REDSTONE RESOURCES LIMITED — Capital/Financing Update 2018

Oct 8, 2018

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 +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 (e.g. 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)

(i) Fully paid ordinary shares

• (ii) Listed options over fully paid ordinary shares
• (i) 85,382,485 fully paid ordinary shares
• (ii) 42,691,267 Listed options
• (i) Fully paid ordinary shares
• (ii) Listed options over ordinary shares exercisable at $0.035 on or before 30 April 2021.

+ See chapter 19 for defined terms.

4 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

(i) Yes

(ii) No, however shares issued upon exercise of the $0.035 Listed options will rank equally with the shares then on issue

5 Issue price or consideration (i) $0.017 (1.7 cents)

(ii) Nil

6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)

Funds raised will be used for drilling and exploration activities at the Company's 100% owned West Musgrave Project, to fund the expenses of the entitlement offer and for general working capital purposes.

6a Is the entity an +eligible entity 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 resolution under rule 7.1A was passed
• 6c Number of +securities issued without security holder approval under rule 7.1

28 November 2017

Yes

4,000,000 unquoted options

+ 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)

Number	+Class
379,934,261	Fullypaidordinaryshares
85,382,485
‐‐‐‐‐‐‐‐‐‐‐‐‐‐465,316,746

Nil

• (i) 85,382,485
• (ii) 42,691,267 (ASX: RDSOB)

N/A

N/A

See Annexure 1

9 October 2018

Nil

+ See chapter 19 for defined terms.

		42,691,267	Listedoptionsexercisable at $0.035on or before 30 April2021
		Number	+Class
9	+classNumberandofall+securitiesnot quoted on ASX+securities(includingtheinsection 2 if applicable)	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
		2,000,000	Unquoted$0.015optionsexercisableat $0.015 on or before31 January 2020
		2,000,000	Unquoted$0.02optionsexercisableat $0.02 on or before31 January 2020
10	Dividend policy (in the case of atrust, distribution policy) on the	TheCompanycurrentlypolicy	hasnodividend

Part 2 - Pro rata issue

increased capital (interests)

11	Issecurityholderapprovalrequired?	No
12	Is the issue renounceable or non‐renounceable?	Non‐renounceable
13	+securitiesRatioinwhichthewill be offered	One (1) share for every three (3) shares heldbyeligibleshareholdersontheRecordDate, together with one (1) free attachinglistedoptionforeverytwo(2)sharessubscribed for and issued under the offer.
14	+Classof +securitiesto which theoffer relates	Fully paid ordinary shares

+ See chapter 19 for defined terms.

15	+Recorddatetodetermineentitlements	7 September 2018
16	Willholdingsondifferentregisters(orsubregisters)beaggregatedforcalculatingentitlements?	N/A
17	Policy for deciding entitlementsin relation to fractions	Rounded up
18	Names of countries in which theentity has security holders whowillnotbesentnewofferdocumentsNote: Security holders must be told how theirentitlements are to be dealt with.Cross reference: rule 7.7.	Any country outside Australiaand New Zealand
19	Closingdateforreceiptofacceptances or renunciations	3 October 2018
20	Names of any underwriters	Cardinals Corporate Pty Ltd
21	Amount of any underwriting feeor commission	TheCompanyhasagreedtopaytheunderwriter an underwriting fee of 6% oftheunderwrittenamount($1,150,000)being an amount of $69,000 and placementfeeof6%foramountsraisedbytheUnderwriter in excess of the $1,150,000.
22	Namesofanybrokerstotheissue	N/A
23	Feeorcommissionpayabletothe broker to the issue	N/A

+ See chapter 19 for defined terms.

Appendix 3B New issue announcement

24	Amountofanyhandlingfeepayabletobrokerswholodgeacceptances or renunciations onbehalf of security holders	Nil
25	Iftheissueiscontingentonsecurityholders'approval,thedate of the meeting	N/A
26	Date entitlement and acceptanceform and offer documents will besent to persons entitled	12 September 2018
27	If the entity has issued options,andthetermsentitleoptionholderstoparticipateonexercise,thedateonwhichnoticeswillbesenttooptionholders	4 September 2018
28	Date rights trading will begin (ifapplicable)	N/A
29	Date rights trading will end (ifapplicable)	N/A
30	Howdosecurityholdersselltheir entitlements in full througha broker?	N/A
31	How do security holders sell partof their entitlements through abrokerandacceptforthebalance?	N/A
32	How do security holders disposeof their entitlements (except bysale through a broker)?	N/A
33	+Issuedate	9 October 2018

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 ‐ 85,382,485 fully paid ordinary shares and 42,691,267 listed options (ASX: RDSOB)

+ See chapter 19 for defined terms.

(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

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

+ See chapter 19 for defined terms.

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)

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: 8 October 2018.............

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 placement capacity is calculated Insert number of fully paid ordinary securities on issue 12 months before date of issue or agreement to issue 379,934,261 Add the following: • Number of fully paid ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid ordinary 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 Entitlement Offer - 9 October 2018 85,382,485 Nil Nil Subtract the number of fully paid ordinary securities cancelled during that 12 month period Nil "A" 465,316,746 Step 2: Calculate 15% of "A" "B" 0.15 [Note: this value cannot be changed] Multiply "A" by 0.15 69,797,511

+ 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:•Under an exception in rule 7.2•Under rule 7.1A•With security holder approval under rule7.1 or rule 7.4Note:•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	7 March 2018:2,000,000 $0.015 unquoted options;and'2,000,000 $0.02 unquoted options
"C"	4,000,000
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1
"A" x 0.15Note: number must be same as shown inStep 2	69,797,511
Subtract "C"	4,000,000

Step 2
Subtract "C"	4,000,000
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	65,797,511
	[Note: this is the remaining placementcapacity under rule 7.1]

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"	465,316,746
Note: number must be same as shown inStep 1 of Part 1
Step 2: Calculate 10% of "A"

+ See chapter 19 for defined terms.

