REDSTONE RESOURCES LTD ACN 090 169 154

ENTITLEMENT ISSUE PROSPECTUS

For a non-renounceable entitlement issue of up to 14,356,939 Listed Options on the basis of one Listed Option for every ten Shares held by those Eligible Shareholders registered at the Record Date at an issue price of $0.01 per Listed Option, to raise up to approximately $143,569 (before costs).

Each Listed Option is exercisable at $0.20 on or before 28 February 2016.

The Offer is conditionally underwritten by Argonaut Capital Limited. Refer to Section 9.3(b) for details of the terms of the Underwriting Agreement.

IMPORTANT INFORMATION

This is an important document. You should read this document in its entirety to assist in deciding whether or not to invest in the Company.

You should also consult your professional advisers before deciding whether to invest in the Company. This Offer does not take into account your investment objectives, financial situation or particular needs. You should carefully consider the risk factors in Sections 3.3 and 8 in light of your circumstances.

THE LISTED OPTIONS OFFERED BY THIS PROSPECTUS SHOULD BE CONSIDERED SPECULATIVE.

1.	CORPORATE DIRECTORY 4
2.	TIMETABLE AND IMPORTANT DATES 5
3.	IMPORTANT NOTICE 6
	3.13.23.33.43.53.6	Applicants Outside Australia and New Zealand 6Underwriting 6Key Risks 7Forward Looking Statements 10Electronic Prospectus 10Website 11
	3.7	Definitions 11
4.		CHAIRMAN'S LETTER 12
5.		DETAILS OF THE OFFER 13
	5.15.25.35.45.55.65.75.85.95.105.115.125.135.145.155.165.17	The Offer 13Actions Eligible Shareholders May Take 13How Eligible Shareholders can accept all or part of their Entitlement 13If you are an Eligible Shareholder and do not wish to take up your Entitlement 15Eligible Shareholders 15Applicants Outside Australia and New Zealand 15Nominees, trusts and custodians 16No trading in Entitlements 16Implications on Acceptance 16Minimum Subscription 16Allotment of Listed Options 16ASX Listing 17Underwriting 17Risk Factors 17Governing Law 17Taxation 17Queries 17
6.		PURPOSE AND EFFECT OF THE OFFER 18
	6.16.26.36.46.56.66.76.86.9	Purpose of the Offer 18Effect of the Offer 18Pro Forma Consolidated Statement of Financial Position 18Assumptions 19Effect on Capital Structure 20Effect of Control of the Company 21Details of Substantial Holders 21Potential Dilution 22Financial Forecasts and Cashflow Projections 22
7.		RIGHTS AND LIABILITIES ATTACHING TO SECURITIES 23
	7.17.2	Terms and Conditions of Listed Options 23Rights and Liabilities attaching to Shares 24
8.		RISK FACTORS 27
	8.18.28.38.48.5	Introduction 27Key Risks 27Operating Risks 28Resource Estimates 28Commercial Risk 28
	8.6	Commodity Price Volatility and Exchange Rate Risks 28

	8.8	Environmental Risks 29
	8.9	Access to Infrastructure 29
	8.10	General Economic Conditions 29
	8.11	Share Market Conditions 29
	8.12	Volatility in Global Credit and Investment Markets 30
	8.13	Government and Legal Risk 30
	8.14	Unforeseen Expenditure Risk 30
9.		ADDITIONAL INFORMATION 31
	9.1	Continuous disclosure obligations 31
	9.2	Market price of Shares 32
	9.3	Material Contracts 32
	9.4	Interests of Directors 36
	9.5	Interests of Experts and Advisers 38
	9.6	Consents 38
	9.7	Expenses of the Offer 39
	9.8	Litigation 39
	9.9	Privacy Statement 39
	9.10	Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship 40
	9.11	Dividend Policy 40
10.		GLOSSARY 41

1. CORPORATE DIRECTORY

Directors
------------------	--

Richard Homsany Non-Executive Chairman

Anthony Ailakis Executive Director

Edward van Heemst Non-Executive Director

Company Secretary Auditor*

ASX Code

Directors Solicitors to the Company

Cardinals Lawyers and Consultants Level 1, 57 Havelock Street WEST PERTH WA 6005 Telephone: +61 8 9213 3000 Facsimile: +61 8 9481 7479

Miranda Conti Butler Settineri (Audit) Pty Ltd Unit 16, First Floor 100 Railway Road SUBIACO WA 6008 Telephone: +61 8 6389 5222 Facsimile: +61 8 6389 5255

Registered Office & Contact Details	Share Registry*
-------------------------------------	-----------------

Suite 3 110 – 116 East Parade EAST PERTH WA 6004 Telephone: +61 8 9328 2552 Facsimile: +61 8 9328 2660 Email: [email protected] Website: www.redstone.com.au

Advanced Share Registry Ltd 150 Stirling Highway NEDLANDS WA 6009 Telephone: +61 8 9389 8033 Facsimile: +61 8 9389 7871

Corporate Adviser & Underwriter to the Offer

RDS Argonaut Capital Limited Level 30, Allendale Square 77 St Georges Terrace PERTH WA 6000 Telephone: +61 8 9224 6888 Facsimile: +61 8 9225 5511

*The names of these entities are included for information purposes only and they have not been involved in the preparation or issue of this Prospectus.

2. TIMETABLE AND IMPORTANT DATES

Indicative timetable

Lodgement of Prospectus with ASIC	Friday, 2 November 2012
Lodgement of Prospectus and Appendix 3B with ASX(includes application for Quotation of Listed Options)	Friday, 2 November 2012
Notice sent to Shareholders and Option holders	Wednesday, 7 November 2012
'Ex' Date(Date from which Shares commence trading without theentitlement to participate in the Offer)	Thursday, 8 November 2012
Record Date for determining Entitlements(Date for determining entitlements to participate in the Offer)	Wednesday, 14 November 2012
Prospectus sent to Shareholders and Opening Date of Offer	Thursday, 15 November 2012
Closing Date of Offer*(5:00pm WST)	Thursday, 29 November 2012
Listed Options quoted on a deferred settlement basis	Friday, 30 November 2012
ASX and Underwriter notified of under-subscriptions	Tuesday, 4 December 2012
Despatch of holding statements	Friday, 7 December 2012
Quotation of Listed Options issued under the Offer*	Monday, 10 December 2012

*Subject to the Listing Rules, the Company reserves the right to extend the Closing Date. As such the date the Listed Options are expected to commence trading on ASX may vary.

3. IMPORTANT NOTICE

This Prospectus is dated 2 November 2012 and was lodged with ASIC on that date. ASIC takes no responsibility for the contents of this Prospectus. No person or entity is authorised to give any information or make any representation in connection with the Offer which is not contained in this Prospectus. Any information or representation not contained in this Prospectus must not be relied on as having been authorised by the Company in connection with the Offer or this Prospectus.

No Listed Options will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

Applications by Eligible Shareholders for Listed Options offered pursuant to this Prospectus can only be submitted with an original Entitlement and Acceptance Form which accompanies this Prospectus. The Entitlement and Acceptance Form sets out an Eligible Shareholder's Entitlement to participate in the Offer. If acceptance is by BPAY® there is no need to return the original Entitlement and Acceptance Form.

It is important that applicants read this Prospectus in its entirety and, if in any doubt about whether to apply for Listed Options, seek professional advice. The Listed Options the subject of this Prospectus should be considered speculative. None of the Company, the Directors or any other person gives any guarantee as to the success of the Company, the repayment of capital, the payment of dividends, the future value of the Listed Options or the price at which the underlying Shares will trade on the ASX.

This Prospectus is a transaction specific prospectus for an offer of continuously quoted securities (as defined in the Corporations Act) and has been prepared in accordance with section 713 of the Corporations Act. It does not contain the same level of disclosure as an initial public offering prospectus. In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and their professional advisers.

3.1 Applicants Outside Australia and New Zealand

The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. A failure to comply with these restrictions may violate applicable securities laws. This Prospectus does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. If you are resident a country other than Australia or New Zealand you should consult your professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed. The return of a completed Entitlement and Acceptance Form will be taken by the Company to constitute a representation and warranty by you that all relevant approvals have been obtained. No action has been taken by the Company to register or qualify the Listed Options or the Shares or otherwise permit a public offering of the Listed Options the subject of this Prospectus in any jurisdiction outside of Australia and New Zealand.

3.2 Underwriting

The Offer is conditionally underwritten by Argonaut Capital Limited. The Underwriter's obligations to underwrite the Offer are conditional upon a number of circumstances set out in the Underwriting Agreement. If the conditions are not satisfied or waived by the Underwriter by their respective deadlines, the Underwriter may elect, in its discretion, to terminate the Underwriting Agreement.

The Underwriting Agreement also includes a number of termination events upon the occurrence of which the Underwriter may elect, in its discretion, to terminate the Underwriting Agreement.

A summary of these conditions and termination events, together with further details of the Underwriting Agreement, are set out in Section 9.3(b).

3.3 Key Risks

You should be aware that subscribing for Listed Options the subject of this Prospectus involves a number of risks to the business, assets and operations of the Company that potentially influence the operating and financial performance of the Company.

Redstone is an exploration company and you should consider that an investment in the Company is speculative.

You should read this Prospectus in its entirety and, in particular, consider the key risk factors set out below and the Risk Factors in Section 8 before deciding whether to apply for Listed Options under this Prospectus.

You are urged to consider those risks carefully and, if necessary, also consult your professional advisers with any questions before deciding whether to subscribe for Listed Options. You should also note that the key risks below and the Risk Factors in Section 8 are not an exhaustive list of all risks faced by the Company or by investors in the Company.

Some risks can be mitigated by the use of appropriate safeguards and appropriate systems and controls by the Company, however some are unpredictable and outside the control of the Company and the extent to which they can be mitigated or managed is very limited or not possible.

Set out below are key and specific risks that the Company is exposed to and that may have a direct influence on the Company and its activities or assets, therefore affecting the value of an investment in the Company.

Additional Requirements for Capital

The Company's capital requirements depend on numerous factors. Depending on the Company's ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the Offer. Any additional equity financing will dilute existing shareholdings, and debt financing (if available) may involve restrictions on future financing and operating activities. If the Company is unable to obtain additional financing as needed or unable to obtain it on acceptable terms (whether or not due to the Company's circumstances or economic and share market conditions or both), it may be required to reduce the scope of its operations and scale back its exploration programmes. This could have a material adverse effect on the Company's activities and the value of the Listed Options and Shares.

Termination of the Underwriting Agreement

The Offer is conditionally underwritten by Argonaut Capital Limited. The Underwriting Agreement is conditional upon a number of matters and may also be terminated by the Underwriter in its discretion upon the occurrence of certain events, as set out in Section 9.3(b). If the Underwriting Agreement is terminated the Company may need to consider other funding options. Further details of the Underwriting Agreement are set out in Section 9.3(b).

Claims, liability and litigation

Mr Ailakis, a Director, is defending a legal claim (Claim) lodged against him in 21 February 2011 in the District Court of Western Australia (3982 of 2010 Olivero v Ailakis & Anor) in his capacity as a Director. To date, the Company has indemnified Mr Ailakis for all legal expenses incurred in defending the Claim pursuant to a Deed of Indemnity, Insurance and Access entered into between the Company and Mr Ailakis. The Company has also lodged an insurance claim for legal expenses and losses that may arise from the Claim pursuant to the Company's Directors and Officers policy with QBE insurance. However, as at the date of this Prospectus the amount of potential claim for defence cost reimbursement from QBE or potential loss from the Claim (subject to the jurisdictional limit of the District Court to award damages up to $750,000) is not known and a reasonable estimate cannot be made.

