REDSTONE RESOURCES LIMITED — Interim / Quarterly Report 2017

Jan 30, 2017

31 January 2017

QUARTERLY REPORT

For the Period Ending 31 December 2016

Redstone Resources Limited (ASX Code: RDS) ("Redstone" or "the Company") presents its quarterly report for the period ending 31 December 2016 ("the Quarter").

Redstone's primary focus is the advancement of the Tollu Project ("Tollu" or the "Project"), located in the southeast portion of the West Musgrave region of Western Australia. This Project hosts a giant swarm of hydrothermal copper rich veins in a mineralised system covering an area at least 5km2 . Copper mineralisation is exposed at the surface and forms part of a dilation system between two major shears.

Redstone expects the Project's initial JORC 2012 resource of 3.8 million tonnes at 1% Cu, containing 38,000 tonnes of copper, including 8,000 tonnes of Cu oxide resource, the mineralised area and the volume of hydrothermal mineralisation to increase significantly with further drilling.

During the Quarter the Company completed and lodged a Research and Development Incentive claim (the R&D Rebate) along with its FY2016 tax return. The Company determined the R&D Rebate amount under the Australian Taxation Office's self‐assessment system with the final amount of $646,000 received by Redstone on 30 January 2017.

The funds from the R&D Rebate will make a significant contribution to the Company's capital requirements over the next 12 months.

Redstone has also continued its efforts during the Quarter on investigating a planned follow up RC drilling program at the Tollu Project. The evaluation of the next program is ongoing.

TENEMENT INFORMATION AS REQUIRED BY LISTING RULE 5.3.3

The Company holds the following tenement at the end of the 31 December 2016 quarter.

TENEMENT SUMMARY AS AT 31 DECEMBER 2016

West Musgrave, Australia

Project	Tenement	Registered Holder Applicant	HolderInterest	ConsolidatedEntity Interest	Grant Date(ApplicationDate)	Expiry	Blocks	Areakm2
Tollu	E 69/2450	Redstone Resources Limited	100%	100%	19/09/2008	18/09/2018	41	125.0
Milyuga	E 69/3456	Redstone Resources Limited			(18/07/2016)		36	110.0
							77	235.0

The Company did not acquire or dispose of any interests in any joint ventures, farm‐in or farm out arrangements during the Quarter.

Competent Persons Statement

The information in this announcement that relates to exploration results, Exploration Targets and Mineral Resources 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 forward‐looking 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.

ABOUT REDSTONE RESOURCES

Redstone Resources Limited (ASX: RDS) is a Perth‐based company focused on highly prospective copper exploration properties in the West Musgrave region of Western Australia.

Redstone's 100% owned Tollu Project is located in the southeast portion of the West Musgrave region of Western Australia. The Project is approximately 20km south east of the Blackstone Community on the Company's 100% owned tenement E69/2450 (Figure 1). The Company has now identified 24 prospects within the Tollu Project (Figure 2).

The Company has also identified the potential for a number of other projects on the Tollu tenement (E69/2450) in addition to the Tollu Project (Figure 1).

3

Figure 1– Tollu Project and other Projects– Location Map Figure 2 – Tollu Project – Prospect Location Map

For further information please contact:

Richard Homsany Chairman Redstone Resources Limited +61 (08) 9328 2552 contact@redstone.com.au

Andrew Rowell /Warrick Hazeldine Cannings Purple +61 8 6314 6304 arowell@canningspurple.com.au

+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, 01/05/13, 01/09/16

Name of entity

Redstone Resources Limited

ABN Quarter ended ("current quarter")

42090169154 31 December 2016

Consolidated statement of cash flows		Current quarter$A'000	Year to date(6 months)$A'000
1.	Cash flows from operating activities
1.1	Receipts from customers	-	-
1.2	Payments for
	(a)exploration & evaluation	(37)	(64)
	(b)development	-	-
	(c)production	-	-
	(d)staff costs	(24)	(53)
	(e)administration and corporate costs	(25)	(65)
1.3	Dividends received (see note 3)	-	-
1.4	Interest received	-	-
1.5	Interest and other costs of finance paid	-	-
1.6	Income taxes paid	-	-
1.7	Research and development refunds*	-	-
1.8	Other (Research & Development fee)	-	(34)
1.9	Net cash from / (used in) operatingactivities	(86)	(216)

