services Pty Ltd* Level 2, Reserve Bank Building 45 St Georges Terrace PERTH WA 6000 Telephone: 1300 557 010 Facsimile: (08) 9323 2033

*This entity has not been involved in the preparation of this Prospectus and has not consented to being named in this Prospectus. Their name is included for information purposes only.

STOCK EXCHANGE LISTING

Australian Stock Exchange Code: RDS

Event	Date
Prospectus lodged with ASIC and ASX	Friday 13 July 2007
Opening date	Friday 13 July 2007
Closing Date	Tuesday 31 July 2007

The above dates are indicative only and may vary at the Directors' discretion, subject to the requirements of the ASX Listing Rules and the Corporations Act. The Company reserves the right to close the Offer earlier than the stated Closing Date or to extend the Closing Date. As such the date the New Shares are expected to commence trading on the ASX may vary with any change in the Closing Date.

4. Details of the Offer

4.1 Purpose of the Offer

The funds raised by the Offer of up to $6,000,000 will be used for the following purposes*:*

(a) Australia West Musgrave Projects
- i) To fast track further exploration and complete follow-up deep RC and diamond drilling on the Blackstone Range project as a result of exceptional exploration and preliminary shallow drilling results. See section 6.2(a) of this Prospectus for more details of the results from Halleys.

The anomalously large thickness of copper-PGE bearing sulphides intersected by the drilling is very promising. This indicates a regionally extensive sulphide system that is very likely to contain economic metal concentrations, particularly more nickel-rich concentrations along the same mineralized zone to the north-west. To follow this up will require an extensive and deeper drilling program along the mineralized trend.

ii) Reconnaissance drilling over copper-PGE anomalies at Titan copper anomalies at Tollu Project, and copper-nickel anomalies at Helena, has also produced intersections with visible sulphides and extensive follow-up RAB and RC drilling is required. See section 6.2(a) of this Prospectus for more details.
iii) To explore the recently announced Discovery Metals Ltd farm-in properties. These tenements have potential for Ni-Cu-PGE sulphide and nickel laterite deposits. Several high-quality electromagnetic (EM) targets have been defined for follow-up exploration, but only one has so far been subjected to shallow reconnaissance drilling, yielding anomalous PGE values. Reconnaissance geochemical sampling has located a 1.2 km long copper anomaly at Apollo, requiring angle drilling.
iv) To explore the additional ground that the Company has applied for since listing (over 2500km2 has been added to the portfolio of projects) as a result of flying a high resolution aeromagnetic survey. This ground was targeted using advanced geological models developed within Redstone. The ground has excellent potential for both Nicopper-PGE sulphide deposits and for IOCG (iron-oxide copper-gold) deposits of Olympic Dam type. No ground work has so far been carried out on these high-priority targets for which access is currently being negotiated.
(b) South America

To conduct exploration acquire ground and conduct Joint Ventures.

Redstone has selected a number of regions for exploration for a variety of commodities in South America, and has identified two high priority regions: the Precambrian Amazon Craton and the Central Andes.

Redstone is a world leader in the understanding of the Amazon Craton evolution and is applying its knowledge, unique database and extensive network to acquire ground for exploration. Redstone has applied for and is the holder of a total of 11 exploration licenses in this region. See section 6.2(c) of this Prospectus.

4.2 The Offer

The Company is offering up to 5,000,000 New Shares at an issue price of $1.20 each to raise approximately $6,000,000 (before the costs of the Offer).

The New Shares offered under this Prospectus will rank equally with the existing fully paid shares of the Company on issue.

4.3 Minimum Subscription

The minimum subscription is $3,000,000.

No New Shares will be allotted by the Company until the Company receives Applications to meet the minimum subscription. Should the minimum subscription not be reached within four months from the date of this Prospectus, Redstone will either repay the Application monies to Applicants or issue a supplementary or replacement prospectus and allow Applicants one month to withdraw their Applications and be repaid their Application monies.

4.4 Oversubscriptions

Oversubscriptions will be accepted up to $6,000,000.

4.5 Action required to Accept

If you are requested by the Company and wish to make an application, you must complete the Application Form attached to this Prospectus.

Application Money must be paid in full at the issue price of $1.20 per New Share applied for. Completed Application Forms and accompanying cheques must be mailed or delivered to:

Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St Georges Terrace Perth WA 6000

by no later than 5.00pm WST on Tuesday 31 July 2007 or such earlier date as may be decided by the Directors.

Cheques and drafts should be made payable to "Redstone Resources Ltd" and crossed "Not Negotiable".

Pending the allotment and issue of New Shares or payment of refunds pursuant to this Prospectus, all Application Money will be held by the Company on trust for the Applicants in a separate bank account as required by the Corporations Act. No interest will be paid on refunded amounts.

4.6 Underwriting

This Offer is not underwritten.

4.7 Allotment

The New Shares will be allotted and issued as soon as practicable after the Closing Date.

Statements of holding for the New Shares will be mailed as soon as possible after the Closing Date.

The Directors reserve the right to reject any Application for New Shares under the Offer and to allot a lesser number of New Shares than an Applicant has applied for. Where the number of New Shares issued is less than the number of New Shares applied for, or no allotment is made, surplus Application monies will be refunded to Applicants without any interest as soon as possible after the Closing Date.

No New Shares will be allotted and issued on the basis of this Prospectus later than thirteen (13) months after the date of this Prospectus.

4.8 ASX Quotation

Application for Quotation of the New Shares by the ASX will be made by the Company within seven (7) days of the date of this Prospectus.

If the ASX does not grant permission for the New Shares offered under this Prospectus to be admitted to Quotation within 3 months after the date of this Prospectus, or such longer period as permitted under the Corporations Act, none of the New Shares offered by this Prospectus will be allotted and issued. In that circumstance all Applications will be dealt with in accordance with the Corporations Act.

The fact that the New Shares may be admitted to Quotation is not to be taken in any way as an indication of the merits of the Company or the New Shares now offered for subscription.

4.9 Overseas Shareholders

Shareholders resident outside Australia should consult their professional advisors as to whether any governmental or other consents are required, or other formalities need to be observed to enable them to accept or deal with their entitlements.

This Prospectus does not constitute an offer or invitation in any place in which or to any person whom it would not be lawful to make such an offer or invitation. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

4.10 CHESS

The Company participates in the Clearing House Electronic Subregister System ("CHESS") operated by ASTC, which is a wholly owned subsidiary of the ASX, in accordance with the Listing Rules and the ASTC Settlement Rules.

Under CHESS, the Company does not issue certificates to Shareholders. The Company operates an electronic issuer sponsored sub-register and an electronic CHESS sub-register, allowing Shares to be traded electronically. Shareholders receive a notice advising them of the number of Shares allocated to them and their holder identification number for holdings registered on the CHESS sub-register, or security holder reference number in the case of holdings registered on the issuer sponsored sub-register.

A holding statement is provided to Shareholders at the end of any subsequent month during which there has been a change in their shareholding. Shareholders can request additional holding statements at any time however a charge may be incurred.

4.11 Risks

Prospective investors should be aware that there are a number of risks involved in subscribing for New Shares the subject of this Prospectus. The major risks are set out in section 10 of the June 2006 Prospectus (which is summarised in 5.2(h) of this Prospectus). There are some additional risks which have arisen as a result of the Company's activities since listing on the ASX which are detailed in section 6.4 of this Prospectus.

4.12 Enquiries

Any questions concerning the Offer should be directed to the Company Secretary on (08) 9328 2552 or by e-mail at [email protected].