Title Risk - Australia

Interests in tenements in Australia are governed by State legislation and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and has annual expenditure and reporting commitments, together with other conditions requiring compliance. Consequently, the Company could lose its title to or its interest in one or more of the tenements in which it has an interest if licence conditions are not met or if insufficient funds are available to meet the minimum expenditure commitments.

The Company's tenements, and other tenements in which the Company may acquire an interest, will be subject to renewal, which is usually at the discretion of the relevant authority. If a tenement is not renewed the Company may lose the opportunity to discover mineralisation and develop that tenement.

A number of the Company's tenements, namely exploration licences 69/2450 (Tollu), 69/2054 (Baggaley Hills), 69/2339 (Baggaley East), 69/2340 (Baggaley South) and 69/2108-2109 (Blackstone Range) expire in the coming 12 months. The Company cannot guarantee that those tenements, or any other tenements in which the Company has an interest in Australia, will be renewed beyond their current expiry date and there is a material risk that, in the event the Company is unable to renew any of its tenements beyond their current expiry date, all or part of the Company's interests in the corresponding projects may be relinquished.

Title Risk – Brazil

The Company owns a number of mining tenements and applications for mining tenements in Brazil. Mining tenure in Brazil is governed by Brazilian legislation. Failure to comply strictly with the applicable laws, regulations and local practices relating to mineral rights and tenure in those jurisdictions could result in the loss, reduction or expropriation of the Company's rights and entitlements in respect of those tenements.

Some of the Company's Brazilian tenements which expired in 2011, namely 866280/2007 (Arinos), and 2010, namely 880197/2007 and 880197/198 (Anebá) are currently subject to an application for extension with the National Department of Mineral Production, while a number of other Brazilian tenements applications have not yet been granted.

The Company's interests in Brazil are subject to the risks associated in operating in a foreign country. These risks may include economic, social or political instability or change, hyperinflation, currency nonconvertibility or instability and changes of law affecting foreign ownership, exchange control, exploration licensing, export duties, investment into a foreign country and repatriation of income or return of capital, environmental protection, land access and environmental regulation, mine safety, labour relations as well as government control over mineral properties or government regulations that require the employment of local staff or contractors or require other benefits be provided to local residents.

The Company may also be hindered or preventing from enforcing its rights with respect to government instrumentalities because of the doctrine of sovereign immunity.

Any future material adverse changes in government policies or legislation in Brazil that affect ownership, mineral exploration, development or mining activities, may affect the viability and profitability of the Company.

The legal system operating in Brazil are different to those operating in Australia and this may result in risks such as:

(a) Different forms of legal redress in the courts whether in respect of a breach of law or regulation, or in ownership dispute.
(b) A higher degree of discretion on the part of governmental agencies.
(c) Differences in political and administrative guidance on implementing applicable rules and regulations including, in particular, as regards local taxation and property rights.
(d) Different attitudes of the judiciary and court.
(e) Difficult in enforcing judgments.

The commitment by local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements may be more uncertain, creating particular concerns with respect to licences and agreements for business. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed. There can be no assurance that joint ventures, licences, licence applications or other legal arrangements will not be adversely affected by the actions of government authorities or others and the effectiveness and enforcement of such arrangements cannot be assured.

The Company cannot guarantee that the tenements in which it has an interest in Brazil will be renewed beyond their current expiry date and there is a material risk that, in the event the Company is unable to renew any of its tenements beyond their current expiry date, all or part of the Company's interests in the corresponding projects may be relinquished.

Further, there is no guarantee that any applications for mining tenements will be granted or granted on conditions satisfactory to the Company.

Exploration Risks

The Company's mining tenements are at various stages of exploration however none of the tenements in which the Company has an interest currently contain a JORC Code compliant resource and there is no guarantee that a JORC Code compliant resource will be discovered on any of the Company's tenements.

You should be aware that mineral exploration and development are high risk undertakings due to the high level of inherent uncertainty. There can be no assurance that exploration of the Company's tenements, or of any other tenements that may be acquired by the Company in the future, will result in the discovery of economic mineralisation. Even if economic mineralisation is discovered there is no guarantee that it can be commercially exploited.

The future exploration activities of the Company may be affected by a range of factors including geological conditions, limitations on activities due to seasonal weather patterns, unanticipated operational and technical difficulties, industrial and environmental accidents, native title process, changing government regulations and many other factors beyond the control of the Company.

The success of the Company will also depend on the Company having access to sufficient development capital, being able to maintain title to its projects and obtaining all required approvals for its activities. In the event that exploration programmes prove to be unsuccessful this could lead to a diminution in the value of the Company's projects, a reduction in the cash reserves of the Company and possible relinquishment of part or all of the Company's projects.

Access Risk - Native Title and Aboriginal Heritage

Redstone's Western Australian tenements are located on an aboriginal reserve where permission from the traditional owners is required for access to the land which has already been granted. It is possible that aboriginal sacred sites found within tenements held by the Company may preclude exploration and mining activities and the Company may also experience delays with respect to obtaining permission from the traditional owners to explore and extract resources. The Company currently has no exploration targets covering sacred sites.

The Company must comply with Aboriginal heritage legislation requirements and access agreements which require heritage survey work to be undertaken ahead of the commencement of mining operations. There are a number of registered Aboriginal heritage sites within the area of the Company's tenements. It is possible that some areas of those tenements may not be available for exploration due to Aboriginal heritage issues (whether in respect of registered sites or not). Under Western Australian and Commonwealth legislation the Company may need to obtain the consent of the holders of such interests before commencing activities on affected areas of the tenements. These consents may be delayed or given on conditions which are not satisfactory to the Company.

Reliance on Key Personnel

The responsibility of overseeing the day to day operations of the Company depends on its management and its key personnel. The Company is aware of the need to have sufficient management to properly supervise the exploration and, if exploration is successful, the development of the Company's projects. As the Company's projects and prospects progress and develop, the Board will continually monitor the management requirements in the Company and look to employ or engage additional personnel when and where appropriate to ensure proper management of the Company's projects. However there is a risk that the Company may not be able to secure personnel with the relevant experience at the appropriate time which may impact on the Company's ability to complete all of its planned exploration programmes within the expected timetable. Furthermore, you should be aware that no assurance can be given that there will be no adverse effect on the Company if one or more of its existing Directors or management personnel cease their employment or engagement with the Company.

Exploration Costs

The exploration costs of the Company are based on certain assumptions with respect to the method and timing of exploration. By their nature these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company's operating and financial performance and the value of the Listed Options and Shares.

Contractual and Joint Venture Risk

The Company's ability to achieve its objectives and earn or maintain an interest in the Blackstone Range Project (Western Australia), the Baggaley Hills Project (Western Australia) and the Pontal Project (Brazil) are dependent upon it and the registered holders of those tenements complying with their respective contractual obligations under joint venture agreements in respect of those tenements, and the registered holders complying with the terms and conditions of the Tenements and any other relevant legislation. As at the date of this Prospectus the Company has earned a 75% interest in the Blackstone Range Project and is entitled to become the registered holder of that interest, however any failure to comply with these obligations may result in the Company not being able to earn a further 15% interest in the tenements.

In the event that the Company's joint venture partner in connection with the Baggaley Hills Project and Pontal Project fails to meet its expenditure and other commitments under the respective joint venture agreements, Redstone would need to source alternative funding to keep the project in good standing and develop the project.

The Directors are not able to presently assess the risk of financial failure or default by a participant in any joint venture to which the Company is, or may become a party, or the insolvency or other failure by any of the contractors engaged by the Company for any exploration or other activity. Any such failure or default could adversely affect the operations and performance of the Company and the value of the Listed Options and Shares.

Further risks associated with an investment in the Company are contained in Section 8.

3.4 Forward Looking Statements

This Prospectus contains forward looking statements which are identified by words such as 'may', 'could', 'believes', 'estimates', 'targets', 'expects' or 'intends' and other similar words that involve risks and uncertainties.

These statements relate to intentions and future acts and events. They are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, the Directors and the Company's management, which could cause these future acts, events and circumstances to differ from the way or manner in which they are expressly or implicitly portrayed in this Prospectus. Some of these risk factors are set out in Section 3.3 and the Risk Factors in Section 8.

The Company does not intend to update or review forward looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this Prospectus, except where required by law.

The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward looking statements contained in this Prospectus will actually occur, and potential investors are cautioned not to place undue reliance on these forward looking statements.

3.5 Electronic Prospectus

Pursuant to ASIC Class Order 00/044, ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus and electronic application form on the basis of a paper prospectus lodged with ASIC, and the publication of notices referring to an electronic prospectus or electronic application form, subject to compliance with certain conditions.

This Prospectus will be issued in paper form and as an electronic prospectus which may be accessed on the internet at the Company's website at www.redstone.com.au. If you are accessing the electronic version of this Prospectus for the purpose of making an investment in the Company, you must be an Australian resident and must only access this Prospectus from within Australia.

If you have received this Prospectus as an electronic prospectus, please ensure that you have received the entire Prospectus accompanied by the Entitlement and Acceptance Form. If you have not, please contact the Company (see the Corporate Directory in Section 1 for the Company's contact details) and the Company will send you, at no cost to you, either a hard copy or a further electronic copy of the Prospectus or both during the Offer period.

The Corporations Act prohibits any person passing an Entitlement and Acceptance Form on to another person unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. The Company reserves the right not to accept an Entitlement and Acceptance Form from a person if it has reason to believe that when that person was given access to the electronic Entitlement and Acceptance Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

3.6 Website

No document or information on the Company's website is incorporated by reference into this Prospectus.

3.7 Definitions

Throughout this Prospectus abbreviations and defined terms are used. Defined terms are generally identifiable by the use of an upper case first letter and the definitions of those terms are contained in the Glossary in Section 10.

4. CHAIRMAN'S LETTER

Dear Investor

On behalf of the directors of Redstone Resources Limited (the Company or Redstone), I am pleased to invite you to participate in a one for ten non-renounceable entitlement offer of Listed Options, at an offer price of $0.01 per Listed Option, with each Listed Option exercisable at $0.20 on or before 28 February 2016, to raise up to $143,569 (before costs). Funds raised under the Offer and upon exercise of the Listed Options will be used for ongoing exploration of the Company's existing projects and meeting the expenses of the Offer.

The Offer is conditionally underwritten by Argonaut Capital Limited.

The Offer is non-renounceable, which means that entitlements to take up Listed Options are nontransferrable and will not be tradeable on ASX. Shareholders who do not take up all or any part of their Entitlement will not receive any payment or value in respect of the Entitlement not taken up and their equity interest in the Company will be diluted if the Listed Options are subsequently exercised.

This Prospectus contains important information about the Offer. Accompanying this Prospectus, you will also find a personalised Entitlement and Acceptance Form that contains details of your Entitlement. Details of how to accept this Offer are provided on the form and in Section 5.3.

The Offer closes at 5:00pm WST on 28 November 2012. To participate, you need to ensure that you have completed and returned this Entitlement and Acceptance Form and paid the corresponding application money before this time and date, or that you have paid the Application Money using BPAY® by that date.

You should read this Prospectus carefully and in its entirety as it contains important information about the Offer, especially the key risk factors in Section 3.3 and the Risk Factors in Section 8. If you have any queries you should consult your stockbroker, accountant, solicitor or other independent professional adviser before determining whether or not to participate in the Offer.

The Board recommends that Shareholders take up their Entitlement.

The Board takes this opportunity to thank all Shareholders for their support and looks forward to your continued support in the future.