2.	Cash flows from investing activities
2.1	Payments to acquire:
	(a)property, plant and equipment
	(b)tenements (see item 10)
	(c)investments
	(d)other non-current assets

1 September 2016 Page 1

	Consolidated statement of cash flows	Current quarter$A'000	Year to date(6 months)$A'000
2.2	Proceeds from the disposal of:
	(a)property, plant and equipment	-	-
	(b)tenements (see item 10)	-	-
	(c)investments	-	-
	(d)other non-current assets	-	-
2.3	Cash flows from loans to other entities	-	-
2.4	Dividends received (see note 3)	-	-
2.5	Other (provide details if material)	-	-
2.6	Net cash from / (used in) investingactivities	-	(6)
3.	Cash flows from financing activities
3.1	Proceeds from issues of shares	-	-
3.2	Proceeds from issue of convertible notes	-	-
3.3	Proceeds from exercise of share options	-	-
3.4	Transaction costs related to issues ofshares, convertible notes or options	-	-
3.5	Proceeds from borrowings	-	-
3.6	Repayment of borrowings	-	-
3.7	Transaction costs related to loans andborrowings	-	-
3.8	Dividends paid	-	-
3.9	Other (provide details if material)	-	-
3.10	Net cash from / (used in) financingactivities	-	-
4.	Net increase / (decrease) in cash andcash equivalents for the period
4.1	Cash and cash equivalents at beginning ofperiod	158	294
4.2	Net cash from / (used in) operatingactivities (item 1.9 above)	(86)	(216)
4.3	Net cash from / (used in) investing activities(item 2.6 above)	-	(6)
4.4	Net cash from / (used in) financing activities(item 3.10 above)	-	-
4.5	Effect of movement in exchange rates oncash held	-	-
4.6	Cash and cash equivalents at end ofperiod *	72	72

* Redstone Resources Limited received approximately $646,000 R&D rebate in January 2017

5.	Reconciliation of cash and cashequivalentsat the end of the quarter (as shown in theconsolidated statement of cash flows) to therelated items in the accounts	Current quarter$A'000	Previous quarter$A'000
5.1	Bank balances	72	102
5.2	Call deposits	-	56
5.3	Bank overdrafts
5.4	Other (provide details)
5.5	Cash and cash equivalents at end ofquarter (should equal item 4.6 above)	72	158

6. Payments to directors of the entity and their associates Current quarter

• 6.1 Aggregate amount of payments to these parties included in item 1.2 -
• 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3
• 6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2

7. Payments to related entities of the entity and their associates

• 7.1 Aggregate amount of payments to these parties included in item 1.2 -
• 7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3
• 7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

Current quarter$A'000
	-

$A'000

8.	Financingfacilities availableAdd notes as necessary for anunderstanding of the position	Total facility amountat quarter end$A'000	Amount drawn atquarter end$A'000
8.1	Loan facilities	-	-
8.2	Credit standby arrangements	-	-
8.3	Other (please specify)	-	-

8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

9.	Estimated cash outflows for next quarter	$A'000
9.1	Exploration and evaluation	(15)
9.2	Development	-
9.3	Production	-
9.4	Staff costs	(25)
9.5	Administration and corporate costs	(30)
9.6	Other (provide details if material)	-
9.7	Total estimated cash outflows	(70)

10.	Changes intenements(items 2.1(b) and2.2(b) above)	Tenementreferenceandlocation	Nature of interest	Interest atbeginningof quarter	Interestat end ofquarter
10.1	Interests in miningtenements andpetroleum tenementslapsed, relinquishedor reduced	Nil
10.2	Interests in miningtenements andpetroleum tenementsacquired or increased	Nil

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.
• 2 This statement gives a true and fair view of the matters disclosed.

31/01/2017

(Company secretary)

Sign here: ............................................................ Date: .............................................

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 that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.
• 1. If this quarterly report has been prepared in accordance with Australian Accounting Standards, 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. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.
• 1. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.