RED MOUNTAIN MINING LIMITED — AGM Information 2013

May 23, 2013

ABN 40 119 568 106

NOTICE OF GENERAL MEETING

EXPLANATORY STATEMENT

PROXY FORM

Date of Meeting 24 June 2013

Time of Meeting 2.00pm (WST)

Place of Meeting The Park Business Centre 45 Ventnor Avenue WEST PERTH WA 6005

TIME AND PLACE OF MEETING AND HOW TO VOTE

Venue

The General Meeting of the Shareholders of Red Mountain Mining Limited will be held at 2.00pm WST on 24 June 2013 at:

The Park Business Centre 45 Ventnor Avenue West Perth, Western Australia 6005

Voting Entitlement

In accordance with Regulations 7.11.37 and 7.11.38 of the Corporations Regulations 2001 (Cth), the Board has determined that a person's entitlement to vote at the Meeting will be the entitlement of that person set out in the register of Shareholders as at 5:00pm (WST) on 22 June 2013. Accordingly, transactions registered after that time will be disregarded in determining Shareholder's entitlement to attend and vote at the Meeting.

How to Vote

You may vote by attending the meeting in person, by proxy or authorised representative.

Voting in Person

To vote in person, attend the meeting on the date and at the place set out above. The meeting will commence at 2.00pm WST.

Voting by Proxy

To vote by proxy, please complete and sign the Proxy Form enclosed with this Notice of General Meeting as soon as possible and either:

• send the Proxy Form by facsimile to the Company on facsimile number (61 8) 9486 8616; or
• deliver or post the Proxy Form to the principal office of the Company at Unit 1, 2 Richardson Street, West Perth, Western Australia, 6005.

so that it is received by no later than 2.00pm WST on 22 June 2013, being 48 hours before the Meeting.

Your Proxy Form is enclosed.

NOTICE O F GENERAL MEETING

NOTICE IS HEREBY GIVEN that a General Meeting of the Shareholders of Red Mountain Mining Limited (ABN 40 119 568 106) (Company) will be held at The Park Business Centre, 45 Ventnor Avenue, West Perth, Western Australia, on 24 June 2013 at 2.00pm WST, for the purpose of transacting the business referred to in this Notice of General Meeting ("Notice").

An Explanatory Statement, containing information in relation to the following Resolutions, and a Proxy Form accompany this Notice. Please note capitalised terms used in this Notice have the meanings set out in the glossary of the Explanatory Statement accompanying this Notice.

AGENDA

ORDINARY BUSINESS:

Resolution 1 – Grant of Underwriter Options to Patersons Securities Limited

To consider and, if thought fit, to pass the following as an ordinary resolution:

"That, for the purposes of Listing Rule 7.1 and for all other relevant purposes, Shareholders approve and authorise the grant of 27,500,000 Underwriter Options to the Patersons Securities Limited or its nominee, on the terms and conditions set out in the Explanatory Statement accompanying this Notice of General Meeting."

Voting Exclusion

The Company will disregard any votes cast on Resolution 1 by any person who may participate in the grant and any person who might obtain a benefit, except solely in the capacity of a holder of shares, if the resolution is passed, and an associate of those persons. However, the Company need not disregard a vote on Resolution 1, if:

• it is cast be a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 2 – Grant of Underwriter Options to Neil Warburton

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That, for the purposes of Listing Rule 10.11 and for all other relevant purposes, Shareholders approve and authorise the grant of 5,000,000 of the 27,500,000 Underwriter Options the subject of Resolution 1, to Neil Warburton or his nominee on the terms and conditions set out in the Explanatory Statement accompanying this Notice of General Meeting."

Voting Exclusion

The Company will disregard any votes cast on Resolution 2 by Mr Neil Warburton (or his nominee) and any of Mr Neil Warburton's associates. However, the Company need not disregard a vote on Resolution 2, if:

• it is cast be a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 3 – Grant of Underwriter Options to Keith Rowe

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That, for the purposes of Listing Rule 10.11 and for all other relevant purposes, Shareholders approve and authorise the grant of 5,000,000 of the 27,500,000 Underwriter Options the subject of Resolution 1, to Keith Rowe or his nominee on the terms and conditions set out in the Explanatory Statement accompanying this Notice of General Meeting."

Voting Exclusion

The Company will disregard any votes cast on Resolution 3 by Mr Keith Rowe (or his nominee) and any of Mr Keith Rowe's associates. However, the Company need not disregard a vote on Resolution 3, if:

• it is cast be a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 4 – Grant of Underwriter Options to Justin Warburton

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That, for the purposes of Listing Rule 10.11 and for all other relevant purposes, Shareholders approve and authorise the grant of 1,500,000 of the 27,500,000 Underwriter Options the subject of Resolution 1, to Justin Warburton or his nominee on the terms and conditions set out in the Explanatory Statement accompanying this Notice of General Meeting."

Voting Exclusion

The Company will disregard any votes cast on Resolution 4 by Mr Justin Warburton (or his nominee) and any of Mr Justin Warburton's associates. However, the Company need not disregard a vote on Resolution 4, if:

• it is cast be a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 5 – Approval of Performance Rights Plan

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That, for the purpose of Listing Rule 7.2 Exception 9(b) and for all other purposes, the Company approves the issue of securities under the Company's Performance Rights Plan, as an exception to Listing Rule 7.1."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by a director of the Company (except one who is ineligible to participate in any employee incentive scheme in relation to the Company) and any associate of those persons. However, the Company need not disregard a vote on Resolution 5, if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

OTHER BUSINESS

To transact any other business which may be properly brought before the Meeting in accordance with the Company's Constitution and the Corporations Act.

BY ORDER OF THE BOARD

Shannon Coates Company Secretary 16 May 2013

NOTES:

• 1. Completion of a proxy form will not prevent individual Shareholders from attending the Meeting in person if they wish. Where a Shareholder completes and lodges a valid proxy form and attends the Meeting in person, then the proxy's authority to speak and vote for that Shareholder is suspended while the Shareholder is present at the Meeting.
• 1. A Shareholder entitled to attend and vote is entitled to appoint not more than two proxies to attend and vote on behalf of the Shareholder. A proxy need not be a Shareholder of the Company, but must be a natural person (not a corporation). A proxy may also be appointed by reference to an office held by the proxy (eg "the Company Secretary").
• 1. Where more than one proxy is appointed, each proxy may be appointed to represent a specified proportion of the Shareholder's voting rights. If no such proportion is specified, each proxy may exercise half of the Shareholder's votes.
• 1. A proxy form is enclosed. A separate form must be used for each proxy. An additional form can be obtained by writing to the Company at Unit 1, 2 Richardson Street, Perth, Western Australia, 6005 or by fax to (61 8) 9486 8616. Alternatively, you may photocopy the enclosed form.
• 1. A duly completed proxy form and (where applicable) any power of attorney or a certified copy of the power of attorney must be received by the Company at its registered office or the address or fax number set out below, not less than 48 hours

before the time for commencement of the Meeting. Please send by post to Unit 1, 2 Richardson Street, Perth, Western Australia, 6005 or by fax to (61 8) 9486 8616.

• 1. The Chairman of the Meeting will vote undirected proxies on, and in favour of, all of the proposed Resolutions. If a proxy is not directed how to vote on an item of business, the proxy may generally vote, or abstain from voting, as they think fit. However, where a member of the key management personnel or a closely related party of that member is appointed as a proxy and is not directed how to vote, the proxy may only vote on Resolutions 2, 3, 4 (Grant of Underwriter Options to related parties) and 5 (Approval of Performance Rights Plan) if the proxy is the Chair of the Meeting and the appointment expressly authorises the Chair to exercise the proxy even if Resolutions 2, 3, 4 and 5 are connected directly or indirectly with the remuneration of a member of the key management personnel. Key management personnel of the Company are the Directors and those other persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly and indirectly. Their closely related parties are defined in the Corporations Act and includes certain of their family members, dependants and companies they control.
• 1. The Company will accept proxy appointments by a corporate Shareholder executed in accordance with either section 127(1) (not under seal) or section 127(2) (under seal) of the Corporations Act.
• 1. The time nominated by the Board for the purpose of determining the voting entitlements at the Meeting is 5.00pm WST on 22 June 2013.
• 1. The Explanatory Statement attached to this Notice forms part of this Notice.