5. Information Deemed to be incorporated in this Prospectus

5.1 Short Form Prospectus

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act. This means that this Prospectus does not of itself contain all the information that is generally required to be set out in a document of this type, however it incorporates by reference information contained in a document that has been lodged with the ASIC.

The information to be incorporated by reference into this Prospectus is summarised below in sections 5.2 and 5.3 and will primarily be of interest to investors and their professional advisors or analysts.

The Company informs investors and their professional advisors that they are able to obtain free of charge, a copy of the June 2006 Prospectus, the 2006 Financial Report, the 2006 Half-Year Financial Report, the Quarterly Reports and the ASX Announcements by contacting the Company at its registered office during normal business hours during the Offer Period or by searching the ASX's or ASIC's records in relation to the Company.

The sections referred to below are a reference to sections in the June 2006 Prospectus, the 2006 Financial Report, the 2006 Half-Year Financial Report, the Quarterly Reports and the ASX Announcements (as the case may be) of the Company.

5.2 June 2006 Prospectus

The following sections and parts of the June 2006 Prospectus are referred to and are taken by section 712(3) of the Corporations Act to be included in this Prospectus.

The sections referred to below are sections of the June 2006 Prospectus.

(a) Section 2 – Details of the Offer

This section details aspects of the offer by the June 2006 Prospectus including minimum subscriptions and oversubscriptions, the purpose of the offer, the application for listing on the ASX and the Company's participation in CHESS.

(b) Section 3 and 4 – Director's Profiles and Technical Team

Section 3 provides details of the Directors of the Company. Section 4 provides background information on the Company's technical team, profiles of the Company's team of geologists and the Company's strategy.

(c) Section 5 – Company and Project Overview

Section 5 provides background information on the Company and the industry in which it operates. It also provides details of the Company's West Musgrave Projects, the Musgrave work program and information concerning the Company's proposed utilisation and expenditure of funds raised under the offer set out in the June 2006 Prospectus.

(d) Section 6 – Independent Consulting Geologist's Report

Section 6 consists of the independent consulting geologist's report prepared by SRK Consulting. The report describes in detail the geological setting, exploration history and feasibility of the Company's six projects within the Musgrave Block in Western Australia. It also sets out details of proposed budget and exploration strategies of the Company in relation to the projects.

(e) Section 7 – Investigating Accountant's Report

This comprises the Investigating Accountant's Report prepared by Butler Settineri (Audit) Pty Ltd, dated 7 June 2006. The report was included in the June 2006 Prospectus to assist investors and their financial advisors in making an assessment of the financial position of the Company.

The Independent Accountant's Report contains the audited financial statements and the unaudited pro forma financial statements as at 31 March 2006 for the period then ended reflecting the position of the Company on the basis that various transactions, including the issue of all the Shares offered under the June 2006 Prospectus, had been completed.

(f) Section 8 – Solicitor's Report on the Tenements

Section 8 consists of a report prepared by Salter Power dated 7 June 2006, on the Western Australian mining tenements and applications in respect of which the Company and its wholly owned subsidiary, Allhawk Nominees Pty Ltd (Allhawk), have an interest. The report details the searches conducted into the tenements, native title issues and significant information about the tenements including location and expenditure requirements. The report is made as at 7 June 2006 for the purposes of the June 2006 Prospectus.

(g) Section 9 – Material Contracts

Section 9 contains summaries of contracts entered into by the Company identified as material and relevant to investors. The contracts summarised are:

(i) a share sale agreement between the Company and David Bailey as trustee for the Bailex Trust to acquire all the issued shares in Westmin Exploration Pty Ltd;
(ii) a Farm-in agreement with Giles Exploration Pty Ltd, Resources Mining Corporation Ltd, Westmin Exploration Pty Ltd and Rivergold Exploration Pty Ltd on tenements E69/2106, E69/2107, E69/2108 and E69/3209;
(iii) an Option Agreement with Broadlake Holdings Pty Ltd granting the Company an option to purchase exploration licence 69/1386 on certain terms and conditions;
(iv) a Royalty Deed between Allhawk and North Eastern Mining Services Pty Ltd (NEMS) whereby Allhawk granted NEMS a royalty over mineral production from exploration licences 69/1508, 69/1528 and 69/1537 and a Deed of Release, releasing Allhawk from its obligations under the Royalty Deed effective 12 March 2006 on certain terms and conditions;
(v) an access agreement between the Company, the Ngaanyatjarra Land Council and Adrian Young for the use of the land subject to tenement E69/1629;
(vi) an access agreement between Allhawk, the Ngaanyatjarra Land Council and Stanley Mervyn for the use of the land subject to tenements E69/1507, E69/1527 and E69/1528;
(vii) an access agreement between Rivergold Exploration Pty Ltd, Ngaanyatjarra Land Council and Yarnangu Ngaanyatjarraku Parna (Aboriginal Corporation) for the use of the land subject to tenements E69/2108 and E69/2109; and
(viii) an agreement with Insight Geology Pty Ltd for services as Exploration Manager to the Company for a two year period commencing 1 January 2006.

(h) Section 10 – Risks

Section 10 identifies the areas the Directors regard as the major risks associated with an investment in the Company, including general investment risks, some specific risks associated with an investment in the Company as well as general risks relating to the business of mineral exploration and development.

(i) Section 11 – Additional Information

Section 11 sets out additional information required to be included in the June 2006 Prospectus including:

(i) Corporate Governance and corporate governance policies;
(ii) Composition of the Board and Corporate Structure;
(iii) Capital Structure;
(iv) Rights attaching to shares;
(v) Terms and conditions of the options including the employee share option plan;
(vi) Interests and remuneration of Directors;
(vii) Interest of promoters, experts and advisers;
(viii) Consents of parties named in the June 2006 Prospectus;
(ix) Dividend policy;
(x) Expenses of the June 2006 Prospectus; and
(xi) Director's responsibility statement and consent.

5.3 The 2006 Financial Report, the 2006 Half-Year Financial Report, the Quarterly Reports and ASX Announcements

The following documents are referred to and are taken by section 712(3) of the Corporations Act to be included in this Prospectus:

(a) Financial Report for the half-year ended 31 December 2006;
(b) 2006 Financial Report for the year ended 30 June 2006;
(c) the Quarterly Activities Report and Quarterly Cash flow Report for the quarter ended 30 September 2006, the Quarterly Activities Report and Quarterly Cash flow Report for the quarter ended 31 December 2006 and the Quarterly Activities Report and Quarterly Cash flow Report for the quarter ended 31 March 2007; and
(d) all other ASX announcements made by the Company as set out in the table below:

Description	Date
Appendix 3B – Option Issue	03/07/2007
Additional Results increase Halleys Cu-PGE-Ni Prospect	15/06/2007
Cu-Ni-PGE Mineralised Zone Intersected at the Saturn Complex	05/06/2007
Final Director's Interest Notice	11/05/2007
Appendix 3B	04/05/2007
Shares & Options being released from Escrow	04/05/2007
Initial Director's Interest Notice	04/05/2007
Final Director's Interest Notice	04/05/2007
Third Quarter Activities & Cash flow Report	30/04/2007
Retirement of Chairman and Appointment of Director	30/04/2007
Appendix 3B	03/04/2007
Redstone to commence RAB Drilling	29/03/2007
Half Year Accounts	16/03/2007
Second quarter activities & cash flow reports	24/01/2007
JV into Ni-Cu-PGE territory in the West Musgrave	24/01/2007
Results of Annual General Meeting	21/12/2006
Chairman's Address and AGM presentation	21/12/2006
EM Results Enhance Redstone Halleys Ni-Cu-PGE Target	20/12/2006
Trading Halt	19/12/2006
Notice of Annual General Meeting	16/11/2006
2006 Annual Financial Report	16/11/2006
First Quarter Activities & Cash flow Report	31/10/2006
Extension of time for holding an AGM	27/10/2006
Change of Director's Interest Notice	14/09/2006
Change of Director's Interest Notice	24/08/2006
Change of Director's Interest Notice	17/08/2006
Change of Director's Interest Notice	16/08/2006
Response to ASX Query	10/08/2006
Initial Director's Interest Notice x 3	10/08/2006

