REDSTONE RESOURCES LIMITED — Interim / Quarterly Report 2016

Mar 14, 2016

REDSTONE RESOURCES LIMITED ACN 090 169 154

CONSOLIDATED FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the Annual Report for the year ended 30 June 2015 and any public announcements made by Redstone Resources Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

ACN 090 169 154

CONTENTS

Corporate Directory	2
Directors' Report	3
Auditor's Independence Declaration	11
Consolidated Statement of Comprehensive Income	12
Consolidated Statement of Financial Position	13
Consolidated Statement of Changes in Equity	14
Consolidated Statement of Cash Flows	15
Notes to the Half-Year Financial Statements	16
Directors' Declaration	22
Independent Auditor's Review Report to the Members	23-24

Competent Persons Statement

The information in this report that relates to Exploration Targets and Exploration Results was authorised by Mr Darryl Mapleson, a Principal Geologist and a full time employee of BM Geological Services, who are engaged as consultant geologists to Redstone Resources Limited. Mr Mapleson is a Fellow of the Australian Institute of Mining and Metallurgy. Mr Mapleson has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to act as a competent person as defined in the 2012 edition of the "Australasian Code for reporting of Exploration results, Mineral Resources and Ore Reserves". Mr Mapleson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Forward-Looking Statements

This document may include forward-looking statements. Forward-looking statements include, but are not limited to statements concerning Redstone Resources Limited's (Redstone) planned exploration program and other statements that are not historical facts. When used in this document, the words such as "could", "plan", "estimate", "expect", "intend", "may", "potential", "should", and similar expressions are forward-looking statements. Although Redstone believes that its expectations reflected in these forwardlooking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements.

ACN 090 169 154

CORPORATE DIRECTORY

DIRECTORS:	Mr Richard Homsany (Chairman)Mr Brett Hodgins (Technical Director)Mr Edward van Heemst (Non-Executive Director)
COMPANY SECRETARY:	Ms Miranda Conti
REGISTERED AND PRINCIPAL OFFICE:	60 Havelock StreetWEST PERTH WA 6005Tel: (08) 9328 2552Fax: (08) 9328 2660Internet: www.redstone.com.auemail: contact@redstone.com.au
SHARE REGISTRY:	Advanced Share Registry Services110 Stirling HighwayNEDLANDS WA 6009PO Box 1156NEDLANDS WA 6909Tel: +61 8 9389 8033Fax: +61 8 9262 3723Level 6, 225 Clarence StreetSYDNEY NSW 2000PO Box Q1736QUEEN VICTORIA BUILDING NSW 1230Website: www.advancedshare.com.au
HOME STOCK EXCHANGE:	Australian Stock Exchange LimitedLevel 40Central Park152-158 Ste Georges TerracePERTH WA 6000ASX Code: RDS, RDSOA
AUDITOR:	Butler Settineri (Audit) Pty LtdUnit 16, First Floor100 Railway Road (Cnr Hay Street)SUBIACO WA 6008

ACN 090 169 154

DIRECTORS' REPORT

Your directors submit the financial report of the Redstone Resources Limited and its controlled entities ("Redstone" or the "Entity") for the half-year ended 31 December 2015. In order to comply with the provisions of the Corporations Act 2001, the directors' report follows:

The Board of Directors

The names of Redstone Resources Limited's directors in office during or since the end of the half-year until the date of this report are:

Richard Homsany (Chairman) Brett Hodgins (Technical Director)

Edward van Heemst (Non-Executive Director)

Review of Operations

The consolidated loss after income tax for the half year is $380,890 (2014: $548,690).

WEST MUSGRAVE

PROJECT LOCATIONS

During the period Redstone held an interest in one exploration licence E69/2450 in the West Musgrave region of Western Australia and includes the Company's 100% owned Tollu Copper Project ("the Project"). The Project is prospective for major copper and nickel-copper mineralisation. The tenement and Project location is shown on Figures 1 and 2.