Yours sincerely

Richard Homsany CHAIRMAN 2 November 2012

5. DETAILS OF THE OFFER

5.1 The Offer

The Offer is being made as a non-renounceable entitlement issue of one (1) Listed Option for every ten (10) Shares held by Shareholders registered at the Record Date at an issue price of $0.01 per Listed Option. The Listed Options are exercisable at $0.20 on or before 28 February 2016. Where the determination of the Entitlement of any Eligible Shareholder results in a fraction of a Share, such fraction will be rounded down to the nearest whole Share.

As at the date of this Prospectus the Company has 26,616,681 Options on issue, all of which may be exercised prior to the Record Date in order to participate in the Offer. Please refer to Section 6.5 for information on the exercise price and expiry date of the Options on issue.

All of the Shares issued upon the exercise of the Listed Options will rank equally with the Shares on issue at the date of this Prospectus. Please refer to Section 7 for further information regarding the right and liabilities attaching to the Listed Options and the Shares.

The purpose of the Offer and the intended use of funds raised under the Offer are set out in Section 6.1.

5.2 Actions Eligible Shareholders May Take

Eligible Shareholders may do any of the following:

(a) take up their full Entitlement;
(b) partially take up their Entitlement; or
(c) decline to take up their Entitlement by taking no action.

The Offer is a pro rata offer to Eligible Shareholders. Eligible Shareholders who do not take up their Entitlements in full will not receive any amounts in respect of the Entitlements that they do not take up, and will have a reduced (i.e. diluted) percentage shareholding in the Company after implementation of the Offer if some or all of the Listed Options are exercised.

Entitlements cannot be traded on ASX or any other exchange, nor can they otherwise be transferred. If the full number of Listed Options available for subscription pursuant to the Offer is not subscribed for, then the Underwriter will subscribe, or procure subscribers, for the remaining Listed Options (subject to the terms of the Underwriting Agreement).

5.3 How Eligible Shareholders can accept all or part of their Entitlement

If you are an Eligible Shareholder and wish to accept the Offer and take up all or part of your Entitlement you have two options that follow below. In either case your acceptance must not exceed your Entitlement as set out on the Entitlement and Acceptance Form that accompanies this Prospectus. If your acceptance is for an amount in excess of your Entitlement your acceptance will be deemed to be for the maximum Entitlement.

Detailed instructions on how to complete the Entitlement and Acceptance Form are set out on the reverse of that form.

Option 1 – Pay by Cheque or Money Order

To follow this Option 1, please complete the personalised Entitlement and Acceptance Form by filling in the spaces provided including the number of Listed Options you wish to subscribe for and attach a cheque or money order for the Application Money indicated on the Entitlement and Acceptance Form (being $0.01 per Listed Option multiplied by the number of Listed Options you wish to subscribe for – if you are not taking up all of your Entitlement you will need to calculate this amount yourself). You should then mail the completed Entitlement and Acceptance Form and accompanying cheque to:

Redstone Resources Limited C/- Advanced Share Registry Ltd PO Box 1156 NEDLANDS WA 6909

or deliver to:

Redstone Resources Limited C/- Advanced Share Registry Ltd 150 Stirling Highway NEDLANDS WA 6009

For the convenience of Eligible Shareholders, a reply paid envelope addressed to the Share Registry has been enclosed with this Prospectus. If mailed in Australia, no postage stamp is required.

Cheques or money orders should be made payable to "Redstone Resources Limited– IPO Account" and crossed "Not Negotiable". Completed Entitlement and Acceptance Forms and accompanying cheques must reach one of the above addresses by no later than 5:00pm WST on the Closing Date (subject to variation).

You should ensure that sufficient funds are held in relevant account(s) to cover the Application Money. If the amount of your cheque for Application Money is insufficient to pay in full for the number of Listed Options you have applied for in your Entitlement and Acceptance Form, you will be taken to have applied for such lower number of Listed Options as your cleared Application Money will pay for (and to have specified that number of Listed Options on your Entitlement and Acceptance Form). Alternatively, at the discretion of the Company, your Application will be rejected.

Cash payments will not be accepted. Receipts for payment will not be issued.

Entitlement and Acceptance Forms (and payments for Application Money) may be accepted if received after the Closing Date at the discretion of Redstone.

Entitlement and Acceptance Forms and accompanying cheques will not be accepted at the Company's registered or corporate office.

Option 2 – Pay via BPAY®

To follow this Option 2 you should pay the full Application Money in accordance with the instructions set out on the personalised Entitlement and Acceptance Form, which includes the biller code and your unique reference number. The Application Money is equal to $0.01 per Listed Option multiplied by the number of Listed Options you wish to subscribe for (if you are not taking up all of your Entitlement you will need to calculate this amount yourself). If you have multiple holdings, you will also have multiple customer reference numbers. You must use the reference number shown on each Entitlement and Acceptance Form to pay for each holding separately. You can only make a payment via BPAY® if you are the holder of an account with an Australian financial institution.

Please note that should you choose to pay via BPAY® payment:

(a) you do not need to submit the personalised Entitlement and Acceptance Form but are taken to make the statements on that form; and

(b) you are deemed to have taken up your Entitlement in respect of such whole number of Listed Options which is covered in full by your Application Money (the amount of your payment received will be divided by $0.01) which will be deemed to be the total number of Listed Options you are applying for.

You need to ensure that your BPAY® payment is received by the Share Registry by no later than 5:00pm WST on the Closing Date (subject to variation).

Applicants should be aware that their own financial institution may implement earlier cut-off times with regards to electronic payment. It is the responsibility of the applicant to ensure that funds submitted through BPAY® are received by 5:00pm WST on the Closing Date (subject to variation).

In case of either Option 1 or Option 2, by taking up all or part of your Entitlement you will be deemed to have represented that you are in compliance with all relevant selling restrictions and otherwise agree to all the terms and conditions of the Offer as set out in this Prospectus.

The Company shall not be responsible for any postal or delivery delays or delay in the receipt of the BPAY® payment.

5.4 If you are an Eligible Shareholder and do not wish to take up your Entitlement

If you are an Eligible Shareholder and you do not wish to take up your Entitlement, do nothing. If you do nothing, then Listed Options representing your Entitlement will be subscribed for by, or by persons nominated by, the Underwriter.

You should also note that if you do not take up your Entitlement, you will continue to own the same number of Shares however your percentage shareholding in the Company will be reduced if the Listed Options are exercised into Shares.

5.5 Eligible Shareholders

The Offer is only open to Eligible Shareholders. Eligible Shareholders are those persons who at 5:00pm WST on the Record Date have a registered address in Australia or New Zealand.

The Company will notify Ineligible Shareholders of the Offer, provide them with details of the Offer and advise them that the Company is not extending the Offer to Ineligible Shareholders.

5.6 Applicants Outside Australia and New Zealand

No Offer will be made to Shareholders with a registered address outside Australia and New Zealand.

The Company is of the view that it is unreasonable to make the Offer to Shareholders with registered addresses outside of Australia and New Zealand, having regard to:

(a) the number of Shareholders with registered addresses outside of Australia and New Zealand;
(b) the number and value of the Listed Options that would be offered to Shareholders with registered addresses outside of Australia and New Zealand; and
(c) the cost of complying with the legal requirements and requirements of regulatory authorities in other overseas jurisdictions.

Accordingly, the Company is not required to make the Offer to Shareholders with registered addresses outside of Australia and New Zealand.

The Company will send each Shareholder to whom it will not make the Offer details of the Offer and advise that it will not make the Offer to them.

The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. A failure to comply with these restrictions may violate those applicable laws. This Prospectus does not, and is not intended to, constitute an offer or invitation to subscribe in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. If you are resident a country other than Australia or New Zealand you should consult your professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed. The return of a completed Entitlement and Acceptance Form will be taken by the Company to constitute a representation and warranty by you that all relevant approvals have been obtained. No action has been taken by the Company to register or qualify the Listed Options or otherwise permit a public offering of the Listed Options the subject of this Prospectus in any jurisdiction outside of Australia and New Zealand.

The Listed Options are not being offered or sold to the public within New Zealand other than to existing Shareholders with registered addresses in New Zealand for whom the offer of Listed Options is being made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). This Prospectus has not been registered, filed with or approved by any New Zealand regulatory authority under the Securities Act 1978 (New Zealand). This Prospectus is not an investment statement or prospectus under New Zealand law and is not required to, and may not, contain all the information that an investment statement or prospectus is required to contain under New Zealand Law.

Shareholders with registered addresses in Australia or New Zealand holding Shares on behalf of persons who are resident overseas are responsible for ensuring that taking up an Entitlement under the Offer does not breach regulations in the relevant overseas jurisdiction. Return of a duly completed Entitlement and Acceptance Form will be taken by the Company to constitute a representation that there has been no breach of those regulations.

5.7 Nominees, trusts and custodians

Nominees, trusts and custodians must not distribute any part of this Prospectus or any Entitlement and Acceptance Form in any country outside Australia, except to beneficial shareholders in New Zealand.

5.8 No trading in Entitlements

Entitlements cannot be traded on ASX or any other securities exchange or privately transferred.

5.9 Implications on Acceptance

Returning a completed Entitlement and Acceptance Form or paying any Application Money via BPAY® will be taken to constitute a representation by you that:

(a) you have received a copy of this Prospectus and the accompanying Entitlement and Acceptance Form, and read them both in their entirety; and
(b) you acknowledge that one the Entitlement and Acceptance Form is returned, or a BPAY® payment instruction is given in relation any Application Money, the application may not be varied or withdrawn except as required by law.

5.10 Minimum Subscription

There is no minimum subscription to be raised under the Offer.

5.11 Allotment of Listed Options

Listed Options offered by this Prospectus will be allotted in accordance with the Listing Rules and the timetable set out in Section 2.

Following allotment, statements of option holdings will be dispatched to successful applicants in accordance with the Listing Rules and the timetable set out in Section 2. It is your responsibility to determine your allocation prior to trading in Listed Options. If you sell Listed Options before receiving your holding statement you do so at your own risk.

Prior to allotment of the Listed Options, all Application Money shall be held by the Company on trust for the Applicants. The Company will retain any interest earned on the Application Money irrespective of whether the allotment of Listed Options takes place and each Applicant waives the right to claim interest.

5.12 ASX Listing

The Company will apply to the ASX in accordance with the timetable set out in Section 2 for Quotation of the Listed Options offered under this Prospectus which is within 7 days of the date of this Prospectus. If the ASX does not grant permission for Quotation of the Listed Options within three (3) months after the date of this Prospectus, or such longer period as is varied by ASIC, the Company will not issue or allot any Listed Options offered for subscription under this Prospectus and will repay all Application Monies received as soon as practicable thereafter.

The ASX takes no responsibility for the contents of this Prospectus. The fact that the ASX may grant Quotation of the Listed Options is not to be taken in any way as an indication of the merits of the Company, the Listed Options or the underlying Shares.

5.13 Underwriting

The Offer is conditionally underwritten by Argonaut Capital Limited. The Underwriter will be paid an underwriting fee of 2.5% of the total amount proposed to be raised pursuant to the Offer of $143,569. The Company and the Underwriter have entered into the Underwriting Agreement, further details of which are set out in Section 9.3(b).

In the event that the Underwriting Agreement is validly terminated by the Underwriter and not all Eligible Shareholders accept their full Entitlement, the Directors reserve the right to place the Listed Opinions not applied for under the Offer at their discretion, subject to the Corporations Act and the Listing Rules.

5.14 Risk Factors

You should be aware that subscribing for Shares the subject of this Prospectus involves a number of risks. The key risks are set out in Section 3.3 and other Risk Factors are set out in Section 8. Potential investors are urged to consider those risks carefully, and if necessary consult their professional advisers before deciding whether to invest in the Company. The risk factors set out in Section 3.3 and Section 8, and other general risks applicable to all investments in listed securities not specifically referred to, may in the future affect the value of the Listed Options and Shares. Accordingly an investment in the Company should be considered speculative.

