30 January 2015 QUAR RTERLY REPORT For the e Period EEnding 31 Decembe er 2014 The Board of Redstonee Resources Limited (ASX X Code: RDSS) (“Redston ne” or “the Company”) presents itss quarterly reeport for the period endin ng 31 Decem mber 2014 (“tthe Quarter””). Redstone’s primary focu us is the Tollu u Project whhich is located d in the souttheast portioon of the West Musgravee region of W Western Ausstralia. Thiss Project hossts a giant swarm of hydrothermall copper rich h veins in a a 2 mineralised d system covvering an areea at least 55km . Copper mineralisation is expoosed at the surface and d forms part o of a dilation system betw ween two maajor shears. Redstone exxpects the Prroject’s mineeralised area a and the volu ume of hydro othermal min neralisation to increase ssignificantly with further r drilling. SUMMAR RY    Con ntinued workk on definingg a Conceptu ual Exploratio on Target onn the Atlas Prroject Com mpleted Environment Maanagement P Plan framew work for futurre Works pro ograms Con ntinued prom motional actiivities and asssessment off fundraisingg options. Tollu Projecct (Redstone e 100%) Redstone’s 100% owneed Tollu Project is locateed in the sou utheast portiion of the W West Musgrave region off Western Au ustralia (Figu ure 1). The P Project is appproximatelyy 20km south h east of thee Blackstone Communityy on Company’s 100% ow wned teneme ent E69/24500 (Figure 2). The Tollu P Project consists of a larrge swarm oof hydrotherrmal copper rich quartzz veins in a mineralised d system coveering an area at least 5kkm2. Malach ite rich gosssans associatted with quaartz veins are e exposed att surface and d form part o of a dilatation nal system b etween two major structtures within the Tollu Fault Zone. Redstone Resou R urces Limited A ABN 42 090 169 154 60 Havelock Stre 6 eet, West Perth h WA 6005 Tel: 08 9328 2552 Fax: 08 9328 26 660 www.redsto one.com.au Email: ccontact@redsto one.com.au ASX: RDS Figure 1 – W West Musgrave e ‐ Location Maap Figure 2 – T Tollu Project – Location Map The C Company haas renamed its existing prospects within w the Tollu Project and has ide entified further prospectss within the Tollu Projectt. There are e now 16 pro ospects in tootal within th he Tollu Projeect. The inittial focus is on o the Chattsworth Prosspect, the Ea astern Reef Prospect, th he Main Reef Prospect and d the Dawycck Prospects.. The C Company haas also identified the p otential for a number of other proojects on th he Tollu tenem ment (E69/2450) in addittion to the TTollu Project, detailed bellow. Teneement E69/2 2450 Prospe ectivity Five additional projects p have e been iden tified on E6 69/2450 (Figure 3) as keey sites to conduct c mineral exploration. These Prrojects are:  Atlas Projject (prospecctive for IOCCG & Mt Isa sstyle‐copper sediment‐hoosted). Project (prosspective for IIOCG & Mt Issa style‐copp per sedimentt‐hosted).  Babylon P Project (prosspective for M Mt Isa style‐copper sedim ment‐hostedd).  Pompeii P diment‐hostted).  Pergamon Project (prrospective foor Mt Isa style‐copper sed  Herculaneum Project (prospectivee for Mt Isa style‐copperr sediment‐hhosted). 2 ASX: RDS Figure 3 –– Project –Lo ocation Map Tollu Project – Co onceptual Exxploration Taarget Redsttone has deffined an incrreased Concceptual Explo oration Targe et (Target) foor the Tollu Project of 222 to 33 million tonnes of mineralissation at a conceptual c grade g rangee of 0.9 ‐ 1..3% Cu, contaaining 198,00 00 to 445,00 00 tonnes of f copper. This includes a an estimate oof 4.3 to 6.4 million tonnees of mineralisation at a conceptual ggrade range of 1.6 ‐ 2.4% %, containingg 69,000 to 1 154,000 tonnees of copper on the Chattsworth Prosspect. potential quaantity and grade of the Target is conceptual in nature. It iss important to note The p that tthere has beeen insufficie ent explorati on to estimaate a Minera al Resource aand it is unce ertain if further exploratio on will resultt in the estim mation of a M Mineral Resource. Atlass Conceptuall Exploration n Target Durin ng the Quarrter the Com mpany contiinued geological and ge eophysical w work on deffining a Conceptual Explo oration Targe et on the Atlaas Project. Atlass Project Bacckground The A Atlas Projectt lies to the immediate north of the e Tollu Proje ect and is prroximal to th he Tollu Fault Zone (Figure 4). Most of the Prooject area appears to be under a tthin Tertiaryy cover. Impo ortantly, mucch of the arch hitecture of Tollu is repe eated in Atlass. In additioon is the inclu usion of interm mediate volccanic rocks o of the Hogarrth Formatio on and the in ntrusion of aa granite (Figgure 5). In combination with w the proximity of th e Tollu Fault Zone, and expanse of Tertiary covver, the Atlas Project is prrospective fo or a blind Mtt Isa style‐cop pper sediment‐hosted deeposit. 