TOLLU PROJECT (REDSTONE 100%)

Redstone's 100% owned Tollu Project is located in the southeast portion of the West Musgrave region of Western Australia (Figure 1). The Project is approximately 20km south east of the Blackstone Community on Company's 100% owned tenement E69/2450 (Figure 2).

The Tollu Project consists of a large swarm of hydrothermal copper rich quartz veins in a mineralised system covering an area at least 5km2 . Malachite rich gossans associated with quartz veins are exposed at surface and form part of a dilatational system between two major structures within the Tollu Fault Zone.

ACN 090 169 154

DIRECTORS' REPORT

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

Tollu Project – 2015 Drilling Programme

During the half year period ending 31 December 2015 (the Period) the Company undertook a reverse circulation (RC) drilling programme (the Programme), with 60 holes drilled for a total of 8,146 metres completed, primarily on the Chatsworth, Eastern Reef and Main Reef Prospects.

The drilling consistently intersected quartz veining, with strong malachite mineralisation in the near surface holes, and quartz veins with stringer and disseminated sulphides (chalcopyrite/pyrrhotite/pyrite) in the deeper holes. Redstone expects the Project's mineralised area and the volume of hydrothermal mineralisation to increase significantly with further drilling.

Assay results completed by February 2016, and which include copper grades of up to 2.6%, are consistent with previous work conducted on the Project area and further highlight the Project's scale and grade. The results from the Programme were primarily focused on extending previous drilling at Chatsworth and Main Reef and testing a new zone at the Forio Prospect.

Following are the significant copper intercepts from the assay samples for the Chatsworth, Main Reef, Forio and Eastern Reef Prospects:

• 7m at 1.75% from 30m (TLC088)
• 9m at 1.07% Cu from 22m, including 5m @ 2.6% Cu and 3m @ 1.7% Cu (TLC090)
• 9m at 2.27% Cu from 27m (TLC130)
• 5m at 2.13% Cu from 54m (TLC101)
• 8m at 2.08% Cu from 17m (TLC131)
• 1m at 1.66% Cu from 23m (TLC136)
• 5m at 1.54% Cu from 93m (TLC125)
• 5m at 1.50% Cu from 19m (TLC132)

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DIRECTORS' REPORT

• 12m at 1.49% Cu from 178m (TLC087)
• 2m at 1.47% Cu from 80m (TLC104)
• 4m at 1.45% Cu from 147m (TLC137)

Aim of the Drilling Programme

The Company identified a number of prospective targets for drilling at the Tollu Project, with the aim of the Programme being to target near surface hydrothermal copper (oxide and sulphide) mineralisation. The main activity concentrated on the known higher-grade zones at the Chatsworth, Main Reef and Eastern Reef prospects within the Tollu Project. The primary purpose was to validate the Tollu mineralised system. The delivery of a maiden (JORC) copper resource is expected in the March 2016 quarter.

Figure 3 – Drill Hole Location Map

Programme Assay Results by Prospect

Chatsworth Prospect

The Chatsworth Prospect is a single sub vertical hydrothermal body exposed at the surface. This prospect forms part of the dilation system between two north south trending shears. Key results from the Programme are included in Table 1 below.

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DIRECTORS' REPORT

Hole	Prospect	Easting	Northing	RL	Dip	Azim	Depth	From	Interval	True	Cu
										Width
		(m)	(m)	(m)	(degree)	(degree)	(m)	(m)	(m)	(m)	(%)
TLC088	Chatsworth	438026	7108625	596	‐50	240	155	201	5	N/C	1.51%
TLC090	Chatsworth	437996	7108654	595	‐60	302	96	90	4	N/C	0.92%
TLC087	Chatsworth	437900.1	7108598	587.5	‐60	300	90	178	12	N/C	1.49%
TLC090	Chatsworth	437996.5	7108654	595.9	‐60	96	302	11	5	N/C	1.25%
TLC125	Chatsworth	438017.5	7108449	574.4	‐60	156	90	93	5	N/C	1.54%

Table 1 – Chatsworth Prospect Assay Results

Figure 4 – Chatsworth Prospect Drill Hole Location Map

Forio Prospect

The Forio Prospect is a series of sub vertical hydrothermal bodies exposed at the surface. This prospect forms part of the dilation system running parallel to Eastern Reef. The key assay results from the Programme are included in Table 2 below.

