REDSTONE RESOURCES LIMITED — Capital/Financing Update 2017

Aug 1, 2017

2 August 2017

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

Electronic Lodgement

A FURTHER 10 EM TARGETS IDENTIFIED AT WEST MUSGRAVE PROJECT DRILLING TO COMMENCE MID-AUGUST

HIGHLIGHTS

• Detailed analysis of final airborne electromagnetic (VTEMmax) data has confirmed another $\bullet$ 10 conductive targets for follow-up exploration at Redstone's 100% owned West Musgrave Project in WA.
• Redstone has now selected three high priority targets and eight lower priority targets for $\bullet$ follow-up exploration. This includes the highest priority target (1A) that has been selected for immediate drill testing.
• $\bullet$ Conductivity target 1A, identified as a high priority nickel-copper (Ni-Cu) sulphide target, has now been modelled, ready for drilling – the target is north dipping at a shallow angle, at least 120m deep with a strike extent of 685m.
• Planning and permitting for follow-up exploration completed.
• Drilling at highest priority 1A target is expected to commence mid-August 2017. $\bullet$

Redstone Resources Limited (ASX: RDS)("Redstone" or "the Company") is pleased to announce it has completed the analysis of the final airborne EM ( $VTEM_{max}$ ) data at its 100% owned Tollu tenement in the West Musgrave region, Western Australia (West Musgrave Project). Three high priority targets and eight lower priority targets have been selected for follow-up exploration (Figure 1). The highest priority target (1A), which is to be tested in the upcoming drill program, as previously stated, has now been modelled in detail ready for drilling.

TARGET 1A A

Conductivit target has b 685m (Figu ~195 S/m. T sulphide de y feature 1A been model re 2). The d The EM anom eposits are us A is a high p led as a 25o depth to the maly occurs sually highly riority magm north dippi top of the p in an embay conductive, matic nickel‐ ing plate wit plate is ~120 yment in the and are hos copper (Ni‐C th a depth e 0m. The cond e interpreted sted by mafic Cu) sulphide extent of 14 ductance (fro d ultramafic c and ultram e exploration 5m and stri om the airbo rocks. Mag mafic rocks. n target. The ke extent of orne data) is gmatic nickel efsleooe

The location Tollu Cu Pro be ultrama positioned Tollu Prospe n of the prio ospect (Figur fic rocks pr proximal to ect area. ority conduct re 1). It is po roximal to a structural fe tive geophys ositioned on regional ea eatures. Two sical target is the south e ast‐west ori o of these ta s approximat ast margin o ented fault. argets are a tely 2.5 km t of a magnetic . Most of th long strike, to the north c feature, int he EM targe north and s west of the terpreted to ets are also outh, of the

Figure 1 – Te after turn of shown in pin showing con enement E69/ ff) as the colo nk and orang nductor with f /2450 airborn our image. Hi ge. Lower pri flight lines (20 ne magnetic im storical drillin ority targets 00m apart). mage (grey) w ng and prospe shown in gre with late time ects shown in een. 1A targe Z componen n black. High p et area within nt channel 48 priority condu n red square, (10.667 msec uctive targets , inset on left cst

ASX: RDS

Figure 2 - Left is a plan view of target 1A showing north south oriented VTEM lines (200m apart) with drilling proposed (black) to test the conductive plate model (blue). The image is channel 40 Z component. On the right is cross section 435670mE looking west through the plate model 1A (blue). The image is resistivity derived from a conductivity depth transform of the Z component data.

Commenting on the results of the survey, Redstone Resources Chairman Richard Homsany said

"In addition to the continued evaluation of the prospective Tollu copper targets, Redstone has identified the potential to host another large Ni-Cu sulphide deposit such as the nearby Nebo- Babel deposit."

"The VTEM results represent a significant step forward in assessing the broader potential of the Tollu project for large-scale Ni-Cu sulphide targets and we are keen to expand our current exploration initiative to include these targets."

Redstone has completed heritage surveys and applied for all Program of Works and Native Vegetation Clearing permit approvals required for its upcoming drilling program, including for drilling of the area over the highest priority 1A target. Drilling is expected to commence mid-August.

ENDS

Competent Persons Statement

The information in this report that relates to Geophysical Exploration Results is based on information compiled by Mr Barry Bourne, who is employed as a Consultant to the Company through geophysical consultancy Terra Resources Pty Ltd. Mr Bourne is a fellow of the Australian Institute of Geoscientists and a member of the Australian Society of Exploration Geophysicists and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Bourne consents to the inclusion in the report of matters based on 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 tenement (E69/2450) 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 prospects on the Tollu tenement 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