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Red Mountain Mining Ltd ACN 119 568 106

Annual Report 30 June 2017

ACN 119 568 106 Red Mountain Mining Ltd

Contents	Page
Corporate Directory	1
Directors’ Report	2
Auditor’s Independence Declaration	20
Consolidated Statement of Profit or Loss and Other Comprehensive Income	21
Consolidated Statement of Financial Position	22
Consolidated Statement of Changes in Equity	23
Consolidated Statement of Cash Flows	24
Notes to the consolidated financial statements	25
Directors’ Declaration	61
Independent Auditor’s Report to the Members	62
Additional Shareholder Information	66

ACN 119 568 106 Red Mountain Mining Ltd

Corporate Directory

Directors

Jeremy King Non-Executive Director

Lincoln Ho Non-Executive Director

Robert Parton Non-Executive Director

Secretary

Shannon Coates

Auditor

RSM Australia Partners Level 32, Exchange Tower 2 The Esplanade Perth WA 6000

Solicitor

Bellanhouse Legal Ground floor, 11 Ventnor Avenue West Perth WA 6005

Bankers

Australia and New Zealand Banking Group Ltd 1275 Hay St West Perth WA 6005

Share Registry

Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace Perth WA 6000

Securities Exchange Listing

Australian Securities Exchange (Home Exchange: Perth, Western Australia) ASX Codes: RMX Ordinary fully paid shares RMXOF $0.048 Options expiring 31 March 2018 RMXOG $0.015 Options expiring 21 November 2019 RMXOH $0.018 Options expiring 13 December 2019

Principal registered office in Australia

Level 1, 1 Altona Street, West Perth WA 6005

Website

www.redmm.com.au

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Your Directors present their report on the Consolidated Entity (“Group”) consisting of Red Mountain Mining Ltd (“Red Mountain Mining” or “Company”) and the entities it controlled at the end of, or during, the financial year ended 30 June 2017.

Directors

The following persons were Directors of Red Mountain Mining during the financial year and to the date of this report:

Jeremy King Non-Executive Director (Appointed 19 July 2016) Jason Bontempo Non-Executive Director (Appointed 1 July 2016; Resigned 1 December 2016) Lincoln Ho Non-Executive Director (Appointed 1 July 2016) Robert Parton Non-Executive Director (Appointed 1 July 2016; Resigned 19 July 2016; Re-appointed 1 December 2016) Neil Warburton Non-Executive Chairman (Removed 1 July 2016) Jon Dugdale Managing Director (Resigned 1 July 2016) Michael Wolley Non-Executive Director (Removed 1 July 2016)

Review of Operations

During the year, Red Mountain Mining Ltd ( Red Mountain , the Company or RMX ) continued to assess opportunities consistent with its strategy of acquiring, exploring and developing gold, base and energy metal mining projects.

RED VALLEY LITHIUM BRINES PROJECT

Commentary

On 26 October 2016, the Company announced it had entered into an exploration and earn-in agreement ( Earn-In Agreement ) in respect of the Red Valley Project, a Lithium brine project located in Utah, United States ( Red Valley Project ).

Under the Earn-In Agreement, Red Mountain agreed to fund initial drilling at existing, mapped targets and conduct chemical analysis of the Red Valley Project. Following analysis of the drilling results for Lithium enrichment, Red Mountain has the right to acquire 51% of the Red Valley Project for US$250,000. Should RMX elect to proceed with the acquisition, a joint venture will be formed and the Company will have right to increase its ownership to 80% of the Red Valley Project by meeting certain expenditure requirements on the Red Valley Project. After that, the joint venture will become a contributing arrangement with customary dilution provisions. The initial drilling and analysis at each prospect at the Red Valley project was conducted during the relevant period. The Board concluded that the results of such drilling did not justify continued work, and the Company notified the earn-in partner that it would not be proceeding to acquire 51% of the project. The Company posted an environmental bond of approximately US$40,000 to the relevant regulator in Utah, and has minor remedial obligations to fulfill including re-seeding the drilled area before it can retrieve that bond amount.

MOKABE-KASIRI COBALT COPPER PROJECT

Commentary

On 21 March 2017, the Company announced it had entered into a binding exclusivity and earn-in agreement with CoCu Metals Ltd ( CoCu ) which controls 100% of the Mokabe-Kasiri Cobalt-Copper project ( Mokabe Cobalt-Copper Project ) in the Katanga Province of the Democratic Republic of Congo, Africa ( Agreement ). During the period, by mutual agreement with CoCu, the Company extended the due diligence period to 19 May 2017 before a further extension until 30 June 2017.