Description	Date
Financial Report for the period from 01/07/05 to 31/03/06	02/08/2006
Financial Report for the Year Ended 30/06/05	02/08/2006
Constitution	02/08/2006
Application for admission to the Official List	02/08/2006
Westmin Share Sale & Exercise of Broadlake Option	02/08/2006
Options issued to North Eastern Mining Services	02/08/2006
Terms & Conditions of Options to Shareholders	02/08/2006
Terms & Conditions of Options to Shareholders as at 04/04/06	02/08/2006
Terms & Conditions of Options to NEMS	02/08/2006
Terms & Conditions of Class A & B Incentive Options	02/08/2006
Rules of 2006 Employee Option Plan	02/08/2006
Top 20 Shareholders	02/08/2006
Pro Form Financial Information Actual Proceeds of $5.5m	02/08/2006
Statement of Commitments	02/08/2006
Appendix 1A- ASX Listing application & agreement	02/08/2006
Distribution Schedule	02/08/2006
Pre-Quotation Disclosure	02/08/2006
Statement of Restricted Securities	02/08/2006
ASX Circular: Commencement of Official Quotation	01/08/2006
Admission to Official List	01/08/2006
Disclosure Document	26/06/2006

6. Company Overview

6.1 Overview and Reference to June 2006 Prospectus

A comprehensive overview of the Company is set out in the June 2006 Prospectus that was lodged with ASIC on 8 June 2006 for the initial public offering of up to 22,000,000 Shares at 25 cents each to raise up to $5,500,000. Persons considering subscribing for New Shares under this Prospectus should refer to section 5 of this Prospectus for a summary of the information contained in the June 2006 Prospectus deemed to be incorporated in this Prospectus.

As detailed in section 2 of the June 2006 Prospectus, the Company has proposed an exploration budget of $5,463,308 over 24 months on the six West Musgrave Region projects owned by the Company.

The actual manner in which the exploration expenditure is incurred may vary having regard to numerous factors, including the results of ongoing exploration activities and other matters as outlined in section 6 of the June 2006 Prospectus.

The Company was admitted to the Official List on 1 August 2006 with Quotation of its Shares commencing on 3 August 2006.

The Company now has 74,368,860 Shares and 17,850,000 Options on issue. Of the Shares on issue, 39,503,032 Shares issued to the original shareholders upon subdivision of their initial shareholding as at 7 April 2006 are subject to a 24 month escrow period from the date of listing. Seed capital contributed was converted to 12,865,828 ordinary shares as at 4 May 2006. Of these seed capital shares, 3,927,066 have been released from a 12 month escrow period and 980,762 are subject to a 24 month escrow from the date of listing.

The Options are issued on various terms further details of which are included in section 7.1 of this Prospectus. Full details of the 17,400,000 Options on issue as at the date of listing of the Company are set out in section 11.8 of the June 2006 Prospectus. None of the Options are listed on the ASX.

6.2 Circumstances or Matters Subsequent to the June 2006 Prospectus

(a) Australian Exploration Activities

Figure 1. Total magnetic intensity map of West Musgrave region showing Redstone's tenements and main targets for exploration (red dots). The tenements with perimeter in magenta are recent acquisitions from 2006 and 2007.

Since listing on the ASX, the Company has been conducting on-ground exploration in the West Musgrave Region. During the last 11 months, Redstone has completed seven access clearances with the traditional owners; sampling of over 9,000 geochemical samples over 7 tenements; two ground EM surveys; detailed aeromagnetic surveys across the southern part of the project; acquisition of over 2,500km2 of additional tenements; extensive geological mapping and geological studies; and over 13,000 metres of RAB and RC drilling.

This exploration has defined several sizable geochemical targets and many anomalies, the best of which is a coincident soil, gossan and EM anomaly at the Halleys prospect, located within a major Ni-Cu-PGE system over a 35km long strike. Definition of such drill targets in such a short period clearly demonstrates the potential of the West Musgrave Region and the ability of Redstone's geological team to effectively and efficiently apply its geological models.

Halleys (part of Blackstone Range Project)

Slimline RC drilling under Halleys gossan outcrop (BSC001 to BSC005) intersected a mineralized zone up to 74m thick, in gabbroic rocks of the Saturn Complex layered intrusion. Significant RC intercepts include:

74m @ 0.29% Cu, 0.08% Ni, and 0.17g/t Pt+Pd+Au (from 6 to 80m, open at depth) with up to 2% disseminated chalcopyrite, including 20m @ 0.56% Cu, 0.14% Ni and 0.32g/t Pt+Pd+Au (BSC003);
9m @ 0.56% Cu, 0.11% Ni and 0.35g/t Pt+Pd+Au (BSC005); and
20m @ 0.56% Cu, 0.14% Ni and 0.32g/t Pt+Pd+Au from 16m (BSC003).

Peak values received in drilling include 1.1% Cu, 0.27% Ni, 1.2g/t Au, and 0.47g/t Pt+Pd+Au.

Results for the first 119 vertical RAB drill holes completed around the periphery of the gossan outcrop at Halleys include:

19m @ 0.21% Cu, 0.08% Ni and 0.13g/t Pt+Pd+Au (BSB0054 open at depth);
28m @ 0.16% Cu, 0.11% Ni and 0.19g/t Pt+Pd+Au (BSB0070 open at depth); and
3m @ 0.20% Cu, 0.20% Ni and 0.49g/t Pt+Pd+Au (BSB0058 open at depth).

The mineralization defined to 70m below surface is open down dip (moderately dipping 20- 40° northeast dip) and down plunge. Geological interpretation, drilling and geochemical results have highlighted a pipe-like geometry to the mineralized body with a diameter of approximately 450m, and a true thickness of up to 250m. Significantly, RAB drilling has intersected higher grade nickel and Pt-Pd-Au at the bottom hole BSB0058, demonstrating the potential for higher grade nickel-PGEs at depth.

Drilling 400m to the northwest, into EM anomalies along strike of the Halleys outcrop, has intersected barren clay, with fresh bedrock intersected at 75m down hole. The EM anomalies represents deep weathering which may relate to preferential weathering of sulphide mineralization, but deeper RC or diamond drilling is required to test the 3D geometry of the mineralization.

Drilling at Titan has intersected thick sequences of copper and PGE anomalous gabbro, with results of up to 0.2% Cu from shallow RAB drill holes. Two RAB traverses to the north east of the Saturn Intrusion (1.6km apart) were conducted at Helena. The eastern line yielded a peak intercept in the bottom of a 4m hole, of 1m @ 0.18% Cu, 0.08%Ni and 0.11% Zn (BSB0457 – 3 to 4m) hosted in gabbro. PGE results are not yet available. This is extremely anomalous and further evaluation work and follow-up drilling will be conducted.

The results confirm Redstone's geological model that massive volumes of sulphide are present in the Saturn Complex and that the district is highly prospective for world-class Ni-Cu-PGE and PGE deposits. The copper-PGE mineralization so far drilled is likely to be only a small part of a much larger system nearby. RAB drilling of a 9.5km PGE geochemical anomaly has confirmed a 2.5km anomaly, which is open to the northwest and demonstrates the PGE reef potential of the entire Saturn Complex.