5.15 Governing Law

The Prospectus and the contracts that arise from acceptance of the Applications are governed by the laws applicable in Western Australia and each Applicant submits to the non-exclusive jurisdiction of the courts of Western Australia.

5.16 Taxation

The Directors do not consider it appropriate to give Shareholders advice regarding the taxation consequences or subscribing for Listed Options under this Prospectus. The acquisition and disposal of Listed Options (and Shares issued on the exercise of the Listed Options) will have tax consequences which will differ depending upon the individual financial affairs of each investor. You are urged to obtain independent financial advice about such consequences from a taxation viewpoint and generally. To the maximum extent permitted by law, the Company, its officers and each of their respective advisers accept no liability or responsibility with respect to the taxation consequences of subscribing for Listed Options and Shares under this Prospectus.

5.17 Queries

This Prospectus provides important information and should be read in its entirety. If you have any questions about what action to take after reading this Prospectus, please contact your stockbroker, financial planner, accountant, lawyer or independent financial adviser. Any questions concerning the Offer should be directed to the Company Secretary, Ms Miranda Conti, on +61 8 9328 2552.

6. PURPOSE AND EFFECT OF THE OFFER

6.1 Purpose of the Offer

The purpose of the Offer is to raise up to $143,569 (before costs). As there is no minimum subscription under the Offer the Company will accept all funds raised under the Offer. The funds are intended to be first applied towards meeting the expenses of the Offer ($34,945) and then used for ongoing exploration of the Company's existing projects ($108,624). Refer to Section 9.7 for further details relating to the estimated expenses of the Offer.

6.2 Effect of the Offer

The principal effect of the Offer, assuming all Listed Options offered under the Prospectus are issued, will be to:

(a) increase the Company's cash reserves by $143,569 (before deducting the estimated expenses of the Offer) immediately after completion of the Offer; and
(b) increase the number of Options on issue from 26,616,681 as at the date of this Prospectus to 40,973,620 Options following completion of the Offer.

6.3 Pro Forma Consolidated Statement of Financial Position

The audited Consolidated State of Financial Position as at 30 June 2012 and the unaudited Pro Forma Statement of Financial Position as at 30 June 2012 shown below have been prepared on the basis of the accounting policies normally adopted by the Company and reflect the changes to its financial position. The Pro Forma Statement of Financial Position (which has not been audited or reviewed by an auditor) has been prepared on the assumption that all Listed Options pursuant to the Offer in this Prospectus are issued and that no Options are exercised prior to the Record Date.

The Statements of Financial Position have been prepared to provide Shareholders with information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company as noted below. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

The Pro-Forma Unaudited Consolidated Statement of Financial Position is provided for illustrative purposes only and is not represented as being indicative of the Company's view of the future financial position of the Company and will not necessarily reflect the actual position and balances as at the date on which Listed Options are issued under the Offer.

Audited Consolidated Statement of Financial Position and Pro-Forma Unaudited Statement of Financial Position as at 30 June 2012

	AuditedConsolidated	Pro-FormaUnaudited
	30 June 2012$	Consolidated30 June 2012
		$
CURRENT ASSETS
Cash and cash equivalents	325,173	1,089,947
Trade and other receivables	33,029	33,029
Other assets	24,141	24,141
TOTAL CURRENT ASSETS	382,343	1,147,117
NON-CURRENT ASSETS
Deferred exploration expenditure	8,922,063	8,868,063
Plant and equipment	105,473	105,473
Other financial assets	6,000	6,000
TOTAL NON-CURRENT ASSETS	9,033,536	8,979,536
TOTAL ASSETS	9,415,879	10,126,653
CURRENT LIABILITIES
Trade and other payables	476,590	476,590
Provisions	123,084	123,084
TOTAL CURRENT LIABILITIES	599,674	599,674
TOTAL LIABILITIES	599,674	599,674
NET ASSETS	8,816,205	9,526,979

EQUITYIssued capital	18,523,536	19,758,310
Reserves	2,338,704	2,338,704
Accumulated losses	(12,046,035)	(12,570,035)
TOTAL EQUITY	8,816,205	9,526,979

6.4 Assumptions

The Pro-Forma Unaudited Consolidated Statement of Financial Position set out above has been prepared on the basis and assumption that there have been no material movements in the assets and liabilities of the Company between 30 June 2012 and completion of the Offer that should have been reflected in the audited full year financial statements of the Company as at 30 June 2012 except:

(a) the Company will undertake and complete the Offer, being a non-renounceable entitlement issue of one Listed Option for every ten Shares held by those Shareholders registered at the Record Date at an issue price of $0.01 per Listed Option to raise a maximum of $143,569 (before costs);
(b) total costs expected to be incurred in relation to the Offer of $34,945 are recognised directly against equity;
(c) the placement of 11,6000,000 Shares at an issue price of $0.10 per Share (together with 5,800,013 free attaching Options) Shares announced to ASX on 4 October 2012 and net proceeds received of $1,126,150 (after ASX listing and capital raising fees);
(d) cash proceeds totalling $200,000 received between 1 July 2012 and the date of this Prospectus relating to instalments due in accordance with the Aneba (Potash) Sale and Purchase Agreement dated 7 May 2012; and
(e) expenditure totalling $670,000 between 1 July 2012 and the date of this Prospectus on continuing activities recorded through accumulated losses or capitalised to exploration projects ($146,000).

6.5 Effect on Capital Structure

The effect of the Offer on the capital structure of the Company, assuming all Listed Options under the Offer are issued, is set out below.

Capital Structure on Completion of the Offer

	Balance at date ofProspectus	To be issuedunder the Offer	Balance afterthe Offer
Shares	143,569,390(1)	Nil	143,569,390
Unquoted Options	26,616,681(2)	Nil	26,616,681
Listed Options	Nil	14,356,939(3)	14,356,939

(1) Assuming no unquoted Options are exercised prior to the Record Date.

(2) The number, terms and expiry dates of the unquoted Options are set out below.

(3) Assumes all Listed Options under the Offer are issued and an application for Quotation of the Listed Options will be made.

Details of all unquoted Options on issue at the date of this Prospectus

	Number
Options currently on issue
Unquoted Options exercisable at $0.95 on or before 28 November 2012	1,000,000
Unquoted Options exercisable at $1.20 on or before 28 November 2012	500,000
Unquoted Options exercisable at $0.75 12 months from 20 February 2013until on or before 20 February 2013	300,000
Unquoted Options exercisable at $0.25 on or before 30 November 2012	6,716,668
Unquoted Options exercisable at $0.25 on or before 30 November 2014	1,500,000
Unquoted Options exercisable at $0.30 on or before 30 November 2014	500,000
Unquoted Options exercisable at $0.35 on or before 30 November 2014	500,000
Unquoted Options exercisable at $0.40 on or before 19 October 2013	3,750,000
Unquoted Options exercisable at $0.50 on or before 4 November 2013	650,000
Unquoted Options exercisable at $0.50 on or before 1 December 2013	500,000
Unquoted Options exercisable at $0.50 on or before 24 February 2014	1,100,000
Unquoted Options exercisable at $0.35 on or before 6 July 2015	750,000
Unquoted Options exercisable at $0.45 on or before 6 July 2015	500,000
Unquoted Options exercisable at $0.35 on or before 6 July 2015	550,000
Unquoted Options exercisable at $0.30 on or before 21 December 2014	1,000,000
Unquoted Options exercisable at $0.30 on or before 26 February 2015	1,000,000
Options exercisable at $0.20 on or before 28 February 2016, in respect ofwhich an application for Quotation will be made subject to therequirements of the Listing Rules and the Corporations Act	5,800,013
Total Options on issue at date of Prospectus26,616,681
Listed Options offered pursuant to the Offer (Quoted exercisable at $0.20	14,356,939

on or before 28 February 2016)
Total Options on issue after completion of Offer	40,973,620

On a fully diluted basis, including the Listed Options, the Company would have 170,186,071 Shares on issue at the date of this Prospectus and 184,543,010 Shares on issue at completion of the Offer assuming all of the Listed Options under the Offer are issued and no Options are exercised prior to the Record Date.

No Shares or Options are subject to escrow restrictions, either voluntary or imposed by ASX.

6.6 Effect of Control of the Company

The Offer is not expected to have any impact on control of the Company. As set out above, the Offer is conditionally underwritten by the Underwriter. If the Underwriter is required to satisfy its underwriting in full, their voting power in the Company may increase if it subsequently exercises its Listed Options and converts them into Shares. At the date of this Prospectus the Underwriter has a relevant interest in 2,770,819 Shares and 1,385,410 Options. Notwithstanding the potential effect of the underwriting, even in the event that the Underwriter is required to satisfy its underwriting in full, and subsequently exercise such Listed Options, and they further subscribe for and exercise the 6,000,000 Options they are entitled to be issued and allotted under the Mandate (following Shareholder approval) the Underwriter will not have a voting power in the Company in excess of 20%.

6.7 Details of Substantial Holders

Based on information available to the Company as at the date of this Prospectus, those persons who (together with their associates) have a relevant interest in 5% or more of the Shares on issue are set out below:

Shareholder	Shares	% shareholdingbefore the Offer	Entitlementsunder the Offer	% shareholding afterthe Offer(1)
Edward van Heemst	10,050,000	7.0%	1,005,000	7.65%
Eastern Prospecting Pty Ltd	9,875,758	6.88%	987,575	7.51%
Samarkand Holding Pty Ltd	9,875,758	6.88%	987,575	7.51%
BullrunInvestmentsPtyLtd	9,725,758	6.77%	972,575	7.40%

(1) Assuming each substantial Shareholder subscribes for their Entitlement in full and exercises all Listed Options issued pursuant to their Entitlement and converts them into Shares and further assuming that none of the unquoted Options on issue at the date of this Prospectus, or any of the other Listed Options issued under the Offer, are exercised.

In the event that all Entitlements are accepted, there will be no change to the substantial holders on completion of the Offer as only Options are being issued. However if the parties set out above do not participate in the Offer, or do not exercise the Listed Options they subscribe for pursuant to their Entitlement under the Offer, their interest in the Company may be diluted in the future if any Options are exercised and converted into Shares by Option holders.

6.8 Potential Dilution

Shareholders should note that if they do not participate in the Offer their holdings, upon the future exercise of the Listed Options issued under the Offer, could be diluted (as compared to their holdings and number of Shares on issue at the date of the Prospectus). Examples of how the dilution may impact Shareholders are set out in the table below:

Holder	Holding as atRecord Date	% at RecordDate	Entitlements underthe Offer	Holdings if Offernot taken up	% post Offer
Shareholder 1	10,000,000	6.97%	1,000,000	10,000,000	6.33%
Shareholder 2	5,000,000	3.48%	500,000	5,000,000	3.17%
Shareholder 3	1,000,000	0.69%	100,000	1,000,000	0.63%
Shareholder 4	500,000	0.35%	50,000	500,000	0.32%
Shareholder 5	100,000	0.07%	10,000	100,000	0.06%

Notes

1. Assumes no further Shares or Options are issued and no Options currently on issue are exercised.
1. Assumes all Listed Options are exercised and converted into Shares.
1. The dilutionary effect shown in the table is the maximum percentage on the assumption that those Entitlements not accepted are subscribed for pursuant to the Underwriting Agreement. If not all Listed Options are issued under the Offer, the dilution effect for each Shareholder not accepting their Entitlement would be a lesser percentage.