3 ASX: RDS Figure 4 – At F tlas Project – –Location Map The A Atlas Project is also prospective for tthe IOCG min neralisation. In the nortthern portion n of the Projeect, a felsic in ntrusion is positioned at the margin to the Tollu Fault Zone. Immediatelly north of thiis is a magneetised unit with a strike oof 1200 metrres and width h of 500m (FFigure 6). The rrock type iss interpreted d to be a pporphyritic rhyolite. As a magnetiseed feature it could repreesent a portion of stratigraphy not deemagnetised d by the Tollu u Fault Zonee, or the foottprint of a hyd drothermal cell c that cau used magnettisation conssistent with an IOCG an alogy. Adjacent to this location, witthin the dam maged and ddemagnetised domain off the Tollu FFault Zone iss a rock specimen P70966 60. This speccimen was sttudied by pe etrographic a analysis by Te Teale and Asssociates (20066) and was observed to b be a porphyrritic rhyolite tthat has bee en sulphidiseed. It contained pyrite, chalcopyrite, covelllite, magnettite and hae ematite as aaccessory minerals. m Abun ndant K‐feldsspar and biottite was pressent but it iss unclear from the descriiption if thesse were primaary or a pro oduct of me etasomatism m. The obsservation of pyrite, cha lcopyrite, co ovellite, magn netite and haaematite favour an IOCG deposit model. 4 ASX: RDS Figuree 5. The locatio on of the six Pro ojects situated within E69/24 450 that have been consideredd prospective ffor metal end dowment. The main mineral system targeteed is Mt Isa stylle‐copper sedim ment‐hosted m mineral system. IOCG mine eralisation is allso considered to be plausible e. The tenemen nt outline is in bbrown. Figurre 6. The spatiaal proximity of the sulphidisedd rhyolite as de etermined from m petrographicc thin section (2 2006), a magn netic high, a felssic intrusive an nd the Tollu Fau ult Zone. 5 ASX: RDS CORP PORATE Durin ng the Quarrter, the Co ompany enggaged a con nsultant to assist a with capital raising and prom motional activvities, with the objectivee of raising aadditional fun nds during t his quarter. A West Musggrave and To ollu project siite visit was undertaken in early Dece ember for thhis purpose. Durin ng the Quartter, the Company receiveed a warningg from the DMP relating to breachess arising from historical exploration activities unddertaken on the Blackstone Range PProject. Furrther to this, tthe Compan ny has completed a revieew and updaated its environmental ppolicies, proccedures and m management plans. Thiss Environme ntal Manage ement Plan will provide the framew work for all futture exploration activitie es to be undeertaken by th he Companyy. Durin ng the Quaarter the Co ompany loddged a Research and Developmennt Tax concession appliccation (“App plication”) for eligible exppenditure inccurred during the 2013/114 financial yyear for a Ressearch and Developmen nt tax offseet amount. The T Applicattion is curreently pendin ng with AusIn ndustry and tthe Australia an Taxation O Office. petent Person ns Statement Comp nformation in n this announ ncement that relates to Exxploration Tarrgets and Expploration Results was The in autho orised by Mr Darryl Maple eson, a Princcipal Geologisst and a full time employeee of BM Ge eological Servicces, who are engaged as consultant c geeologists to Re edstone Reso ources Limitedd. Mr Maple eson is a Fellow w of the Austrralian Institute e of Mining annd Metallurgyy. Mr Mapleson has suffici ent experiencce which is releevant to the sstyle of minerralisation andd type of depo osit under consideration too act as a com mpetent perso on as defined in the 2012 edition of t he “Australassian Code forr reporting off Exploration results, erves”. Mr Maapleson conse ents to the incclusion in the report of the matters Minerral Resources and Ore Rese based d on his inform mation