Extensive deeper drilling is planned for the remainder of this year to follow up the thick intercepts of mineralization, in order to test the down-dip and down-plunge position at Halleys and the Saturn Complex margin to the northwest for copper-PGE, nickel and PGE reef mineralization.

Apollo (part of Discovery Metals Ltd Project)

A significant new anomaly has been highlighted at Apollo on the Discovery Metals Ltd Joint Venture. Geochemical sampling using a handheld XRF Niton® highlighted peak rock chip values of 0.12% Cu and 80ppm As from a 1.2km long copper anomaly up to 200m wide at >300ppm Cu. This is one of the largest and highest tenor copper anomalies thus far defined on Redstone's ground in the Musgrave Block.

Mt Muir Project

Exploratory work on the Mt Muir project has defined five separate geochemical targets, some of which have recently been tested with broad spaced RAB drilling. Much of the project still requires first pass geochemical exploration. Based on mapping by Redstone, the area is proven to contain thick sequences of Giles Complex (prospective for Ni-Cu-PGE) and granites potentially prospective for IOCG type deposits. Highlights include:

A coincident PGE and gold anomaly in the west of the project with peak surface geochemical assays of 1g/t gold and 25ppb PGE;
Strong PGE anomalism of up to 70ppb PGE located during 1.6km x 400m spaced surface geochemical sampling; and
Multiple low order Ni-Cu-PGE anomalies associated with gabbroic host rocks.

Infill geochemical sampling and detailed mapping and rock chip sampling are being conducted at present, but the results from the RAB drilling are still pending.

Tollu Project

At the Tollu project, RC holes were drilled to test surface vein-related copper mineralization. Significant mineralization was intersected in several holes and preliminary results from the field-unit handheld XRF machine include:

17m @ 0.21% Cu from 32m open at depth (TLC001)
2m @ 2.82% Cu from 83m 5m from the end of hole (TLC003)
16m @ 0.55% Cu from 21m including 5m @ 0.94% Cu from 32m (TLC005).

The volume of stringer style mineralization surrounding high-grade copper rich veins at Tollu is encouraging.

Figure 2. Halleys prospect showing pipe-like geometry to mineralized area (grey)

Figure 3. Drill section at Halleys prospect showing drill holes and mineralized zones.

(b) South American Exploration

(i) Amazon Craton

Nickel

Redstone has targeted the Sunsás belt as the most important belt for nickel exploration in South America. The belt is of Grenvillian age (1,450-1,000 Ma) and is located in the western margin of the Amazon Craton, in the Brazil-Bolivia border region, and it includes a large amount of Grenvillian-age mafic-ultramafic intrusions. These intrusions have great potential for three styles of nickel deposits:

1. Nickel-laterite;
1. Voisey's Bay-type; and
1. Noril'sk-type.

Two giant deposits have already been discovered in this belt. They are Rincón Del Tigre (Noril'sk-type gold-PGE in Bolivia) and Morro-Sem-Boné (nickel-cobaltlaterite in Mato Grosso State).

Redstone has acquired eight projects in the Sunsás belt (applications for exploration licences) covering mafic-ultramafic complexes totalling 46,000 ha in the states of Rondônia and Mato Grosso in Brazil. We believe these carefully selected areas will provide Redstone with unique commercial opportunities.

The details of these tenements are as follows:

Application #	Area #	Name	Easting	Northing	Area (ha)	Type
886.253	1	Pimenteiras A	60.667 W	13.212 S	5,966	nickel-laterite
886.254	2	Pimenteiras B	60.948 W	13.405 S	5,096	nickel-laterite
886.255	3	Pimenteiras C	61.041 W	12.978 S	4,760	nickel-laterite
886.256	4	Pimenteiras D	61.305 W	13.340 S	8,911	nickel-laterite
886.257	5	Pimenteiras E	61.372 W	13.143 S	5,170	nickel-laterite
886.252	6	Pimenteiras F	60.193 W	13.793 S	3,104	nickel-laterite
866.280	7	Arinos	58.217 W	09.5185S	9,000	Voisey's Bay
886.193	8	Rio Branco	61.568 W	11.206 S	4,000	Voisey's Bay
Total	8				46,007	2

Table 2. Details of eight exploration applications for nickel in SW Amazon Craton

Iron

Three areas for iron exploration were recently selected in a Paleoproterozoic basin to the west of Carajás Province (Pará State-Brazil) and exploration licences were applied for with the Departamento Nacional de Produção Mineral of Brazil.

Table 3. Details of three exploration applications for iron ore in eastern Amazon Craton

Application #	Area #	Name	Easting	Northing	Area (ha)	Type
850411/2007	1	Pontal	53.1619 W	6.1301 S	9,780	Iron-itabirite
850412/2007	2	Bala A	53.6735 W	6.3234 S	10,000	Iron-itabirite
850413/2007	3	Bala B	53.5937 W	6.3339 S	7,700	Iron-itabirite
Total	3				27,480	1

• Coordinates are from the centre of the areas.

Figure 5. This map shows the location of Redstone's properties for nickel and iron ore exploration in Brazil and the selected zone of Central Andes for copper (gold-molybdenum) exploration.

Figure 6: Geological map of part of the Southwest Amazon Craton at the Brazil-Bolivia border zone showing the distribution of the two main types of mafic-ultramafic intrusions in relation to the main tectonic boundaries. Magenta circles enclose the intrusions selected for exploration.

(ii) Central Andes

Redstone has identified a number of high priority targets and opportunities in the Central Andean region of South America. Our company is very well positioned in this most prospective and under explored region. The Central Andes is the main source of copper in the world and is also a major source of other commodities such as gold, silver and molybdenum.

Compared with Chile, Peru and Bolivia, Argentina is the most under-explored country in the Central Andes in terms of mineral endowment. Redstone has a working relationship with SEGEMAR (Geological Survey of Argentina) in areas of geochronology and hafnium isotopes in Argentina. Dr. Santos of Redstone is the Brazilian contributor to the current metallogenic map of South America edited by Dr. Eduardo Zappettini, Director of SEGEMAR. We continue this co-operation with the full support of the Federal Ministry of Mines of Argentina and the Federal Minister, Mr. Jorge Mayoral.

Redstone has visited a number of regions and projects over the past twelve months, and combined with our generative/ conceptual targeting team, has selected the most prospective north-western part of Argentina (provinces of Catamarca, Salta and Jujuy) for immediate follow-up. These provinces host world-class deposits such as the Bajo de la Alumbrera (Xtrata), Agua Rica (Northern Orion, presently investing in excess of US$2,000 million), and many others. Redstone has an extensive provincial network that includes the Universities of Jujuy and Salta (recognized for their Geological Departments) as well as local industry experts and past and present members of provincial governments. A large number of projects are being evaluated for acquisition or Joint Venture after the planned field inspections in late August 2007.

Redstone has developed a new tectonic-stratigraphic model to target porphyry systems in the Central Andes. This model combined with our regional geological knowledge, contacts, data base and its integration into a Geographic Information System is creating new opportunities and vastly improving our chances of success.

Competent Persons Statement

The information contained in section 6.2 (a) and (b) of this Prospectus is based on information reviewed by Professor David Groves, a member of the Australian Institute of Geoscientists. Professor Groves has sufficient experience relevant to the style of mineralization under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves'. Professor Groves consents to the inclusion in this prospectus of the matters based on his information in the form and context in which it appears.

(c) Corporate

As announced to the ASX on 24 January 2007, the Company has entered into a Joint Venture agreement with Discovery Metals Ltd (Discovery) in the West Musgrave region, in relation to which the Company will farm into tenements E69/1640, E69/1641, E69/1642, E69/1663 and E69/1662. The 704km2 area covers a large volume of unexplored Giles Complex rocks, which are highly prospective for Ni-Cu-PGE sulphide mineralization and nickel-cobalt laterite deposits. Several high-quality EM targets have been defined in the tenements. The terms and conditions of this agreement are detailed further in section 6.3 of this Prospectus.

