REDSTONE RESOURCES LIMITED — Interim / Quarterly Report 2012

Jul 30, 2012

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QUARTERLY REPORT

For the Period Ending 30 June 2012

31 July 2012

The Board of Redstone Resources Limited (ASX: RDS) is pleased to present its quarterly report for the period ending 30 June 2012.

Redstone’s primary focus is the Tollu Copper Nickel Project in Western Australia. This Project has the potential to be a world class deposit. Intersections of copper sulphide mineralisation of greater than 1% Cu now extend over an area of 1.8km long and up to 1km wide. Depth of mineralisation now stands at 379m open at depth. Redstone expects the Project’s mineralised area and the volume of hydrothermal mineralisation will increase significantly with further drilling.

SUMMARY

• During the Quarter, the initial Exploration Target[1 ] for the Central Zone (Subzone 1) was estimated to be between 5.8 and 6.2 million tonnes of copper mineralisation at an expected grade of between 2.6% - 2.8% Cu, for between 150,000 and 170,000 tonnes of contained copper.

• The Exploration Target at the Central Zone (Subzone 1) (based on the confirmed depth of mineralisation of 379m) is expected to rise with further drilling, given the mineralisation remains open at depth.

• The potential resources of hydrothermal copper within the whole of the Tollu Project area are much larger than the Central Zone (Subzone 1) Exploration Target, given copper mineralisation discovered at surface of Subzones 2 to 8 of the Central Zone has not been evaluated at depth.

• During the Quarter, analysis of the drill core from TD-3 revealed a 150m intersection of iron-cobalt sulphide mineralisation (see Figure 5) open at end of hole. This intersection includes grades of up to 0.56% Co with cobalt grades increasing at depth (see Figure 4). This discovery is significant because cobalt is much less mobile in a silica-rich hydrothermal setting than copper. As a consequence grades of cobalt mineralisation are expected to increase closer to the primary source of mineralisation.

Redstone Resources Limited ABN 42 090 169 154 Suite 3, 110-116 East Parade, East Perth WA 6004 Tel: 08 9328 2552 Fax: 08 9328 2660

www.redstone.com.au

Email: contact@redstone.com.au

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PROJECTS

The Company holds an interest in 9 exploration licences in three project areas in the West Musgrave region of Western Australia. The projects are prospective for major copper, nickel-copper and PGE mineralisation. The exploration licences cover in excess of 2,200km[2] . Project locations are shown on Figures 1 and 2.

Six of the exploration licences held by Redstone comprise the Baggaley Hills Farmin/Joint Venture, which is an exploration joint venture between Redstone and HJH Nominees Pty Ltd (HJH), where Redstone is farming out an 80% interest.

A further two exploration licences are part of the Blackstone Range Farmin/Joint Venture between Redstone and Resource Mining Corporation where Redstone is earning in to 90%. The remaining exploration licence is wholly owned and operated by Redstone and comprises the Tollu Copper Nickel Project.

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Figure 1 (Left) Location of Redstone Projects in Western Australia Figure 2 (Right) Location of Redstone Project Tenements in the West Musgrave Region

Redstone Resources Limited ABN 42 090 169 154 Suite 3, 110-116 East Parade, East Perth WA 6004 Tel: 08 9328 2552 Fax: 08 9328 2660

www.redstone.com.au Email: contact@redstone.com.au

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Tollu Copper Nickel Project (Redstone 100%)

(E69/2450)

The Tollu Project area hosts a giant swarm of hydrothermal copper rich veins in a mineralised system covering an area of at least 6km[2] and forming part of a dilation system between two major shears. Copper mineralisation from the surface comprises malachite, tenorite and azurite to about 80m depth. Below 80m depth, the mineralisation consists of chalcopyrite and minor bornite and chalcocite. The Project hosts multiple mineralised target zones (Figure 3). Exploration has so far been conducted in parts of the Central Zone and the Eastern Zone and has met with considerable success.

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Figure 3 Target Zones at the Tollu Copper Nickel Project

Redstone Resources Limited ABN 42 090 169 154 Suite 3, 110-116 East Parade, East Perth WA 6004 Tel: 08 9328 2552 Fax: 08 9328 2660

www.redstone.com.au Email: contact@redstone.com.au

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Tollu Central Zone

The Central Zone is a swarm of hydrothermally mineralised bodies formed in a dilation system between two larger N-S bodies in an area of approximately 1.3 km long and 700 – 800m wide. Eight main clusters of mineralised bodies (Subzones) have been mapped at surface. So far, exploration has only been concentrated in Subzone 1.