1.0 EXPLANATORY STATEMEN T

This Explanatory Statement has been prepared to provide Shareholders with material information to enable them to make an informed decision on the business to be conducted at the General Meeting of Red Mountain Mining Limited (Company).

The Explanatory Statement and all attachments are important documents. They should be read carefully. The Directors recommend Shareholders read this Explanatory Statement in full before making any decision in relation to the Resolutions.

1.1 BACKGROUND TO THE RESOLUTIONS

Pro Rata Renounceable Rights Issue

On 15 May 2013, the Company announced that it is undertaking a partially and conditionally underwritten pro-rata renounceable rights issue of new ordinary shares in the Company (New Shares) on the basis of 3 New Shares for every 2 Shares held at the record date at an issue price of $0.01 per New Share, with 1 free attaching listed Option (exercisable at $0.015 each on or before 30 June 2014) for every 2 New Shares subscribed for under the Prospectus and one free attaching listed Option (exercisable at $0.03 each on or before 30 June 2016) for every 4 New Shares subscribed for under the Prospectus (Rights Issue).

The purpose of the offer is to raise a minimum of $550,000 and a maximum of $2,813,580 (before expenses).

The Company intends to use the funds raised from the Rights Issue broadly as follows:

• Drilling high-grade gold targets at Lobo and Archangel prospects to seek to increase and upgrade Mineral Resources at Batangas Gold Project.
• Undertaking a preliminary scoping study into a profitable gold project development at Batangas Gold Project (where funds allow).
• General working capital.
• Payment of the costs of the Rights Issue, including underwriting fee.

Underwriting of Rights Issue

The Rights Issue is partially and conditionally underwritten by Patersons Securities Limited ACN 008 896 291 (Underwriter) to $550,000 (Underwritten Amount) pursuant to an underwriting agreement between the Underwriter and the Company entered into on 16 May 2013 (Underwriting Agreement). The Underwriter's obligation to underwrite the Underwritten Amount is conditional on Shareholders or other applicants subscribing for a minimum of $281,358 under the Rights Issue.

Pursuant to the Underwriting Agreement, the Company has agreed to:

• pay the Underwriter a corporate advisory fee of $60,000, an underwriting fee of $35,750, being 6.5% of the total Underwritten Amount, and a subscription fee of 6.5% on the amount of shortfall securities placed in excess of the Underwritten Amount; and

• grant the Underwriter or its nominee 27,500,000 Underwriter Options, exercisable at $0.03 each on or before 30 June 2016 and otherwise on the terms and conditions detailed in Schedule 1, subject to Shareholder approval. The Underwriter has sought sub-underwriting commitments for the Rights Issue. The Underwriter will pay all sub-underwriting fees and selling fees to third parties out of its fees. The Underwriter will also allocate Underwriter Options to sub-underwriters on the basis of one (1) Underwriter Option for every two (2) New Share sub-underwritten to induce them to sub-underwrite.

Shareholder approvals sought

The Company is seeking Shareholder approval under Listing Rule 7.1 for the grant of 27,500,000 Underwriter Options to the Underwriter or its nominees (i.e. subunderwriters) (Resolution 1).

As Directors Neil Warburton and Keith Rowe and Mr Warburton's son Justin Warburton (the Related Parties) have agreed to partially sub-underwrite the Rights Issue, the Company is also seeking shareholder approval under Listing Rule 10.11 for the grant of 11,500,000 of the 27,500,000 Underwriter Options the subject of Resolution 1, to the Related Parties (Resolutions 2, 3 and 4).

Consequences if Shareholders do not approve Resolutions 1 to 4

The Company is contractually bound to issue the 27,500,000 Underwriter Options pursuant to the Underwriting Agreement. If Shareholders do not approve the grant of the 27,500,000 Underwriter Options, then the Company will need to do so pursuant to its 15% placement capacity under Listing Rule 7.1, which will then deplete its 15% placement capacity for the following 12 month period.

1.2 RESOLUTION 1- GRANT OF UNDERWRITER OPTIONS TO PATERSONS SECURITIES LIMITED AND NOMINEES

Background

Resolution 1 seeks Shareholder approval for the grant of 27,500,000 Underwriter Options to the Underwriter or its nominees. The Underwriter is neither a Shareholder nor a related party of the Company.

The Company is contractually bound to issue the 27,500,000 Underwriter Options. Section 1.1 sets out the consequences if Shareholders do not approve Resolution 1. Listing Rule 7.1 provides that, without shareholder approval, an entity may not during any 12-month period grant any equity securities if the number of those securities exceeds 15% of the total ordinary securities on grant at the commencement of that 12-month period (subject to certain exceptions). While the grant of 27,500,000 Underwriter Options will not exceed the Company's 15% placement capacity under Listing Rule 7.1, by obtaining Shareholder approval, the Company will not deplete its 15% placement capacity by issuing the 27,500,000 Underwriter Options.

Listing Rule 7.3

The following information is provided to Shareholders for the purpose of Listing Rule 7.3:

• the maximum number of Underwriter Options to be granted by the Company under Resolution 1 is 27,500,000;
• the Underwriter Options will be granted on or around 25 June 2013 (or otherwise in accordance with the date of allotment of securities under the Rights Issue timetable, but in any event no later than 3 months after the date of the Meeting);
• the issue price of the Underwriter Options is $0. The Company agreed to grant the Underwriter Options as part of the consideration for the Underwriter agreeing to enter into the Underwriting Agreement;
• the Underwriter Options will be granted to the Underwriter, the subunderwriters to the Rights Issue, or a combination of both. The Underwriter Options to be granted to the Related Parties who have participated as subunderwriters will be subject to Shareholders passing Resolutions 2, 3 and 4.
• the Underwriter Options will have an exercise price of $0.03 each and an expiry date of 30 June 2016. The full terms and conditions of the Underwriter Options are set out in Schedule 1 to this Explanatory Statement; and
• no funds will be raised by the Company from the grant of the Underwriter Options.

The effect of Resolution 1 will be to allow the Company to grant the Underwriter Options during the period of 3 months after this Meeting without using the Company's placement capacity under the Listing Rules.

1.3 RESOLUTIONS 2, 3 and 4 – GRANT OF UNDERWRITER OPTIONS TO RELATED PARTIES

Background

The Related Parties have each entered into sub-underwriting agreements in relation to the Rights Issue. Each sub-underwriting agreement commits each Related Party to subscribe for their proportionate share of the sub-underwriting pool and the Underwriter will pay a fee of 5% on the amount sub-underwritten. The Related Parties will also be entitled to Underwriter Options.

Resolutions 2, 3 and 4 seek Shareholder approval for the grant of 11,500,000 Underwriter Options to the Related Parties, namely Neil Warburton, Keith Rowe and Justin Warburton.

Section 1.1 sets out the consequences if Shareholders do not approve Resolutions 2, 3 and 4.

Listing Rule 10.11

Listing Rule 10.11 requires a listed company to obtain Shareholder approval prior to the grant of equity securities, including the grant of options, to a related party (subject to certain exceptions). If Resolutions 2, 3 and 4 are passed, a total of 11,500,000 Underwriter Options will be granted to Neil Warburton, Keith Rowe and Justin Warburton, each of whom are related parties of the Company by virtue of them being Directors or relevantly associated with Directors. Accordingly, Shareholder approval for the grant of the Underwriter Options to the Related Parties is required pursuant to Listing Rule 10.11.

