REDSTONE RESOURCES LIMITED — Capital/Financing Update 2007

Jan 23, 2007

REDSTONE RESOURCES LTD

REDSTONE RESOURCES JOINT VENTURE INTO PRIME NI-Cu-PGE TERRITORY IN THE WEST MUSGRAVES

Redstone Resources Limited (ASX:RDS) today announced that it will farm into tenements owned by Discovery Metals Ltd (ASX:DML) in the West Musgrave region of Western Australia, 50km to the west-northwest of the Wingellina Ni-Co Deposit.

The Joint Venture includes five tenements - E69/1640, E69/1641, E69/1642, E69/1663 and E69/1662 - located near the junction of the WA, SA and Northern Territory borders. The 704km² area covers a large volume of unexplored Giles Complex rocks, which are highly prospective for Ni-Cu-PGE sulphide mineralization and Ni-Co laterite deposits.

Discovery Metals and Falconbridge completed airborne EM surveys across the entire tenement package, totalling over 2500 line kilometres of GeoTEM, with the recognition of 11 first order EM anomalies, and 33 anomalies overall. No other significant work has been conducted on the tenements.

Discovery Metals Managing Director, Mr Jeremy Read, said "Discovery has decided to joint venture or sell a number of its Australian exploration projects, including the West Musgraves, in order to focus its efforts and expenditure on fast tracking the assessment of the copper resources at the company's Maun Copper Project in north-west Botswana".

Under the arrangement announced today:

• Redstone have a minimum expenditure commitment of \$260,000
• . Redstone can earn a 51% interest in the Musgrave Project for the expenditure of \$1,000,000
• Redstone can earn a 75% interest in the Musgrave Project for a total expenditure of \$2,000,000
• As an alternative, Discovery has also granted Redstone an option to purchase the Musgrave Project up until 30th April 2007 for \$300,000 in Redstone shares and a cash payment of \$190,000
• Discovery will retain a 2% Net Smelter Return royalty in either case

Redstone has been adding ground to its West Musgrave portfolio since listing on the ASX on August 3^rd, 2006. "The total land package is now over 7000km² and Redstone is very excited about exploring one of the least-explored Proterozoic terranes in Australia", said Managing Director, Mr Anthony Ailakis. "After just four months of on-ground exploration, we are extremely impressed by the potential of the region and the size and quality of the targets emerging on our tenements".

Exploration on the new Joint Venture Tenements will commence early in 2007. with clearance proposals to the Land Council, followed by on-ground EM to validate the priority GeoTEM targets and detailed geochemical sampling of those targets. Regional geochemical sampling will be utilized across the tenements to locate mineralisation not detectable by geophysical techniques.

Head and exploration office:

Redstone Resources Ltd, level 3, 110-116 East Parade, East Perth WA 6004. PO Box 8646, Perth Business Centre WA 6849 Telephone +61 8 9328 2552 Facsimile +61 8 9328 2660 Website www.redstone.com.au