REDSTONE RESOURCES LIMITED — Interim / Quarterly Report 2014

Jan 29, 2015

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30 January 2015

QUARTERLY REPORT

For the Period Ending 31 December 2014

The Board of Redston e Resources Limited ( ASX Code: RDS ) (“ Redstone ” or “ the Company ”) presents it s quarterly r e port for the period endi n g 31 Dece m ber 2014 (“ the Quarter ” ).

Redstone’s primary foc u s is the Toll u Project w h ich is locate d in the sou t heast porti o n of the West Musgrav e region of W estern Au s tralia. Thi s Project ho s ts a giant swarm of hydrotherma l copper ric h veins in a mineralise d system co v ering an ar e a at least 5 km[2] . Copper mineralisation is exp o sed at the surface an d forms part o f a dilation system bet w een two m a jor shears. Redstone e x pects the P r oject’s min e ralised are a and the vol u me of hydr o thermal mi n eralisation to increase s ignificantly with furthe r drilling.

SUMMARY

• Co n tinued wor k on definin g a Concept u al Explorati o n Target o n the Atlas P r oject

• Co m pleted Environment M a nagement P lan frame w ork for futu r e Works pr o grams  Co n tinued pro m otional act i vities and a s sessment o f fundraisin g options.

Tollu Project (Redstone 100%)

Redstone’s 100% own e d Tollu Project is locat e d in the so u theast port i on of the W est Musgrave region o f Western A u stralia (Figure 1) . The P roject is a p proximatel y 20km sout h east of th e Blackstone Communit y on Company’s 100% o w ned tenem e nt E69/245 0 ( Figure 2 ).

The Tollu P roject consists of a la r ge swarm o f hydrothe r mal copper rich quart z veins in a mineralise d system cov e ring an area at least 5 k m[2] . Malachite rich gos s ans associa t ed with qu a rtz veins ar e exposed a t surface an d form part o f a dilatatio n al system between two major struc t ures within the Tollu Fault Zone.

Redstone Resources Limited A BN 42 090 169 154 www.redstone.com.au 6 0 Havelock Str e et, West Pert h WA 6005 Tel: 08 9328 2552 Fax: 08 9328 2 6 60 Email: c ontact@redst o ne.com.au

ASX: RDS

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Figure 1 – West Musgrave ‐ Location Map Figure 2 – Tollu Project – Location Map

The C ompany h a s renamed its existing prospects w ithin the Tollu Project and has id e ntified further prospect s within the Tollu Projec t . There ar e now 16 pr o spects in t o tal within t h e Tollu Proj e ct. The ini t ial focus is o n the Cha t sworth Pro s pect, the E a stern Reef Prospect, t h e Main Reef Prospect an d the Dawy c k Prospects .

The C ompany h a s also identified the potential for a number of other pr o jects on t h e Tollu tene m ent (E69/2450) in addi t ion to the T ollu Project, detailed be l ow.

Tenement E69/2450 Prospectivity

Five additional p rojects hav e been identified on E 6 9/2450 (Figure 3) as k e y sites to c onduct mineral exploration. These P r ojects are:

• Atlas Pro j ect (prospe c tive for IO C G & Mt Isa s tyle‐copper sediment‐h o sted).

• Babylon P roject (pro s pective for I OCG & Mt I s a style‐cop p er sedimen t ‐hosted).  Pompeii P roject (pro s pective for M t Isa style‐copper sedi m ent‐hoste d ).  Pergamon Project (p r ospective f o r Mt Isa style‐copper se d iment‐hos t ed).  Herculaneum Project (prospectiv e for Mt Isa style‐coppe r sediment‐ h osted).

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Figure 3 – Project –Location Map

Tollu Project – Conceptual Exploration Target

Reds t one has de f ined an inc r eased Con c eptual Expl o ration Targ e t ( Target ) f o r the Tollu Project of 2 2 to 33 million tonnes of minerali s ation at a c onceptual g rade rang e of 0.9 ‐ 1 . 3% Cu, cont a ining 198,0 0 0 to 445,0 0 0 tonnes o f copper. This includes a n estimate o f 4.3 to 6.4 million tonn e s of mineralisation at a conceptual g rade range of 1.6 ‐ 2.4 % , containin g 69,000 to 1 54,000 tonn e s of copper on the Cha t sworth Pro s pect.