6.9 Financial Forecasts and Cashflow Projections

The Directors have considered the matters set out in ASIC Regulatory Guide 170 and consider that they do not have a reasonable basis to forecast future earnings for the Company. Given the speculative nature of mineral exploration and the early stage of the Company's projects there are significant uncertainties associated with the future revenue earning potential of the Company and the timing and sustainability of the cash flow. On the basis of these inherent uncertainties, the Directors believe that reliable forecasts cannot be prepared and accordingly have not included forecasts in this Prospectus.

7. RIGHTS AND LIABILITIES ATTACHING TO SECURITIES

7.1 Terms and Conditions of Listed Options

Each Listed Option entitles the holder to subscribe for Shares on the following terms and conditions:

(a) Entitlement Each Listed Option entitles the holder to subscribe for one Share upon exercise of each Listed Option.
(b) Exercise Price The exercise price of the Listed Option is $0.20.
(c) Expiry Date Each Listed Option has an expiry date of 28 February 2016.
(d) Exercise Period Each Listed Option is exercisable at any time on or before 28 February 2016.
(e) Quotation Application for Quotation of Listed Options will be made, subject to the requirements of the Listing Rules and the Corporations Act.

(f) Notice of Exercise Each Listed Option may be exercised by notice in writing to the Company. Any notice of exercise of Listed Options received by the Company will be deemed to be a notice of the exercise of the Listed Options as at the date of receipt.

(g) Timing of issue of Shares After a Listed Option is validly exercised, the Company must as soon as possible:

A. issue and allot the Share; and
B. do all such acts matters and things to obtain the grant of Quotation for the Share on ASX no later than 5 days from the date of exercise of the Listed Option.
(h) Shares issued on exercise Shares issued on exercise of the Listed Options rank equally with the then shares of the Company.
(i) Quotation of Shares on exercise Application will be made by the Company to ASX for Quotation of the Shares issued upon the exercise of the Listed Options.
(j) Participation in new issues There are no participation rights or entitlements inherent in the Listed Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Listed Options.

However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least ten business days after the issue is announced. This will give holders of Listed Options the opportunity to exercise their Listed Options prior to the date for determining entitlements to participate in any such issue.

(k) Adjustment for bonus issues of Shares

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction, of dividends or by way of dividend reinvestment):

A. the number of Shares which must be issued on the exercise of a Listed Option will be increased by the number of Shares which the Listed Option holder would have received if the Listed Option holder had exercised the Listed Option before the record date for the bonus issue; and
B. no change will be made to the Exercise Price.
(l) Adjustment for rights issue

If the Company makes an issue of Shares pro rata to existing Shareholders (other than an issue in lieu of in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of a Listed Option will be reduced according to the following formula:

New exercise price = $$ O - \frac{E[P - (S + D)]}{N + 1} $$

O = the old Exercise Price of the Listed Option.
E = the number of underlying Shares into which one Listed Option is exercisable.
P = average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.
S = the subscription price of a Share under the pro rata issue.
D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).
N = the number of Shares with rights or entitlements that must be held to receive a right to one new share.
(m) Adjustments for reorganisation If there is any reconstruction of the issued share capital of the Company, the rights of the Listed Option holders will be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction.
(n) Lodgement Instructions Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for Shares on exercise of the Listed Options with the appropriate remittance should be lodged with the Company Secretary, at the Company's registered office.

7.2 Rights and Liabilities attaching to Shares

The underlying Shares into which the Listed Options offered for subscription under this Prospectus will convert upon exercise of the Listed Options are new Shares that will rank equally with the issued Shares. The rights attaching to Shares are set out in the Constitution and in certain circumstances are regulated by the Corporations Act, the Listing Rules, the ASX Settlement Operating Rules and general law. The rights, privileges and restrictions attaching to Shares are summarised below. This is not exhaustive nor is it a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement you should obtain independent legal advice. A copy of the Constitution is available for inspection at the Company's registered office during normal business hours.

(a) Voting

At a general meeting, on a show of hands every Shareholder present in person has one vote. At the taking of a poll, every 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) Dividends

The Directors may pay to ordinary shareholders any interim and final dividends as, in the Directors' judgement, the financial position of 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 Shareholders in proportion to the number and the amount paid on the shares held.

Generally, all Shares are freely transferable subject to the procedural requirements of the Constitution, and to the provisions of the Corporations Act, the Listing Rules and the SCH Business 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 Listing Rules or the SCH Business 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 when required by the Corporations Act, the Listing Rules or the SCH Business Rules.

(d) General meetings

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

(e) Variation of rights

The Company may only 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 threefourths of the issued shares of that class.

(f) 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.

(g) Issue of further Shares Subject to the Constitution, the Corporations Act 2001 and the 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 or restrictions in relation to dividends, voting, return of capital and participation in surplus on winding up.

(h) Alteration to the Constitution

The 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. RISK FACTORS

8.1 Introduction

Subscribing for Listed Options involves a number of risks. Prospective investors in the Company should consider the risk factors described below, together with information contained elsewhere in this Prospectus, before deciding whether to apply for the Listed Options offered under this Prospectus.

Redstone is an exploration company and you should consider that an investment in the Company is speculative. You should consult your professional advisers before deciding whether to apply for Listed Options pursuant to this Prospectus.

The risk factors set out below and others not specifically referred to below must not to be taken as exhaustive of the risks faced by the Company or by investors in the Company.

These risk factors may materially affect the financial performance of the Company and the value of the Listed Options offered under this Prospectus and the underlying Shares. Accordingly the Listed Options to be issued pursuant to this Prospectus and the underlying Shares carry no guarantee with respect to the payment of dividends, returns of capital or their market value. Some risks can be mitigated by the use of appropriate safeguards and appropriate systems and controls by the Company, however some are unpredictable and outside the control of the Company and the extent to which they can be mitigated or managed is very limited or not possible.

KEY RISKS SPECIFIC TO THE COMPANY

8.2 Key Risks

The key risks which the Directors consider are associated with an investment in the Company are:

(a) Additional Requirements for Capital.
(b) Termination of Underwriting Agreement.
(c) Claims, liabilities and litigation.
(d) Title Risk.
(e) Exploration Risks.
(f) Reliance on Key Personnel.
(g) Exploration Costs.

Details of these key risks are contained in Section 3.3 and have not been repeated in this Section 8.

INDUSTRY RISKS

8.3 Operating Risks

The current and future operations of the Company, including exploration, project appraisal and possible production activities may be affected by various factors which can limit or prevent such activities. Such factors may include failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in surveying, drilling, other exploration activities and/or production activities, difficulties in commissioning and operating plant and equipment, electrical or mechanical failure or plant break, unanticipated metallurgical problems which may affect extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes and unexpected shortages or increases in the costs of skilled labour, consumables, spare parts, plant and equipment.

8.4 Resource Estimates

None of the Company's tenements contain a JORC Code compliant resource and there is no guarantee that a JORC Code compliant resource will be discovered on any of the Company's tenements. Resource estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend to some extent on interpretations which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis the estimates are likely to change. This may result in alterations to development and mining plans which may, in turn, adversely affect the Company's operations and the value of the Listed Options and Shares.

8.5 Commercial Risk

The mining industry is competitive and there is no assurance that, even if commercial quantities of minerals are discovered by the Company on its current projects or future projects it may acquire an interest in, a profitable market will exist for sales of such minerals. There can be no assurance that the quality of any such minerals will be such that they can be mined economically.

8.6 Commodity Price Volatility and Exchange Rate Risks

If the Company achieves success leading to mineral production, the revenue it will derive through the sale of copper, nickel or any other minerals it may discover exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for precious and base metals, technological advancements, forward selling activities and other macro-economic factors such as inflation expectations, interest rates and general global economic conditions.

Furthermore, international prices of various commodities are denominated in United States dollars whereas the income and expenditure of the Company are and will be taken into account in Australian currency. This exposes the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.

If the price of commodities declines this could have an adverse effect on the Company's exploration, development and possible production activities, and its ability to fund these activities, which may no longer be profitable.

8.7 Insurance Risks

Exploration for and development of minerals involves hazards and risks that could result in the Company incurring losses or liabilities that could arise from its operations. If the Company incurs losses or liabilities which are not covered by its insurance policies, the funds available for exploration and development will be reduced and the value and/or title to the Company's assets may be at risk.

The Company insures its operations in accordance with industry practice. However in certain circumstances the Company's insurance may not be of a nature or level to provide adequate insurance cover. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of the Company.

Insurance against all risks associated with mining exploration and production is not always available and, where available, the costs can be prohibitive or not adequate to cover all claims.

8.8 Environmental Risks

The operations and proposed activities of the Company are subject to Western Australian and Commonwealth laws and regulations concerning the environment as well as all laws and regulations concerning the environment in Brazil. As with most exploration projects and mining operations, the Company's activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. Future legislation and regulations governing exploration, development and possible production may impose significant environmental obligations on the Company.

The cost and complexity of complying with the applicable environmental laws and regulations may prevent the Company from being able to develop potential economically viable mineral deposits. The Company may require approval from the relevant authorities before it can undertake activities that are likely to impact the environment. Failure to obtain such approvals or to obtain them on terms acceptable to the Company may prevent the Company from undertaking its desired activities. The Company is unable to predict the effect of additional environmental laws and regulations, which may be adopted in the future, including whether any such laws or regulations would materially increase the Company's cost of doing business or affect its operations in any area.

There can be no assurances that new environmental laws, regulations or stricter enforcement policies, once implemented, will not oblige the Company to incur significant expenses and undertake significant investments in such respect which could have a material adverse effect on the Company's business, financial condition and results of operations.

8.9 Access to Infrastructure

There is limited capacity and high demand for rail and port services for the export of mineral products in Australia at the present time. If the Company progresses to production there is no guarantee that appropriate and affordable rail and port capacity will be available, which could have an adverse effect on the Company. In the event of production the Company will also require the use of both power and water infrastructure. Due to high demand for power and water access there is a risk that the Company may not be able to procure such access which could have an adverse effect on the Company.

GENERAL RISKS

8.10 General Economic Conditions

General economic conditions, introduction of tax reform, new legislation, the general level of activity within the resources industry, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company's exploration, development and possible production activities, as well as on its ability to fund those activities.

8.11 Share Market Conditions

Share market conditions may affect the value of the Company's quoted securities regardless of the Company's operating performance. Share market conditions are affected by many factors such as:

(a) general economic outlook;
(b) the introduction of tax reform or other new legislation (such as royalties);
(c) interest rates and inflation rates;
(d) currency fluctuations;
(e) changes in investor sentiment toward particular market sectors in Australia and/or overseas (such as the exploration industry or copper and/or nickel sectors within that industry);
(f) the demand for, and supply of, capital; and
(g) terrorism or other hostilities.

The market price of the Listed Options and underlying Shares can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular, which influences are beyond the Company's control and which are unrelated to the Company's performance. Neither the Company nor the Directors warrant the future performance of the Company, the Listed Options or the Shares and subsequently any return on an investment in the Company. Shareholders who exercise their Listed Options and sell the Shares into which they convert may not receive the entire amount of their original investment.

8.12 Volatility in Global Credit and Investment Markets

Global credit, commodity and investment markets have recently experienced a high degree of uncertainty and volatility. The factors which have led to this situation have been outside the control of the Company and may continue for some time resulting in continued volatility and uncertainty in world stock markets (including the ASX). This may impact the price at which the Listed Options and Shares trade regardless of operating performance and affect the Company's ability to raise additional equity and/or debt to achieve its objectives, if required.

8.13 Government and Legal Risk

The introduction of new legislation or amendments to existing legislation by governments (including introduction of tax reform), developments in existing common law or the respective interpretation of the legal requirements in any of the legal jurisdictions which govern the Company's operations or contractual obligations, could impact adversely on the assets, operations and ultimately the financial performance of the Company and its Listed Options and Shares. The same adverse impact is possible by the introduction of new government policy or amendments to existing government policy.

