REDSTONE RESOURCES LIMITED — Capital/Financing Update 2014

Feb 16, 2014

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ASX ANNOUNCEMENT 17 February 2014

REDSTONE SUCCESSFULLY COMPLETES OVERSUBSCRIBED CAPITAL RAISING OF $1.75M

Redstone Resources Limited (ASX Code: RDS) (“ Redstone ” or “ the Company ”) is pleased to advise that further to its announcement on 5 February 2014, it has today successfully completed its capital raising. Due to strong demand from a number of highly credentialed investors the Company accepted additional oversubscriptions of $100,000 to bring total funds raised to $1.75 million (before costs). Total funds were raised by way of placement of 35,000,000 fully paid ordinary shares in the Company to sophisticated and professional investors at an issue price of $0.05 per share (“ Placement ”).

In accordance with Listing Rule 3.10.5A the Company advises the following additional details in respect of the $1.75 million Placement and attached Appendix 3B.

1. The dilution to existing shareholder as a result of the Placement:

2. (a) Issue under Listing Rule 7.1 (19,803,061 shares) 13.03% (b) Issue under Listing Rule 7.1A (15,196,939 shares) 10.00% resulting in a total dilution of 23.03%.

3. Further details of the approximate percentage of the issued capital post the total Placement held by pre‐placement security holders and new security holders are as follows. Please note that this information relates to the portion of shares issued under Listing Rule 7.1A only (15,196,939 shares):

Pre‐placement security holders who did not participate 91.9% Pre‐placement security holders who did participate 0% Placement participants who were new holders 8.1%

1. The Company believed that the Placement to sophisticated and professional investors (including shares issued under both Listing Rule 7.1 and 7.1A) was the most efficient mechanism for raising funds to meet the Company’s immediate capital needs to achieve the Company’s previously stated Stage 1 Tollu exploration strategy.

2. No underwriting agreements were in place for the Placement.

Redstone Resources Limited ABN 42 090 169 154 60 Havelock Street, West Perth WA 6005 Tel: 08 9328 2552 Fax: 08 9328 2660

www.redstone.com.au Email: contact@redstone.com.au

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ASX: RDS

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1. Fees payable are up to 5% (plus GST) of the funds under the Placement.

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Miranda Conti Company Secretary

For further information please refer to the attached Appendix 3B or contact:

Richard Homsany Miranda Conti Chairman Company Secretary Redstone Resources Limited Redstone Resources Limited +61 (08) 9328 2552 +61 (08) 9328 2552 contact@redstone.com.au contact@redstone.com.au

About Redstone Resources Limited

Redstone Resources Ltd is a Perth‐based company focused on copper and nickel with a portfolio of highly prospective mineral exploration properties in the West Musgrave region of WA.

Redstone Resources Limited ABN 42 090 169 154 60 Havelock Street, West Perth WA 6005 Tel: 08 9328 2552 Fax: 08 9328 2660

www.redstone.com.au Email: contact@redstone.com.au

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Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

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

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

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12

Name of entity

Redstone Resources Limited

ABN

42 090 169 154

We (the entity) give ASX the following information.

Part 1 - All issues

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

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the +securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Fully paid ordinary shares (RDS) and Listed Options (RDSO)
	35,000,000 fully paid ordinary shares; 1,000,000 listed options
	Fully paid ordinary shares; Listed Options – exercisable at $0.20 any time on or before 28 February 2016 issued at $0.001/option.

• See chapter 19 for defined terms.

Appendix 3B Page 1

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Appendix 3B New issue announcement

4 Do the[+] securities rank equally Yes in all respects from the date of ‐ fully paid ordinary shares; and allotment with an existing[+] class ‐ Listed options (ASX: RDSO) of quoted[+] securities? If the additional securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration $0.05/Share to raise $1,750,000; and $0.001/Option to raise $1,000 6 Purpose of the issue To fund Tollu Project stage 1 exploration (If issued as consideration for strategy and general working capital. the acquisition of assets, clearly identify those assets) 6a Is the entity an[+] eligible entity Yes that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the[+] securities the subject of this Appendix 3B , and comply with section 6i 6b The date the security holder 29 November 2013 resolution under rule 7.1A was passed 6c Number of[+] securities issued 19,803,061 fully paid ordinary shares without security holder 1,000,000 listed options approval under rule 7.1

• See chapter 19 for defined terms.