Listing Rule 10.13

The following information is provided to Shareholders for the purpose of Listing Rule 10.13:

• the number of Underwriter Options to be granted by the Company to each of the Related Parties under Resolutions 2, 3 and 4 are as follows:

Related Party	Number of Underwriter Options
Neil Warburton	5,000,000
Keith Rowe	5,000,000
Justin Warburton	1,500,000

• the Underwriter Options will have an exercise price of $0.03 each and an expiry date of 30 June 2016. The full terms and conditions of the Underwriter Options are set out in Schedule 1 to this Explanatory Statement;
• the Underwriter Options will be granted on or around 25 June 2013 (or otherwise in accordance with the date of allotment of securities under the Rights Issue timetable, but in any event no later than 1 month after the date of the Meeting);
• the issue price of the Underwriter Options is $0. The Company agreed to grant

the Underwriter Options as part of the consideration for the Underwriter agreeing to enter into the Underwriting Agreement; and

• no funds will be raised from the grant of the Underwriter Options the subject of Resolutions 2, 3 and 4.

1.4 RESOLUTION 5 – APPROVAL OF PERFORMANCE RIGHTS PLAN

Background

The Directors considered that it was desirable to establish an employee incentive scheme pursuant to which employees and Directors may be offered the opportunity to be granted performance rights in order to increase the range of potential incentives available to them and to strengthen links between the Company and its employees and directors. Accordingly, the Directors have adopted a Performance Rights Plan (Plan).

The Plan is designed to provide incentives to the employees and Directors of the Company and to recognise their contribution to the Company's success. Under the Company's current circumstances, the Directors consider that the issue of performance rights to employees and Directors is a cost effective and efficient means for the Company to provide an incentive to employees and directors as opposed to alternative forms of incentives such as cash bonuses or increased remuneration.

Performance rights are rights to acquire Shares subject to satisfaction of specified vesting conditions (Vesting Conditions) in a specified performance period (Performance Period) (Performance Rights).

Shareholder approval is required if the issue of Performance Rights pursuant to the Plan is to fall within the exception to the calculation of the 15% limit imposed by Listing Rule 7.1 on the number of securities which may be issued without shareholder approval. Accordingly, Shareholder approval is sought for the purposes of Listing Rule 7.2 exception 9(b) which provides that Listing Rule 7.1 does not apply to an issue of securities under an employee incentive scheme that has been approved by the holders of ordinary securities within 3 years of the date of issue.

Further Shareholder approval will be required before any Director or related party of the Company can be granted Performance Rights pursuant to the Plan.

In accordance with the requirements of Listing Rule 7.2 exception 9(b), the following information is provided:

• (a) a copy of the Plan is annexed as Schedule 2;
• (b) the Plan has not previously been approved by Shareholders; and
• (c) a voting exclusion statement has been included for the purposes of Resolution 5.

The Directors unanimously recommend that Shareholders vote in favour of Resolution 5.

GLOSSARY

Where the following terms are used in the Notice they have the following meanings:

$ means Australian dollars, unless otherwise stated.

ASX means the Australian Securities Exchange;

ASX Listing Rules means the rules governing the operation of the ASX.

Board means the board of Directors of the Company.

Business Day means every day other than a Saturday, Sunday, New Year's Day, Good Friday, Easter Monday, Christmas Day, Boxing Day and any other day that ASX declares is not a business day.

Company means Red Mountain Mining Limited (ARBN 40 119 568 106.)

Director means a director of the Company.

Rights Issue means the pro rata renounceable rights issue of Shares and Options pursuant to the Prospectus dated 16 May 2013

Listing Rules means the Listing Rules of ASX.

New Share means a Share offered for subscription under the terms of the Entitlement Offer.

Option means an option to acquire a Share.

Optionholder means a holder of an Option.

Plan means the Performance Rights Plan set out in Schedule 2 to this Explanatory Statement.

Share means an ordinary fully paid share in the capital of the Company.

Shareholder means the registered holder of a Share.

Underwriter means Patersons Securities Limited ACN 008 896 291.

Underwriting Agreement means the underwriting agreement between the Company and the Underwriter entered into on 16 May 2013.

Underwritten Amount means the amount of $550,000 underwritten by the Underwriter pursuant to the Underwriting Agreement.

Underwriter Option means an Option that is granted on the terms and conditions set out in Schedule 1 to this Explanatory Statement.

WST means Australian Western Standard Time.

Schedule 1

Terms of Underwriter Options

• (a) Each Option entitles the holder to one Share in the capital of the Company.
• (b) The Options may be exercised at any time prior to 5.00pm WST on 30 June 2016.
• (c) The exercise price of the Options is 3 cents each.
• (d) Subject to meeting the listing requirements of the Listing Rules, application will be made for the Options to be quoted and the Options will be freely tradeable.
• (e) The Company will provide to each Option holder a notice that is to be completed when exercising the Options ("Notice of Exercise"). Options may be exercised by the Option holder in whole or in part by completing the Notice of Exercise and forwarding the same to the Secretary of the Company to be received prior to the expiry date. The Notice of Exercise must state the number of Options exercised, the consequent number of Shares to be allotted and the identity of the proposed allottee. The Notice of Exercise by an Option holder must be accompanied by payment in full for the relevant number of Shares being subscribed, being an amount of the exercise price per Share.
• (f) All Shares issued upon the exercise of the Options will rank equally in all respects with the Company's then issued Shares. The Company must apply to the ASX within 7 business days after the date of issue of all Shares pursuant to the exercise of Options to be admitted to quotation.
• (g) There are no participating rights or entitlements inherent in the Options and the holders will not be entitled to participate in new issues or pro-rata issues of capital to Shareholders during the term of the Options. Thereby, the Option holder has no rights to a change in the exercise price of the Option or a change to the number of underlying securities over which the Option can be exercised. The Company will ensure, for the purposes of determining entitlements to any issue, that Option holder will be notified of a proposed issue after the issue is announced. This will give Option holders the opportunity to exercise their Options prior to the date for determining entitlements to participate in such issues.
• (h) In the event of any reconstruction (including consolidation, subdivisions, reduction or return) of the authorised or issued capital of the Company, all rights of the Option holder shall be reconstructed (as appropriate) in accordance with the Listing Rules.

Schedule 2

Performance Rights Plan

RED MOUNTAIN MINING LTD ACN 119 568 106

PERFORMANCE RIGHTS PLAN

1.	DEFINITIONS AND INTERPRETATION 3
	1.1	Definitions 3
	1.2	Interpretations6
2.		PURPOSE 7
3.		COMMENCEMENT AND TERM 7
4.		OFFER OF PERFORMANCE RIGHTS 7
	4.1	Offer 7
	4.2	Offer Document 7
	4.3	Personal Offer8
	4.4	Renunciation8
	4.5	Offer to be provided to Eligible Participants 8
	4.6	No Consideration8
	4.7	Vesting Conditions8
	4.8	Disposal of Performance Rights8
	4.9	Share Restriction Period8
	4.10	Limit on Offers9
5.	ACCEPTANCE 9
	5.1	Acceptance Time Period9
	5.2	Board's right to reject9
	5.3	Participant Agrees to be Bound9
6.		GRANT OF PERFORMANCE RIGHTS 10
	6.1	Grant of Performance Rights10
	6.2	Approvals10
	6.3	Restrictions on Dealings and Hedging10
7.		VESTING OF PERFORMANCE RIGHTS 10
	7.2	One or Several Parcels11
8.		ISSUE OF SHARES 11
	8.1	Issue of Shares11
	8.2	Blackout Period, Takeover Restrictions and Insider Trading11
	8.3	Withholding 11
	8.4	Share ranking 11
	8.5	Quotation on ASX11
	8.6	Sale of Shares12
9.	RESTRICTION ON DISPOSAL OF SHARES 12
	9.1	Restriction 12
	9.2	Enforcing the disposal restriction12
	9.3	Holding Locks13
	9.4	Removing the restriction13
	9.5	Removing Holding Locks 13
10.		LAPSE OF PERFORMANCE RIGHTS 13
	10.1	Lapsing of Performance Right 13
	10.2	Good Leaver Exceptions13
	10.3	Bad Leaver 14
11.		CHANGE OF CONTROL AND WINDING-UP 14
	11.1	Vesting of Performance Rights 14