8.14 Unforeseen Expenditure Risk

Expenditure may need to be incurred that has not been considered in this Prospectus. Although the Company is not aware of any such additional expenditure requirements, if such expenditure is subsequently incurred this may adversely affect the expenditure proposals and activities of the Company, as the Company may be required to reduce the scope of its operations and scale back its exploration programmes. This could have a material adverse effect on the Company's activities and the value of the Listed Options and Shares.

9. ADDITIONAL INFORMATION

9.1 Continuous disclosure obligations

The Company is a "disclosing entity" (as defined in section 111AC of the Corporations Act) for the purposes of section 713 of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company is required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Company's securities.

This Prospectus is a "transaction specific prospectus". In general terms a "transaction specific prospectus" is only required to contain information in relation to the effect of the issue of securities on the Company and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest.

Having taken such precautions and having made such enquires as are reasonable, the Company believes that it has complied with the general and specific requirements of ASX as applicable from time to time before the issue of this Prospectus which required the Company to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX.

Information that is already in the public domain has not been reported in this Prospectus other than that which is considered necessary to make this Prospectus complete.

The Company, as a disclosing entity under the Corporations Act states that:

(a) it is subject to regular reporting and disclosure obligations;
(b) copies of documents lodged with ASIC in relation to the Company (not being documents referred to in section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of ASIC; and
(c) it will provide a copy of each of the following documents, free of charge, to any person on request between the date of issue of this Prospectus and the Closing Date:
- (i) the annual financial report most recently lodged by the Company with ASIC;
- (ii) any half-year financial report lodged by the Company with ASIC after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with ASIC; and
- (iii) any continuous disclosure documents given by the Company to ASX in accordance with the Listing Rules as referred to in section 674(1) of the Corporations Act after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with ASIC.

Copies of all documents lodged with ASIC in relation to the Company can be inspected at the registered office of the Company or an ASIC office during normal office hours, free of charge.

The Company has lodged the following announcements with ASX since the lodgement of the Company's 2012 annual financial report and before the lodgement of this Prospectus with ASIC:

Date	Description of Announcement
01/11/2012	Quarterly Activities Report
01/11/2012	Quarterly Cashflow Report
26/10/2012	Annual Report to Shareholders
26/10/2012	Notice of Annual General Meeting/Proxy Form
22/10/2012	Non-renounceable Entitlement Issue of Options
11/10/2012	Notice under Section 708A(5)(e)(i) of the Corporations Act
11/10/2012	Appendix 3B
04/10/2012	Redstone Raises $2m and Appoints New Corporate Advisor
02/10/2012	Trading Halt

ASX maintains files containing publicly available information for all listed companies. The Company's file is available for inspection at ASX during normal office hours.

The announcements are also available through the Company's website www.redstone.com.au.

9.2 Market price of Shares

The Company is a disclosing entity for the purposes of the Corporations Act and the Shares are enhanced disclosure securities quoted on ASX.

The highest, lowest and last market sale prices of the Shares on ASX during the three months immediately preceding the date of lodgement of this Prospectus with ASIC and the respective dates of those sales were:

Highest: $0.175 on 23 October 2012.

Lowest: $0.094 on 2 August 2012.

Last: $0.15 on 1 November 2012.

9.3 Material Contracts

The following are summaries of the significant terms of material contracts which relate to the Offer:

(a) Corporate Adviser Mandate with Argonaut Capital Limited

On 4 October 2012 the Company announced that it had entered into a mandate agreement (Mandate) pursuant to which it has appointed Argonaut Capital Limited (which is also the Underwriter to the Offer) as the Company's corporate adviser, and that a $2,000,000 placement was to be undertaken by the Company with Argonaut as the lead manager by the issue and allotment of 20,000,000 Shares at an issue price of $0.10 (together with 10,000,000 free attaching Options on a one (1) for two (2) Shares basis, exercisable at $0.20 on or before 28 February 2016) to take place in two tranches (Capital Raising). Tranche 1 of the Capital Raising, raising $1,160,000 (before costs) has been completed by the issue of 11,600,000 Shares (together with 5,800,013 free attaching Options). Tranche 2 of the Capital Raising is subject to Shareholder approval at the 2012 annual general meeting of Shareholders.

Argonaut's engagement as corporate and financial adviser to the Company under the Mandate is for a period of six (6) months from the date of the Mandate or such other date as is agreed in writing or as extended to complete the transactions completed by or defined in the Mandate. Should the Company elect to terminate the Mandate early the Company is liable to pay a $100,000 termination fee. The following fees and other consideration are payable to Argonaut under the Mandate:

(i) a fee of $5,000 per calendar month, payable for six months from the date of the Mandate;
(ii) a capital raising fee equivalent to 2.5% of any funds raised by the Company pursuant to the Capital Raising; and
(iii) in the event Argonaut introduces a strategic investor to the Company who commits to provide capital or, or otherwise fund expenditure on the Company or its assets, a fee equivalent to 4% of any unconditional funds committed by the strategic investor plus 2% of any conditional funds committed by a strategic investor as they are expended, which fee shall not exceed $2,000,000 in aggregate and the right to the fee shall cease four (4) years after the date of a strategic investor's first commitment.

Under the Mandate, Argonaut is also entitled (subject to Shareholder approval), but is not required, to subscribe for up to 6,000,000 Options at a price of $0.001 per Option, which Options will have the same terms as the Listed Options. 3,000,000 Options shall not vest until the Share price trades above $0.25 for at least 3 consecutive business days. The Company is also required to pay all reasonable out of pocket expenses incurred by Argonaut in connection with the Mandate.

The Mandate contains representations and warranties that are considered standard for a mandate of this type and entitles Argonaut to a first right of refusal to assist the Company should it elect to undertake certain transactions in the 12 months from the date of the Mandate.

(b) Underwriting Agreement

On 2 November 2012, the Company entered into an underwriting agreement with the Underwriter pursuant to which the Underwriter has agreed to conditionally fully underwrite the Offer. The following are the material terms of the Underwriting Agreement:

(i) The Underwriter's obligation to underwrite the Offer is conditional upon a number of matters including that:
- (a) a review of the Company is completed by the Underwriter to its satisfaction;
- (b) the Company undertakes a due diligence programme to the satisfaction of the Underwriter in respect of the Prospectus; and
- (c) the Company lodges the Prospectus with ASIC.
(ii) If any of the Conditions Precedent are not satisfied or waived by the Underwriter on or before the date the Prospectus is lodged with ASIC, the Underwriter may (in its sole and absolute discretion) terminate the Underwriting Agreement.
(iii) The Underwriter will be paid a fee of 2.5% of the total amount proposed be raised under the Offer of $143,569, being an amount of $3,589.23. The Company must reimburse the Underwriter for the reasonable costs of and incidental to the Offer.
(iv) The Underwriter may nominate and determine the allottees of all or any Listed Options subscribed for by the Underwriter, or for which the Underwriter procures a subscriber, pursuant to the Underwriting Agreement.
(v) The obligation of the Underwriter to underwrite the Offer is subject to certain events of termination. The Underwriter may terminate its obligations under the Underwriting Agreement if any of the conditions precedent are not satisfied or waived on or before the date the Prospectus is lodged with ASIC, or if any one or more the a number of events occurring prior to the issue of the Listed Options, including (but not limited to):
- i. Prospectus: any of the following occurs in relation to the Prospectus:
  - 1. it is not lodged with ASIC by such date agreed in writing by the Underwriter;
  - 1. the Underwriter reasonably forms the view that there is a material omission, it contains a material statement which is misleading or deceptive, or a material statement has become misleading or deceptive;
  - 1. the Underwriter reasonably forms the view that any projection or forecast in the Prospectus becomes, to a material extent, incapable of being met or unlikely to be met in the projected time;
  - 1. ASIC gives notice of intention to hold a hearing under section 739(2) of the Corporations Act or makes an interim order under section 739(3) of the Corporations Act; or
  - 1. any person other than the Underwriter who consented to being named in the Prospectus withdraws that consent;
- ii. Supplementary Prospectus: the Underwriter reasonably forms the view that a supplementary or replacement document (as appropriate) must be lodged with ASIC under section 719 or section 724 of the Corporations Act and the Company does not lodge a supplementary or replacement document (as the case may be) in the form and content and within the time reasonably required by the Underwriter;
- iii. ASX listing: ASX does not give approval for the Listed Options to be listed for official quotation, or if approval is granted, the approval is subsequently withdrawn, qualified or withheld except for any Listed Options issued under the underwriting obligation;
- iv. Index changes: the S&P / ASX All Ordinaries Index (ASX Code: XAO) or S&P / ASX Small Resources Index (ASX Code: XSR) falls more than 10% from the date of the Underwriting Agreement for a period of 3 continuous business days;
- v. indictable offence: a director of the Company or any Related Corporation is charged with an indictable offence;
- vi. return of capital or financial assistance: the Company or a Related Corporation takes any steps to undertake a proposal contemplated under section 257A of the Corporations Act or passes or takes any steps to pass a resolution under section 260B of the Corporations Act, without the prior written consent of the Underwriter;

vii. banking facilities: the Company's bankers terminating or issuing any demand or penalty notice or amending the terms of any existing facility or claiming repayment or accelerated repayment of any facility or requiring additional security for any existing facility;

viii. change in laws: any of the following occurs:

1. the introduction of legislation into the Parliament of the Commonwealth of Australia or of any State or Territory of Australia; or
1. the public announcement of prospective legislation or policy by the Federal Government, or the Government of any State or Territory; or
1. (the adoption by the ASIC, its delegates, ASX, the Reserve Bank of Australia or any other regulatory authority of any regulations or policy,

which does or is likely to prohibit, restrict or regulate the principal business of the Company, the Offer or the operation of stock markets generally;

(vi) failure to comply: the Company or any Related Corporation fails to comply with any of the following:
- 1. a provision of its constitution;
- 1. any statute;
- 1. a requirement, order or request, made by or on behalf of the ASIC or any Governmental Agency; or
- 1. any material agreement entered into by it;
- ix. alteration of capital structure or constitution: except as described in the Prospectus, the Company alters its capital structure or its constitution without the prior written consent of the Underwriter;
- x. hostilities: there is an outbreak of hostilities or a material escalation of hostilities (whether or not war has been declared) after the date of this Agreement involving one or more of Australia, Japan, Russia, the United Kingdom, the United States of America, or the Peoples' Republic of China, other than hostilities involving Afghanistan or Iraq, any country bordering Afghanistan or Iraq or any Arab country (being a country the majority of whose inhabitants are of Arab ethnicity);
- xi. extended Force Majeure: a Force Majeure, which prevents or delays an obligation under the Underwriting Agreement, lasting in excess of 2 weeks occurs;
- xii. default: the Company is in default of any of the terms and conditions of the Underwriting Agreement or breaches any warranty or covenant given or made by it under the Underwriting Agreement;
- xiii. adverse change: any adverse change occurs which materially impacts or is likely to impact the assets, operational or financial position of the

Company or a Related Corporation (including but not limited to an administrator, receiver, receiver and manager, trustee or similar official being appointed over any of the assets or undertaking of the Company or a Related Corporation);

xiv. investigation: any person is appointed under any legislation in respect of companies to investigate the affairs of the Company or a Related Corporation;
xv. due diligence: there is a material omission from the results of the due diligence investigation performed in respect of the Offer or the results of the investigation or the verification material are false or misleading;
xvi. Prescribed Occurrence: a Prescribed Occurrence occurs, other than as disclosed in the Prospectus;
xvii. Suspension of debt payments: the Company or a Related Corporation suspends payment of its debts generally;
xviii. Event of Insolvency: an Event of Insolvency occurs in respect of the Company or a Related Corporation; or
- xix. Judgment against a Related Corporation: a judgment in an amount exceeding $50,000 is obtained against the Company or a Related Corporation and is not set aside or satisfied within 7 days.