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6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of securities issued under an exception in rule 7.2 6g If securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the issue date and both values. Include the source of the VWAP calculation. 6h If securities were issued under rule 7.1A for non‐cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 Dates of entering +securities into uncertificated holdings or despatch of certificates 8 Number and +class of all +securities quoted on ASX (including the securities in section 2 if applicable)	15,196,939 fully paid ordinary shares	15,196,939 fully paid ordinary shares
	N/A
	N/A
	Yes Issue Date: 16 November 2014 Issue Price: $0.05 75% of 15 Day VWAP: $0.042 (Source: Iress)
	N/A
	Refer Annexure 1
	17 February 2014
	Number	+Class
	186,969,390 31,356,966	Ordinary Shares (RDS) Options exercisable at $0.20 any time on or before 28 February 2016 (RDSO)

• See chapter 19 for defined terms.

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9 Number and +class of all +securities not quoted on ASX (including the securities in section 2 if applicable)	Number	+Class
	1,500,000 Unquoted Options (RDSAK) 500,000 Unquoted Options (RDSAK) 500,000 Unquoted Options (RDSAK) 1,100,000 Unquoted Options (RDSAY) 950,000 Unquoted Options (RDSAS) 850,000 Unquoted Options (RDSAS) 1,000,000 Unquoted Options (RDSAU) 1,000,000 Unquoted Options (RDSAB) 2,000,000 Unquoted Options	$0.25 Options exercisable any time on or before 30 November 2014. $0.30 Options exercisable any time on or before 30 November 2014. $0.35 Options exercisable any time on or before 30 November 2014. $0.50 Options exercisable any time on or before 24 February 2014 $0.35 unquoted options exercisable any time on or before 6 July 2015. $0.45 unquoted options exercisable any time on or before 6 July 2015. $0.30 unquoted options exercisable any time on or before 21 December 2014. $0.30 unquoted options exercisable any time on or before 26 February 2015. $0.20 options exercisable any time on or before 3 December 2017

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non‐ renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has+security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of+security holders 25 If the issue is contingent on +security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do+security holders sell their entitlements_in full_through a broker? 31 How do+security holders sell part of their entitlements through a broker and accept for the balance? 32 How do +security holders dispose of their entitlements (except by sale through a broker)?	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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33 +Despatch date

N/A

Part 3 - Quotation of securities

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

• 34 Type of securities ( tick one )

• (a)  Securities described in Part 1 ‐ 35,000,000 fully paid ordinary shares (RDS) and 1,000,000 Listed Options (RDSO)

• (b) All other securities

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

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 ‐ 1,000 1,001 ‐ 5,000 5,001 ‐ 10,000 10,001 ‐ 100,000 100,001 and over

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

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought

• See chapter 19 for defined terms.

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• 39 Class of +securities for which quotation is sought

• 40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted[+] securities? If the additional securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security)

• Number +Class

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

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• See chapter 19 for defined terms.

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• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

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

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

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Sign here: ............................................................ Date: 17 February 2014 (Company secretary)

Print name: Miranda Conti

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• See chapter 19 for defined terms.

Appendix 3B Page 9

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Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for[+] eligible entities

Introduced 01/08/12

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

• Insert number of fully paid ordinary 151,969,390 securities on issue 12 months before date of issue or agreement to issue Add the following: • Number of fully paid ordinary securities Nil issued in that 12 month period under an exception in rule 7.2

• • Number of fully paid ordinary securities NIl issued in that 12 month period with shareholder approval

• • Number of partly paid ordinary Nil securities that became fully paid in that 12 month period

• Note: • Include only ordinary securities here – other classes of equity securities cannot be added

• • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• • It may be useful to set out issues of securities on different dates as separate line items

• Subtract the number of fully paid ordinary Nil securities cancelled during that 12 month period “A” 151,969,390

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”

Appendix 3B New issue announcement	Appendix 3B New issue announcement
Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	22,795,409
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of equity securities issued or agreed to be issued in that 12 month period not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 _Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable ) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	17/02/14 - 19,803,061 fully paid ordinary shares 17/02/14 - 1,000,000 listed options (RDSO)
“C”	Nil
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	22,795,409
Subtract“C” Note: number must be same as shown in Step 3	20,803,061
Total[“A” x 0.15] – “C”	1,992,348 [Note: this is the remaining placement capacity under rule 7.1]

placement capacity under rule 7.1
“A” x 0.15	22,795,409
Note: number must be same as shown in
Step 2
Subtract“C”	20,803,061
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	1,992,348
	[Note: this is the remaining placement
	capacity under rule 7.1]

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Part 2

Rule 7.1A – Additional placement capacity for eligible entities Step 1: Calculate “A”, the base figure from which the placement capacity is calculated “A” 151,969,390 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 15,196,939 Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used Insert number of equity securities issued or 17/02/14 - 15,196,939 agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items “E” 15,196,939

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement	Appendix 3B New issue announcement
Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	15,196,939
Subtract“E” Note: number must be same as shown in Step 3	15,196,939
Total[“A” x 0.10] – “E”	Nil Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 13

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