	11.2	Acquisitions of shares in Acquiring Company 14
12.		PARTICIPATION RIGHTS AND REORGANISATION 15
	12.112.2	Participation Rights15Adjustment for reorganisation 15
13.	AMENDMENTS 15
	13.113.213.3	Power to amend Plan15Adjustment to Performance Right Terms15Notice of amendment16
14.		TRUST 16
15.		MISCELLANEOUS 16
	15.115.215.315.415.515.615.715.815.915.1015.1115.1215.1315.1415.15	Rights and obligations of Participant16Power of the Board 17Dispute or disagreement18ASIC relief18Non-residents of Australia18Communication18Attorney 19Costs and Expenses19Data protection19Error in Allocation20Dispute 20No fiduciary capacity20ASX Listing Rules20Enforcement20Laws governing Plan 20

RED MOUNTAIN MINING LTD

ACN 119 568 106

PERFORMANCE RIGHTS PLAN

The Directors are empowered to operate the Red Mountain Mining Ltd Performance Rights Plan (Plan) on the following terms and in accordance with the ASX Listing Rules of ASX (where applicable).

1. DEFINITIONS AND INTERPRETATION

1.1 Definitions

For the purposes of the Plan, the following words have the following meanings.

Acceptance Form means the Acceptance Form by which an Eligible Participant or Associate (as applicable) accepts an Offer for Performance Rights, in substantially the same form as set out in Schedule 2 or as otherwise approved by the Company from time to time.

ASIC means the Australian Securities and Investments Commission.

Associate has the meaning given to the term in the Income Tax Assessment Act 1936 (Cth).

Associated Body Corporate means:

• (a) a related body corporate (as defined in the Corporations Act) of the Company;
• (b) a body corporate which has an entitlement to not less than 20% of the voting Shares of the Company; and
• (c) a body corporate in which the Company has an entitlement to not less than 20% of the voting shares.

ASX means ASX Limited (ACN 008 624 691) or the Australian Securities Exchange, as the context requires.

ASX Listing Rules means the official Listing Rules of the ASX as they apply to the Company from time to time.

Blackout Period means a period when the Participant is prohibited from trading in the Company's securities by the Company's written policies.

Board means the board of Directors of the Company or committee appointed by the Board for the purposes of the Plan.

Business Day means those days other than a Saturday, Sunday, New Year's Day, Australia Day, Good Friday, Easter Monday, Anzac Day, Christmas Day, Boxing Day and any other day which the ASX shall declare and publish is not a business day.

Change of Control means:

• (a) a bona fide Takeover Bid is declared unconditional and the bidder has acquired a Relevant Interest in at least 50.1% of the Company's issued Shares;
• (b) a court approves, under Section 411(4)(b) of the Corporations Act, a proposed compromise or arrangement for the purposes of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with any other company or companies; or
• (c) in any other case, a person obtains Voting Power in the Company which the Board (which for the avoidance of doubt will comprise those Directors immediately prior to the person acquiring that Voting Power) determines, acting in good faith and in accordance with their fiduciary duties, is sufficient to control the composition of the Board

Closing Date means the date on which an Offer is stated to close.

Company means Red Mountain Mining Ltd (ACN 119 568 106).

Corporations Act means the Corporations Act 2001 (Cth), as amended from time to time.

Director means a director of the Company.

Eligible Participant means:

• (a) an Executive Director of the Company or any Group Company;
• (b) a full or part time employee of the Company or any Group Company; or
• (c) subject to, and in accordance with, any necessary ASIC relief being obtained, a contractor of a Group Company.

who is declared by the Board to be eligible to receive grants of Performance Rights under the Plan.

Employee Share Scheme has the meaning given in section 9 of the Corporations Act.

Executive Director means a Director who holds salaried employment or office with a Group Company.

Expiry Date means, in respect of a Performance Right, the date that the Performance Right will lapse if it has not otherwise vested or lapsed in accordance with the Plan, as determined by the Board in its discretion with respect to that Performance Right at the time of the grant of that Performance Right.

Group means the Company and each of its Associated Bodies Corporate.

Group Company means the Company or an Associated Body Corporate.

Holding Lock has the meaning given to that term in the ASX Listing Rules.

Marketable Parcel has the meaning given to that term in the ASX Listing Rules.

Nominee means a nominee of an Eligible Participant being a permitted Nominee under Clause 4.4.

Offer means an offer made to an Eligible Participant to be granted one or more Performance Rights under the Plan as set out in an Offer Document.

Offer Document means an offer document in substantially the same form as set out in Schedule 2, or such other form as required by the Board from time to time consistent with the Corporations Act and the Class Order.

Participant means an Eligible Participant to whom Performance Rights have been granted under the Plan, or if Clause 4.4 applies, an Associate of the Eligible Participant to whom Performance Rights have been granted under the Plan.

Performance Right means a right to acquire a Share, subject to satisfaction of any Vesting Conditions, and the corresponding obligation of the Company to provide the Share, under a binding contract made by the Company and an Eligible Participant in the manner set out in this Plan.

Plan means the plan as set out in this document, subject to any amendments or additions made under clause 13.

Redundancy means termination of the employment of a Relevant Person due to economic, technological, structural or other organisational change where:

• (a) no Group Company requires the duties and responsibilities carried out by the Eligible Participant to be carried out by anyone; or
• (b) no Group Company requires the position held by the Eligible Participant to be held by anyone.

Relevant Interest has the meaning given in the Corporations Act.

Relevant Person means:

• (a) in respect of an Eligible Participant, that person; and
• (b) in respect of a Nominee of an Eligible Participant, being a permitted Nominee under Clause 4.4, that Eligible Participant.

Restriction Period means the period during which a Share issued on the vesting of a Performance Right cannot be transferred or otherwise dealt with in accordance with Clause 9.

Retirement means where a Relevant Person intends to permanently cease all gainful employment in circumstances where the Relevant Person provides, in good faith, a written statutory declaration to the Board to that effect.

Severe Financial Hardship means the Eligible Participant is unable to provide themselves, their family or other dependents with basic necessities such as food, accommodation and clothing, including as a result of family tragedy, financial misfortune, serious illness, impacts of natural disaster and other serious or difficult circumstances.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of Shares.

Takeover Bid means a takeover bid (as defined in the Corporations Act) to acquire the Company's Shares.

Total and Permanent Disability means that the Relevant Person has, in the opinion of the Board, after considering such medical and other evidence as it sees fit, become incapacitated to such an extent as to render the Relevant Person unlikely to engage in their usual occupation again.

Vesting Condition means, in respect of a Performance Right, any condition set out in the Offer which must be satisfied (unless waived by the Board in its absolute discretion) before that Performance Right can vest or any other restriction on vesting of that Performance Right specified in the Offer or in this Plan.

Voting Power has the meaning given to that term in Section 9 of the Corporations Act.

1.2 Interpretations

In this Plan unless the context otherwise requires:

• (a) headings are for convenience only and do not affect the interpretation of this Plan;
• (b) any reference in the Plan to any enactment of the ASX Listing Rules includes a reference to that enactment or those ASX Listing Rules as from time to time amended, consolidated, re-enacted or replaced;
• (c) the singular includes the plural and vice versa;
• (d) any words denoting one gender include the other gender;
• (e) where any word or phrase is given a definite meaning in this Plan, any part of speech or other grammatical form of that word or phrase has a corresponding meaning;
• (f) a reference to:
  • (i) a person includes a natural person, partnership, joint venture, government agency, association, corporation or other body corporate;
  • (ii) a document includes all amendments or supplements to that document;
  • (iii) a clause is a reference to a clause of this Plan;
  • (iv) a law includes a constitutional provision, treaty, decree, convention, statute, regulation, ordinance, by-law, judgment, rule of common law or equity and is a reference to that law as amended, consolidated or replaced;
  • (v) an agreement other than this Plan includes an undertaking, or legally enforceable arrangement or understanding, whether or not in writing; and
  • (vi) a monetary amount is in Australian dollars; and

(g) when the day on which something must be done is not a Business Day, that thing must be done on the following Business Day.