The p otential qu a ntity and grade of the Target is conceptual in nature. It i s important to note that t here has b e en insuffici e nt exploration to estim a te a Miner a l Resource a nd it is unc e rtain if further explorati o n will resul t in the esti m ation of a M ineral Resource.

Atlas Conceptual Exploration Target

Duri n g the Qua r ter the Co m pany cont i nued geological and g e ophysical w ork on de f ining a Conceptual Expl o ration Targ e t on the Atl a s Project.

Atlas Project Background

The A tlas Projec t lies to the immediate north of th e Tollu Proj e ct and is p r oximal to t h e Tollu Fault Zone (Figure 4) . Most of the Pr o ject area appears to be under a t hin Tertiar y cover. Imp o rtantly, mu c h of the arc h itecture of Tollu is rep e ated in Atla s . In additi o n is the incl u sion of inter m ediate vol c anic rocks o f the Hoga r th Formati o n and the i n trusion of a granite (Figure 5) . In combination w ith the proximity of the Tollu Fault Zone, and expanse of Tertiary co v er, the Atlas Project is p r ospective f o r a blind M t Isa style‐co p per sediment‐hosted d e posit.

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Figure 4 – Atlas Project –Location Map
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The A tlas Project is also prospective for t he IOCG mi n eralisation. In the nor t hern portio n of the Proj e ct, a felsic i n trusion is positioned at the margin to the Tollu Fault Zone. Immediate l y north of th i s is a magn e tised unit with a strike o f 1200 met r es and widt h of 500m (Figure 6) .

The r ock type i s interprete d to be a p orphyritic rhyolite. As a magnetis e d feature it could repr e sent a portion of stratigraphy not d e magnetise d by the Toll u Fault Zon e , or the foo t print of a hy d rothermal c ell that ca u sed magne t isation con s istent with an IOCG analogy. Adjacent to this location, wi t hin the da m aged and d emagnetised domain o f the Tollu F ault Zone i s a rock specimen P7096 6 0. This spe c imen was s t udied by p e trographic a nalysis by Te ale and As s ociates (200 6 ) and was observed to b e a porphy r itic rhyolite t hat has be e n sulphidis e d.

It contained pyrite, chalcopyrite, covel l ite, magne t ite and ha e matite as a ccessory m inerals. Abu n dant K‐feld s par and bio t ite was pre s ent but it i s unclear from the descr i ption if the s e were prim a ry or a pr o duct of m e tasomatis m . The ob s ervation of pyrite, chalcopyrite, c o vellite, mag n etite and h a ematite favour an IOCG deposit model .

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Figure 5. The location of the six Projects situated within E69/2450 that have been considered prospective for metal endowment. The main mineral system targeted is Mt Isa style‐copper sediment‐hosted mineral system. IOCG mineralisation is also considered to be plausible. The tenement outline is in brown.

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Figure 6. The spatial proximity of the sulphidised rhyolite as determined from petrographic thin section (2006), a magnetic high, a felsic intrusive and the Tollu Fault Zone.

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CORPORATE

Duri n g the Qua r ter, the C o mpany en g aged a co n sultant to a ssist with capital raising and pro m otional acti v ities, with the objectiv e of raising a dditional fu n ds during this quarter. A West Mus g rave and T o llu project s i te visit was undertaken in early Dec e mber for t h is purpose.

Duri n g the Quar t er, the Company receiv e d a warnin g from the DMP relating to breache s arising from historical exploration activities un d ertaken on the Blackstone Range P roject. Fu r ther to this, t he Compa n y has completed a revi e w and upd a ted its environmental p olicies, pro c edures and m anagement plans. Thi s Environmental Manag e ment Plan will provide the frame w ork for all fu t ure exploration activiti e s to be und e rtaken by t h e Compan y .

Duri n g the Qu a rter the C o mpany lo d ged a Research and Developme n t Tax concession appli c ation (“Ap p lication”) for eligible ex p enditure in c urred during the 2013/ 1 4 financial y ear for a Re s earch and Developme n t tax offs e t amount. T he Applica t ion is curr e ntly pendi n g with AusI n dustry and t he Australi a n Taxation O ffice.