Hole	Prospect	Easting	Northing	RL	Dip	Azim	Depth	From	Interval	TrueWidth	Cu
		(m)	(m)	(m)	(degree)	(degree)	(m)	(m)	(m)	(m)	(%)
TLC130	Forio	438645.1	7108904	570	‐60	42	90	27	9	N/C	2.27%
TLC131	Forio	438647.8	7108944	567.8	‐60	32	90	17	8	N/C	2.08%
TLC131	Forio	438647.8	7108944	567.8	‐60	32	90	26	2	N/C	1.19%
TLC132	Forio	438659.1	7108984	568.9	‐60	30	90	19	5	N/C	1.50%
TLC133	Forio	438665.4	7109015	568.5	‐60	29	90	12	6	N/C	1.38%
TLC134	Forio	438671.8	7109053	567.8	‐60	34	90	18	5	N/C	1.34%
TLC134	Forio	438671.8	7109053	567.8	‐60	34	90	25	2	N/C	1.05%
TLC136	Forio	438678.1	7109140	567.5	‐60	38	90	23	1	N/C	1.66%

Table 2 Forio Prospect Assay Results

ACN 090 169 154

DIRECTORS' REPORT

Figure 5 – Forio Prospect Drill Hole Location Map

Main Reef Prospect

The Main Reef Prospect is a series of sub vertical hydrothermal bodies exposed at the surface. This prospect forms part of the dilation system running along the western north south trending shear. The key assay results from the Programme are included in Table 3 below.

Hole	Prospect	Easting	Northing	RL	Dip	Azim	Depth	From	Interval	True	Cu
										Width
		(m)	(m)	(m)	(degree)	(degree)	(m)	(m)	(m)	(m)	(%)
TLC101	Main Reef	437996.0	7108654	595	‐60	302	96	54	5	N/C	2.13%
TLC102	Main Reef	437453.5	7107887	614.8	‐60	102	90	79	1	N/C	1.26%
TLC104	Main Reef	437476.7	7108129	602.2	‐60	198	90	80	2	N/C	1.47%
TLC106	Main Reef	437522.7	7108236	593.1	‐60	150	90	54	10	N/C	1.15%

Table 3 Main Reef Prospect Assay Results

ACN 090 169 154

DIRECTORS' REPORT

Figure 6 – Main Reef Prospect Drill Hole Location Map

Eastern Reef Prospect

The Eastern Reef Prospect is a series of sub vertical hydrothermal bodies exposed at the surface. This prospect forms part of the dilation system running along the eastern north south trending shear. The key assay result from the Programme is included in Table 4 below.

Hole	Prospect	Easting	Northing	RL	Dip	Azim	Depth	From	Interval	True	Cu
										Width
		(m)	(m)	(m)	(degree)	(degree)	(m)	(m)	(m)	(m)	(%)
TLC137	Eastern Reef	438364.2	7108987	610.4	‐60	240	90	147	4	N/C	1.45%

Table 4 Eastern Reef Prospect Assay Results

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DIRECTORS' REPORT

BLACKSTONE RANGE PROJECT FARMIN/JOINT VENTURE (REDSTONE EARNING 90%: RESOURCE MINING CORPORATION LTD (ASX: RMI) 10%) (E69/2108 AND E69/2109)

On 16 February 2016 the Entity surrendered the Blackstone Range project tenements E69/2108 and E69/2109.

CORPORATE

Capital Raising

During the Period the Company successfully completed a fully subscribed pro rata non renounceable entitlement offer pursuant to the prospectus dated 4 November 2015 (the Offer), raising $1.25 million (before costs).

The Offer was made to eligible holders of shares in the capital of the Company on the basis of three (3) new fully paid ordinary shares (New Shares) for every four (4) existing shares held at an issue price of $0.009 per New Share.