2. PURPOSE

The purpose of the Plan is to:

• (a) assist in the reward, retention and motivation of Eligible Participants;
• (b) link the reward of Eligible Participants to performance and the creation of Shareholder value;
• (c) align the interests of Eligible Participants more closely with the interests of Shareholders by providing an opportunity for Eligible Participants to receive Shares;
• (d) provide Eligible Participants with the opportunity to share in any future growth in value of the Company; and
• (e) provide greater incentive for Eligible Participants to focus on the Company's longer term goals.

3. COMMENCEMENT AND TERM

• (a) This Plan will commence on the date determined by resolution of the Board and will continue until terminated by the Board.
• (b) The Board may terminate the Plan at any time by resolution. Termination shall not affect the rights or obligations of a Participant or the Company which have arisen under the Plan before the date of termination and the provisions of the Plan relating to a Participant's Performance Rights shall survive termination of the Plan until fully satisfied and discharged.

4. OFFER OF PERFORMANCE RIGHTS

4.1 Offer

• (a) The Board may, from time to time, in its absolute discretion, may make a written offer to Eligible Participants to apply for up to a specified number of Performance Rights, upon the terms set out in the Plan and upon such additional terms and conditions as the Board determines (Offer).
• (b) In exercising that discretion, the Board may have regard to the following (without limitation):
  • (i) the Eligible Participant's length of service with the Group;
  • (ii) the contribution made by the Eligible Participant to the Group;
  • (iii) the potential contribution of the Eligible Participant to the Group; or
  • (iv) any other matter the Board considers relevant.

4.2 Offer Document

An Offer must be made using an Offer Document.

4.3 Personal Offer

Subject to Clause 4.4, an Offer is personal and is not assignable.

4.4 Renunciation

• (a) Upon receipt of an Offer, an Eligible Participant may, by notice in writing to the Board, nominate an Associate of that Eligible Participant (Nominee) in whose favour the Eligible Participant wishes to renounce the Offer.
• (b) The Board may, in its discretion, resolve not to allow a renunciation of an Offer in favour of a Nominee without giving any reason for that decision.

4.5 Offer to be provided to Eligible Participants

An Offer will advise the Eligible Participant of the following minimum information regarding the Performance Rights:

• (a) the maximum number of Performance Rights that the Eligible Participant may apply for, or the formula for determining the number of Performance Rights that may be applied for;
• (b) the maximum number of Shares that the Participant is entitled to be issued on the vesting of each Performance Right or the formula for determining the maximum number of Shares;
• (c) any applicable Vesting Conditions;
• (d) when unvested Performance Rights will expire (Expiry Date);
• (e) the date by which an Offer must be accepted (Closing Date); and
• (f) any other relevant conditions to be attached to the Performance Rights or the Shares to be issued on the vesting of the Performance Rights.

4.6 No Consideration

Performance Rights granted under the Plan will be issued for nil cash consideration.

4.7 Vesting Conditions

A Performance Right may be made subject to Vesting Conditions as determined by the Board in its discretion and as specified in the Offer for the Performance Right.

4.8 Disposal of Performance Rights

Performance Rights will not be transferable and will not be quoted on the ASX, except as otherwise specified in this Plan or the Offer.

4.9 Share Restriction Period

A Share issued on vesting of a Performance Right is subject to a Restriction Period in accordance with Clause 9 of this Plan.

4.10 Limit on Offers

The Company must take reasonable steps to ensure that the number of Shares to be issued on vesting of Performance Rights offered under an Offer, when aggregated with:

• (a) the number of Shares that would be issued if each outstanding Offer or other offer with respect to Shares, units of Shares or options to acquire Shares under an Employee Share Scheme (including this Plan) were to be accepted or vest; and
• (b) the number of Shares issued during the previous 5 years under the Plan or any other Employee Share Scheme extended only to Eligible Participants,

does not exceed 5% of the total number of Shares on issue at the time of an Offer (but disregarding any offer or issue with respect to Shares, units of Shares or options to acquire Shares that can be disregarded in accordance with the Class Order).

5. ACCEPTANCE

5.1 Acceptance Time Period

An Eligible Participant (or permitted Nominee) may only accept an Offer within the time period specified in the Offer Document in whole or in part, by signing and returning an Acceptance Form to the Company no later than the Closing Date.

5.2 Board's right to reject

• (a) The Board may accept or reject any Acceptance Form in its absolute discretion.
• (b) Before accepting or rejecting the Acceptance Form, the Board may require the applicant to provide any information that the Board requests concerning the person's entitlement to lodge an Acceptance Form under this Plan.
• (c) The Board must promptly notify an applicant if an Acceptance Form has been rejected, in whole or in part.

5.3 Participant Agrees to be Bound

• (a) An Eligible Participant, by submitting an Acceptance Form, agrees to be bound by the terms and conditions of the Offer and Acceptance Form, the Plan and the Constitution of the Company, as amended from time to time.
• (b) If the Board resolves to allow a renunciation of an Offer in favour of a Nominee, the Eligible Participant will procure that the permitted Nominee accepts the Offer made to that Eligible Participant and that both the Eligible Participant and the Nominee agree be bound by the terms and conditions of the Offer and Acceptance Form, the Plan and the Constitution of the Company, as amended from time to time.

6. GRANT OF PERFORMANCE RIGHTS

6.1 Grant of Performance Rights

• (a) Subject to clause 6.2, once the Board has received and accepted a duly signed and completed Acceptance Form for Performance Rights, the Company must, provided the Eligible Participant to whom the Offer was made remains an Eligible Participant, promptly grant Performance Rights to the applicant, upon the terms set out in the Offer, the Acceptance Form and the Plan and upon such additional terms and conditions as the Board determines.
• (b) The Company will, within a reasonable period after the date a Performance Right is granted, issue the applicant with a certificate evidencing the grant of the Performance Right.

6.2 Approvals

The Company's obligation to grant Performance Rights is conditional on:

• (a) the grant of the Performance Rights complying with all applicable legislation; and
• (b) all necessary approvals required under any applicable legislation being obtained prior to the grant of the Performance Rights.

6.3 Restrictions on Dealings and Hedging

• (a) A Performance Right granted under the Plan is only transferable, assignable or able to be otherwise disposed or encumbered:
  • (i) with the consent of the Board (which may be withheld in its absolute discretion); or
  • (ii) by force of law upon death to the Participant's legal personal representative or upon bankruptcy to the Participant's trustee in bankruptcy.
• (b) A Participant must not enter into any arrangement for the purpose of hedging, or otherwise affecting their economic exposure, to their Performance Rights.
• (c) Where the Participant purports to transfer, assign, mortgage, charge or otherwise dispose or encumber a Performance Right, other than in accordance with clause 6.3(a), or hedge a Performance Right contrary to clause 6.3(b), the Performance Right immediately lapses.

7. VESTING OF PERFORMANCE RIGHTS

(a) Subject to clause 10.2 (Good Leaver Exceptions) and clause 10 (Change in Control and Winding Up), a Performance Right granted under the Plan will not vest unless the Vesting Conditions (if any) attaching to that Performance Right have been satisfied and the Board has notified the Participant of that fact.

(b) The Board must notify a Participant in writing within 10 Business Days of becoming aware that any Vesting Condition attaching to a Performance Right has been satisfied.

