29 July 2016‌

QUARTERLY REPORT

For the Period Ending 30 June 2016

Redstone Resources Limited (ASX Code: RDS) ("Redstone" or "the Company") presents its quarterly report for the period ending 30 June 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 mineralised area and the volume of hydrothermal mineralisation to increase significantly with further drilling.

HIGHLIGHTS

• Initial JORC 2012 resource of 3.8 million tonnes at 1% Cu, containing 38,000 tonnes of copper at the Tollu Project defined

• The Tollu JORC resource includes 8,000 tonnes approx. of copper oxide, which provides scope for the evaluation of a low cost expedited development path as part of the broader development of higher grade sulphide prospects.

• Review and significant upgrade of the Conceptual Exploration Target for the Tollu Project resulting in a significant increase in size to 31 to 47 million tonnes of mineralisation at a conceptual grade range of 0.8 to 1.3% Cu, containing 259,000 to 626,000 tonnes of copper. The potential quantity and grade of this target is conceptual in nature. It is important to note that there has been insufficient exploration to estimate a Mineral Resource for the Target and it is uncertain if further exploration will result in the estimation of a Mineral Resource for the Target.

• Significant upgrade of the Forio Prospect at the Tollu Project following the success of the 2015 drilling program, which identified mineralised strike over 250m open in all directions, despite displaying limited surface expression and not yet being effectively drilled out below 50m. Results at Forio displayed the widest and strongest copper mineralisation discovered at this depth to date at the Tollu Project.

Redstone Resources Limited ABN 42 090 169 154 www.redstone.com.au

60 Havelock Street, West Perth WA 6005 Tel: 08 9328 2552 Fax: 08 9328 2660 Email: [email protected]

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• Identification of seven additional new Forio analogues and three existing Forio analogue prospects

• Prospectivity of tenement further increased

• Planning underway for follow‐up drilling at Forio and at four of the identified Forio analogues, which have been elevated in priority for further testing, with a proposed RC drilling program comprising 53 holes for a total of 8,000m.

• WA Government awards EIS co‐funded drilling grant of up to $200,000 for the Tollu Project, planned to be used for a single deep diamond drill hole of approximately 1,000m at the Chatsworth Prospect.

TOLLU PROJECT

Maiden Mineral Resource Estimate

During the Quarter the Company announced its first Mineral Resource estimate, reported in accordance with the 2012 JORC Code, for its 100% owned Tollu Project in the West Musgrave, Western Australia. The initial Mineral Resource estimate at Tollu is 3.8Mt @ 1.0% copper, which equates to 38,000 tonnes of contained copper (the "Mineral Resource") (Tables 1 and 2). The Tollu Mineral Resource was prepared by BM Geological Services Pty Ltd, a Kalgoorlie based, independent geological consulting group and is reported in line with the guidelines of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 edition (JORC 2012).

The definition of a maiden resource at Tollu represents a major milestone for Redstone and for the advancement of the Project.

Table 1 Mineral Resource Estimate by Prospect

The defined Mineral Resource also includes 8,000 tonnes of JORC oxide resource. Accordingly, there is excellent potential to significantly expand the Mineral Resource with future drilling, both to extend the mineralisation in the near‐surface, open pittable environment as well as targeting extensions of the higher grade sections of mineralisation.

The Board is confident that after further drilling, evaluation can commence of the economic viability of the near surface copper mineralisation at Tollu. If studies prove it to be viable, the near surface copper oxide may present short term development options generating early cash flow with significantly lower up front capital expenditure.

Table 2 Indicated and Inferred Mineral Resource Estimate by Prospect

Increased Conceptual Exploration Target

During the Quarter Redstone defined a significantly increased Conceptual Exploration Target for the Tollu Project of 31 to 47 million tonnes of mineralisation at a conceptual grade range of 0.8 ‐ 1.3% Cu, containing 259,000 to 626,000 tonnes of copper (the "Target"). This Target is based on the current geological understanding of the mineralised outcrop area at Tollu, coupled with geophysical evidence to suggest that the mineralised environment extends beneath cover to the north and south. Table 3 describes the Target breakdown by Prospect. This represents a substantial 41% increase to the upper range of the previously existing target (49% when the Mineral Resource is included).

Given the drilling data is constrained to less than 2% of the tenement area and only on one project (Tollu) out of six, the upside to the Mineral Resource remains unlimited.

Table 3 ‐ Tollu Project ‐ Target - Prospect Breakdown

The Tollu deposit is located in a large, reverse fault system where Cu mineralisation is focused into low stress dilatational jog positions along a north‐south structural corridor (Figure 1). High grade Cu mineralisation appears to be constrained to late stage veining within the dilatational positions which results in a limited strike length of the mineralisation. Drilling at the Project has showed these mineralised jogs have a steep plunge competent which has been tested down to a vertical depth of 360 metres. Mineralised jog positions occur at relatively regular intervals of 100

- 300 metres along the structural corridor.