As announced on 22 May 2017, the Company and CoCu varied the Agreement ( Amendment Agreement ) such that the Mokabe Cobalt-Copper Project comprised a total contiguous land package of 116km[2] . This represents a more targeted approach to the Project, while preserving the optionality required for a highly prospective exploration project.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

In addition, revised earn-in terms have been agreed as part of the Amendment Agreement, representing a significant improvement from RMX’s perspective.

Pursuant to the Amendment Agreement, the Company has the right, solely at its election, to earn-in to the Project by way of incurring expenditure as follows:


Phase	Exploration Expenditure	CoCu interest	RMX interest
1	A$250,000	50%	50%
2	A$250,000	30%	70%
3	A$250,000	20%	80%

Reconnaissance exploration work including trenching and rock chip sampling work together with laboratory analysis has been undertaken in the Mokabe Cobalt-Copper Project area.

BATANGAS GOLD PROJECT

Commentary

The Batangas Gold Project (the Project ) is located 120 km south of Manila on the Island of Luzon in the Philippines. The Project is accessible by sealed road from Manila to Lobo township then by well-formed roads to the Lobo resources, 2 km to the east of Lobo, and 15 km via the coastal road to the Archangel (Kay Tanda) resources.

The Project includes two Mineral Production Sharing Agreements ( MPSA’s ), the Lobo MPSA 176-2002-IV and the Archangel MPSA 177-2002-IV, that contain all of the identified resources. In addition, the Project includes 8 granted Exploration Permits ( EP’s ) and 3 EP applications (see Figure 1 below).

On 2 December 2016, the Company advised that it had entered into a transaction with Philippines based company and 25% Batangas Gold Project joint venture partner, Bluebird Merchant Ventures Ltd ( Bluebird ), concerning RMX’s 75% interest in the Batangas Gold Project ( Agreement ).

Under the terms of the Agreement, Bluebird acquired the remaining balance of the Batangas Gold Project in exchange for 1.25 million fully paid ordinary shares in Bluebird plus a perpetual 1% net smelter production royalty over the Batangas Gold Project. Bluebird is a Philippines based company listed on the main board of the London Stock Exchange.

Furthermore, should Bluebird sell 50% or more of the Bantagas Gold Project within 12 months of settlement under the Agreement then it shall share the net proceeds of such sale with RMX on a 50/50 basis.

CORPORATE

Board Changes

On 5 May 2016, the Company received a notice under section 249D of the Corporations Act ( Section 249D Notice ) from certain requisitioning shareholders. The Section 249D Notice requisitioned a general meeting of the Company seeking removal of the then Directors of the Company ( General Meeting ). The General Meeting was held on 1 July 2016. Mr Jon Dugdale resigned immediately prior to the General Meeting, with the remaining Directors Mr Neil Warburton and Mr Michael Wolley being removed as Directors by shareholders at the General Meeting. The new Board of Messrs Lincoln Ho, Jason Bontempo and Robert Parton were then appointed as Directors.

On 19 July 2016, Mr Jeremy King was appointed as a Director of the Company and Mr Robert Parton resigned, effective immediately. On 1 December 2016, Mr Jason Bontempo resigned and Mr Parton was re-appointed as a Director.

Consolidation

On 20 September 2016, the Company’s shareholders approved a consolidation of the Company’s issued capital of one (1) share for every thirty two (32) held ( Consolidation ). The Consolidation was concluded on 26 September 2016.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Registered Office

On 31 March 2017, the Company changed its registered office to Suite 5, 62 Ord Street, West Perth WA 6000. On 18 September 2017, the Company changed its registered office to Level 1, 1 Altona Street, West Perth WA 6005.

Other Corporate Activities

During the year, the Company raised $3,775,000 (before costs) pursuant to placements to sophisticated and professional investors and an oversubscribed Share Purchase Plan ( SPP ), issuing a total of 260,455,290 fully paid ordinary shares. In addition, the Company issued 16,687,708 fully paid ordinary shares pursuant to the exercise of options.

The Company issued a further 52,333,333 fully paid ordinary shares to service providers in consideration for services provided and to Directors, as approved by shareholders.

During the year, the Company issued 15,000,000 unlisted options exercisable at $0.02 each on or before 14 October 2019, 73,413,986 listed RMXOG options exercisable at $0.015 each on or before 21 November 2019 and 45,000,000 listed RMXOH options exercisable at $0.018 each on or before 13 December 2019.

Other Activities

The Company continues to seek additional mineral projects that will deliver shareholder value and has reviewed and conducted due diligence with regard to several over the reporting period but, other than the Mokabe-Kasiri Cobalt-Copper Project, none that have been considered of sufficient merit to transact on.

