REDSTONE RESOURCES LIMITED — Capital/Financing Update 2017

Feb 28, 2017

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, 04/03/13

Name of entity

Redstone Resources Ltd

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	+Classof +securitiesissued or tobe issued	Fully paid ordinary shares;$0.015 Unquoted options; and$0.02 Unquoted options
2	Number of +securitiesissued ortobeissued(ifknown)ormaximumnumberwhichmaybe issued	53,750,000 Fully paid ordinary shares;10,000,000$0.015Unquotedoptions;and10,000,000 $0.02 Unquoted options
3	Principaltermsofthe+securities(e.g.ifoptions,exercise price and expiry date; if+securities,partlypaidtheamountoutstandingandduedatesforpayment;if+convertiblesecurities,theconversion price and dates forconversion)	$0.015Unquotedoptionsexercisableat$0.015 per option on or before 3 years fromdate of grant, being 28/02/2020.$0.02 Unquoted options exercisable at $0.02per option on or before 3 years from thedate of grant, being 28/02/2020.

+ See chapter 19 for defined terms.

4	Do the +securitiesrank equallyin all respects from the +issuedate with an existing +classofquoted +securities?If the additional +securitiesdonot rank equally, please state:the date from which they dotheextenttowhichtheyparticipateforthenextdividend, (in the case of atrust,distribution)orinterest paymentthe extent to which they donot rank equally, other thaninrelationtothenextdividend,distributionorinterest payment	Fully paid ordinary shares ‐ YesUnquotedoptions ‐ No,howeversharesissued upon exercise of the $0.015 Unquotedoptionsand$0.02Unquotedoptionswillrank equally with the shares then on issue
5	Issue price or consideration	Fully paid ordinary shares ‐ $0.008/shareUnquoted options ‐ nil
6	Purpose of the issue(If issuedasconsiderationforthe acquisition of assets, clearlyidentify those assets)	Fully paid ordinary shares – Funds raised areintended to be applied to the expenses ofthe offer and for ongoing exploration of theCompany's Tollu project.Unquotedoptions–toconsultantsand
		employee of the Company
6a	Is the entity an +eligibleentitythathasobtainedsecurityholder approval under rule 7.1A?If Yes, complete sections 6b – 6hin relation to the +securitiesthesubject of this Appendix 3B, and	Yes
	comply with section 6i
6b	Thedatethesecurityholderresolution under rule 7.1A waspassed	29 November 2016
6c	+securitiesNumberofissuedwithout security holder approvalunder rule 7.1	Nil

+ See chapter 19 for defined terms.

• 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 +Issue dates

Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

8 Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)

ShareholderNovember 2016	approval	meeting	date	–	29
Fully paid ordinary shares ‐ 53,750,000

$0.015 Unquoted options – 10,000,000 $0.02 Unquoted options – 10,000,000

Nil

N/A

Nil

N/A

See Annexure 1

28 February 2017

Number	+Class
379,797,245	FullypaidordinaryShares
55,631,193	Listed Options (ASX:RDSOA)exercisableat $0.03 on or before31 July 2017

+ See chapter 19 for defined terms.

		Number	+Class
9	+classNumberandofall+securitiesnot quoted on ASX+securities(includingtheinsection 2 if applicable)	2,000,000	Unquotedoptionsexercisableat$0.20onorbefore4December 2017
		10,000,000	Unquoted$0.015optionsexercisableat $0.015 on or before28 February 2020
		10,000,000	Unquoted$0.02optionsexercisableat $0.02 on or before28 February 2020

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

The Company currently has no dividend policy

Part 2 - Pro rata issue

11	Issecurityholderapprovalrequired?
12	Is the issue renounceable or non‐renounceable?
13	+securitiesRatioinwhichthewill be offered
14	+Classof +securitiesto which theoffer relates
15	+Recorddatetodetermineentitlements
16	Willholdingsondifferentregisters(orsubregisters)beaggregatedforcalculatingentitlements?
17	Policy for deciding entitlementsin relation to fractions

+ See chapter 19 for defined terms.