Competent Persons Statement

The i n formation i n this annou n cement that relates to E x ploration Ta r gets and Ex p loration Results was auth o rised by Mr Darryl Mapl e son, a Prin c ipal Geologi s t and a full time employ e e of BM G e ological Servi c es, who are engaged as c onsultant g e ologists to R e dstone Res o urces Limite d . Mr Mapl e son is a Fello w of the Aust r alian Institut e of Mining a n d Metallurg y . Mr Mapleson has sufficient experien c e which is rel e vant to the s tyle of mine r alisation an d type of dep o sit under consideration t o act as a co m petent pers o n as defined in the 2012 edition of the “Australa s ian Code fo r reporting o f Exploration results, Mine r al Resources and Ore Res e rves”. Mr M a pleson cons e nts to the in c lusion in the report of the matters base d on his infor m ation in the f orm and con t ext in which it appears.

Forward‐Looking Statements

This d ocument ma y include for w ard‐looking s tatements. F orward‐looking statemen t s include, bu t are not limit e d to statements concerni n g Redstone R esources Li m ited’s (Redstone) planned exploration p rogram and o ther statem e nts that are not historic a l facts. When used in t h is documen t , the words such as “coul d ”, “plan”, “ e stimate”, “expect”, “inten d ”, “may”, “ p otential”, “s h ould”, and similar expres s ions are forw a rd‐looking st a tements. Al t hough Redstone believes that its expe c tations refle c ted in these f orward‐ looki n g statement s are reasonable, such statements invol v e risks and u ncertainties a nd no assur a nce can be gi v en that actu a l results will b e consistent with these f o rward‐lookin g statements .

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TENEMENT INFORMATION AS REQUIRED BY LISTING RULE 5.3.3

The C ompany holds the follo w ing tenem e nts at the end of the 31 December 2 014 quarte r .

TENEMENT SUMMARY AS AT 31 DECEMBER 2014

West Musgrave, Australia

Pro ject	Tene ment	Reg istered Holder Applicant	Holder Interes t	Consoli Enti Intere dated ty st	Gran (App D t Date lication ate)	Expiry	Blocks	Area km2
Tollu Blacks Range Blacks Range tone tone	E6 E6 E6 9/2450 9/2108 9/2109	Reds Limite River Explo River Explo tone Resource d Go ration Pty Ltd Go ration Pty Ltd s ld ld	100% 100% 100%	100 75% 75% %	19/0 28/0 28/0 9/2008 4/2006 4/2006	18/09/2018 27/04/2015 27/04/2015	41 39 70	125.0 121.0 217.0
							150	463.0

Brazil, South America

Proj ect		State	Registered Applica Holder nt	Holder Interest	Co nsolidated Entity Interest	Grant Date	Expiry	Area (ha)
	Tene ment
Arinos	866.2 80/2007	Ma ta Grosso	Re Br dstone Mine asil Ltda ração Do	100%	100%	15/02/2008	15/02/2011*	6,953.43
Applica Produc tion for an exte tion (DNMP) an nsion of termf d is still pendin or tenement 86 g. 6280/07 for a fu rther three yea rs was lodgedw ith the BrazilN ational Depart ment of Mineral*

The f o llowing gra n ted tenem e nt interests held by the Company e x pired durin g the Quart e r:

Brazil, South America

Proj ect		State	Registered Applica Holder nt	Holder Interest	Co nsolidated Entity Interest	Grant Date	Expiry	Area (ha)
	Tene ment
Bala Ponta Bala Ponta and l and l	850.7 850.7 38/2011 39/2011	Xing Xing u u	HJ Ltd HJ Ltd H Mineração a. H Mineração a. do Brasil do Brasil	90% 90%	10% 10%	3/10/2011 3/10/2011	3/10/2014 3/10/2014	9,203.78 9,727.25
								18,931.03

Black s tone Rang e Project – E 69/2108 and E69/2109 : Farmin wi t h Resource Mining Cor p oration Ltd (ASX: RMI) , Redst o ne earning 90%

The C ompany has a benefici a l interest o f 75% in its B lackstone Range joint v e nture at the end of th e Quar t er. The Co m pany did n ot acquire o r dispose o f any beneficial interes t s in any joint ventures , farm ‐ in or farm out arrang e ments duri n g the Qua r ter. These t enements a re currentl y subject t o Forf e iture Applic a tions whic h are being defended.