Revenues and results

A summary of consolidated revenues and results is set out below:

Revenue Loss before income tax expense Income tax (expense) Loss attributable to members of Red Mountain Mining Ltd	2017 $ 2016 $
	87,333 122,070
	(27,431,610) (378,112) 243,867 (695)
	(27,187,743) (378,807)

Financial Position

The Group had a total contributed equity of $2,669,106 (2016: $25,564,936) at the end of the reporting period.

During the financial year, the Group had a net increase in contributed equity of $3,213,235 (2016: $1,518,488) net of share issue costs as a result of capital raising issuing a total of 260,455,290 fully paid ordinary shares (post-consolidation). A total of 52,333,333 fully paid ordinary shares (post-consolidation) were issued to consultants in consideration of services provided and 16,687,708 fully paid ordinary shares (post-consolidation) were issued as a result of conversion of options during the financial year.

At the end of the financial year the Group had cash balances of $2,416,752 (2016: $757,642) and net assets of $2,699,106 (2016: $25,564,936).

Total liabilities (being trade and other creditors, provisions, and tax liabilities) amounted to $264,689 (2016: $1,159,709).

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Matters subsequent to the end of the financial year

On 4 July 2017, the Company announced that the results of drilling at the Red Valley Lithium Brines project did not justify proceeding with the earn-in/acquisition of Red Valley.

On 17 July 2017, 15,625 shares were issued at $0.015 per share on exercise of RMXOG options.

On 6 September 2017, RMX announced its intention to proceed with an earn-in to acquire up to 90% of the MokabeKasiri Project with improved earn-in terms:

Issue of 14 million shares in RMX;
Payment of $70,000 on commencement of Phase 1 of exploration;
Payment of $75,000 90 days after Phase 1 of exploration commencement provided that RMX notifies CoCu Pty Ltd that it wishes to continue with the Project; and
Payment of US$100,000 on issue of Mining Licence (or equivalent) over the Project area or portion thereof.

On 6 September 2017, 66,818,182 shares were issued at $0.011 per share raising $735,000 before costs.

On 8 September 2017, 14 million shares were issued in part consideration if the revised terms of the Company’s proposed earn in of up to 90% of the Mokabe-Kasiri Project.

7,500,003 RMXOE options expired unexercised on 15 September 2017.

On 14 September 2017, RMX announced that it is to commence exploration at the Mukabe-Kasari Cobalt-Copper Project with Phase 1 exploration to focus on areas of outcropping mineralization with the objective to delineate targets for RC and Diamond follow-up drilling.

Other than as stated above, the Directors are not aware of any other subsequent matters.

Outlook

The Board shall continue its work to optimise the Company’s Projects as well as assessing opportunities for additional mineral projects that will deliver shareholder value.

No other matter or circumstance has arisen since 30 June 2017 that has significantly affected, or may significantly affect:

(a) the Consolidated Entity’s operations in future financial years, or
(b) the results of those operations in future financial years, or
(c) the Consolidated Entity’s state of affairs in future financial years.

Information on Directors

Jeremy King LLB (Appointed 19 July 2016)

Non-Executive Director

Jeremy is a corporate advisor and lawyer with over 10 years’ experience in domestic and international legal, financial and corporate matters. He spent several years in London where he worked with Allen & Overy LLP and Debevoise & Plimpton LLP and has extensive corporate experience, particularly in relation to cross-border private equity, leveraged buy-out acquisitions and acting for banks, financial institutions and corporate issuers in respect of various debt and equity capital raisings.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Jason Bontempo BComm, CA (Appointed 1 July 2016; Resigned 1 December 2016)

Non-Executive Director

Jason has worked in investment banking and corporate advisory since qualifying as a Chartered Accountant with Ernst & Young in 1997. He has worked for investment banks in Australia and the UK and has been closely involved with the advising and financing of companies in the resources industry specialising in asset sales and AIM | ASX listings. Mr Bontempo is a former director of Glory Resources Limited, Matrix Metals Limited and Chameleon Mining NL.

Lincoln Ho B.Optom A.Mus.A (Appointed 1 July 2016)

Non-Executive Director

With a background in equities trading for over 8 years, Lincoln is the founding director of a private boutique corporate advisory firm in Australia. He has wide knowledge and experience in corporate restructure, mergers and acquisitions. Lincoln has the ability to negotiate deals across local & overseas markets, working in conjunction with experienced corporate financiers across the emerging caps space. In particular, Lincoln has a focus on a network of industry and finance contacts across South-East Asia.