The Underwriting Agreement also contains a number of indemnities, representations and warranties from the Company to the Underwriter that are considered standard for an agreement of this type.

9.4 Interests of Directors

Other than as set out below or elsewhere in this Prospectus, no Director or proposed Director holds, or has held within the two years preceding lodgement of this Prospectus with the ASIC, any interest in:

the formation or promotion of the Company; or
any property acquired or proposed to be acquired by the Company in connection with:
- o its formation or promotion; or
- o the Offer; and
the Offer,

and no amounts have been paid or agreed to be paid (in cash, Shares, Options or otherwise) and no benefits have been given or agreed to be given to a Director or a proposed Director:

as an inducement to become, or to qualify as, a Director; or
for services provided in connection with:
- o the formation or promotion of the Company; or
- o the Offer.

Security Holdings

The Directors', including their personally-related entities, relevant interests in Securities as at the date of this Prospectus are set out below:

Name	Shares	Options
Richard Homsany	Nil	4,000,000
Anthony Ailakis	Nil	2,000,000
Edward van Heemst	10,050,000	750,000

Remuneration

The total maximum remuneration of non-executive Directors is initially set by the Constitution and subsequent variation is by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the Corporations Act and the Listing Rules, as applicable. The determination of non-executive Directors' remuneration within that maximum will be made by the Board having regard to the inputs and value to the Company of the respective contributions by each nonexecutive Director. The current amount has been set at an amount not to exceed $250,000 per annum.

A Director may be paid fees or other amounts (i.e. non-cash performance incentives such as Options, subject to any necessary Shareholder approval) as the other Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. In addition, Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively in or about the performance of their duties as Directors.

The Company has entered into a deed of indemnity, insurance and access with each of the Directors and the Company Secretary (Deeds). Under the terms of the Deeds, the Company indemnifies each officer to the extent permitted by the Corporations Act against any liability as a result of the officer acting as an officer of the Company. The Company is required under the Deeds to use its best endeavours to obtain and maintain insurance policies for the benefit of the relevant officer for the term of their appointment and for a period of seven (7) years after retirement, termination or resignation, except to the extent that such insurance cannot be procured at a reasonable cost or is otherwise unavailable to the Company. The Deeds also provide for the officer to have a right of access to Board papers and minutes.

The following table shows the total the Directors, including their personally-related entities, have been paid or are entitled to be paid.

Name	Year Ended 30 June2011	Year Ended 30 June2012	1 July 2012 to date ofthis Prospectus
Richard Homsany(3)	$75,500	$97,620	$32,540
Anthony Ailakis(1)	$517,030	$199,224	$66,000
Edward van Heemst(2)	Nil	Nil	$4,360

Notes:

(1) Mr Ailakis was appointed as Executive Director on 9 July 2012 and did not receive any remuneration in FY 11 or FY12 as a Director, however he received remuneration as an executive officer (Operations Manager) of the Company as disclosed in the Company's 2012 annual report. During the 2011 financial year Mr Ailakis was granted 2,000,000 Options valued at $289,900 included in his total remuneration of $517,030.
(2) Mr van Heemst was appointed as Non-Executive Director on 9 July 2012.
(3) Cardinals Lawyers and Consultants, a firm of which Mr Homsany is the principal, will also receive fees of $18,500 plus GST and disbursements for legal services in respect of the Offer.

9.5 Interests of Experts and Advisers

Other than as set out below or elsewhere in this Prospectus, no:

person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus; or
promoter of the Company; or
an underwriter (but not a sub-underwriter),

holds, or has held within the two (2) years preceding lodgement of this Prospectus with ASIC, any interest in:

the formation or promotion of the Company; or
any property acquired or proposed to be acquired by the Company in connection with:
- o its formation or promotion; or
- o the Offer; and
the Offer,

and no amounts have been paid or agreed to be paid (in cash, Shares, Options or otherwise) and no benefits have been given or agreed to be given to any of these persons for services provided in connection with:

the formation or promotion of the Company; or
the Offer.

Argonaut Capital Limited has been appointed as corporate adviser and underwriter to the Offer and will be paid for these services on the terms and conditions in Sections 9.3(a) and 9.3(b). During the 24 months preceding lodgment of this Prospectus with ASIC, the Company has incurred fees of approximately $39,000 to Argonaut Capital Limited for services provided to the Company. As part of the consideration for services provided to the Company Argonaut Capital Limited is entitled (but not obligated) to subscribe for up to 6,000,000 Options at $0.001 per Option, subject to the Company receiving Shareholder approval.

Cardinals Lawyers and Consultants, the principal of which is the Chairman, have acted as the solicitors to the Company in relation to the Offer. The Company estimates it will pay Cardinals Lawyers and Consultants approximately $18,500 plus GST and disbursements for these services. During the 24 months preceding lodgement of this Prospectus with ASIC, the Company has incurred fees of approximately $153,820 plus GST and disbursements to Cardinals Lawyers and Consultants for legal and other services provided to the Company.

9.6 Consents

Each of the parties referred to in this Section:

(a) does not make the Offer;
(b) has not authorised or caused the issue of this Prospectus;
(c) does not make, or purport to make, any statement in this Prospectus other than those referred to in this Section; and
(d) to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any statement included in or omitted from this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this Section 9.6.

Argonaut Capital Limited has given its written consent to being named as corporate adviser and underwriter to the Offer in this Prospectus, in the form and context in which it is named. Argonaut Capital Limited has not withdrawn its consent prior to lodgement of this Prospectus with ASIC.

Cardinals Lawyers and Consultants has given its written consent to being named as solicitors to the Company in this Prospectus, in the form and context in which it is named. Cardinals Lawyers and Consultants has not withdrawn its consent prior to the lodgement of this Prospectus with ASIC.

9.7 Expenses of the Offer

In the event that all Entitlements are accepted, the total expenses of the Offer are estimated to be approximately $34,945 and are expected to be applied towards the items set out in the table below:

Item of Expenditure	($)
ASIC fees	2,171
ASX fees	1,685
Underwriting fees	3,589
Legal fees	18,500
Printing and distribution	9,000
TOTAL	34,945

9.8 Litigation

Mr Ailakis, a Director, is defending a legal claim (Claim) lodged against him in 21 February 2011 in the District Court of Western Australia (3982 of 2010 Olivero v Ailakis & Anor).

The Company has in place Deeds of Indemnity, Insurance and Access with its officers including Mr Ailakis, whereby inter alia the Company has agreed to indemnify and keep indemnified Mr Ailakis against:

(a) all liabilities incurred by Mr Ailakis as a Director; and
(b) without limiting the above, all legal expenses incurred by Mr Ailakis as a Director.

The indemnity only applies to the extent and amount that Mr Ailakis is not indemnified under any other indemnity, including an indemnity contained in any insurance policy taken out by the Company.

To date, the Company has indemnified Mr Ailakis for all legal expenses incurred in defending the Claim. The Company has also lodged an insurance claim for legal expenses and losses that may arise from the Claim pursuant to the Company's Directors and Officers policy with QBE insurance. However as at the date of this Prospectus, the amount of potential claim for defence cost reimbursement from QBE or potential loss from the Claim (subject to the jurisdictional limit of the District Court to award damages up to $750,000) is not known and a reasonable estimate cannot be made.

As at the date of this Prospectus, the Company is not involved in any legal proceedings other than as specified above and the Directors are not aware of any legal proceedings pending or threatened against the Company.

9.9 Privacy Statement

If you complete an Entitlement and Acceptance Form you will be providing personal information to the Company. The Company collects, holds and will use that information to assess your application, and, if your application is successful, to service your needs as a Security holder and to facilitate distribution payments and corporate communications to you as a Security holder.

The information may also be used from time to time and disclosed to persons inspecting the Share register, including bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the Share Registry.

You can access, correct and update the personal information that we hold about you. If you wish to do so, please contact the Share Registry whose contact details are set out in the Corporate Directory in Section 1.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules.

You should note that if you do not provide the information required on the Entitlement and Acceptance Form the Company may not be able to accept or process your application.

9.10 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship

The Company participates in the Clearing House Electronic Sub-register System (CHESS). CHESS is operated by ASX Settlement Pty Ltd, a wholly owned subsidiary of the ASX, in accordance with the Listing Rules and the ASX Settlement Operating Rules. The Company operates an electronic issuer-sponsored sub-register and an electronic CHESS sub-register. The two sub-registers together make up the Company's principal register of Securities.

The Company will not issue certificates to Security holders. Instead Security holders will receive a statement of their holdings in the Company, including their holding of Listed Options. If an investor is broker sponsored, ASX Settlement Pty Ltd will send a CHESS statement. This statement will also advise investors of either their Holder Identification Number (HIN) in the case of a holding on the CHESS sub-register or a Security Holder Reference Number (SRN) in the case of a holding on the issuer sponsored sub-register.

A statement will be routinely sent to Security holders at the end of any calendar month during which their holding changes. A Security holder may request a statement at any other time however a charge may be incurred for additional statements.

9.11 Dividend Policy

The Company has not declared a dividend since its incorporation and, at the date of this Prospectus, does not intend to pay any dividends in the two year period following the date of this Prospectus. During this period the Board expects to incur significant expenditure on the exploration and development of its Projects and in identifying, evaluating and, if warranted, acquiring other resource projects or assets in Australia and/or overseas that have the potential to add Shareholder value. The extent, timing and payment of dividends by the Company in the future will be at the discretion of the Directors and will depend on a number of factors including future earnings, the operating results and financial condition of the Company, future capital requirements, general business and other factors considered relevant by the Directors. No assurances in relation to the payment of dividends, or the franking credits attached to such dividends, can be given.

10. GLOSSARY

Where the following terms are used in this Prospectus they have the following meanings, unless the context requires otherwise:

$ means an Australian dollar.

Application Money means money for Listed Options received by the Company from an Eligible Shareholder pursuant to the Offer.

ASIC means the Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the market operated by it (as the context requires).

ASX Settlement Operating Rules means the operating rules of the settlement facility operated by ASX Settlement Pty Ltd (ACN 008 504 532), as amended from time to time.

Baggaley Hills Project means the exploration project located in the West Musgrave, Australia, comprising exploration licences 69/2200, 69/2249, 69/2053, 69/2054, 69/2339, 69/2340 applied for and granted under the Mining Act.

Blackstone Range Project means the exploration project located in the West Musgrave, Australia comprising exploration licences 69/2108 and 69/2109 applied for and granted under the Mining Act.

Board means the board of Directors.

Business Day means a day other than a Saturday or a Sunday when trading banks are ordinarily open for business in Perth, Western Australia.

Chairman means the chairman of the Board.

Closing Date means the closing date of the Offer as set out in the indicative timetable in Section 5.1 (subject to the Company reserving the right to extend the Closing Date).

Company or Redstone means Redstone Resources Limited (ACN 090 169 154).

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth) and any regulations made under it, each as amended from time to time.

Directors means the directors of the Company from time to time.

Eligible Shareholders has the meaning given in Section 5.5.

Entitlement means the entitlement of an Eligible Shareholder to subscribe for Listed Options under the Offer.

Entitlement and Acceptance Form means the entitlement and acceptance form attached to and forming part of this Prospectus.