Shareholders also received two (2) free attaching options, exercisable at $0.03 on or before 31 July 2017, for every five (5) New Shares subscribed for and issued under the Offer.

The Company received maximum subscriptions under the Offer available to eligible shareholders. The funds received under the Offer contributed to funding the costs of the exploration of the Programme and the ongoing evaluation of the Programme results.

Research and Development Tax Concession

In June 2015, subsequent to review and following supporting advice received from an independent top-tier global tax advisory firm the Company claimed a further refundable Research and Development tax offset of approximately $1.0 million (the R&D Rebate). The R&D Rebate amount of $1.0 million, which was determined under the self-assessment system, was received in July 2015.

Share Options

During the Period no options were issued. The following options expired during the Period:

• 750,000 $0.35 options exercisable on or before 6 July 2015; and
• 750,000 $0.45 options exercisable on or before 6 July 2015.

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DIRECTORS' REPORT

Subsequent Events

Blackstone Range Project

The Entity surrendered the Blackstone Range Project tenements E69/2108 and E69/2109 on 16 February 2016.

Listed Options (ASX: RDSO)

On 28 February 2016, 31,356,966 $0.20 quoted options (ASX: RDSO) expired, unexercised.

No other matters or circumstances have arisen since the end of the half-year which have significantly affected or may significantly affect the operations or the state of affairs of the Entity in future financial years.

Auditor's Independence Declaration

Section 307C of the Corporations Act 2001 requires our auditors, Butler Settineri (Audit) Pty Ltd, to provide the directors of Redstone with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is set out on the following page and forms part of this directors' report for the half-year ended 31 December 2015.

This report is signed in accordance with a resolution of the Board of Directors made pursuant to s306(3) of the Corporations Act 2001.

On behalf of the Directors

R Homsany Chairman Perth, Western Australia 15 March 2016

ACN 090 169 154

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

	Note	Half-year ended31 December2015$	Half-year ended31 December2014$
Revenue
Other IncomeTotal revenue		--	103,718103,718
Expenses
Administration and other expenses fromordinary activities		(137,447)	(243,785)
Employee benefit expense		(121,652)	(150,891)
Depreciation and amortisation expense		(4,771)	(6,963)
Finance costs		(1,226)	(1,447)
Write off of Investment		(6,000)	-
Exploration expenditure		(111,649)	(254,764)
Total expenses		(382,745)	(657,850)
Loss before interest and taxes		(382,745)	(554,132)
Interest revenue		1,855	5,442
Loss before income tax		(380,890)	(548,690)
Income tax expense		-	-
Loss after income tax for the period		(380,890)	(548,690)
Other comprehensive income		-	-
Movement in foreign exchange translationreserve		-	-
Total comprehensive income for the period		(380,890)	(548,690)
Earnings per share (cents per share)		Cents	Cents
- Basic and diluted loss for the half-year	10(c)	(0.20)	(0.29)

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

ACN 090 169 154

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

	Note	At31 December2015$	At30 June2015$
CURRENT ASSETS
Cash and Cash Equivalents		924,387	60,726
Trade and Other Receivables		111,988	1,071,309
Other Assets		23,916	22,409
TOTAL CURRENT ASSETS		1,060,291	1,154,444
NON-CURRENT ASSETS
Deferred Exploration Expenditure	5	5,850,373	5,038,744
Property, Plant and Equipment		28,921	32,302
Other financial assets		-	6,000
TOTAL NON-CURRENT ASSETS		5,879,294	5,077,046
TOTAL ASSETS		6,939,585	6,231,490
CURRENT LIABILITIES
Trade and Other Payables		1,019,939	1,050,698
Provisions		31,435	33,895
TOTAL CURRENT LIABILITIES		1,051,374	1,084,593
		1,051,374	1,084,593
TOTAL LIABILITIES
NET ASSETS		5,888,211	5,146,897
EQUITY
Issued Capital	10	23,336,849	22,214,645
Reserves		156,999	397,749
Accumulated Losses		(17,605,637)	(17,465,497)
TOTAL EQUITY		5,888,211	5,146,897

