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Business Strategy

Introduction

Measured against current exploration industry standards Redstone is a unique multi-disciplined company. Its board and management team have a depth of technical expertise and industry knowledge which is normally found only within the large global mining houses. Whilst the project generation teams of most large companies are depleted after years of down-sizing, Redstone has defied that trend and built a team that has the ability to identify and generate major deposit exploration targets at a time when there is a scarcity of such targets. Such exploration teams are essential to finding the new mineral resources needed to alleviate impending shortfalls in global metal stocks.

The Opportunity

The global mining industry is experiencing an almost unprecedented increase in demand for commodities at a time when its ability to increase production is at an all time low.

A 30 year lack of investment by the mining industry in exploration for new world class “greenfields exploration” discoveries in favour of investment in exploration around existing operations “brownfields exploration” has resulted in only incremental increases in new production capacity and a lack of large scale new development opportunities. Large scale new development projects to alleviate a looming supply–demand shortfall are few and far between for many commodities and have long lead times to production for others.

It is now over 30 years since conceptual targeting and innovative exploration led to the discovery of the giant Olympic Dam (Cu–Au–U) deposit and almost 15 years since the discovery of the Centenary (Zn–Pb–Ag) and Cadia–Ridgeway (Cu–Au) deposits. Globally, there has been a drastic decline in the exploration for and discovery of world-class deposits.

Over the next decade the industry will strive to rebuild exploration teams to meet world demand for new resources. Conceptual targeting teams with the capacity to generate and efficiently explore world class targets are very scarce and will be in high demand by the industry. They are likely to get preferential access to projects and prospective geological terrains through partnering with mining and smelting groups anxious to secure long term access to commodities.

The Redstone exploration team has been built with the objective of exploiting this opportunity.

The Company also has the depth of commercial experience in the conduct of business at all levels within the industry and in the global capital markets to capitalise on its technical expertise.

Redstone's Strategy

The Redstone strategy is to leverage off its strategic competitive advantage provided by the expertise (both commercial and geological), extensive industry knowledge and existing relationships and networks of its team. This strategy is designed to rapidly enhance the value of the Company’s existing assets and to continually generate new projects for the Company.

Australian Operations

Redstone's targeting and project-acquisition strategy has already been used successfully in the West Musgrave region of Australia. The Redstone portfolio of projects assembled in the West Musgrave Region in central Australia holds potential for major world-class discoveries. The West Musgrave projects have been identified from a multi-disciplinary approach which includes:

South American Operations

Redstone has an ongoing strategy of targeting and project-acquisition of properties in South America with potential for world-class mineral deposits.

In 2006, Redstone identified fertiliser minerals as representing a major opportunity for exploration and development in Brazil, and since then it has focused on acquiring projects which it considers to have outstanding potential. Redstone has now secured two of the best exploration projects for fertiliser minerals in Brazil.

Redstone's strategy is to develop new fertiliser sources in close proximity to one of the world's largest and fastest growing agricultural regions. The ready access to large markets in Brazil also provides substantial cost savings associated with transport and import replacement, giving Redstone a significant economic advantage.

Redstone continues to actively investigate other opportunities for potassium and phosphate deposits within Brazil, and expects to make further acquisitions in the near future to capitalise on the growing demand for these products.

In the meantime, Redstone is developing a comprehensive exploration program for both its potassium and phosphate projects.

As a result of Redstone's worldwide geological targeting program, the Company has also identified and secured an Iron Ore (Fe) Project in the eastern Amazon Craton of Brazil.