Redstone is also developing exploration targets in South America as part of its global targeting strategy, and has picked up a significant ground holding in Brazil. Further ground acquisition is anticipated in the near future.

The Company is negotiating with several major mining and exploration companies regarding the establishment of strategic alliances, Joint Ventures and global targeting strategies.

Other than as stated in this Prospectus, the Company is not aware of any material matter or circumstance that would impact on the contents of the June 2006 Prospectus or the activities and prospects of the Company and be relevant to assist investors or their professional advisors making an informed assessment of relevant matters.

6.3 Material Contracts

Section 9 of the June 2006 Prospectus which is referred to in section 5.2 of this Prospectus, sets out contracts to which the Company is a party which were considered by the Directors as being material to enable investors to make an informed assessment of the Shares being offered under that prospectus. Investors and their professional advisors are referred to that section of the June 2006 Prospectus in relation to material contracts.

The following are summaries of contracts which the Company has entered into since listing and which are considered to be material by the Directors:

(a) Discovery Metals Farmin and Joint Venture Agreement

On 24 January 2007, the Company entered into a farmin and Joint Venture agreement with Discovery in the West Musgrave region, in relation to which the Company will farm into tenements E69/1640, E69/1641, E69/1642, E69/1663 and E69/1662 (Discovery Metals farmin properties).

Under the agreement, the Company has committed to a minimum expenditure of $260,000 in return for which it can earn a 51% interest in the Discovery Metals farmin properties for the expenditure of $1,000,000, or a 75% interest for a total expenditure of $2,000,000. Thereafter Discovery can elect to contribute in order to maintain a 25% interest or dilute to a 10% interest. At a 10% interest, Discovery can elect to contribute to maintain a 10% interest or convert to a 2% net smelter royalty. As an alternative, Discovery granted the Company an option to purchase the Discovery Metals farmin properties until 30 April 2007 for a $190,000 cash payment and $300,000 in Redstone shares. The option was not exercised.

(b) Assignment and Assumption of Discovery Access Agreement

On 25 October 2005, Discovery, Ngaanyatjarra Land Council and Yarnangu Ngaanyatjarraku Parna (Aboriginal Corporation) entered into an agreement (Discovery Access Agreement) for the use of the land the subject of the Discovery Metals farmin properties (described below).

On 16 April 2007, Discovery assigned and Redstone accepted, all of Discovery's legal and beneficial rights, benefits obligations and liabilities under the Discovery Access Agreement.

(c) Discovery Access Agreement

The terms of the Discovery Access Agreement are substantially identical to the terms contained in the Redstone Access Agreement set out at 9.5 of the June 2006 Prospectus.

(d) Executive Employment Agreement with Mr Stephen George Fountain (Fountain)

On 24 April 2007, the Company entered into an executive employment agreement with Fountain appointing him as a General Manager and Executive Director for a term of 3 years commencing from 14 May 2007.

Remuneration payable under the Executive Employment Agreement is a base salary of $150,000 inclusive of directors' fees plus 10% superannuation. The base salary is subject to review on a six monthly basis. Fountain may be entitled to a bonus if there has been outstanding performance, including as reflected in the Company's share price or value, in a manner to be agreed in good faith between the Employee and the Company.

In addition, Fountain has been offered 750,000 Options to be granted subject to shareholder approval at the next annual general meeting and continuation of employment. The Options entitle Fountain to subscribe for one Share upon exercise of each Option. The Options have an exercise price of $1.40 per Share and will be exercisable at any time 12 months from the date of being granted and prior to the expiry date, being 5 years from the date of grant of the Options.

Either the Company or Fountain may terminate the agreement upon one week's notice during the first six months of service. The Company may terminate the agreement by no less than six month's written notice at any time if Fountain becomes incapacitated by illness or accident for an accumulated period of six months in any twelve month period. Termination may also occur immediately where certain circumstances exist, including misconduct which may detrimentally affect Redstone, wilful, persistent and material breach, unsound mind and any act of bankruptcy.

If either Fountain or the Company wish to terminate the agreement for any other reason, either party may give the other three months notice or payment of 3 months salary in lieu of notice.

6.4 Risks

In addition to the risk factors stated in the June 2006 Prospectus, set out below are risk factors to which the Company may be exposed:

(a) Funding

While the Directors believe the Company will have sufficient funds to fund its activities in the short to medium term, the Company is operating in a competitive industry. Depending on the Company's ability to generate income from its investments the Company may require further financing in addition to amounts raised in the Offer. There can be no assurance that the Company will not seek to exploit business opportunities of a kind that will require it to raise additional capital form equity or debt sources. There can be no assurance that the Company will be able to raise such capital on favourable terms or at all.

Any additional equity raising may dilute the interest of Shareholders and any debt financing, if available, may involve financial covenants which limit the Company's operations. If the Company is unable to obtain such additional capital, the Company may be required to reduce the scope of any expansion, which could adversely affect its business and financial condition.

7. Effect of the Issue on the Company

7.1 Effect of the Issue on the Capital Structure of the Company

Under the Offer, up to 5,000,000 New Shares are available for issue and will be issued if the Offer is fully subscribed.

Upon completion of the Offer the issued capital of the Company will comprise:

Shares	Number
Shares on issue at the date of this Prospectus	74,368,860
Offered pursuant to this Prospectus	5,000,000
Total Shares on issue at completion of Offer if fully subscribed	79,368,860

Options*	Number	ExercisePrice	Expiry Date
Class A Options	3,450,000	25 cents	31 December 2008
Class B Options	2,950,000	50 cents	31 December 2009
Options to vendorshareholders	8,000,000	25 cents	31 December 2009
Options to NEMS	3,000,000	25 cents	3 August 2009
Options to Dr.Richard Vielriecher	50,000	75 cents	30 March 2010
Options to Dr JoaoOrestes Santos	400,000	150 cents	29 June 2012
Total	17,850,000

*Full details of the terms and conditions of the Options on issue as at the date of listing are set out in section 11.8 of the June 2006 Prospectus.

Since listing of the Company, 450,000 Options have been granted and a further 750,000 have been offered to be granted to the following parties on the terms and conditions set out below.

No Options have been quoted on the ASX.

Options to Dr Richard Manfred Vielriecher

On 30 March 2007 the directors granted 50,000 Options to Dr. Richard Vielreicher entitling him to subscribe for one Share upon exercise of each Option. The Options have an exercise price of 75 cents per Share and are exercisable at any time 12 months from the date of grant and prior to the expiry date of 30 March 2010.

Options to Dr Joao Orestes Santos

On 29 June 2007 the directors granted 400,000 Options to Doctor Joao Orestes Santos entitling him to subscribe for one Share upon exercise of each Option. The Options have an exercise price of $1.50 per Share and are exercisable at any time 12 months from the date of grant and prior to the expiry date of 29 June 2012.

Options to Mr Stephen George Fountain

On 24 April 2007, pursuant to an executive employment agreement, the directors offered 750,000 Options to Mr Stephen George Fountain, to be granted upon shareholder approval at the next annual general meeting of members. If granted, these Options will entitle Mr Fountain to subscribe for one Share upon exercise of each Option. The Options have an exercise price of $1.40 per Share and will be exercisable at any time 12 months from the date of being offered and prior to the expiry date, being 5 years from the date of grant of the Options.