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

ACN 090 169 154

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

Six months ended 31 December 2015

	IssuedCapital	AccumulatedLosses	SharebasedPaymentsReserve	Total Equity
	$	$	$	$
At 1 July 2015	22,214,645	(17,465,497)	397,749	5,146,897
Total comprehensiveincome attributable tomembersShare capital issued	-	(380,890)	-	(380,890)
	1,251,701	-	-	1,251,701
Equity raising costs	(129,497)	-	-	(129,497)
Share-based paymentsexpiring	-	240,750	(240,750)	-
At 31 December 2015	23,336,849	(17,605,637)	156,999	5,888,211

Six months ended 31 December 2014

	IssuedCapital	AccumulatedLosses	SharebasedPaymentsReserve	Total Equity
	$	$	$	$
At 1 July 2014	22,214,645	(17,315,337)	767,424	5,666,732
Total comprehensiveincome attributable tomembersShare capital issued	--	(548,690)-	--	(548,690)-
Equity raising costsShare-based paymentsexpiring	--	-225,676	-(225,676)	--
At 31 December 2014	22,214,645	(17,638,351)	541,748	5,118,042

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

ACN 090 169 154

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

	Half-year ended31 December2015$	Half-year ended31 December2014$
CASH FLOWS FROM OPERATINGACTIVITIES
Payments to suppliers and employeesInterest receivedInterest paid	(576,765)56,631-	(328,469)5,442-
Net R&D tax concession received	186,052	-
Net cash flows used in operating activities	(334,082)	(323,027)
CASH FLOWS FROM INVESTINGACTIVITIES
Exploration expenditureNet R&D tax concession received	(587,087)647,029	(360,526)-
Net cash flows from/(used in) investingactivities	59,942	(360,526)
CASH FLOWS FROM FINANCINGACTIVITIES
Proceeds from issue of sharesPayment of share issue costs	1,251,701(113,900)	--
Net cash flows from financing activities	1,137,801	-
Net increase/(decrease) in cash heldCash at the beginning of the half-year	863,66160,726	(683,553)899,633
CASH AT THE END OF THE HALF-YEAR	924,387	216,080

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

ACN 090 169 154

NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

1. Corporate Information

The financial report of Redstone Resources Limited (the "Company") for the half-year ended 31 December 2015 was authorised for issue in accordance with a resolution of the directors on 15 March 2016.

Redstone Resources Limited is a company limited by shares incorporated and domiciled in Australia whose shares commenced public trading on the Australian Stock Exchange on 3 August 2006.

The nature of the operations and principal activities of the Company are described on pages 3 to 9 in the Directors' Report.

2. Summary of Significant Accounting Policies

The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Entity as the full financial report.

This half-year financial report should be read in conjunction with the annual financial report of Redstone Resources Limited for the year ended 30 June 2015.

It is also recommended that the half-year financial report be considered together with any public announcements made by the Company during the half- year ended 31 December 2015 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.

a) Basis of Consolidation

The half-year consolidated financial statements comprise the financial statements of Redstone Resources Limited and its controlled entities as at 31 December 2015 (the "Entity" or "Group") - refer note 9.

b) Basis of Accounting

The half-year financial report is a general purpose financial report which has been prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 "Interim Financial Reporting" and other mandatory professional reporting requirements.

For the purposes of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.

ACN 090 169 154

NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

2. Summary of Significant Accounting Policies (continued)

c) Significant Accounting Policies

The half-year consolidated financial statements have been prepared using the same accounting policies as the annual financial statements for the year ended 30 June 2015.

The Entity has reviewed all of the new and revised standards and interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2015. It has been determined that there is no impact, material or otherwise, and therefore no change is required to the Entity's accounting policies.