Robert Parton CPA (Appointed 1 July 2016; Resigned 19 July 2016; Re-appointed 1 December 2016)

Non-Executive Director

Commencing in 1987, Robert spent 20 years providing business analysis and management at companies including BHP, Kraft Foods, Crane Group, Mitre 10 and PDL Electronics (part of the Schneider Electric Group). Since 2.006, Robert has been providing corporate advisory services utilising his extensive experience in business management, project evaluation and capital-raising across various sectors including real estate, cleantech, IT and manufacturing. He has been involved in transaction management from sourcing,analysis and due diligence evaluation through to settlement and is a qualified accountant with over 20 years' membership with CPA Australia.

Neil Warburton Assoc MinEng WASM, MAUSIMM, FAICD (Removed 1 July 2016)

Non-executive Chairman

Neil Warburton has worked within the Mining Industry throughout his entire career in roles ranging from corporate nonexecutive directorships to managing large mining and contracting companies. This experience covers gold and base metal mining.

Neil was until March 2012, the Chief Executive Officer of Barminco Limited, one of Australia’s largest underground mining contractors. Neil successfully guided and grew the company both within Australia and Africa with revenues having more than doubled during his tenure.

Before joining Barminco, he was Managing Director of Coolgardie Gold.

Neil graduated from the Western Australia School of Mines with an Associate Degree in Mining Engineering, is a Fellow of the Australian Institute of Company Directors and Member of the Australian Institute of Mining and Metallurgy.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Jon Dugdale BSc (Hons 1), FAUSIMM, MAICD (Resigned 1 July 2016)

Managing Director

Jon was appointed as Managing Director effective 1 April 2013 after having joined the Board on 30 October 2012 as an Executive Director. The transition to Managing Director was part of the acquisition of the gold and copper gold assets from Mindoro Resources Ltd, where he was former President and CEO.

Jon graduated as a geologist with first class honours from the University of Melbourne in 1986 and has 29 years mining and investment experience in Australia and the Asian region. Before Mindoro, Jon spent four years with Asian Lion, part of the Lion Selection Group, as an investment manager and analyst focussed on valuation and investment in mining projects in the Asian region.

With MPI Mines from 1993 to 2004, Jon was involved with the exploration and development of several discoveries made by the MPI exploration team, including direct involvement in the 1 million ounce Golden Gift discovery at Stawell, Victoria for which he jointly received the Joe Harmes Medal for excellence in mineral exploration and contributions to the discovery of ore deposits.

Jon’s early career from 1986 to 1993 was with Western Mining Corporation in gold and nickel exploration and mine geology at Kambalda and Leinster in WA and in far north Queensland.

Michael Wolley BE, MM, MAICD (Removed 1 July 2016)

Non-executive Director

Michael is a senior executive with Todd Corporation and has a depth of experience in the resources and industrial sectors in both Australia and internationally.

Michael was recently Managing Director of a junior gold development business, Golden Iron Resources, and prior to that was Chief Operating Officer for Lynas Corporation, an ASX 100 company that is a vertically integrated mining and minerals business with mining and processing facilities in Western Australia and downstream processing in Malaysia. Prior to Lynas Corporation, Michael held senior executive roles with industrial and construction services businesses across Asia Pacific including the position of Managing Director Asia Pacific for a refrigeration and climate control business and as President BlueScope Steel China. Prior to joining BlueScope Steel, Michael was General Manager Operations for Dexion, a business servicing the logistics industry across Asia Pacific. He began his career with Mobil Oil Australia and over a 15 year period held senior roles in engineering, production and planning across Australia and New Zealand.

Michael holds a first class honours degree in Chemical and Materials Engineering from Auckland University and a Masters of Management from Macquarie Graduate School of Management. Michael is a Member of both the Australian and New Zealand Institutes of Company Directors.

Shannon Coates LLB, ACS, GAICD

Company Secretary

Ms Coates completed a Bachelor of Laws through Murdoch University in 1993 and has since gained over 20 years’ inhouse experience in corporate law and compliance for public companies. She is a Chartered Secretary and an Associate Member of both the Institute of Chartered Secretaries & Administrators and the Governance Institute of Australia. She is also a graduate of the Australian Institute of Company Directors.