The proceeds from the issue of New Shares if the Offer is successful will be $6,000,000 before the expenses of the Offer of approximately $30,000. The Company intends to apply the funds as set out in section 4.1 of this Prospectus.

7.2 Pro Forma Consolidated Statement of Financial Position

The unaudited pro forma consolidated balance sheet has been prepared by adjusting the reviewed balance sheet as at 31 December 2006 which was included in the Company's halfyear financial report lodged with ASX on 16 March 2007 to reflect the financial effect of the following transactions if they had occurred on 31 December 2006 (based on the assumptions set out below):

(a) Net exploration and corporate expenditure of approximately $1,700,000 paid or incurred from 1 January 2007 to 30 June 2007; and

then it was further adjusted to reflect the financial effect of the Offer (based on further assumptions set out below):

(a) Issue of 5,000,000 Shares at an issue price of $1.20 each in accordance with this Prospectus, raising the maximum amount of $6,000,000; and
(b) The raising of funds by this Prospectus of $6,000,000 less estimated expenses of the Offer of approximately $30,000.

	Reviewed 31December 2006	Unaudited Pro forma31 December 2006Before Offer	Unaudited Pro forma31 December 2006After Offer
	$	$	$
CURRENT ASSETS
Cash and cash equivalents	3,121,483	1,534,885	7,504,885
Trade and other receivables	99,332	107,476	107,476
Other financial assets	61,012	18,125	18,125
TOTAL CURRENT ASSETS	3,281,827	1,660,486	7,630,486
NON-CURRENT ASSETS
Other – Exploration and evaluation
phases	2,926,672	4,115,117	4,115,117
Plant and Equipment	260,000	304,025	304,025
TOTAL NON-CURRENT ASSETS	3,186,672	4,419,142	4,419,142
TOTAL ASSETS	6,468,499	6,079,629	12,049,628
CURRENT LIABILITIES
Trade and other payables	315,475	357,958	357,958
Provisions	31,978	46,344	46,344
TOTAL CURRENT LIABILITIES	347,453	404,302	404,302
TOTAL LIABILITIES	347,453	404,302	404,302
NET ASSETS	6,121,046	5,675,326	11,645,326
EQUITY
Issued capital	7,254,903	7,254,903	13,224,903
Reserves	612,522	612,522	612,522
Accumulated Losses	(1,746,379)	(2,192,099)	(2,192,099)
TOTAL EQUITY	6,121,046	5,675,326	11,645,326

8. Rights Attaching to New Shares

8.1 Rights Attaching to New Shares

Full details of the rights attaching to Shares (including New Shares) are set out in the Company's Constitution a copy of which can be inspected, free of charge, at the Company's registered office during normal business hours.

The following is a broad summary of the rights, privileges and restrictions attaching to all Shares (including New Shares). This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders.

All New Shares issued pursuant to this Prospectus will from the time they are issued, rank pari passu with all the Company's existing Shares.

(a) Voting Rights

At a general meeting, on a show of hands, every ordinary Shareholder present in person has one vote. At the taking of a poll, every ordinary Shareholder present in person or by proxy, and whose Shares are fully paid, has one vote for each of his or her Shares. On a poll, the holder of a partly paid share has a fraction of a vote with respect to the Share. The fraction is equivalent to the proportion which the amount paid (not credited) bears to the total amount paid and payable (excluding amounts credited).

(b) General Meetings

Each ordinary Shareholder is entitled to receive notice of, attend and vote at general meetings of the Company and to receive all notices, financial statements and other documents required to be sent to Shareholders under the Constitution of the Company, the Corporations Act and the ASX Listing Rules.

(c) Liquidation Rights

Subject to any Shares that may in the future be issued with special or preferential rights (currently there are none), the surplus assets of the Company after winding-up will be divided among the members in proportion to the number of Shares held by them, irrespective of the amounts paid or credited as paid on the Shares.

However, a liquidator in a winding-up may, with the sanction of a special resolution of members, divide among the members the whole or any part of the property of the Company and determine how the division is to be carried out as between members of different classes.

(d) Transfer of Shares

Generally, all Shares in the Company are freely transferable subject to the procedural requirements of the Constitution, and to the provisions of the Corporations Act, the ASX Listing Rules and the ASTC Operating Rules. The Directors may decline to register an instrument of transfer received where the transfer is not in registrable form or where refusal is permitted under the ASX Listing Rules or the ASTC Operating Rules. If the Directors decline to register a transfer the Company must give reasons for the refusal. The Directors must decline to register a transfer where required by the Corporations Act, the ASX Listing Rules or the ASTC Operating Rules.

(e) Issue of Further Shares

Subject to the Company's constitution, the Corporations Act and the ASX Listing Rules, the Directors may issue, or grant options in respect of, Shares to such persons on such terms as they think fit. In particular, the Directors may issue preference shares, including redeemable preference shares, and may issue shares with preferred, deferred or special rights of restrictions in relation to dividends, voting, return of capital and participation in surplus on winding up.

(f) Variation of Rights

The Company may modify or vary the rights attaching to any class of Shares with the prior approval by a special resolution of the holders of Shares in that class at a meeting of those holders, or with the written consent of the holders of at least three-quarters of the issued Shares of that class.

(g) Dividend Rights

The Directors may pay to ordinary Shareholders any interim and final dividends as, in the Directors' judgment, the financial position of the Company justifies. The Directors may fix the amount, the record date for determining eligibility and the method of payment. All dividends must be paid to the ordinary Shareholders in proportion to the number and the amount paid on the Shares held.

(h) Alteration to the Constitution

The Company's constitution can only be amended by a special resolution passed by at least 75% of ordinary Shareholders present and voting at a general meeting. At least 28 days' notice of the intention to propose the special resolution must be given.

(i) Directors

The minimum number of Directors is three and the maximum is 14 unless resolved otherwise in general meeting. Currently, there are three Directors. Directors must retire on a rotational basis so that one-third of Directors retire at each annual general meeting. Any other Director who has been in office for three or more years must also retire. A retiring Director is eligible for re-election. The Directors may appoint a Director either in addition to existing Directors or to fill a casual vacancy, who then holds office until the next annual general meeting.

(j) Decisions of Directors

Questions arising at a meeting of Directors are decided by a majority of votes. Where the votes are equal on a proposed resolution the Chairman does not have a casting vote.

8.2 Options

Full details of the terms of the Options are set out in section 11.8 of the June 2006 Prospectus and in section 7.1 of this Prospectus.

9. Additional Information

9.1 Market Prices of Shares

Official quotation of the Company's Shares commenced on 3 August 2006 and consequently, the trading history on ASX as at the date of this Prospectus is limited to that period.

The highest and lowest recorded market sale prices of the Company's Shares quoted on ASX during the period from commencement of official quotation to the date of this Prospectus were $1.76 on 11 April 2006 and 29 cents on 3 August 2006 respectively.

The last market sale price of the Company's Shares on ASX on the last day that trading took place in these Shares prior to the date of this Prospectus was $1.385 on 11 July 2007.

9.2 Taxation Implications

It is the responsibility of all persons to satisfy themselves of the particular taxation treatment that applies to them by consulting their own professional tax advisors before investing in the New Shares. Taxation consequences will depend on particular circumstances. Neither the Company nor any of its officers accept any liability or responsibility in respect of the taxation consequences of the matters referred to above or any other taxation consequences connected with an investment in the New Shares.

9.3 Legal Proceedings

There is no litigation, arbitration or proceedings pending against or involving the Company as at the date of this Prospectus.

9.4 Continuous Disclosure and Documents Available for Inspection

The Company is listed on ASX and its Shares are quoted on ASX.