The Entity has also reviewed all new standards and interpretations that have been issued but are not yet effective for the half-year ended 31 December 2015. As a result of this review, the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and therefore, no change necessary in the Entity's accounting policies.

d) Going Concern

The Entity recorded a loss of $380,890 for the half-year ended 31 December 2015 and as at 31 December 2015 had net current liabilities of $1,051,374 and exploration and operating commitments for the following 12 months to 31 December 2016 of $64,924 (note 6). Although these matters are indicative of a material uncertainty, the financial report has been prepared on a going concern basis, as the Directors are of the opinion that the Entity will be able to pay its debts as and when they fall due. The Directors contemplate continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

Subsequent to the end of the half-year ended 31 December 2015 the Entity has been, and will continue, to actively pursue capital raising and funding opportunities.

ACN 090 169 154

NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

NOTE 3: DIVIDENDS

The Entity has not declared or paid a dividend during the half-year ended 31 December 2015.

NOTE 4: SEGMENT INFORMATION

During the 2014 financial year the Entity ceased operations in South America. Therefore the Entity has one operating segment being mineral exploration in Australia.

The accounting policies used by the Entity in reporting segments are the same as those in the prior period.

NOTE 5: DEFERRED EXPLORATION EXPENDITURE

The ultimate recoupment of costs carried forward in relation to exploration expenditure is dependent on the successful development and commercial exploitation or sale of the areas of interest at an amount at least equal to the carrying value.

The carrying value of $5,850,373 relates solely to the net deferred exploration spend incurred on the Tollu Project tenement (E69/2450) to 31 December 2015.

NOTE 6: CAPITAL AND EXPLORATION EXPENDITURE COMMITMENTS

The future exploration commitment (including access costs) of the Entity relating to currently held and granted tenements to their expiry is as follows:

Cancellable operating lease commitments for	31 December	30 June
exploration tenements	2015	2015
	$	$
Within one year	43,924	220,892
One year or later and no later than five years	316,000	432,134
Later than five years	-	-
	359,924	653,026

Joint venture commitments

Blackstone Range Joint Venture

Subsequent to 31 December 2015, the Entity surrendered the remaining Blackstone Range Project tenements (E69/2108 and E69/2109) and the Blackstone Range Joint Venture was terminated.

ACN 090 169 154

NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

NOTE 6: CAPITAL AND EXPLORATION EXPENDITURE COMMITMENTS (continued)

Capital Commitments

The Entity does not have any capital commitments as at balance date.

Operating lease – corporate office premises

The Entity is leasing office premises for a gross rent inclusive of car bay of $4,300 per month. As of 30 June 2015 the Entity is holding over on a monthly tenancy on the same rental terms and conditions although this is subject to rate review if deemed appropriate. Such rental rate review may not result in an increase of 10% unless otherwise agreed between the parties. The monthly tenancy may be terminated by either party giving at least one month's written notice to the other party.

Commencing from 1 April 2013 the Entity entered into a two year operating lease for storage premises at an annual rental of $24,000 plus variable outgoings plus GST. On 31 July 2015, the Entity entered into a further two year lease at an annual rental of $21,000 plus variable outgoings plus GST.

Cancellable operating lease commitments forexploration tenements	31 December2015$	30 June2015$
Within one year	21,000	21,250
One year or later and no later than five years	12,250	22,750
Later than five years	-	-
	33,250	44,000

NOTE 7: CONTINGENT ASSETS AND LIABILITIES

Foreign Subsidiary Obligations

During the 2014 financial year, the Entity recognised a provision for foreign subsidiary obligations relating to estimated amounts that may be required to settle outstanding obligations arising from a winding-up of the Entity's investment in its Brazilian subsidiary, Redstone Mineraco Do Brasil Ltd (Redstone Brazil).

However, as at 30 June 2015, the Entity considered that it was more likely that a present obligation no longer existed for any of these amounts and that it was more likely that no economic outflow would be required. Further the timing and amount of any potential economic outflow is uncertain. Accordingly, there may be a contingent liability for potential obligations required to be paid in any eventual winding up of Redstone Brazil for which the timing is uncertain and amount cannot be measured reliably.

The Company had no other contingent assets or liabilities as at 31 December 2015.

