REDSTONE RESOURCES LIMITED — Capital/Financing Update 2012

Nov 4, 2012

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12

Name of entity

Redstone Resources Limited

ABN

42 090 169 154

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1	+Class of +securities issued or tobe issued	Options*
2	Number of +securities issued or tobe issued (if known) or maximumnumber which may be issued	A maximum of 14,356,939 Options
3	Principal terms of the +securities(eg, if options, exercise price andexpirydate;ifpartlypaid+securities, the amount outstandingand due dates for payment; if+convertiblesecurities,theconversion price and dates forconversion)	Pro-rata non renounceable option entitlementissue of one (1) Option for every ten (10)Shares held at an issue price of $0.01 perOption and exercisable at $0.20 on or before 28February 2016.*Application for quotation of these Optionswill be made, subject to the requirements to theASX Listing Rules and the Corporations Act.

+ See chapter 19 for defined terms.

4	Do the +securities rank equally inallrespectsfromthedateofallotment with an existing +class ofquoted +securities?If the additional securities do notrank equally, please state:•the date from which they do•theextenttowhichtheyparticipateforthenextdividend, (in the case of a trust,distribution)orinterestpayment•the extent to which they do notrank equally, other than inrelation to the next dividend,	NoListed Options - The fully paid ordinary sharesthat will be issued upon exercise of the listedoptions will rank pari passu with the fully paidordinary shares on issue
	distribution or interest payment
5	Issue price or consideration	$0.01/Option
6	Purpose of the issue(If issued as consideration for theacquisitionofassets,clearlyidentify those assets)	Conditionally underwritten pro-rata nonrenounceable entitlement issue of one (1)Listed Option for every ten (10) fully paidordinary shares.Funds raised are intended to be first applied tothe expenses of the offer and then used forongoing exploration of the Company's existingprojects.
6a	Is the entity an +eligible entity thathasobtainedsecurityholderapproval under rule 7.1A?If Yes, complete sections 6b – 6hin relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i	No
6b	Thedatethesecurityholderresolution under rule 7.1A waspassed	N/A
6c	+securitiesNumberofissuedwithout security holder approvalunder rule 7.1	N/A
6d	Number of +securities issued withsecurity holder approval under rule7.1A	N/A

+ See chapter 19 for defined terms.

• 6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)
• 6f Number of securities issued under an exception in rule 7.2
• 6g If securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the issue date and both values. Include the source of the VWAP calculation.
• 6h If securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements
• 6i Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements
• 7 Dates of entering +securities into uncertificated holdings or despatch of certificates
• 8 Number and +class of all +securities quoted on ASX (including the securities in section 2 if applicable)

		Number	+Class
8	+classNumberandofall+securitiesquotedonASX(including the securities in section2 if applicable)	143,569,390	Ordinary Shares(RDS)
		14,356,939	Options exercisable at$0.20 any time on orbefore28February2016.

N/A

N/A

N/A

N/A

N/A

7 December 2012

• See chapter 19 for defined terms.

		Number	+Class
9	+classNumberandofall+securities not quoted on ASX(including the securities in section2 if applicable)	400,000 UnquotedOptions (RDSAZ)	$1.50Optionsexercisable 12 monthsfrom29June2007and expiring 29 June2012.
		1,000,000UnquotedOptions (RDSAM)	$0.95Optionsexercisableatanytime on or before 28November 2012.
		500,000 UnquotedOptions (RDSAM)	$1.20Optionsexercisableatanytime on or before 28November 2012
		300,000 UnquotedOptions (RDSAA)	$0.75Optionsexercisable 12 monthsfrom20February2008 and expiring 20February 2013.
		6,716,668 UnquotedOptions (RDSAI)	$0.25Optionsexercisable any timeonorbefore30November 2012.
		1,500,000 UnquotedOptions (RDSAK)	$0.25Optionsexercisable any timeonorbefore30November 2014.
		500,000 UnquotedOptions (RDSAK)	$0.30Optionsexercisable any timeonorbefore30November 2014.
		500,000 UnquotedOptions (RDSAK)	$0.35Optionsexercisable any timeonorbefore30November 2014.
		3,750,000 UnquotedOptions (RDSAO)	$0.50Optionsexercisable any timeonorbefore19October 2013.

+ See chapter 19 for defined terms.

650,000UnquotedOptions (RDSAQ)	$0.50Optionsexercisable any timeonorbefore4November 2013.
500,000UnquotedOptions (RDSAC)	$0.50Optionsexercisable any timeonorbefore1December 2013.
1,100,000UnquotedOptions (RDSAY)	$0.50Optionsexercisable any timeonorbefore24February 2014.
750,000UnquotedOptions (RDSAS)	$0.35unquotedoptionsexercisableany time on or before6 July 2015.
500,000UnquotedOptions (RDSAS)	$0.45unquotedoptionsexercisableany time on or before6 July 2015.
550,000UnquotedOptions (RDSAS)	$0.35unquotedoptionsexercisableany time on or before6 July 2015.
1,000,000UnquotedOptions (RDSAU)	$0.30unquotedoptionsexercisableany time on or before21 December 2014.
1,000,000UnquotedOptions (RDSAB)	$0.30unquotedoptionsexercisableany time on or before26 February 2015.
5,800,013 Options	$0.20optionsexercisable any timeonorbefore28February 2016.

+ See chapter 19 for defined terms.