During the Quarter, an initial Exploration Target was estimated for the Central Zone (Subzone 1) It is estimated to be between 5.8 and 6.2 million tonnes of copper mineralisation at an expected grade of between 2.6% - 2.8% Cu, for between 150,000 and 170,000 tonnes of contained copper.

The Exploration target was estimated as follows:

• Drill hole TC-80 has intercepted the same mineralised body drilled by drill holes TC-32 (at 87 metres depth), TC-15 (155m), TC-20 (161m), and TC-21 (215 m).

• All five of these drill holes have demonstrated mineralisation grades between 2.4% and 3.1% Cu. Their thicknesses of mineralisation are 6.1m, 15.6m, 10.4m, 3.5m, and 11.25m.

• The average grade of mineralisation within this body so far is 2.68%, the average thickness is 9.37 metres and the average specific gravity of the mineralised body is estimated to be 2.86.

• The mineralisation drilled in Subzone 1 is part of the main mineralised body of the Central Zone, which has mineralisation confirmed along 600 metres at surface.

• The Exploration Target for the Central Zone (Subzone 1) is estimated to be between 5.8 and 6.2 million tonnes of copper mineralisation at an expected grade of between 2.6% and 2.8% Cu for between 150,000 and 170,000 tonnes of contained copper.

• The Exploration Target at the Central Zone (Subzone 1) has been estimated using the information set out above.

The Exploration Target at the Central Zone (Subzone 1) (based on the confirmed depth of mineralisation of 379m) is expected to increase with further drilling, given the body remains open at depth.

1 Exploration Target – All statements as to the potential quantity and grade of the exploration targets is conceptual in nature and there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the determination of a mineral resource.

Tollu Eastern Zone

The Eastern Zone is a single sub-vertical hydrothermal body exposed at surface over a distance of 2500 metres. This body includes the thickest mineralisation so far detected at Tollu (see ASX announcement of 22 September 2011). There is considerable potential to identify further copper mineralisation in this Zone as less than 5% of this body has been drilled.

Redstone Resources Limited ABN 42 090 169 154 Suite 3, 110-116 East Parade, East Perth WA 6004 Tel: 08 9328 2552 Fax: 08 9328 2660

www.redstone.com.au

Email: contact@redstone.com.au

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Tollu Project Copper Potential

The potential resources of hydrothermal copper within the whole of the Tollu Project area are much larger than the Central Zone (Subzone 1) Exploration Target, given:

1. copper mineralisation discovered at surface of Subzones 2 to 8 of the Central Zone has not been evaluated at depth;

2. the Eastern Zone also has copper mineralisation exposed at surface for at least 1,200 metres. Initial drilling of the Eastern Zone has discovered significant copper mineralisation. It is expected that further drilling will allow an exploration target to be announced for the Eastern Zone;

3. the Western Zone, which has copper mineralisation exposed at surface for 1,000 metres, has not yet been drill tested; and

4. all targets listed above are hydrothermal and do not include the primary magmatic NiCu mineralisation interpreted at depth.

Tollu Project Nickel Potential

The Tollu Project also has considerable potential for the discovery of Nickel. Redstone’s geological model for the mineralisation at Tollu predicts a Voisey’s Bay style magmatic Cu-Ni(Co) source. Several key indicators consistent with this model, namely the presence of gabbro stock and cobalt mineralisation, have been discovered at drill hole TC-74/TD-3 (Figure 6).

Drill hole TD-3 was drilled as a diamond drill hole extension to RC drill hole TC-74. TD-3 was a deep reconnaissance hole, the goal of which was to intersect the potential gabbro host for a primary Cu-Ni-(Co) mineral deposit, which is thought to be the source of the hydrothermal copper sulphide mineralisation at Tollu.

TD-3 intersected gabbro from a depth of approximately 400m. During the Quarter the gabbro core was analysed (using a portable Niton XRF spectrometer), revealing a 150m intersection of iron-cobalt sulphide mineralisation from 400m to the end of hole (with grades up to 0.56% Co). Cobalt grades are increasing with depth over the width of the intersection.

This is very significant for a number of reasons:

• The presence of cobalt is a strong indicator of Voisey’s Bay style Ni-Cu-(Co) magmatic mineralisation, in accordance with Redstone’s model of the Tollu mineralisation; and

• Cobalt is much less mobile in a silica-rich hydrothermal setting than copper and grades of cobalt mineralisation are expected to increase closer to the primary source of mineralisation.