The Company is a "disclosing entity" for the purposes of the Corporations Act 2001. As such, it is subject to regular reporting and disclosure obligations, which require it to disclose to ASX any information of which it is or becomes aware concerning the Company and which a reasonable person would expect to have a material effect on the price or value of securities of the Company.

Copies of documents lodged with the ASIC in relation to the Company may be obtained from or inspected at, an office of the ASIC. This includes the June 2006 Prospectus, the 2006 Financial Report, the 2006 Half-Year Financial Report, the Quarterly Reports and the ASX Announcements referred to in section 5 of this Prospectus.

The Company will provide a copy of all documents used to notify the ASX of information relating to the Company under the provisions of the Listing Rules since official quotation on 3 August 2006. Details of all such documents at the time of lodging this Prospectus are set out in section 5.3 of this Prospectus.

9.5 Interests of Directors and Experts

A full disclosure of the interests of Directors, Experts and Promoters of and to the Company for the period commencing on incorporation of the Company and to the date of issue of the June 2006 Prospectus are set out in sections 11.13 and 11.14 of the June 2006 Prospectus and other than as set out below or elsewhere in this Prospectus, that information and disclosure remains current. The interest of the Directors in the securities of the Company at the date of this Prospectus are as follows:

Director	Shares	Class A Options	Class B Options
Exercise Price		25c	50c
Expiry Date		31/12/2008	31/12/2009
Anthony Alexander Ailakis	494,108	750,000	750,000
Juan Carlos Olivero	837,500	750,000	750,000
Stephen George Fountain	706,324	0	0

Pursuant to an executive employment agreement dated 24 April 2007, Mr Stephen George Fountain has been offered 750,000 Options to be granted to him upon shareholder approval at the next annual general meeting of members. If granted these Options will entitle Mr Fountain to subscribe for one Share upon exercise of each Option. The Options have an exercise price of $1.40 per Share and will be exercisable at any time 12 months from the date of being offered and prior to the expiry date, being 5 years from the date of grant of the Options.

Butler Settineri (Audit) Pty Ltd has received $13,750 in fees for audit and review services rendered to the Company.

DLA Phillips Fox will be paid approximately $8,000 for services in relation to certain aspects of this Prospectus. Since incorporation DLA Phillips Fox has received or is entitled to receive approximately $2,000 for other services rendered to the Company.

9.6 Expenses of the Issue

The total expenses of the Issue are estimated to be $30,000 comprising legal costs, ASX fees, ASIC fees and other administrative expenses.

9.7 Privacy Disclosure

The Company collects information in relation to each Applicant as provided on an Application Form for the purposes of processing the Application Form and, should the Applicant be successful, to administer the Applicant's security holding in the Company.

The Company may use the information in the Application Form for the purposes described above, and the may disclose that information for these purposes to the Share Registry, the Company's related bodies corporate, agents, contractors and third party service providers, and to the ASX, ASIC and other regulatory authorities.

This information may also be used and disclosed to persons inspecting the register, including bidders for your securities in the context of take-overs, licensed securities dealers, mail houses for corporate communications, and legal and regulatory bodies including the Australian Taxation Office.

10. Consents

The following persons have each consented to the inclusion of the following statements and statements identified in this Prospectus as being based on statements made by those persons, in the form and context in which they are included, and have not withdrawn that consent before lodgement of this Prospectus with the ASIC:

Butler Settineri (Audit) Pty Ltd consents to being named as auditor to the Company in this Prospectus, to the inclusion of and references to the reviewed statement of financial position as at 31 December 2006 in section 7.2 of this Prospectus and in relation to the Independent Accountant's Report in section 7 of the June 2006 Prospectus and the reference to that report in this Prospectus. Butler Settineri has not authorised or caused the issue of any other part of this Prospectus.
DLA Phillips Fox consents to being named as solicitors to the Company in this Prospectus. DLA Phillips Fox has not authorised or caused the issue of any other part of this Prospectus.
SRK Consulting consents to the inclusion of the Independent Consulting Geologist's Report contained in section 6 of the June 2006 Prospectus and the reference to that report in this Prospectus. SRK Consulting has not authorised or caused the issue of any other part of this Prospectus.
Salter Power consents to the inclusion of the Solicitor's Report on Tenements contained in section 8 of the June 2006 Prospectus and the reference to that report in this Prospectus. Salter Power has not authorised or caused the issue of any other part of this Prospectus.

To the maximum extent permitted by law, each of the persons referred to above expressly dissolves and takes no responsibility for any part of this Prospectus other than the statements referred to above and the statements identified in this Prospectus as being based on any statements made by those persons.

11. Authority and Consent of Directors

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

Each of the Directors of Redstone Resources Limited has consented to the lodgement of this Prospectus in accordance with section 720 of the Corporations Act 2001 and has not withdrawn that consent.

Dated: 12 July 2007

Signed for and on behalf of REDSTONE RESOURCES LIMITED by Anthony Ailakis Chairman

12. Glossary

2006 Half-Year FinancialReport	the Company's Consolidated Financial Report for the half-year ended31 December 2006 as lodged with the ASX on 16 March 2007.
2006 Financial Report	the Company's Annual Financial Report for the year ended 30 June2006 as lodged with the ASX on 16 November 2006.
Application Form	the application form enclosed with this Prospectus.
Applicant	a person who submits an Application.
Application	a valid application to subscribe for New Shares.
ASIC	Australian Securities and Investments Commission.
ASX	ASX Limited (ACN 008 624 691).
ASX Listing Rulesor Listing Rules	means listing rules of the ASX and any other rules of the ASX whichare applicable while the Company is admitted to the Official List of theASX, each as amended or replaced from time to time, except to theextent of any express written waiver by the ASX.
Auditors	Butler Settineri (Audit) Pty Ltd.
Board	the board of Directors unless the context indicates otherwise.
Business Day	a day other than a Saturday or Sunday on which banks are open forbusiness in Perth, Western Australia.
CHESS	ASX Clearing House Electronic Subregistry System.
Closing Date	the date on which the Offer closes.
Company	Redstone.
Corporations Act 2001	Corporations Act 2001 (Cth).
Directors	the directors of the Company from time to time.
Discovery or DML	Discovery Metals Limited (ACN 104 924 423).
Dollars or $	Australian dollars unless otherwise stated.
Gabbro	a dark, coarse-grained rock that is intrusive and igneous
Glossary	this glossary.
Investigating Accountant	Butler Settineri
Investigating Accountant'sReport	the report contained in section 7 of the June 2006 Prospectus.

Issue	the issue of New Shares pursuant to this Prospectus.
June 2006 Prospectus	the prospectus lodged by the Company with the ASIC and dated 8 June2006.
New Share	a Share issued on the terms and conditions set out in this Prospectus.
Offer	the offer of New Shares pursuant to this Prospectus.
Offer Period	the period commencing on the Opening Date and ending on theClosing Date.
Official List	the Official List of ASX.
Opening Date	the date on which the Offer opens.
Options	an option to acquire a Share.
Prospectus	this prospectus dated 12 July 2007 for the issue of up to 5,000,000 NewShares at an issue price of $1.20 per New Share, including anyelectronic or online version.
Quarterly Reports	the quarterly activities report and quarterly cash flow report for thequarters ended 30 September 2006, 31 December 2006 and 31 March2007.
Quotation	quotation of the Shares on ASX.
Redstone	Redstone Resources Limited ACN 090 169 154
Share	one fully paid ordinary share in Redstone.
Shareholder	a holder of Shares.
WST	Western Standard Time, Perth, Western Australia.

Unless otherwise stated in this Prospectus the projects referred to in this Prospectus are defined in the June 2006 Prospectus.