10	Dividend policy (in the case of atrust, distribution policy) on the	N/A
	increased capital (interests)

Part 2 - Bonus issue or pro rata issue

11	Issecurityholderapprovalrequired?	No
12	Is the issue renounceable or nonrenounceable?	Non-renounceable
13	Ratio in which the +securities willbe offered	1 Option for every 10 existing Shares at therecord date
14	+Class of +securities to which theoffer relates	Listed Option
15	+Recorddatetodetermineentitlements	14 November 2012
16	Will holdings on different registers(or subregisters) be aggregated forcalculating entitlements?	N/A
17	Policy for deciding entitlements inrelation to fractions	Rounded down
18	Names of countries in which theentity has +security holders whowillnotbesentnewissuedocuments	AnycountryoutsideAustraliaandNewZealand
	Note: Security holders must be told how theirentitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closingdateforreceiptofacceptances or renunciations	29 November 2012

+ See chapter 19 for defined terms.

20	Names of any underwriters	Argonaut Capital Limited
21	Amount of any underwriting fee or	2.5% of the maximum amount to be raised of
	commission	$143,569 ($3,589.23)
22	Names of any brokers to the issue	N/A
23	Fee or commission payable to thebroker to the issue	N/A
24	Amount of any handling fee payable	N/A
	to brokers who lodge acceptancesorrenunciationsonbehalfof
	+security holders
25	Iftheissueiscontingenton+security holders' approval, the date	N/A
	of the meeting
26	Date entitlement and acceptanceform and prospectus or Product	15 November 2012
	Disclosure Statement will be sent to
	persons entitled
27	If the entity has issued options, and	7 November 2012
	the terms entitle option holders to
	participate on exercise, the date on
	which notices will be sent to optionholders
28	Date rights trading will begin (if	N/A
	applicable)
29	Date rights trading will end (if	N/A
	applicable)
30	How do +security holders sell their	N/A
	entitlementsinfullthroughabroker?
31	How do +security holders sell part
	oftheirentitlementsthroughabroker and accept for the balance?

+ See chapter 19 for defined terms.

32		How do +security holders dispose oftheir entitlements (except by salethrough a broker)?	N/A
33		+Despatch date	7 December 2012
		Part 3 - Quotation of securitiesYou need only complete this section if you are applying for quotation of securities
34	(tick one)	Type of securities
(a)		Securities described in Part 1 – 14,356,939 Options
(b)		All other securities	Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employeeincentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35	If the +securities are +equity securities, the names of the 20 largest holders of theadditional +securities, and the number and percentage of additional +securities held bythose holders
36	If the +securities are +equity securities, a distribution schedule of the additional+securities setting out the number of holders in the categories1 - 1,0001,001 - 5,0005,001 - 10,00010,001 - 100,000100,001 and over
37	A copy of any trust deed for the additional +securities

+ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

• 38 Number of securities for which +quotation is sought
• 39 Class of +securities for which quotation is sought
• 40 Do the +securities rank equally in all respects from the date of allotment with an existing +class of quoted +securities?

If the additional securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another security, clearly identify that other security)

		Number	+Class
42	Number and +class of all +securitiesquotedonASX(includingthesecurities in clause 38)

+ See chapter 19 for defined terms.

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
• 2 We warrant the following to ASX.
  • The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those +securities should not be granted +quotation.
  • An offer of the + securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.
• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ............................................................ Date: 2 November 2012 (Company secretary)

Print name: Miranda Conti

== == == == ==

+ See chapter 19 for defined terms.

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for +eligible entities

Introduced 01/08/12

Part 1

Rule 7.1 – Issues exceeding 15% of capitalStep 1: Calculate "A", the base figure from which the placementcapacity is calculated
Add the following:
•Number of fully paid ordinary securitiesissued in that 12 month period under anexception in rule 7.2
•Number of fully paid ordinary securitiesissued in that 12 month period withshareholder approval
•Number of partly paid ordinary securitiesthat became fully paid in that 12 monthperiod
Note:•Include only ordinary securities here –other classes of equity securities cannotbe added•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
Subtract the number of fully paid ordinarysecurities cancelled during that 12 monthperiod
"A"

+ See chapter 19 for defined terms.

Step 2: Calculate 15% of "A"
"B"	0.15
	[Note: this value cannot be changed]
Multiply "A" by 0.15
Step 3: Calculate "C", the amount of placement capacity under rule7.1 that has already been used
Insert number of equity securities issued oragreed to be issued in that 12 month periodnot counting those issued:
•Under an exception in rule 7.2
•Under rule 7.1A
•With security holder approval under rule7.1 or rule 7.4
Note:•This applies to equity securities, unlessspecifically excluded – not just ordinarysecurities•Include here (if applicable ) thesecurities the subject of the Appendix3B to which this form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
"C"
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1
"A" x 0.15
Note: number must be same as shown inStep 2
Subtract "C"
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"
	[Note: this is the remaining placementcapacity under rule 7.1]

+ See chapter 19 for defined terms.

Part 2

Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
"A"
Note: number must be same as shown inStep 1 of Part 1
Step 2: Calculate 10% of "A"
"D"	0.10
	Note: this value cannot be changed
Multiply "A" by 0.10
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
Insert number of equity securities issued oragreed to be issued in that 12 month periodunder rule 7.1A
Notes:•This applies to equity securities – notjust ordinary securities•Include here – if applicable – thesecurities the subject of the Appendix3B to which this form is annexed•Do not include equity securities issuedunder rule 7.1 (they must be dealt within Part 1), or for which specific securityholder approval has been obtained•It may be useful to set out issues ofsecurities on different dates as separateline items
"E"

+ See chapter 19 for defined terms.

Step 4: Subtract "E" from ["A" x "D"] to calculate remainingplacement capacity under rule 7.1A
"A" x 0.10
Note: number must be same as shown inStep 2
Subtract "E"
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"
	Note: this is the remaining placementcapacity under rule 7.1A

+ See chapter 19 for defined terms.