Redstone Resources Limited ABN 42 090 169 154 Suite 3, 110-116 East Parade, East Perth WA 6004 Tel: 08 9328 2552 Fax: 08 9328 2660

www.redstone.com.au

Email: contact@redstone.com.au

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Cobalt ppm vs Depth at TD-3

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Figure 4 Cobalt distribution (ppm). Cobalt content is clearly increasing with depth. This is consistent with the geological model, which predicts higher values close to the primary magmatic Cu-Ni-(Co) source.

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Figure 5 Diamond Drill Core from TD-3 showing cobalt-iron sulphide mineralisation.

Redstone Resources Limited ABN 42 090 169 154 Suite 3, 110-116 East Parade, East Perth WA 6004 Tel: 08 9328 2552 Fax: 08 9328 2660

www.redstone.com.au Email: contact@redstone.com.au

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Figure 6 Map of Tollu Project area showing location of TC-74/TD-3. The exposed mineralised bodies (red lines) relate to the three main target areas: the Eastern, Central, and Western Zones.

Blackstone Range Farmin/Joint Venture

(Redstone Earning 90%: Resource Mining Corporation Ltd (ASX: RMI) 10%)

(E69/2108 and E69/2109)

The Blackstone Range Project is located approximately 25km east of the BHP Babel and Nebo Ni-Cu-PGE discoveries. The project area is prospective for Cu-Ni-PGE + Au. The Project contains a number of prospects including:

• Halleys.

• Last Frontier.

• Saturn.

An auger drilling programme was completed during the Quarter to provide better quality soil geochemistry data. Geological mapping of mafics was conducted to assess the significance of surface nickel and copper sulphide mineralisation (pentlandite and chalcopyrite) discovered in rock samples during exploration in the previous Quarter at the Saturn prospect.

Redstone Resources Limited ABN 42 090 169 154 Suite 3, 110-116 East Parade, East Perth WA 6004 Tel: 08 9328 2552 Fax: 08 9328 2660

www.redstone.com.au Email: contact@redstone.com.au

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Baggaley Hills Farmin/Joint Venture

(Redstone Farming Out 80%)

(E69/2053, E69/2054, E69/2339, E69/2340, E69/2249 and E69/2200)

The Baggaley Hills Project is prospective for both Ni-Cu-PGE and Iron Oxide Copper Gold (IOCG) mineralisation. Several areas within the project have been identified as high priority targets based upon geochemical, magnetic and gravity signatures and IP surveys.

A ground based magnetic survey was completed during the Quarter to assist in the definition of drill targets. During the Quarter, drill targets were defined and a diamond drilling programme is expected to commence in the next Quarter.

South American Projects

Aneba and Autazes Potash Projects

During the Quarter, the Company entered into an agreement for the sale of its potash projects in Brazil. Under the terms of the agreement, Redstone agreed to sell a 100% interest in the Projects for $390,000. The purchaser also agreed to subscribe for 2 million fully paid ordinary shares in Redstone at $0.18 per share to raise $360,000.

Apui Phosphate Project

Negotiations are progressing with a number of parties interested in farming into and/or acquiring an interest in this project.

Corporate

The Company is actively pursuing further capital raising and funding opportunities.

The Board is in ongoing negotiations with several interested investor entities and a capital injection is planned for the forthcoming quarter.

Redstone Resources Limited ABN 42 090 169 154 Suite 3, 110-116 East Parade, East Perth WA 6004 Tel: 08 9328 2552 Fax: 08 9328 2660

www.redstone.com.au

Email: contact@redstone.com.au

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ABOUT REDSTONE

Redstone Resources Ltd is a Perth-based company focused on nickel and copper with a portfolio of highly prospective mineral exploration properties in the West Musgrave region of WA and also in Brazil.

Further information on Redstone Resources Ltd can be found on the company’s website at www.redstone.com.au.

Investor Enquiries:

Telephone: +61 8 9328 2552 Facsimile: +61 8 9328 2660 Email: contact@redstone.com.au Website: www.redstone.com.au Address: PO Box 8646, Perth Business Centre WA 6849

ATTRIBUTION

The information in this report relates to exploration results is based on information compiled by Dr Joao Orestes Santos, a part-time employee of Redstone Resources Limited. Dr Santos is a member of the Australian Institute of Geoscientists and has sufficient experience relevant to the style of mineralisation under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves’. Dr Santos consents to the inclusion in the report of the matter based on his information in the form and context in which it appears.

Redstone Resources Limited ABN 42 090 169 154

www.redstone.com.au

Suite 3, 110-116 East Parade, East Perth WA 6004 Tel: 08 9328 2552 Fax: 08 9328 2660

Email: contact@redstone.com.au

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