Event of Insolvency means:

(a) a receiver, manager, receiver and manager, trustee, administrator, controller or similar officer is appointed in respect of a person or any asset of a person;

(b) a liquidator or provisional liquidator is appointed in respect of a corporation;
(c) any application (not being an application withdrawn or dismissed within 7 days) is made to a court for an order, or an order is made, or a meeting is convened, or a resolution is passed, for the purpose of:
- (i) appointing a person referred to in paragraphs (a) or (b);
- (ii) winding up a corporation; or
- (iii) proposing or implementing a scheme of arrangement;
(d) any event or conduct occurs which would enable a court to grant a petition, or an order is made, for the bankruptcy of an individual or his estate under any insolvency provision;
(e) a moratorium of any debts of a person, or an official assignment, or a composition, or an arrangement (formal or informal) with a person's creditors, or any similar proceeding or arrangement by which the assets of a person are subjected conditionally or unconditionally to the control of that person's creditors or a trustee, is ordered, declared, or agreed to, or is applied for and the application is not withdrawn or dismissed within 7 days;
(f) a person becomes, or admits in writing that it is, is declared to be, or is deemed under any applicable act to be, insolvent or unable to pay its debts; or
(g) any writ of execution, garnishee order, mareva injunction or similar order, attachment, distress or other process is made, levied or issued against or in relation to any asset of a person.

Group means the Company and its related bodies corporate (as that term is defined in the Corporations Act) (if any).

Ineligible Shareholder means a Shareholder who is not an Eligible Shareholder.

JORC Code means the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2004) prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia.

Listed Option means an Option issued under the Offer on the terms and conditions set out in Section 7.1.

Listing Rules means the Listing Rules of ASX and any other rules of ASX which are applicable while the Company is admitted to the official list of the ASX, each as amended or replaced from time to time, except to the extent of any express written waiver by ASX.

Mining Act means the Mining Act 1978 (WA) and any regulations made under it, each as amended from time to time.

Offer means the invitation to subscribe for Listed Options under this Prospectus.

Option means an option to acquire a Share.

Pontal Project means the exploration project located in the Xingu region**,** Brazil comprising tenements 850738/2011 and 850739/2011 applied for and granted under the Federal Mining Code (1967) of Brazil.

Prescribed Occurrence means the Company or:

(a) a Related Corporation converting all or any of its shares into a larger or smaller number of shares;
(b) a Related Corporation resolving to reduce its share capital in any way;
(c) a Related Corporation:
(i) entering into a buy-back agreement or;
(ii) resolving to approve the terms of a buy-back agreement under section 257C or 257D of the Corporations Act;
(h) a Related Corporation making an issue of, or granting an option to subscribe for, any of its shares, or agreeing to make such an issue or grant such an option except to its directors or employees;
(i) a Related Corporation issuing, or agreeing to issue, convertible notes;
(j) a Related Corporation disposing, or agreeing to dispose, of the whole, or a substantial part, of its business or property;
(k) a Related Corporation charging, agreeing to charge, the whole, or a substantial part, of its business or property;
(l) a Related Corporation resolving that it be wound up;
(m) a Related Corporation having a liquidator or provisional liquidator appointed;
(n) a Related Corporation having an order by a court for winding up made in relation to it;
(o) a Related Corporation having an administrator appointed under section 436A, 436B or 436C of the Corporations Act;
(p) a Related Corporation executing a deed of company arrangement; or
(q) a Related Corporation having a receiver, or a receiver and manager, in relation to the whole, or a substantial part, of its property, appointed.

Prospectus means this prospectus dated 1 November 2012.

Record Date means the record date for determining Entitlements specified in the timetable set out in Section 2.

Related Corporation means a related body corporate of the Company as that expression is defined in the Corporations Act and, in the context of the Underwriting Agreement, includes a body corporate which is at any time after the date of the Underwriting Agreement but ceases to be a related body corporate because of an amendment, consolidation or replacement of the Corporations Act.

Quotation means official quotation by the ASX in accordance with the Listing Rules.

Section means a section of this Prospectus.

Securities means Shares and Options, or any one of them, as the context requires, and Security has a corresponding meaning.

Share means a fully paid ordinary share in the capital of the Company.

Share Registry means Advanced Share Registry Ltd.

Shareholder means a holder of a Share.

Underwriter or Argonaut means Argonaut Capital Limited.

Underwriting Agreement means the underwriting agreement dated 2 November 2012 between the Company and the Underwriter, details of which are set out in Section 9.3(b).

WST means Western Standard Time as observed in Perth, Western Australia.

11. DIRECTORS' STATEMENT AND AUTHORISATION

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

Each Director has consented to the lodgement of this Prospectus with ASIC in accordance with section 720 of the Corporations Act and has not withdrawn that consent.

Dated 2 November 2012.

_______________________________ Richard Homsany Chairman For and on behalf of Redstone Resources Limited

REDSTONE RESOURCES LIMITED

ACN 090 169 154

ENTITLEMENT AND ACCEPTANCE FORM

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCKBROKER OR OTHER PROFESSIONAL ADVISER

REGISTERED OFFICE: Suite 3, 110-116 East Parade, East Perth WA 6004 SHARE REGISTRY: Advanced Share Registry Ltd, Unit 2, 150 Stirling Highway Nedlands WA 6009

Non-renounceable entitlement offer of up to 14,356,939 Listed Options, at an issue price of $0.01 per Listed Option on the basis of 1 Listed Option for every 10 Shares held by Eligible Shareholders at 5:00 pm (WST) on Wednesday 14, November 2012. The Offer closes at 5.00 pm (WST) on Thursday, 29 November 2012.

To the Directors

Redstone Resources Limited

I/We the above mentioned, being registered at 5:00 pm (WST) on Wednesday, 14 November 2012 as the holder(s) of Shares hereby accept that number of Listed Options shown below in accordance with the enclosed Prospectus;

By submitting this Entitlement and Acceptance Form or by using the BPAY facility to accept the Offer, I/we represent and warrant that I/we have read and understood the Prospectus to which this Entitlement and Acceptance Form relates and declare that this Application is completed and lodged according to the Prospectus and the instructions on the reverse of this Entitlement and Acceptance Form, and declare that all details and statements made by me/us are complete and accurate.

I/We agree to be bound by the constitution of Redstone Resources Limited and agree to the terms and conditions of the Offer. I/We represent and warrant that I/we have not relied on any other information provided by or on behalf of the Company other than as set out in the Prospectus when making my/our decision to invest.

I/We hereby authorise you to place my/our name(s) on the registers of option holders in respect of the number of Listed Options (if any) allotted to me/us.

RETURN OF THIS DOCUMENT WITH THE REQUIRED PAYMENT WILL CONSTITUTE YOUR ACCEPTANCE OF THE NUMBER OF LISTED OPTIONS SET OUT BELOW (BEING NOT MORE THAN YOUR ENTITLEMENT)

ACCEPTANCE OF ENTITLEMENT

NUMBER OF LISTED OPTIONS ACCEPTED	TOTAL AMOUNT ENCLOSED
(BEING NOT MORE THAN THE ENTITLEMENT SHOWN ABOVE)	AT $0.01 PER LISTED OPTION
	$

PAYMENT

Payment of Application Money may only be made by BPAY, cheque or money order. Cash will not be accepted. Please indicate which payment option you have chosen by marking the relevant box below.

Cheque/money order BPAY

PLEASE ENTER	Drawer	Bank	Branch	Amount
CHEQUEDETAILSTHANK YOU

Application being rejected.	NOTE: Cheques or money orders should be made payable to Redstone Resources Limited – IPO Account, crossed NOT NEGOTIABLE andmust accompany your Entitlement and Acceptance Form and be mailed to Advanced Share Registry Ltd, PO Box 1156, Nedlands, WesternAustralia, 6909 or delivered to Advanced Share Registry Ltd, 150 Stirling Highway, Nedlands, Western Australia 6009 to arrive no later than5.00 pm WST on Thursday, 29 November 2012. Please ensure that you submit the correct amount. Incorrect payments may result in your
	If you choose to pay by BPAY, you do not need to return thisEntitlement and Acceptance Form.
My/Our contact numbers in the case of enquiry are:
Telephone : ()	Fax : ()
Email :
Complete this panel and sign below only if a change of address is to be registered with the Company
New Address :
Signature(s) :Date :
Please indicate correct title: Director / Secretary /
	THE OFFER CLOSES 5.00 PM WST ON THURSDAY, 29 NOVEMBER 2012 (UNLESS EXTENDED). THE DIRECTORS RESERVE THERIGHT TO MAKE AMENDMENTS TO THIS ENTITLEMENT AND ACCEPTANCE FORM WHERE APPROPRIATE.

PLEASE REFER OVERLEAF FOR INSTRUCTIONS.

EXPLANATION OF ENTITLEMENT

The front of this Entitlement and Acceptance Form sets out the number of Listed Options which you are entitled to accept.

Your Entitlement may be accepted either in full or in part. There is no minimum acceptance.

The price payable on acceptance of each Listed Option is $0.01 per Listed Option.

APPLICATION INSTRUCTIONS

Payment

You can apply for Listed Options by utilising the payment options detailed below. There is no requirement to return this Entitlement and Acceptance Form if you are paying by BPAY.

Your cheque or money order must be made payable to Redstone Resources Limited – IPO Account, in Australian currency and crossed Not Negotiable. Your cheque must be drawn on an Australian branch of a financial institution. Please ensure you submit the correct amount. Incorrect payments may result in your Application being rejected. Complete cheque details in the boxes provided.

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. Paperclip (do not staple) your cheque(s) or money order(s) to the Entitlement and Acceptance Form. Cash will not be accepted. A receipt for payment will not be provided.

Contact Details

Enter the name of a contact person and telephone number. These details will only be used in the event that the registry has a query regarding this Entitlement and Acceptance Form.

Lodgement of Application

If you are applying for Listed Options and your payment is being made by BPAY, you do not need to return this Entitlement and Acceptance Form however you are encouraged to return the Entitlement and Acceptance Form to the registry for reconciliation purposes – in that case you can post it to the registry at the address shown below or send it by facsimile to (61) (8) 9389 7871. Your payment must be received by no later than 5.00 pm WST on Thursday, 29 November 2012. Applicants should be aware that their own financial institution may implement earlier cut off times with regard to electronic payment, and should therefore take this into consideration when making payment. It is the responsibility of the applicant to ensure that funds submitted through BPAY are received by this time.

If you are paying by cheque or money order, Advanced Share Registry Ltd must receive your Application at the address set out below no later than 5.00pm WST on Thursday, 29 November 2012. You should allow sufficient time for this to occur. Return your Entitlement and Acceptance Form with your cheque or money order attached.

Neither Advanced Share Registry Ltd nor the Company accepts any responsibility if you lodge your Entitlement and Acceptance Form at any other address or by any other means.

Privacy Statement

Personal information is collected on this Entitlement and Acceptance Form by Advanced Share Registry Ltd, as registrar for securities issuers ("the issuer"), for the purpose of maintaining registers of security holders, 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 Advanced Share Registry Ltd, or you would like to correct information that is inaccurate, incorrect or out of date, please contact Advanced Share Registry Ltd. In accordance with the Corporations Act 2001 (Cth), 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 Advanced Share Registry Ltd. You can contact Advanced Share Registry Ltd using the details provided on the front of this Entitlement and Acceptance Form.

If you have any enquiries concerning this Entitlement and Acceptance Form or your Entitlement, please contact Advanced Share Registry Ltd on 08 9389 8033.

CHESS holders must contact their Controlling Participant to notify a change of address.

By Mail

Redstone Resources Limited C/- Advanced Share Registry Ltd PO Box 1156, Nedlands Western Australia 6909

By Delivery

Redstone Resources Limited C/- Advanced Share Registry Ltd 150 Stirling Hwy Nedlands Western Australia 6009

Capitalised terms used in this Entitlement and Acceptance Form have the same meaning as those terms in the Prospectus unless the context requires otherwise.