REDSTONE RESOURCES LIMITED — Interim / Quarterly Report 2010

Jan 30, 2011

Appendix 5B

Rule 5.3

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity

Redstone Resources Limited

ABN Quarter ended ("current quarter")

Year to date (6 months) $A'000

42 090 169 154 31 December 2010

Current quarter $A'000

Consolidated statement of cash flows

Cash flows related to operating activities

1.1	Receipts from product sales and related debtors	-	-
1.2	Payments for(a) exploration & evaluation	(502)	(781)
	(b) development	-	-
	(c) production	-	-
	(d) administration	(236)	(448)
1.3	Dividends received	-	-
1.4	Interest and other items of a similar nature	45	63
	received
1.5	Interest and other costs of finance paid	-	-
1.6	Income taxes paid	-	-
1.7	Other (provide details if material)	-	-
	Net Operating Cash Flows	(693)	(1,166)
	Cash flows related to investing activities
1.8	Payment for purchases of:(a) prospects	(13)	(13)
	(b) equity investments	-	-
	(c) other fixed assets	(53)	(53)
1.9	Proceeds from sale of:(a) prospects	210	310
	(b) equity investments	-	-
	(c) other fixed assets	-	-
1.10	Loans to other entities	-	-
1.11	Loans repaid by other entities	-	-
1.12	Other (provide details if material)	-	-
	Net investing cash flows	144	244
1.13	Total operating and investing cash flows
	(carried forward)	(549)	(922)

+ See chapter 19 for defined terms.

1.13	Total operating and investing cash flows
	(brought forward)	(549)	(922)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	600	4,437
1.15	Proceeds from sale of forfeited shares	-	-
1.16	Proceeds from borrowings	-	-
1.17	Repayment of borrowings	-	-
1.18	Dividends paid	-	-
1.19	Other – payment of share issue costs	(24)	(156)
	Net financing cash flows
		576	4,281
	Net increase (decrease) in cash held	27	3,359
1.20	Cash at beginning of quarter/year to date	3,734	402
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	3,761	3,761

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current quarter$A'000
1.23	Aggregate amount of payments to the parties included in item 1.2	36
1.24	Aggregate amount of loans to the parties included in item 1.10	-

1.25 Explanation necessary for an understanding of the transactions

Directors Fees

Non-cash financing and investing activities

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

Nil

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Nil

+ See chapter 19 for defined terms.

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available$A'000	Amount used$A'000
3.1	Loan facilities	-	-
3.2	Credit standby arrangements	-	-

Estimated cash outflows for next quarter

		$A'000
4.1	Exploration and evaluation	300
4.2	Development	-
4.3	Production	-
4.4	Administration	200
	Total	500

Reconciliation of cash

Reconciliation of cash at the end of the quarter (asshown in the consolidated statement of cash flows) tothe related items in the accounts is as follows.		Current quarter$A'000	Previous quarter$A'000
5.1	Cash on hand and at bank	63	71
5.2	Deposits at call	3,698	3,663
5.3	Bank overdraft	-	-
5.4	Other (provide details)	-	-
	Total: cash at end of quarter (item 1.22)	3,761	3,734

Changes in interests in mining tenements

		Tenementreference	Nature of interest(note (2))	Interest atbeginningof quarter	Interest atend ofquarter
6.1	Interests in miningtenements relinquished,reduced or lapsed	886256/2006		100%	0%
6.2	Interests in miningtenements acquired orincreased	N/A

Issued and quoted securities at end of current quarter

+ See chapter 19 for defined terms.

		Total number	Number quoted	Issue price persecurity (see note3) (cents)	Amount paid up persecurity (see note 3)(cents)
7.1	Preference+securities(description)
7.2	Changes duringquarter(a) Increasesthrough issues(b) Decreasesthrough returnsof capital, buybacks,
	redemptions
7.3	+Ordinarysecurities	126,056,280	126,056,280		Fully paid
7.4	Changes duringquarter(a) Increasesthrough issues(b) Decreasesthrough returnsof capital, buybacks	2,402,778	2,402,778		Fully paid
7.5	+Convertibledebt securities(description)
7.6	Changes duringquarter(a) Increasesthrough issues(b) Decreasesthroughsecuritiesmatured,converted
7.7	Options(description and	Unquoted Options		Exercise price	Expiry date
	conversionfactor)	400,0001,000,000500,000400,000500,0007,902,7781,500,000500,000500,000		150 cents95 cents120 cents75 cents25 cents25 cents25 cents30 cents35 cents	29/06/1230/11/1230/11/1220/02/1317/06/1130/11/1230/11/1430/11/1430/11/14
7.8	Issued duringquarter	3,750,000650,000		50 cents50 cents	19/10/1304/11/13
7.9	Exercised duringquarter	500,000500,0001,902,778		50 cents25 cents25 cents	01/12/1317/06/1130/11/12

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

+ See chapter 19 for defined terms.

7.10	Expired duringquarter
7.11	Debentures(totals only)
7.12	Unsecurednotes (totalsonly)

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
• 2 This statement does give a true and fair view of the matters disclosed.

Sign here: ......................................................... Date: 31 January 2011.................. (Company secretary)

Miranda Conti

Print name: .........................................................

Notes

• 1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
• 2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities*.*
• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

== == == == ==

+ See chapter 19 for defined terms.