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ABOUT REDSTONE RESOURCES

Reds t one Resou r ces Ltd (A S X: RDS) is a Perth‐bas e d compan y focused on highly pr o spective copp e r explorati o n properties in the We s t Musgrave region of W e stern Austr a lia.

Reds t one’s 100 % owned Tollu Project is located in t h e south‐ea s t portion o f the West M usgrave region of Weste r n Australia. The Tollu P roject consi s ts of a larg e swarm of h ydrotherm a l copper rich q uartz veins in a mineralised syste m covering a n area at le a st 5km[2] . M alachite‐ric h gossans asso c iated with quartz veins are expo s ed at surf a ce and for m part of a dilatation a l system bet w een two ma j or structur e s within th e Tollu Fault Z one.

The T ollu Projec t has a Conc e ptual Expl o ration Targ e t estimated to be 22 t o 33 million t onnes of mineralisation at a conceptu a l grade ran g e of 0.9 ‐ 1. 3 % Cu, cont a ining 198,0 0 0 to 445,0 0 0 tonnes of copper. This i n cludes 4.3 t o 6.4 millio n tonnes of m ineralisati o n at a conc e ptual grad e range of 1.6 – 2.4%, containing 69,00 0 to 154,000 tonnes of C o pper on th e Chatswort h Prospect.

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For f u rther infor m ation please contact:

Rich a rd Homsan y B rett Hodgin s Chai r man T echnical Dir e ctor Reds t one Resources Limited R edstone Re s ources Limi t ed +61 (08) 9328 25 5 2 +61 (08) 932 8 2552 cont a ct@redsto n e.com.au contact@red s tone.com. a u

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013

Name of entity

Redstone Resources Limited

ABN 42 090 169 154

Quarter ended (“current quarter”) 31 December 2014

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 (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) R&D Rebate (net) Net Operating Cash Flows	Current quarter $A’000	Year to date (6 months) $A’000
	- (169) - - (103) - 1 - - - -	- (352) - - (337) - 5 - - - -
	(271)	(684)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (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 1.13 Total operating and investing cash flows (carried forward)	- - - - - - - - -	- - - - - - - - -
	-	-
	(271)	(684)

• See chapter 19 for defined terms.

01/05/2013 Appendix 5B Page 1

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(271)	(684)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 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 - capital raising costs Net financing cash flows	- - - - - -	- - - - - -
	-	-
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	(271) 487	(684) 900
	216	216

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

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		75
		-
1.25	Explanation necessaryfor an understandingof the transactions
	Director and Director Consulting Fees including to related entities of the directors.

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.

Appendix 5B Page 2

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

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

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	75
	-
	-
	75
Total	150

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	186	257
	30	230
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	216	487

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Changes in interests in mining tenements and petroleum tenements

6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements and petroleum tenements acquired or increased	Tenement reference and location	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	Brazil, South America 850.738/2011 850.739/2011	10% free carried interest 10% free carried interest	10% 10%	0% 0%
	Nil

Issued and quoted securities at end of current quarter

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

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	186,969,390	186,969,390		Fully Paid
7.5 +Convertible debt securities (description)

• See chapter 19 for defined terms.

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	Quoted Options (ASX: RDSO) 31,356,966 Unquoted Options 750,000 750,000 1,000,000 2,000,000		Exercise price 20 cents 35 cents 45 cents 30 cents 20 cents	Expiry date 28/02/16 06/07/15 06/07/15 26/02/15 04/12/17
	1,500,000 500,000 500,000 1,000,000		25 cents 30 cents 35 cents 30 cents	30/11/14 30/11/14 30/11/14 21/12/14
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

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 5).

• 2 This statement does give a true and fair view of the matters disclosed.

30 January 2015 Sign here: ............................................................ Date: ............................ (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.

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

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 and petroleum 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 or petroleum 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 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting 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.

Appendix 5B Page 6

01/05/2013