Common Exploration Abbreviations

Au	Gold	RAB	Rotary Air Blast Drilling
Cu	Copper	RC	Reverse Circulation Drilling
Ni	Nickel	EM	Electro Magnetic Survey
PGE	Platinum Group Elements	ppm	Parts per million
Pt	Platinum	ppb	Parts per billion
Pd	Palladium	g/t	Gram per tonne
Fe	Iron	m	Metres
Mo	Molybdenum	km	Kilometres
		Ma	Million Year

Application Form
	included in, or accompanied by, the prospectus.	This Application Form is important. If you are in doubt as to how to deal with it, pleasecontact your stockbroker or professional adviser without delay. You should read theentire prospectus carefully before completing this form. To meet the requirements ofthe Corporations Act, this Application Form must not be distributed unless		Broker Code			Adviser Code
I/we apply for			B		I/we lodge full Application Money
				A$
		Number of New Shares in Redstone Resources Limited at A$1.20 per New Shareor such lesser number of New Shares which may be allocated to me/us
		Individual/Joint applications - refer to naming standards overleaf for correct forms of registrable title(s)
Title or Company Name	Given Name(s)			Surname

	Joint Applicant 2 or Account Designation


	Joint Applicant 3 or Account Designation



	Enter your postal address - Include State and Postcode
Unit	Street Number	Street Name or PO Box /Other Information




City / Suburb / Town						State		Postcode

	Enter your contact details
Contact Name					Telephone Number - Business Hours / After Hours
					(	)
CHESS Participant
	Holder Identification Number (HIN)
X				Please note that if you supply a CHESS HIN but the name and address details on your form do notcorrespond exactly with the registration details held at CHESS, your application will be deemed to be madewithout the CHESS HIN, and any securities issued will be held on the Issuer Sponsored subregister.
		Cheque details - Make your cheque or bank draft payable to Redstone Resources Limited

				A$
Drawer	Cheque Number	BSB Number	Account Number	Amount of cheque
				A$

By submitting this Application Form, I/we declare that this application is completed and lodged according to the Shortform Prospectus and the declarations/statements on the reverse of this Application form and I/we declare that all details and statements made by me/us (including the declaration on the reverse of this Application Form) are complete and accurate. I/we agree to be bound by the Constitution of the Company. See back of form for completion guidelines

How to complete this form

A Shares Applied for

Enter the number of New Shares you wish to apply for. The application must be for a minimum of 2,500 New Shares. Applications for greater than 2,500 New Shares must be in multiples of 600 New Shares.

Application Monies B

Enter the amount of Application Monies. To calculate the amount, multiply the number of New Shares by the price per New Share.

Applicant Name(s)

Enter the full name you wish to appear on the statement of share holding. This must be either your own name or the name of a company. Up to 3 joint Applicants may register. You should refer to the table below for the correct forms of registrable title. Applications using the wrong form of names may be rejected. Clearing House Electronic Subregister System (CHESS) participants should complete their name identically to that presently registered in the CHESS system.

Postal Address

Enter your postal address for all correspondence. All communications to you from the Registry will be mailed to the person(s) and address as shown. For joint Applicants, only one address can be entered.

Contact Details

Enter your contact details. These are not compulsory but will assist us if we need to contact you.

CHESS

Redstone Resources Limited (the Company) will apply to the ASX to participate in CHESS, operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned subsidiary of Australian Stock Exchange Limited. In CHESS, the company will operate an electronic CHESS Subregister of security holdings and an electronic Issuer Sponsored Subregister of security holdings. Together the two Subregisters will make up the Company's principal register of securities. The Company will not be issuing certificates to applicants in respect of New Shares allotted. If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold New Shares allotted to you under this Application on the CHESS Subregister, enter your CHESS HIN. Otherwise, leave this section blank and on allotment, you will be sponsored by the Company and allocated a Securityholder Reference Number (SRN).

G

Payment

Make your cheque or bank draft payable to Redstone Resources Limited in Australian currency and cross it Not Negotiable. Your cheque or bank draft must be drawn on an Australian Bank.

Complete the cheque details in the boxes provided. The total amount must agree with the amount shown in box B.

Cheques will be processed on the day of receipt and as such, sufficient cleared funds must be held in your account as cheques returned unpaid may not be re-presented and may result in your Application being rejected. Pin (do not staple) your cheque(s) to the Application Form where indicated. Cash will not be accepted. Receipt for payment will not be forwarded.

Before completing the Application Form the applicant(s) should read this prospectus to which this application relates. By lodging the Application Form, the applicant agrees that this application for New Shares in Redstone Resources Limited is upon and subject to the terms of the prospectus and the Constitution of Redstone Resources Limited, agrees to take any number of New Shares that may be allotted to the Applicant(s) pursuant to the prospectus and declares that all details and statements made are complete and accurate. It is not necessary to sign the Application Form.

Lodgement of Application

Application Forms must be received at the Perth office of Computershare Investor Services Pty Limited by no later than 5.00pm WST on 31 July 2007. Return the Application Form with cheque(s) attached to:

Computershare Investor Services Pty Limited OR Computershare Investor Services Pty Limited GPO Box D182 Level 2 PERTH WA 6840 45 St Georges Terrace

PERTH WA 6000

Privacy Statement

Personal information is collected on this form by Computershare Investor Services Pty Limited ("CIS"), as registrar for securities issuers ("the issuer"), for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal information may be disclosed to our related bodies corporate, to external service companies such as print or mail service providers, or as otherwise required or permitted by law. If you would like details of your personal information held by CIS, or you would like to correct information that is inaccurate, incorrect or out of date, please contact CIS. In accordance with the Corporations Act 2001, you may be sent material (including marketing material) approved by the issuer in addition to general corporate communications. You may elect not to receive marketing material by contacting CIS. You can contact CIS using the details provided on the front of this form or E-mail [email protected]

If you have any enquiries concerning your application, please contact the Computershare Investor Services Pty Limited on 1300 557 010.

Correct forms of registrable title(s)

Correct forms of registrable title(s)	Note that ONLY legal entities are allowed to hold New Shares or Shares. Applications must be made in the name(s) of natural persons, companies or other legal entities inaccordance with the Corporations Act. At least one full given name and the surname is required for each natural person. The name of the beneficial owner or any other registrablename may be included by way of an account designation if completed exactly as described in the examples of correct forms of registrable title(s) below.	x
Type of Investor	Correct Form of Registration	Incorrect Form of Registration
Individual- Use given name(s) in full, not initials	Mr John Alfred Smith	J.A Smith
Joint- Use given name(s) in full, not initials	Mr John Alfred Smith &Mrs Janet Marie Smith	John Alfred &Janet Marie Smith
Company- Use company title, not abbreviations	ABC Pty Ltd	ABC P/LABC Co
Trusts- Use trustee(s) personal name(s)- Do not use the name of the trust	Ms Penny Smith	Penny Smith Family Trust
Deceased Estates- Use executor(s) personal name(s)- Do not use the name of the deceased	Mr Michael Smith	Estate of Late John Smith
Minor (a person under the age of 18)- Use the name of a responsible adult with an appropriate designation	Mr John Alfred Smith	Peter Smith
Partnerships- Use partners personal name(s)- Do not use the name of the partnership	Mr John Smith &Mr Michael Smith<john &="" a="" c="" smith="" son="">	John Smith & Son
Clubs/Unincorporated Bodies/Business Names- Use office bearer(s) personal name(s)- Do not use the name of the club etc	Mrs Janet Smith	ABC Tennis Association
Superannuation Funds- Use the name of trustee of the fund- Do not use the name of the fund	John Smith Pty Ltd	John Smith Pty Ltd Superannuation Fund

Redstone drilling programme in the West Musgrave region in May 2007.