7.2 One or Several Parcels

Performance Rights may vest in one or more parcels of any size, provided that the number of Shares issued upon vesting of Performance Rights in any parcel is not less than a Marketable Parcel.

8. ISSUE OF SHARES

8.1 Issue of Shares

Subject to the Corporations Act, the ASX Listing Rules and this Plan, the Company must issue to the Participant or his or her personal representative (as the case may be) the number of Shares the Participant is entitled to be issued in respect of vested Performance Rights within 10 business days of the Performance Rights vesting.

8.2 Blackout Period, Takeover Restrictions and Insider Trading

If the issue of Shares on vesting of a Performance Right would otherwise fall within a Blackout Period, or breach the insider trading or takeover provisions of the Corporations Act, the Company may delay the issue of the Shares until 10 Business Days following the expiration, as applicable, of the Blackout Period or the day on which the insider trading or takeover provisions no longer prevent the issue of the Shares.

8.3 Withholding

If a Participant is liable for tax, duties or other amounts on the vesting of their Performance Rights, and the Company is liable to make a payment to the appropriate authorities on account of that liability, unless the Participant and the Company agree otherwise, the Company must issue and sell such number of Shares which would otherwise be issued and allocated to the Participant so that the net proceeds of sale equal the payment the Company is required to pay to the appropriate authorities.

8.4 Share ranking

All Shares allotted under the Plan will rank equally in all respects with the Shares of the same class for the time being on issue except as regards any rights attaching to such Shares by reference to a record date prior to the date of their allotment.

8.5 Quotation on ASX

• (a) If Shares of the same class as those allotted under the Plan are quoted on the ASX, the Company will, subject to the ASX Listing Rules, apply to the ASX within 10 Business Days of Shares being allotted for those Shares to be quoted on ASX.
• (b) The Company will not apply for quotation of any Performance Rights on the ASX.

8.6 Sale of Shares

• (a) Subject to clause 9 (Restriction on Disposal of Shares), there will be no transfer restrictions on Shares allotted under the Plan unless the sale, transfer or disposal by the Participant of the Shares issued to them on vesting of the Performance Rights (or any interest in them) would require the preparation of a disclosure document (as that term is defined in the Corporations Act).
• (b) If a disclosure document is required, the Participant agrees to enter into such arrangements with the Company as the Board considers appropriate to prevent the sale, transfer or disposal of the relevant Shares in a manner that would require a disclosure document to be prepared.
• (c) The Company will issue, where required to enable Shares issued on vesting of Performance Rights to be freely tradeable on the ASX from the date of issue, a cleansing statement under Section 708A(5) of the Corporations Act at the time Shares are issued. Where a cleansing statement is required, but cannot be issued, the Company will have a prospectus available in relation to the Shares which complies with the requirements of the Corporations Act.

9. RESTRICTION ON DISPOSAL OF SHARES

9.1 Restriction

• (a) Subject to clause 9.1(b), any Share acquired by a Participant on the vesting of a Performance Right must not be disposed of or dealt with in any way by that Participant until the earlier of:
  • (i) the time when an event occurs so that the Eligible Participant to whom the Offer was originally made is no longer an Eligible Participant in any Group Company;
  • (ii) the Board approving by resolution that the restriction on disposal in this clause 9.1 is released
  • (iii) there is a Change in Control or the Company passes a resolution for voluntary winding up or an order is made for the compulsory winding up of the Company; or
  • (iv) the seven year anniversary of the date of grant of the Performance Right (Restriction Period).
• (b) Clause 9.1(a) does not apply to any transfers by force of law, upon death, to the Participant's legal personal representative or, upon bankruptcy, to the Participant's trustee in bankruptcy.

9.2 Enforcing the disposal restriction

The Company will make such arrangements as it considers necessary to enforce the restriction on disposal of Shares under clause 9.1 and the Participant must agree to such arrangements, including entering into a voluntary restriction agreement.

9.3 Holding Locks

Without limiting clause 9.2, and subject to the ASX Listing Rules, the Company will procure that a Holding Lock be put on those Shares while the Shares are subject to the restriction on disposal under clause 9.1.

9.4 Removing the restriction

Within 10 business days of the Company becoming aware that the restriction on disposal of Shares under clause 9.1 no longer applies, the Company must procure that any restriction on dealing with that Share pursuant to this Plan no longer applies.

9.5 Removing Holding Locks

Without limiting clause 9.4, when the Company becomes aware that a Share is no longer subject to the restriction on disposal in clause 9.1, the Company must, within 10 business days, procure that any Holding Lock on that Share is removed.

10. LAPSE OF PERFORMANCE RIGHTS

10.1 Lapsing of Performance Right

A Performance Right will lapse upon the earlier to occur of:

• (a) an unauthorised dealing in, or hedging of, the Performance Right occurring, as governed by clause 6.3(c);
• (b) a Vesting Condition in relation to the Performance Right not being satisfied by the due date, or becoming incapable of satisfaction, as determined by the Board in its absolute discretion;
• (c) a Participant (or, where the Participant is an Associate of the Eligible Participant to whom the Offer was made, the Eligible Participant) ceasing to be an Eligible Participant, unless clause 10.2 (Good Leaver Exceptions) is applied;
• (d) a Performance Right lapses under clause 10.3 (Bad Leaver);
• (e) the Performance Right lapses following a Change in Control, or winding up resolution or order, in accordance with clause 11;
• (f) the Expiry Date; and
• (g) the 7 year anniversary of the date of grant of the Performance Rights.

10.2 Good Leaver Exceptions

Where a Participant (or, where the Participant is an Associate of the Eligible Participant to whom the Offer was made, the Eligible Participant) ceases to be an Eligible Participant as a result of:

• (a) death or Total or Permanent Disability;

• (b) Retirement or Redundancy;

• (c) Severe Financial Hardship;

• (d) death of an immediate family member of the Participant (or Eligible Participant, as applicable);

• (e) substantial change in circumstances, out of the control of the Participant (or Eligible Participant, as applicable) which affects the ability of the Participant (or Eligible Participant, as applicable) to perform his or her role with a Group Company; or

• (f) terminal illness of the Participant (or Eligible Participant, as applicable) or an immediate family member,

the Board may determine, in its absolute discretion, within 10 Business Days of the Participant (or Eligible Participant, as applicable) ceasing to be an Eligible Participant, that all or a portion of the Participant's unvested Performance Rights vest rather than lapsing, in which case clause 1.1 applies.

10.3 Bad Leaver

Where a Participant (or, where the Participant is an Associate of the Eligible Participant to whom the Offer was made, the Eligible Participant):

• (a) in the opinion of the Board, acts fraudulently or dishonestly, is grossly negligent, demonstrates serious and wilful misconduct, or causes a material adverse effect on the reputation of the Company;
• (b) has his or her employment terminated due to serious or wilful misconduct or otherwise for cause without notice; or
• (c) becomes ineligible to hold his or her office due to Part 2D.6 of the Corporations Act,

the Board may, by written notice to the Participant, deem any unvested Performance Rights of the Participant to have lapsed.

11. CHANGE OF CONTROL AND WINDING-UP

11.1 Vesting of Performance Rights

• (a) Subject to the terms and conditions of a grant of a Performance Right, any unvested Performance Rights will vest within 10 Business Days of:
  • (i) a Change of Control occurring: or
  • (ii) the Company passes a resolution for voluntary winding up or an order is made for the compulsory winding up of the Company,
  • (iii) in which case the Board must promptly notify the holder of the vested Performance Rights in writing.
• (b) Any unvested Performance Rights that do not vest under clause 11.1(a) automatically lapse.

11.2 Acquisitions of shares in Acquiring Company

If a company (Acquiring Company) obtains control of the Company as a result of a Change of Control and both the Company and the Acquiring Company agree, a Participant may, in respect of any vested Performance Rights, be provided with shares of the Acquiring Company or its parent in lieu of Shares, on substantially the same terms and subject to substantially the same conditions as the Shares, but with appropriate adjustments to the number and kind of shares subject to the Performance Rights.

