REDSTONE RESOURCES LIMITED — Capital/Financing Update 2016

Jun 27, 2016

28 June 2016

The Manager Company Announcements Office Australian Stock Exchange Limited Level 4, Exchange Centre 20 Bridge Street SYDNEY NSW 2000

Electronic Lodgement

PLANNED FOLLOW UP DRILLING AT TOLLU PROJECT AND EIS DRILLING GRANT AWARDED

Highlights

• 2015 drilling program success has resulted in:
  • o Delineation of maiden JORC resource for Tollu Project.
  • $\circ$ Substantial increase to exploration target
  • o Significantly upgraded Forio Prospect and revised priority targets.
• The Forio Prospect at the Tollu Project is significantly upgraded, with recent drilling identifying mineralised strike over 250m.
• Forio remains open in all directions, despite displaying limited surface expression and not yet being effectively drilled out below 50m.
• Results at Forio displayed the widest and strongest copper mineralisation discovered at this depth $\bullet$ to date at the Tollu Project.
• Planning underway for follow-up drilling at Forio and at four of the identified Forio analogues. which have been elevated in priority for further testing following a full data review and the 2015 drilling results.
• The proposed RC drilling program at Forio and the further four Forio analogue prospects comprises 53 holes for a total of 8,000m.
• WA Government awards EIS co-funded drilling grant of up to $200,000 for the Tollu Project.
• $\bullet$ EIS grant planned to be used for a single deep diamond drill hole of approximately 1,000m at the Chatsworth Prospect.

Follow up RC Drilling at Tollu

Redstone Resources Limited (ASX: RDS) ("Redstone" or "the Company") is pleased to announce that, further to the ASX announcement of 15 June 2016 and subject to the availability of funding, the Company has planned a systematic follow-up RC drilling program at the Company's 100% owned Tollu Copper Project (the "Project"), focusing on the Forio and Forio Deeps Prospect ("Forio") and a further four of the identified Forio analogues, namely the Forio South, Stourhead, Exbury and Killruddery Prospects (Figure 1).

Figure 1 Tollu Prospects to the east of Eastern Reef - Forio analogues

The objective of the planned RC drilling is to test veins hosting near surface copper mineralisation on Tollu prospects displaying minimal surface expression analogous to that identified at the Forio Prospect from the most recent drilling campaign. In addition deeper holes have been planned to test mineralisation at Forio, at depths between 50m and 250mbelow surface, and to potentially extend mineralisation of Forio Deeps to below 250m.

The aim of t is to extend the planned d the depth o single deep of sulphide m diamond dr mineralisatio ill hole of ap n beyond th pproximately e 379m leve y 1,000m at t l previously the Chatswo identified. rth Prospect

The initial p this year, s approximat phase of the subject to a tely 8,000m. e follow‐up R availability o RC drilling ha of funding. as been plan This progra nned to com am will com mmence late mprise 53 R r in the thir RC holes for d quarter of r a total of

A Program Departmen of Works (P t of Mines a POW) and N nd Petroleum ative Vegeta m (DMP) for ation Clearin approval. ng Permits a are planned to be subm mitted to the

Redstone's Chairman, M Mr Homsany comments:

"W ach of high cop iden e are very p hieved, which previous ex hlights the s pper minera ntified a min pleased and h has highlig ploration fo significant u lisation. De neralised stri enthused b ghted the pro ocus. The di upside poten espite displa ke over 250m y the recent ospectivity o iscovery ma ntial to rapi aying minim m, which rem t drilling suc of the broade ade at the p dly identify mal surface e mains open i ccess and th er Tollu Proj previously u further vein expression, n all directio he important ject outside undrilled For ns hosting n the Forio P ons. t milestones of the areas rio Prospect near surface Prospect has tffesstesnneyrdtodseew

The disc effe e drilling res covered at t ectively drille ults at the F this depth t ed out below Forio Prospe to date at T w 50m. ect disclose t Tollu, which the widest a h is outstand and stronges ding given F st copper m Forio has no ineralisation ot yet been

The incr exc follo ana For e identificati reased likeli ellent poten ow up RC d alogous pros io." ion of addit hood of fur ntial to signif drilling of 8,0 pects, which tional analo rther drilling ficantly expa 000m to be h have now ogues to the g success in and the Com undertaken been elevate e Forio Pros n the very mpany's maid n at Forio, a ed in priority spect is see near future den Mineral and a furthe y for testing en as signifi . There is u Resource w er four of th g based on th cant to the undoubtedly ith plans for he identified he results at

Forio and F orio Deeps P Prospects (Fo orio)