in the fform and conttext in which it appears. Forwaard‐Looking SStatements document mayy include forw ward‐looking sstatements. FForward‐looking statementts include, butt are not This d limiteed to statements concernin ng Redstone R Resources Lim mited’s (Redsto one) planned exploration p program and o other statemeents that are not historicaal facts. When used in th his documentt, the words such as “could d”, “plan”, “eestimate”, “expect”, “intendd”, “may”, “p potential”, “sh hould”, and si milar expresssions are forwaard‐looking staatements. Altthough Redst one believes that its expecctations refleccted in these fforward‐ lookin ng statementss are reasonable, such stat ements involvve risks and u uncertainties aand no assura ance can be givven that actuaal results will b be consistent with these fo orward‐looking g statements.. 6 ASX: RDS TENEM MENT INFOR RMATION ASS REQUIRED BY LISTING RULE 5.3.3 The C Company holds the follow wing tenemeents at the end of the 31 December 22014 quarterr. TENEM MENT SUMM MARY AS AT 31 DECEMB BER 2014 Australia West Musgrave, A Pro oject Tollu Tene ement E6 69/2450 Blacks stone Range e Blacks stone Range e 69/2108 E6 69/2109 E6 Reg gistered Holderr Applicant es Redsstone Resource Limite ed Gold Riverr Explo oration Pty Ltd Gold Riverr Explo oration Pty Ltd Consolidated Entity Intere est Gran nt Date (Application Date) D 100% 100% 19/0 09/2008 18/09/2018 41 125.0 100% 75% % 28/0 04/2006 27/04/2015 39 121.0 100% 75% % 28/0 04/2006 27/04/2015 70 217.0 150 463.0 Holderr Interes t Expiry Area km2 Blocks Brazil, South Ameerica Projject Tene ement State Registered Holder Applica ant Holder Interest Co onsolidated Entity Interest Grant Date Expiry Area (ha) Re edstone Mine eração Do 100% 100% 15/02/2008 15/02/2011* 6,953.43 Ma ata Grosso Brrasil Ltda *Applica ation for an exte ension of term for f tenement 866280/07 for a fu urther three yea ars was lodged with w the Brazil N National Department of Minerall Production (DNMP) an nd is still pending. Arinos s 866.280/2007 The fo ollowing gran nted tenemeent interests held by the Company exxpired during g the Quarteer: Brazil, South Ameerica Projject Tene ement Bala and al Ponta 850.738/2011 Bala and al Ponta 850.739/2011 State gu Xing Xing gu Registered Holder Applica ant HJ JH Mineração Ltd da. HJ JH Mineração Ltd da. do Brasil do Brasil Holder Interest Co onsolidated Entity Interest 90% 10% 3/10/2011 3/10/2014 90% 10% 3/10/2011 3/10/2014 Grant Date Expiry Area (ha) 9,203.78 9,727.25 18,931.03 Blacksstone Rangee Project – E69/2108 E and E69/2109:: Farmin witth Resource Mining Corpporation Ltd (ASX: RMI),, Redsto one earning 90% The C Company has a beneficia al interest off 75% in its B Blackstone Range joint veenture at the end of thee Quartter. The Com mpany did not n acquire oor dispose of o any beneficial interestts in any joint ventures,, farm‐‐in or farm out arrange ements durinng the Quarrter. These tenements t aare currentlyy subject to o Forfeeiture Applicaations which h are being d efended. 7 ASX:: RDS ABOU UT REDSTON NE RESOURC CES Redsttone Resourrces Ltd (ASSX: RDS) is aa Perth‐base ed companyy focused o n highly pro ospective coppeer exploratio on properties in the Wesst Musgrave region of We estern Austraalia. Redsttone’s 100% % owned Tollu Project is located in th he south‐easst portion off the West M Musgrave region of Westerrn Australia. The Tollu PProject consissts of a large e swarm of hhydrotherma al copper 2 quartz veins in a mineralised system m covering an n area at lea ast 5km . M Malachite‐rich h gossans rich q assocciated with quartz veins are expossed at surfaace and form m part of aa dilatationa al system betw ween two majjor structure es within thee Tollu Fault ZZone. The TTollu Projectt has a Conce eptual Explooration Targe et estimated to be 22 too 33 million ttonnes of mineralisation at a conceptua al grade rangge of 0.9 ‐ 1.3 3% Cu, conta aining 198,0000 to 445,00 00 tonnes of copper. This in ncludes 4.3 tto 6.4 millionn tonnes of m mineralisatio on at a conceeptual grade e range of 1.6 – 2.4%, containing 69,000 0 to 154,000 tonnes of Co opper on the e Chatsworthh Prospect. For fu urther inform mation please contact: Richaard Homsanyy Chairrman Redsttone Resources Limited +61 (08) 9328 255 52 contaact@redston ne.com.au Brett Hodgins B