ACN 090 169 154

NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

NOTE 8: EVENTS AFTER BALANCE DATE

Blackstone Range Project

On 16 February 2016, the Entity surrendered the Blackstone Range Project tenements (E69/2108) and (E69/2109) and the Blackstone Range Joint Venture was terminated.

Options

On 28 February 2016 31,356,966 $0.20 quoted options (ASX: RDSO) expired unexercised.

No other matters or circumstances have arisen since the end of the half-year which have significantly affected or may significantly affect the operations or the state of affairs of the Entity in future financial years.

NOTE 9: CONTROLLED ENTITIES

Redstone Resources Limited is the parent entity of the Group.

	At 31 December2015	At 30 June2015
	%	%
Particulars in relation to wholly owned entities
Allhawk Nominees Pty Ltd	100	100
Minex Services Pty Ltd	100	100
Westmin Exploration Pty Ltd	100	100
Rivergold Exploration Pty Ltd	100	100
Redstone Mineracao Do Brasil Ltda*	98	98

*The remaining 2% shareholding is held on trust for Redstone Resources Limited. The Board and shareholding structure is in accordance with Brazilian law.

NOTE 10: CONTRIBUTED EQUITY
(a) Issued and Paid Up Capital	31 December2015$	30 June2015$
Shares issued and fully paid – 326,047,245(June 2015: 186,969,390 ordinary shares fullypaid)	23,261,146	22,138,942
Listed Options (ASX: RDSO) issued and fullypaid – 31,356,966 (June 2015: 31,356,966)Listed Options issued (ASX: RDSOA) –55,631,193 (June 2015: Nil)	75,703-	75,703-
Issued and fully paid capital	23,336,849	22,214,645

ACN 090 169 154

NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

NOTE 10: CONTRIBUTED EQUITY (continued)

During the half-year period to 31 December 2015 no options were issued and no options were exercised. The following options expired during the half-year period to 31 December 2015:

• 750,000 $0.35 options exercisable on or before 6 July 2015; and
• 750,000 $0.45 options exercisable on or before 6 July 2015.

Reconciliation of options on issue

Share Options	As at 30June 2015	Issued/(Exercisedor lapsed)	As at 31December2015	Exerciseprice$	Exercisablefrom	Expiry
Unlisted optionsUnlisted optionsUnlisted optionsListed Options- (ASX: RDSO)	750,000750,0002,000,00031,356,966	(750,000)(750,000)--	--2,000,00031,356,966	0.350.450.200.20	7 Jul 117 Jul 115 Dec 1210 Oct 12	6 Jul 156 Jul 154 Dec 1728 Feb 16
Listed Options- (ASX: RDSOA)	-	55,631,193	55,631,193	0.03	11 Dec 15/30 Dec 15	31 Jul 17
Total options	34,856,966	54,131,193	88,988,159

(b) Movement of fully paid ordinary shares during the period

On 11 December 2015 and 30 December 2015 the Entity issued 72,007,774 fully paid ordinary shares and 67,070,081 fully paid ordinary shares respectively.

(c) Earnings per Share

	Half-year ended31 December2015	Half-year ended31 December2014
Basic loss per share (cents per share)	(0.20)	(0.29)
Weighted average number of ordinaryshares on issue used in the calculationof basic earnings per share (number)	195,160,833	186,969,390
Earnings used in the calculation ofbasic loss per share ($)	(380,890)	(548,690)
As the Entity made a loss for the year,diluted earnings per share is the sameas basic earnings per share.

ACN 090 169 154

DIRECTORS' DECLARATION

In accordance with a resolution of the directors of Redstone Resources Limited, we state that:

In the opinion of the directors:

• 1. The financial statements and notes of the Entity set out on pages 12 to 21 are in accordance with the Corporations Act 2001 including:
  • a. giving a true and fair view of the financial position as at 31 December 2015 and the performance for the half-year ended on that date of the Entity; and
  • b. complying with Australian Accounting Standards and the Corporations Regulations 2001; and
• 1. there are reasonable grounds to believe that the Entity will be able to pay its debts as and when they become due and payable.

On behalf of the Board

R Homsany Chairman Perth, Western Australia 15 March 2016