The Forio P priority EM the north mineralisati rospect is a Target. The west of th ion. series of sub e mineralisat he Tollu Fa b vertical hyd tion at Forio ult, which drothermal b o is also very is in a dif bodies expos significant a ferent locat sed at the su as it is locate tion to the urface and id ed in a dilatio e previously entified as a onal zone to discovered

Drilling on t and as yet h the widest planned fol 50m and to the Forio Pr has not been and stronge low‐up RC d potentially rospect to da n effectively est copper m drilling at Fo extend mine ate has iden y drilled out mineralisation rio of 19 ho eralisation of ntified a min below 50m n discovered les for a tot f Forio Deeps eralised stri (Figure 3). T d at this dep tal of 3,425m s to below 2 ke over 250 The most rec pth to date a m will be to t 50m (Figure m open in a cent drill res at Tollu. The test the pro 2). all directions ults disclose e aim of the spect below

7,109,000m N

$\blacksquare$

7,109,100m N

7,109,200m

7,108,800m N

$-300m$ RL

Forio South h Prospect

The Forio geophysics South Prosp data. This P pect is a se Prospect form eries of sub ms part of th b vertical h e dilation sy ydrotherma stem runnin l bodies ide g south of Fo entified from orio. m Redstone ed

The propos ed RC drilling g program co omprises 9 h holes for a to otal 1,575m ( (Figure 4).

Figure 4 P Proposed Drill Hole Locations s at Forio South h Prospect

Stourhead P Prospect

The Stourh identified a head Prospe s a priority E ct is a seri EM Target. T es of sub v This Prospect vertical hydr t forms part rothermal b of the dilatio odies expos on system ru sed at the unning parall surface and lel to Forio.

The propos ed RC drilling g program co omprises 10 holes for a t total 1,500m m (Figure 5).

Figure 5 Proposed Drill Hole Location s at Stourhead Prospect

Exbury Pros spect

The Exbury data as a pr Prospect is a riority EM Ta series of su arget. This P ub vertical hy rospect form ydrothermal ms part of the bodies iden e dilation sys tified from R stem running Redstone geo g parallel to ophysics Forio.

The propos ed RC drilling g program co omprises 5 h holes for a to otal 700m (Fi igure 6).

Figure 6 Proposed Dr rill Hole Locatio ons at Exbury P rospect

Killruddery Prospect

The Kilrudd Prospect fo ery Prospect rms part of t t is a series o the dilation s of sub vertica system runn al hydrother ing parallel t mal bodies e to Forio. exposed at th he surface. T This

The propos ed RC drilling g program co omprises 10 holes for a t total 800m (F Figure 7).

Figure 7 Proposed Drill Hole Location s at Kilruddery Prospect

Exploration Incentive Scheme Co-funded Drilling Grant

Redstone Resources Limited is also pleased to announce that it has won a West Australian Government Exploration Incentive Scheme (EIS) grant to co-fund drilling at its 100% owned Tollu Project.

Redstone has been awarded funding up to the value of $200,000 to assist with a single deep drill hole of approximately 1,000m at the Chatsworth Prospect. The deep drill hole has been designed to test the transition of Cu-only hydrothermal mineralisation to a potential primary, magmatic Cu-Ni-(Co) mineralisation at depth and with the potential to considerably increase the copper resource at Tollu.

Figure 8 - Chatsworth Cross-section

The Company would like to acknowledge the WA Government's ongoing support for exploration through the EIS initiative.

Competent Persons Statement

The information in this report that relates to exploration results, Exploration Targets and Mineral Resources was authorised by Mr Darryl Mapleson, a Principal Geologist and a full time employee of BM Geological Services, who are engaged as consultant geologists to Redstone Resources Limited. Mr Mapleson is a Fellow of the Australian Institute of Mining and Metallurgy. Mr Mapleson has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to act as a competent person as defined in the 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Mapleson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

ABOUT REDSTONE RESOURCES

Redstone Resources Limited (ASX: RDS) is a Perth-based company focused on highly prospective copper exploration properties in the West Musgrave region of Western Australia.

Redstone's 100% owned Tollu Project is located in the southeast portion of the West Musgrave region of Western Australia. The Company has also identified the potential for a number of other projects on the Tollu tenement (E69/2450) in addition to the Tollu Project.

For further information please contact:

Richard Homsany Chairman Redstone Resources Limited +61 8 9328 2552 contact@redstone.com.au

Andrew Rowell / Warrick Hazeldine Cannings Purple +61 8 6314 6304 arowell@canningspurple.com.au