12. PARTICIPATION RIGHTS AND REORGANISATION

12.1 Participation Rights

• (a) There are no participating rights or entitlements inherent in the Performance Rights and Participants will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Performance Rights without exercising the Performance Right.
• (b) A Performance Right does not confer the right to a change in the number of underlying Shares over which the Performance Right can vest.
• (c) A Participant who is not a Shareholder is not entitled to:
  • (i) notice of, or to vote or attend at, a meeting of the Shareholders of the Company; or
  • (ii) receive any dividends declared by the Company,
  • (iii) unless and until any Performance Right vests and the Participant holds Shares that provide the right to notice and dividends.

12.2 Adjustment for reorganisation

If, at any time, the issued capital of the Company is reorganised (including consolidation, subdivision, reduction or return), all rights of a Participant are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reorganisation.

13. AMENDMENTS

13.1 Power to amend Plan

Subject to clause 13.2, the Corporations Act and the ASX Listing Rules:

• (a) the Board may, at any time, by resolution amend or add to all or any of the provisions of the Plan, or the terms or conditions of any Performance Right granted under the Plan; and
• (b) any amendment may be given such retrospective effect as is specified in the written instrument or resolution by which the amendment is made.

13.2 Adjustment to Performance Right Terms

• (a) Subject to any requirements of the ASX Listing Rules, the Board will have the power to make adjustments to or vary the terms of a Performance Right.
• (b) No adjustment or variation of the terms of a Performance Right will be made without the consent of the Participant who holds the relevant

Performance Right if such adjustment or variation would have a materially prejudicial effect upon the Participant (in respect of his or her outstanding Performance Rights), other than an adjustment or variation introduced primarily:

• (i) for the purpose of complying with or conforming to present or future State, Territory or Commonwealth legislation governing or regulating the maintenance or operation of the Plan or like plans;
• (ii) to correct any manifest error or mistake;
• (iii) to enable a member of the Group to comply with the Corporations Act, the ASX Listing Rules, applicable foreign law, or a requirement, policy or practice of the ASIC or other foreign or Australian regulatory body; or
• (iv) to take into consideration possible adverse taxation implications in respect of the Plan including changes to applicable taxation legislation or the interpretation of that legislation by a court of competent jurisdiction or any rulings from taxation authorities administering such legislation.

13.3 Notice of amendment

As soon as reasonably practicable after making any amendment under clause 13.1, the Board will give notice in writing of that amendment to any Participant affected by the amendment.

14. TRUST

• (a) The Board may, at any time, establish a trust for the sole purpose of acquiring and holding Shares issued upon vesting of a Participant's Performance Rights, including for the purpose of enforcing the disposal restrictions and appointing a trustee to act as trustee of the trust.
• (b) The trustee will hold the Shares as trustee for and on behalf of a Participant as beneficial owner upon the terms of the trust.
• (c) The Board may at any time amend all or any of the provisions of this Plan to effect the establishment of a trust and the appointment of a trustee as detailed in this clause.

15. MISCELLANEOUS

15.1 Rights and obligations of Participant

• (a) The rights and obligations of Eligible Participant under the terms of their office, employment or contract with a Group Company are not affected by their participating in the Plan. This Plan will not form part of, and are not incorporated into, any contract of any Eligible Participant (whether or not they are an employee of a Group Company).

• (b) No Participant will have any rights to compensation or damages in consequence of:

• (i) the termination, for any reason, of the office, employment or other contract with a Group Company of the Participant (or, where the Participant is an Associate of the Eligible Participant to whom the Offer was made, the Eligible Participant) where those rights arise, or may arise, as a result of the Participant ceasing to have rights under the Plan as a result of such termination; or

• (ii) the lapsing of Performance Rights in accordance with this Plan.

• (c) Nothing in this Plan, participation in the Plan or the terms of any Performance Right:

  • (i) affects the rights of any Group Company to terminate the employment, engagement or office of an Eligible Participant or a Participant (as the case may be);
  • (ii) affects the rights and obligations of any Eligible Participant or Participant under the terms of their employment, engagement or office with any Group Company;
  • (iii) confers any legal or equitable right on an Eligible Participant or a Participant whatsoever to take action against any Group Company in respect of their employment, engagement or office;
  • (iv) confers on an Eligible Participant or a Participant any rights to compensation or damages in consequence of the termination of their employment, engagement or office by any Group Company for any reason whatsoever including ceasing to have rights under the Plan as a result of such termination; or
  • (v) confers any responsibility or liability or any Group Company or its directors, officers, employees, representatives or agents in respect of any taxation liabilities of the Eligible Participant or Participant.

• (d) If a Vesting Condition attached to a Performance Right requires a Participant to remain an employee of a Group Company, then the Participant will be treated as having ceased to be an employee of a Group Company at such time the Participant's employer ceases to be a Group Company.

• (e) A Participant who is granted an approved leave of absence and who exercises their right to return to work under any applicable award, enterprise agreement, other agreement, statute or regulation before the vesting of a Performance Right under the Plan will be treated for those purposes as not having ceased to be such an employee.

15.2 Power of the Board

• (a) The Plan is administered by the Board which has power to:

  • (i) determine appropriate procedures for administration of the Plan consistent with this Plan; and

• (ii) delegate to any one or more persons, for such period and on such conditions as it may determine, the exercise of any of its powers or discretions arising under the Plan.

• (b) Except as otherwise expressly provided in this Plan, the Board has absolute and unfettered discretion to act, or refrain from acting, under or in connection with the Plan or any Performance Rights under the Plan and in the exercise of any power or discretion under the Plan.

15.3 Dispute or disagreement

In the event of any dispute or disagreement as to the interpretation of the Plan, or as to any question or right arising from or related to the Plan or to any Performance Rights granted under it, the decision of the Board is final and binding.

15.4 ASIC relief

• (a) Notwithstanding any other provisions of the Plan, every covenant or other provisions set out in an exemption or modification granted from time to time by ASIC in respect of the Plan pursuant to its power to exempt and modify the Corporations Act and required to be included in the Plan in order for that exemption or modification to have full effect, is deemed to be contained in the Plan.
• (b) To the extent that any covenant or other provision deemed by this clause to be contained in the Plan is inconsistent with any other provision in the Plan, the deemed covenant or other provision shall prevail.

15.5 Non-residents of Australia

• (a) The Board may adopt additional rules of the Plan applicable in any jurisdiction outside Australia under which rights offered under the Plan may be subject to additional or modified terms, having regard to any securities, exchange control or taxation laws or regulations or similar factors which may apply to the Participant or to any Group Company in relation to the rights. Any additional rule must conform to the basic principles of the Plan.
• (b) When a Performance Right is granted under the Plan to a person who is not a resident of Australia the provisions of the Plan apply subject to such alterations or additions as the Board determines having regard to any securities, exchange control or taxation laws or regulation or similar factors which may apply to the Participant or to any Group Company in relation to the Performance Right.

15.6 Communication

• (a) Any notice or other communication under or in connection with the Plan may be given by personal delivery or by sending the same by post or facsimile:

  • (i) in the case of a company, to its registered office;
  • (ii) in the case of an individual, to the individual's last notified address; or

• (iii) where a Participant is an Executive Director or employee of a Group Company, either to the Participant's last known address or to the address of the place of business at which the Participant performs the whole or substantially the whole of the duties of the Participant's office of employment.

• (b) Where a notice or other communication is given by post, it is deemed to have been received 48 hours after it was put into the post properly addressed and stamped. Where a notice or other communication is given by facsimile, it is deemed to have been received on completion of transmission. Where a notice is given by electronic transmission, the notice is taken to have been received at the time the electronic transmission is sent.

