REDSTONE RESOURCES LIMITED — Capital/Financing Update 2009

Oct 12, 2009

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

Redstone Resources Limited

ABN

42 090 169 154

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued

Fully paid ordinary shares

• 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued
• 3 Principal terms of the +securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

6,075,000 fully paid ordinary shares to be issued and allotted immediately.

• See chapter 19 for defined terms.

4	Do the +securities rank equally in allrespects from the date of allotmentwith an existing +class of quoted+securities?If the additional securities do notrank equally, please state:•the date from which they do•theextenttowhichtheyparticipate for the next dividend,(inthecaseofatrust,distribution) or interest payment•the extent to which they do notrankequally,otherthanin	Yes
	relation to the next dividend,distribution or interest payment
5	Issue price or consideration	•sophisticated$0.09/share (total $321,750)•(total $250,000)	3,575,000 fully paid ordinary shares toprivateinvestorsat2,500,000 fully paid ordinary shares toHJH Nominees Pty Ltd at $0.10/share
6	Purpose of the issue(If issued as consideration for theacquisition of assets, clearly identifythose assets)	Working capital
7	Dates of entering +securities intouncertificated holdings or despatchof certificates	13 October 2009
		Number	+Class
8	+classNumberandofall+securitiesquotedonASX(including the securities in clause 2	79,170,722+ 6,075,000----------------	Ordinary Shares(RDS)
	if applicable)	85,245,722----------------

		Number	+Class
9	+classNumberandofall+securities not quoted on ASX(including the securities in clause 2if applicable)	2,850,000 UnquotedOptions	$0.50ClassBIncentiveOptionsexercisable any time12monthsfrom3August2006andexpiring 31 December2009.
		8,000,000 UnquotedOptions	$0.25Optionstoshareholders as at 4April 2006 exercisableany time 12 monthsfrom 3 August 2006andexpiring31December 2009.
		3,000,000 UnquotedOptions	$0.25Optionsexercisable any timefrom 3 August 2006and expiring 3 August2009.
		50,000 UnquotedOptions	$0.75Optionsexercisable 12 monthsfrom 30 March 2007and expiring 30 March2010.
		400,000 UnquotedOptions	$1.50Optionstexercisable 12 monthsfrom 29 June 2007 andexpiring 29 June 2012.

+ See chapter 19 for defined terms.

+class9Numberandofall+securities not quoted on ASX(including the securities in clause 2if applicable)	1,000,000UnquotedOptions	$0.95Optionsexercisable at any timeonorbefore30November 2012.
	500,000 UnquotedOptions	$1.20Optionsexercisable at any timeonorbefore30November 2012
	300,000 UnquotedOptions	$0.75Optionsexercisable 12 monthsfrom20February2008 and expiring 20February 2013.
	1,000,000 UnquotedOptions	$0.25Optionsexercisable any timeon or before 17 June2011.

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

N/a

Part 2 - Bonus issue or pro rata issue

11	Issecurityholderapprovalrequired?
12	Is the issue renounceable or nonrenounceable?
13	Ratio in which the +securities willbe offered
14	+Class of +securities to which theoffer relates
15	+Recorddatetodetermineentitlements
16	Will holdings on different registers(or subregisters) be aggregated forcalculating entitlements?
17	Policy for deciding entitlements inrelation to fractions
18	Names of countries in which theentity has +security holders whowillnotbesentnewissuedocumentsNote: Security holders must be told how theirentitlements are to be dealt with.Cross reference: rule 7.7.
19	Closingdateforreceiptof
	acceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting fee orcommission
22	Names of any brokers to the issue
23	Fee or commission payable to thebroker to the issue

+ See chapter 19 for defined terms.

• 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of +security holders
• 25 If the issue is contingent on +security holders' approval, the date of the meeting
• 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled

27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders

• 28 Date rights trading will begin (if applicable)
• 29 Date rights trading will end (if applicable)
• 30 How do +security holders sell their entitlements in full through a broker?
• 31 How do +security holders sell part of their entitlements through a broker and accept for the balance?
• 32 How do +security holders dispose of their entitlements (except by sale through a broker)?
• 33 +Despatch date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities (tick one)
• (a) Securities described in Part 1 6,075,000 fully paid ordinary shares only
• (b) All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the + securities are +equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders
• 36 If the + securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional +securities

Entities that have ticked box 34(b)

38	Numberofsecurities+quotation is sought	forwhich	40,683,794
39	+securitiesClassofforquotation is sought	which	Fully paid ordinary shares

+ See chapter 19 for defined terms.

40	Do the +securities rank equally in allrespects from the date of allotmentwith an existing +class of quoted+securities?	Yes
	If the additional securities do notrank equally, please state:•the date from which they do•theextenttowhichtheyparticipate for the next dividend,(inthecaseofatrust,distribution) or interest payment•the extent to which they do notrankequally,otherthaninrelation to the next dividend,distribution or interest payment
41	Reason for request for quotationnow	Restricted securities released from escrow.
	Example: In the case of restricted securities, end ofrestriction period
	(ifissueduponconversionofanother security, clearly identify thatother security)
		Number	+Class

42 Number and +class of all +securities quoted on ASX (including the securities in clause 38)

85,245,722	Fully paid ordinary
	shares

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
• 2 We warrant the following to ASX.
  • The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those +securities should not be granted +quotation.
  • An offer of the + securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ....................Date: 13 October 2009

(Company secretary)

Print name: Miranda Conti ......................................................... == == == == ==

• See chapter 19 for defined terms.