REDSTONE RESOURCES LIMITED — Capital/Financing Update 2011

Feb 28, 2011

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 and Unquoted options 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued 2,227,000 fully paid ordinary shares 1,100,000 unquoted options 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) $0.50 unquoted options exercisable any time on or before 24 February 2014

• 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?	Fully paid ordinary shares - YesUnquoted options – No
	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	The fully paid ordinary shares that will beissued upon exercise of the unquoted optionswill rank pari passu with the fully paid ordinaryshares on issue.
5	Issue price or consideration		Fully paid ordinary shares - $0.22/share (total
		$489,940)
		Unquoted options - nil
6	Purpose of the issue(If issued as consideration for theacquisition of assets, clearly identifythose assets)	2,227,000Placementsharesand1,000,000unquoted options to consultant in accordancewith shareholder approval obtained at the 2010Annual General Meeting of the Company.100,000 unquoted options to employee inaccordance with the terms of the RedstoneResources ESOP.
7	Dates of entering +securities intouncertificated holdings or despatchof certificates	25 February 2011
8	+classNumberandofall+securitiesquotedonASX(including the securities in clause 2if applicable)	Number127,406,279+2,227,000----------------------129,633,279----------------------	+ClassOrdinary Shares(RDS)

9	+classNumberandofall+securities not quoted on ASX(including the securities in clause 2if applicable)	400,000 UnquotedOptions	$1.50Optionsexercisable 12 monthsfrom 29 June 2007 andexpiring 29 June 2012.
		1,000,000UnquotedOptions	$0.95Optionsexercisable at any timeonorbefore28November 2012.
		500,000 UnquotedOptions	$1.20Optionsexercisable at any timeonorbefore28November 2012
		300,000 UnquotedOptions	$0.75Optionsexercisable 12 monthsfrom20February2008 and expiring 20February 2013.
		7,052,779 UnquotedOptions	$0.25Optionsexercisable any timeonorbefore30November 2012.
		1,500,000 UnquotedOptions	$0.25Optionsexercisable any timeonorbefore30November 2014.
		500,000 UnquotedOptions	$0.30Optionsexercisable any timeonorbefore30November 2014.
		500,000 UnquotedOptions	$0.35Optionsexercisable any timeonorbefore30November 2014.
		3,750,000 UnquotedOptions	$0.50Optionsexercisable any timeonorbefore19October 2013.
		650,000 UnquotedOptions	$0.50Optionsexercisable any timeonorbefore4November 2013.

+ See chapter 19 for defined terms.

9	Number	and	+class	of	all	500,000	Unquoted
	+securities not quoted on ASX					Options
	(including the securities in clause 2
	if applicable)

500,000Options	Unquoted	$0.50Optionsexercisable any time onor before 1 December2013.
1,000,000Options	Unquoted	$0.50Optionsexercisable any time onor before 24 February2014.
100,000Options	Unquoted	$0.50Optionsexercisable any time onor before 24 February2014.

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 whowillnotbesentnewissuedocuments
	Note: Security holders must be told how theirentitlements are to be dealt with.
	Cross reference: rule 7.7.

19	Closingdateforreceiptofacceptances 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
24	Amount of any handling fee payableto brokers who lodge acceptancesorrenunciationsonbehalfof+security holders
25	Iftheissueiscontingenton+security holders' approval, the dateof the meeting
26	Date entitlement and acceptanceform and prospectus or ProductDisclosure Statement will be sent topersons entitled
27	If the entity has issued options, andthe terms entitle option holders toparticipate on exercise, the date onwhich notices will be sent to optionholders
28	Date rights trading will begin (ifapplicable)
29	Date rights trading will end (ifapplicable)
30	How do +security holders sell theirentitlementsinfullthroughabroker?
31	How do +security holders sell partoftheirentitlementsthroughabroker and accept for the balance?
32	How do +security holders dispose oftheir entitlements (except by salethrough a broker)?

+ See chapter 19 for defined terms.

+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 2,227,000 fully paid ordinary shares
• (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 theadditional +securities, and the number and percentage of additional +securities held bythose 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	Numberofsecuritiesforwhich+quotation is sought
39	+securitiesClassofforwhichquotation is sought

+ See chapter 19 for defined terms.

40 Do the +securities rank equally in all respects from the date of allotment with an existing +class of quoted +securities?

If the additional securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another security, clearly identify that other security)

		Number	+Class
42	Number and +class of all +securities
	quotedonASX(includingthe
	securities in clause 38)

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: 28 February 2011

(Company secretary)

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

• See chapter 19 for defined terms.