15.7 Attorney

Each Participant:

• (a) irrevocably appoints the Company and any person nominated from time to time by the Company (each an attorney), severally, as the Participant's attorney to complete and execute any documents, including applications for Shares and Share transfers, and to do all acts or things on behalf of and in the name of the Participant which may be convenient or necessary for the purpose of giving effect to the provisions of this Plan;
• (b) covenants that the Participant will ratify and confirm any act or thing done pursuant to this power;
• (c) releases each Group Company and the attorney from any liability whatsoever arising from the exercise of the powers conferred by this clause; and
• (d) indemnifies and holds harmless each Group Company and the attorney in respect thereof.

15.8 Costs and Expenses

The Company will pay all expenses, costs and charges in relation to the establishment, implementation and administration of the Plan, including all costs incurred in or associated with the issue or purchase of Shares for the purposes of the Plan.

15.9 Data protection

By lodging an Acceptance Form, each Participant consents to the holding and processing of personal data provided by the Participant to any Group Company for all purposes relating to the operation of the Plan. These include, but are not limited to:

• (a) administering and maintaining Participants' records;
• (b) providing information to trustees of any employee benefit trust, registrars, brokers or third party administrators of the Plan;
• (c) providing information to future purchasers of the Company or the business in which the Participant works; and

(d) transferring information about the Participant to a country or territory outside Australia.

15.10 Error in Allocation

If any Performance Rights are provided under this Plan in error or by mistake to a person (Mistaken Recipient) who is not the intended recipient, the Mistaken Recipient shall have no right or interest, and shall be taken never to have had any right or interest, in those Performance Rights and those Performance Rights will immediately lapse.

15.11 Dispute

Any disputes or differences of any nature arising under the Plan will be referred to the Board for determination.

15.12 No fiduciary capacity

The Board may exercise any power or discretion conferred on it by this Plan in the interest or for the benefit of the Company, and in so doing the Board is not required to act in the interests of another person or as requested by another person and will not be under any fiduciary obligation to another person.

15.13 ASX Listing Rules

While the Company remains admitted to the ASX, the provisions of the ASX Listing Rules of the ASX will apply to the Plan, and to the extent that the Plan and the ASX Listing Rules are inconsistent, the provisions of the ASX Listing Rules will prevail.

15.14 Enforcement

This Plan, any determination of the Board made pursuant to this Plans, and the terms of any Performance Rights granted under the Plan, will be deemed to form a contract between the Company and the Participant.

15.15 Laws governing Plan

• (a) This Plan, and any Performance Rights issued under it, are governed by the laws of Western Australia and the Commonwealth of Australia.
• (b) The Company and the Participants submit to the non-exclusive jurisdiction of the courts of Western Australia.

[insert date]

[insert name]

[Insert address]

RED MOUNTAIN MINING LTD - PERFORMANCE RIGHTS PLAN

The board of directors of Red Mountain Mining Ltd (ACN 119 568 106) (Company) is pleased to make an offer to you of Performance Rights under its Performance Rights Plan (Plan) on the terms of this offer letter (Offer). Terms used in this Offer have the same meaning as used in the Plan.

The Company informs you of the following:

• (a) this Offer is subject to the terms and conditions of the Performance Rights Plan, a copy of which is attached to this Offer;

• (b) subject to the following, you will be granted [insert] Performance Rights under the Plan for nil consideration in the following tranches and subject to the following vesting conditions:

  • (i) [insert details of tranche and vesting conditions];
  • (ii) [insert details of tranche and vesting conditions];

• (c) the grant of the Performance Rights is subject to the terms of the Plan, including the Company obtaining any necessary Shareholder approvals and you remaining an Eligible Participant at the time the Performance Rights are to be issued and converted into Shares;

• (d) the Expiry Date of the Performance Right is seven years after the date of grant; [SP Comment: confirm this period is consistent with the plan rules.]

• (e) this Offer remains open for acceptance by you until 5pm WST on [insert date] (Closing Date) at which time the Offer will close and lapse;

• (f) you may apply for the Performance Right by filling out Acceptance Form below and returning to the Company Secretary before the Closing Date;

• (g) you may apply for the Performance Right to be registered in your name, or in an associate's name. Examples of acceptable associate's names include entitles of which you are a beneficiary or have a controlling interest such as a trust or a company or associated persons such as, a spouse, parent, sibling, or child. Please discuss this with the Company Secretary if you have any queries;

• (h) unless the Plan provides otherwise, the Shares to which you are entitled on vesting of the Performance Right will be allotted and issued to you as soon as practicable after the vesting date;

• (i) unless the Plan provides otherwise, the Company will apply for the Shares to be quoted on the ASX in accordance with the ASX Listing Rules as soon as practicable after the issue date. However, the Shares will be subject to restrictions on disposal in accordance with the Plan and the Company will impose a holding lock with the Company's share registry and will not be able to be traded until the holding lock is lifted by the Company; and

• (j) the Company will issue, where required to enable Shares issued on vesting of Performance Rights to be freely tradeable on the ASX from the date of issue, a cleansing statement under Section 708A(5) of the Corporations Act at the time Shares are issued. Where a cleansing statement is required, but cannot be issued, the Company will have a prospectus available in relation to the Shares which complies with the requirements of the Corporations Act.

This Offer and all other documents provided to you at the time of this Offer contain general advice only and you should consider obtaining your own financial product advice from an independent person who is licensed by the Australian Securities and Investments Commission to give such advice. You are advised to seek independent professional advice regarding the Australian tax consequences of the grant of Performance Rights and the acquiring and disposing of any Shares that are issued on vesting of Performance Rights under the Plan according to your own particular circumstances.

Please confirm your (or your associate's) acceptance of the Offer set out in this letter by completing the Acceptance Form below and returning it to the Company.

Yours faithfully

[insert name] Red Mountain Mining Ltd

PERFORMANCE RIGHTS PLAN – ACCEPTANCE FORM

Red Mountain Mining Ltd (ACN 119 568 106) (Company) has invited you (or your associate), by an offer dated [insert] (Offer), to apply for the grant under its Performance Rights Plan (Plan) of certain Performance Rights.

The person below hereby applies for the Performance Rights under the terms of the Offer, this Acceptance Form and the Plan.

Full Name:

Address:

Ph: Email:

Tax file number(s) or exemption:

CHESS HIN (where applicable):

In applying for the grant of Performance Rights under the Offer, the person below acknowledges and agrees:

• (a) to be entered on the register of members of the Company as the holder of the Performance Rights applied for, and any Shares issued on the vesting of the Performance Rights;
• (b) to be bound by the terms of the Constitution of the Company;
• (c) to be bound by the terms and conditions of the Plan;
• (d) to be bound by the terms and conditions of the Offer;
• (e) a copy of the full terms of the Plan has been provided to it;
• (f) that, by completing this Acceptance Form, it agrees to appoint the Company Secretary as its attorney to complete and execute any documents and do all acts on its behalf which may be convenient or necessary for the purpose of giving effect to the provisions of the Plan (if applicable);
• (g) that any tax liability arising from the Company accepting your application for Performance Rights under the Plan or the issue of Shares on vesting of the Performance Rights is your responsibility and not that of the Company; and
• (h) to the extent required by the terms of the Plan and the ASX Listing Rules, to enter into any necessary restriction agreement in relation to any Shares provided on the vesting of the Performance Rights and to the placing of a holding lock on those Shares.

Where an individual

SIGNED by [insert] in the presence of: )

	))
_______________________________________Signature of witness		_______________________________________Signature
_______________________________________Name of witness
Where an Australian companyEXECUTED by [INSERT COMPANY NAME]ACN ([INSERT ACN])in accordance with its constitution and in	)))
the presence of:_______________________________________Signature of director		_______________________________________Signature of director/company secretary
_______________________________________Name of director		(please delete as applicable)_______________________________________Name of director/company secretary(please delete as applicable)

* Delete if not applicable