18	Names of countries in which theentity has security holders whowillnotbesentnewofferdocumentsNote: Security holders must be told how their
	entitlements are to be dealt with.Cross reference: rule 7.7.
19	Closingdateforreceiptofacceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting feeor commission
22	Namesofanybrokerstotheissue
23	Feeorcommissionpayableto
	the broker to the issue
24	Amountofanyhandlingfeepayabletobrokerswholodge
	acceptances or renunciations onbehalf of security holders
25	Iftheissueiscontingentonsecurityholders'approval,the
	date of the meeting
26	Date entitlement and acceptance
	form and offer documents will besent to persons entitled
27	If the entity has issued options,andthetermsentitleoption
	holderstoparticipateonexercise,thedateonwhich
	noticeswillbesenttooptionholders
28	Date rights trading will begin (ifapplicable)
29	Date rights trading will end (ifapplicable)

+ See chapter 19 for defined terms.

• 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)?
• 33 +Issue date

Part 3 - Quotation of securities

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

• 34 Type of +securities (tick one)
• (a) +Securities described in Part 1 ‐ 53,750,000 Fully paid ordinary shares
• (b) All other +securities

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

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the +securities are +equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders – Refer pages 1‐2 of Annexure 2
• 36 If the +securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories – Refer page 3 of Annexure 2 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

+ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

• 38 Number of +securities for which +quotation is sought 39 +Class of +securities for which quotation is sought 40 Do the +securities rank equally in all respects from the +issue date 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)

Number	+Class

+ See chapter 19 for defined terms.

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
• 2 We warrant the following to ASX.
  • The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those +securities should not be granted +quotation.
  • An offer of the + securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

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

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no‐one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.
• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we 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.

(Company secretary)

Sign here: ................................... Date: 1 March 2017.............

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

== == == == ==

+ See chapter 19 for defined terms.

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 placementcapacity is calculated
Insert number of fully paid ordinarysecurities on issue 12 months before dateof issue or agreement to issue	326,047,245
Add the following:
•Number of fully paid ordinary securitiesissued in that 12 month period under anexception in rule 7.2	Nil
•Number of fully paid ordinary securitiesissued in that 12 month period withshareholder approval	53,750,000
•Number of partly paid ordinarysecurities that became fully paid in that12 month period	Nil
Note:•Include only ordinary securities here –other classes of equity securities cannotbe added•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
Subtract the number of fully paid ordinarysecurities cancelled during that 12 monthperiod	Nil
"A"	379,797,245
Step 2: Calculate 15% of "A"
"B"	0.15[Note: this value cannot be changed]
Multiply "A" by 0.15	56,969,587

+ See chapter 19 for defined terms.

Step 3: Calculate "C", the amount of placement capacity under rule 7.1that has already been used
Insert number of equity securities issued oragreed to be issued in that 12 month periodnot counting those issued:	Nil
•Under an exception in rule 7.2
•Under rule 7.1A
•With security holder approval under rule7.1 or rule 7.4
Note:•This applies to equity securities, unlessspecifically excluded – not just ordinarysecurities•Include here (if applicable ) thesecurities the subject of the Appendix3B to which this form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
"C"	Nil
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1
"A" x 0.15	56,969,587
Note: number must be same as shown inStep 2
Subtract "C"	Nil
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	56,969,587

Part 2

Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
"A"326,047,245
Note: number must be same as shown inStep 1 of Part 1
Step 2: Calculate 10% of "A"

[Note: this is the remaining placement

capacity under rule 7.1]

+ See chapter 19 for defined terms.

"D"	0.10Note: this value cannot be changed
Multiply "A" by 0.10	32,604,725
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
Insert number of equity securities issued oragreed to be issued in that 12 month periodunder rule 7.1ANotes:•This applies to equity securities – notjust ordinary securities•Include here – if applicable – thesecurities the subject of the Appendix3B to which this form is annexed•Do not include equity securities issuedunder rule 7.1 (they must be dealt within Part 1), or for which specific securityholder approval has been obtained•It may be useful to set out issues ofsecurities on different dates as separateline items	Nil
"E"	Nil
Step 4: Subtract "E" from ["A" x "D"] to calculate remainingplacement capacity under rule 7.1A
"A" x 0.10	32,604,725
Note: number must be same as shown inStep 2
Subtract "E"	Nil
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	32,604,725Note: this is the remaining placementcapacity under rule 7.1A

+ See chapter 19 for defined terms.