s Technical Dire T ector Redstone Res R sources Limitted +61 (08) 9328 8 2552 contact@redsstone.com.aau 8 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 Quarter ended (“current quarter”) 42 090 169 154 31 December 2014 Consolidated statement of cash flows Cash flows related to operating activities Current quarter $A’000 Year to date (6 months) $A’000 (169) (103) (352) (337) 1 5 - - (271) (684) Cash flows related to investing activities Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets - - 1.10 1.11 1.12 Loans to other entities Loans repaid by other entities Other (provide details if material) - - Net investing cash flows Total operating and investing cash flows (carried forward) - - 1.13 (271) (684) 1.1 1.2 Receipts from product sales and related debtors Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 1.4 Dividends received Interest and other items of a similar nature received Interest and other costs of finance paid Income taxes paid Other (provide details if material) R&D Rebate (net) 1.5 1.6 1.7 Net Operating Cash Flows 1.8 1.9 + 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 1.14 1.15 1.16 1.17 1.18 1.19 Total operating and investing cash flows (brought forward) Cash flows related to financing activities Proceeds from issues of shares, options, etc. Proceeds from sale of forfeited shares Proceeds from borrowings Repayment of borrowings Dividends paid Other - capital raising costs Net financing cash flows Net increase (decrease) in cash held (271) (684) - - - - (271) (684) 1.20 1.21 Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20 487 900 1.22 Cash at end of quarter 216 216 Payments to directors of the entity, associates of the directors, related entities of the entity and associates of the related entities Current quarter $A'000 1.23 Aggregate amount of payments to the parties included in item 1.2 1.24 Aggregate amount of loans to the parties included in item 1.10 1.25 Explanation necessary for an understanding of the transactions 75 - 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 01/05/2013 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 $A’000 Amount used $A’000 3.1 Loan facilities - - 3.2 Credit standby arrangements - - Estimated cash outflows for next quarter $A’000 75 4.1 Exploration and evaluation 4.2 Development - 4.3 Production - 4.4 Administration 75 150 Total 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. 5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details) Total: cash at end of quarter (item 1.22) + See chapter 19 for defined terms. 01/05/2013 Appendix 5B Page 3 Current quarter $A’000 Previous quarter $A’000 186 257 30 230 - - - - 216 487 Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report Changes in interests in mining tenements and petroleum tenements 6.1 6.2 Tenement reference and location Nature of interest (note (2)) Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed Brazil, South America 850.738/2011 850.739/2011 10% free carried interest 10% free carried interest Interests in mining tenements and petroleum tenements acquired or increased Nil Interest at beginning of quarter 10% 10% Interest at end of quarter 0% 0% 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 7.1 7.2 7.3 7.4 7.5 Preference +securities (description) Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks, redemptions +Ordinary securities 186,969,390 Number quoted 186,969,390 Issue price per security (see note 3) (cents) Amount paid up per security (see note 3) (cents) Fully Paid Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks +Convertible debt securities (description) + See chapter 19 for defined terms. Appendix 5B Page 4 01/05/2013 Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report 7.6 7.7 7.8 7.9 7.10 7.11 7.12 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted Options (description and conversion factor) Quoted Options (ASX: RDSO) 31,356,966 Exercise price 20 cents Expiry date 28/02/16 Unquoted Options 750,000 750,000 1,000,000 2,000,000 35 cents 45 cents 30 cents 20 cents 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 Issued during quarter Exercised during quarter Expired during quarter Debentures (totals only) 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. 01/05/2013 Appendix 5B Page 5 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