"D"	0.10Note: this value cannot be changed
Multiply "A" by 0.10	46,531,674
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 0.10Note: number must be same as shown inStep 2	46,531,674
Subtract "E"	Nil
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	46,531,674Note: this is the remaining placementcapacity under rule 7.1A

+ See chapter 19 for defined terms.

Appendix 3B – Annexure 2 Page 1 of 3

Section 35 of Appendix 3B

REDSTONE RESOURCES LIMITED

Top Listing ASX: RDS

Rank	Name	Units	% of Units
1	MR EDWARD VAN HEEMST + MRS MARILYN ELAINE VAN HEEMST	60,191,178	12.94
2	CARDINALS CORPORATE PTY LTD	47,343,489	10.17
3	VYSCARD PTY LTD	24,690,417	5.31
4	GREYHOUND INVESTMENTS PTY LTD	23,750,000	5.10
5	INSPIRE INVESTMENTS PTY LTD	23,011,047	4.95
6	MR CHEE NAM LIEW + MRS LEE CHIN LIEW	14,189,879	3.05
7	ACEDAY INVESTMENTS PTY LTD	9,000,000	1.93
8	BERNE NO 132 NOMINEES PTY LTD <631394 A/C>	7,370,292	1.58
9	GRAHAM JOHN FISHER PTY LTD	6,184,588	1.33
10	HORN NOMINEES PTY LTD	5,912,350	1.27
11	TROYWARD PTY LTD	5,888,236	1.27
12	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	5,576,270	1.20
13	MR THOMAS DUDLEY HOUSTON + MRS ZOE ANNE HOUSTON <the fund<br="" houston="" super="">A/C>	5,115,074	1.10
14	POSSUM INVESTORS PTY LTD	5,000,000	1.07
15	TOM & ILONA PTY LTD <the &="" a="" c="" f="" ilona="" s="" tom="">	5,000,000	1.07
16	MEMPHIS HOLDINGS PTY LTD	4,717,504	1.01
17	KERIMI INVESTMENTS PTY LTD	4,578,334	0.98
18	MR NICHOLAS MILENTIS	4,280,000	0.92
19	HORN RESOURCES PTY LTD	4,147,650	0.89
20	SVAGELJ INVESTMENTS PTY LTD	4,086,640	0.88
	Totals: Top 20 holders of RDS	270,032,948	58.03
	Total Remaining Holders Balance	195,283,798	41.97
Total Holders Balance		465,316,746	100.00

Appendix 3B – Annexure 2 Page 2 of 3

Section 35 of Appendix 3B

REDSTONE RESOURCES LIMITED

Top Listing - ASX: RDSOB

Rank	Name	Units	% of Units
1	CARDINALS CORPORATE PTY LTD	8,021,471	18.79
2	INSPIRE INVESTMENTS PTY LTD	4,034,412	9.45
3	MR EDWARD VAN HEEMST + MRS MARILYN ELAINE VAN HEEMST <lynward fund<br="" super="">A/C>	3,970,589	9.30
4	TROYWARD PTY LTD	2,944,118	6.90
5	VYSCARD PTY LTD	2,941,177	6.89
6	HORN NOMINEES PTY LTD	2,941,175	6.89
7	HORN RESOURCES PTY LTD	2,058,825	4.82
8	MR THOMAS DUDLEY HOUSTON + MRS ZOE ANNE HOUSTON <the fund<br="" houston="" super="">A/C>	1,029,412	2.41
9	POSSUM INVESTORS PTY LTD	1,000,000	2.34
10	JAYBRE GEOLOGICAL CONSULTING PTY LTD	882,353	2.07
11	MR ROBERT PETER VAN DER LAAN	882,350	2.07
12	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	716,251	1.68
13	MR MATTHEW BURFORD	647,059	1.52
14	MR THOMAS MILENTIS	600,000	1.41
15	MEMPHIS HOLDINGS PTY LTD	589,688	1.38
16	MR CRAIG DOUGLAS WHITEHEAD	562,500	1.32
17	SVAGELJ INVESTMENTS PTY LTD	510,830	1.20
18	GRAHAM JOHN FISHER PTY LTD	500,000	1.17
19	MR CHEE NAM LIEW + MRS LEE CHIN LIEW	500,000	1.17
20	FRANDEN PTY LTD <d&f a="" c="" fund="" hull="" super=""></d&f>	400,825	0.94
	Totals: Top 20 holders RDSOBTotal Remaining Holders Balance	35,733,0356,958,232	83.7016.30

Total Holders Balance 42,691,267 100.00

Appendix 3B – Annexure 2 Page 3 of 3

Section 36 of Appendix 3B

	Holders ofRDSOB Listed	Number ofRDSOB Listed
	Options	Options	%
1 - 5,000	18	7,166	0.02%
1,001 - 5,000	39	111,402	0.26%
5,001-10,000	16	114,113	0.27%
10,001 -100,000	52	1,907,512	4.47%
100,001 and over	41	40,551,074	94.99%
TOTALS	166	42,691,267	100.00%