Ms Coates is a Director of Evolution Corporate Services, a boutique corporate advisory services company and is also company secretary to a number of ASX listed companies.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Directorships of other listed companies

Directorships of other listed companies held by Directors in the 3 years immediately before the end of the financial year are as follows:

are as follows:
Name	Company	Period of Directorship
Jeremy King	Pure Mineral Limited Transcendent Technologies Limited DTI Group Limited Smart Parking Limited Cott Oil and Gas Limited Plukka Limited	July 2017 to date June 2016 to date June 2011 to date August 2012 to date February 2016 to date March 2012 to December 2015
Lincoln Ho	Pure Minerals Limited	July 2017 to date
Robert Parton	Pure Minerals Limited Directmoney Limited (formerly Basper Limited) Telesso Technologies Limited Motopia Limited Lanka Graphite Limited (formerly Viculus Limited)	October 2016 to date October 2014 to July 2015 January 2014 to June 2015 November 2013 to June 2015 January 2012 to January 2014

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Directors’ interests in shares and options

As at the date of this report, the interests of the Directors in the shares and options of the Company were:

	Ordinary Shares	Ordinary Shares	Options Shares	over Ordinary	Performance Rights	Performance Rights
	Direct	Indirect	Direct	Indirect	Direct	Indirect
JeremyKing	-	9,000,0001	-	10,000,0001	-	-
Lincoln Ho	-	3,000,0002	-	2,500,0002	-	-
Robert Parton	-	-	-	-	-	-

Shares and Options held by Bushwood Nominees Pty Ltd, of which Mr King is a director.
Shares and Options held by Saltus Corporate Pty Ltd < LLPMH Investment Trust.>. Mr Ho is a director of the trustee and beneficiary of the fund.

Directors’ Remuneration

Please refer to the Remuneration Report for information relating to the Directors’ remuneration for the financial year.

Meetings of Directors

The number of Directors’ meetings (including meetings of Committees of Directors) and number of meetings attended by each of the Directors of the Company during the financial year were as follows. The Directors meet frequently and have conference calls on an informal basis to discuss all matters associated with investment strategy, review of operations, and other Company matters. During the period, in order to save costs (with two of three directors situated in Melbourne), much of the Company’s business has been conducted by circular resolution.

Director	Board	Board	Audit and Risk Committee8	Audit and Risk Committee8	Nomination and Remuneration Committee9	Nomination and Remuneration Committee9	Sustainability Committee10	Sustainability Committee10
	A	B	A	B	A	B	A	B
Jeremy King1	2	2	-	-	-	-	-	-
Jason Bontempo2	-	-	-	-	-	-	-	-
Lincoln Ho3	2	2	-	-	-	-	-	-
Robert Parton4	2	2	-	-	-	-	-	-
Neil Warburton5	-	-	-	-	-	-	-	-
Jon Dugdale6	-	-	-	-	-	-	-	-
Michael Wolley7	-	-	-	-	-	-	-	-

A - denotes the number of meetings attended
B - denotes the number of meetings held during the time the Director held office or was a member of the Committee during the year.
Appointed as a Director 19 July 2016.
Appointed as a Director 1 July 2016, resigned 1 December 2016.
Appointed as a Director 1 July 2016.
Appointed as a Director 1 July 2016, resigned 19 July 2016, re-appointed 1 December 2016.
Removed as a Director 1 July 2016.
Resigned as a Director 1 July 2016.
Removed as a Director 1 July 2016.
From 1 July 2016, the full Board assumed the duties of the Audit and Risk Committee in accordance with the committee charter.
From 1 July 2016, the full Board assumed the duties of the Nomination and Remuneration Committee in accordance with the committee charter.
From 1 July 2016, the full Board assumed the duties of the Sustainability Committee in accordance with the committee charter.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Shares and options on issue

At the date of this report, the Company has 511,352,320 (post consolidation) fully paid ordinary shares on issue.

The following options over ordinary shares and performance rights in the Company were on issue at the date of this report, on a post consolidation basis:

Options	Date of Expiry	Exercise Price AUD	Number
Listed Options – RMXOF	31 March 2018	$0.0.048	44,761,867
Listed Options – RMXOG	21 November 2019	$0.015	67,210,653
Listed Options – RMXOH	13 December 2019	$0.018	37,000,000
Unlisted Options	24 December 2018	$0.096	1,093,750
Unlisted Options	14 October 2019	$0.02	12,500,000

No option holder has any right to participate in any other share issue of the Company or any other entity.

During the financial year, 260,455,290 fully paid ordinary shares (post-consolidation) were issued in conjunction with capital raisings. A further 38,333,333 fully paid ordinary shares (post-consolidation), 40,000,001 RMXOG options (postconsolidation) exercisable at $0.015 each on or before 21 November 2017 and 45,000,000 RMXOH Options (postconsolidation) exercisable at $0.0018 each on or before 13 December 2019 were issued to consultants in lieu of services provided to the Company. 14,000,000 fully paid ordinary shares (post-consolidation) and 15,000,000 unlisted options (post-consolidation) exercisable at $0.02 each on or before 14 October 2019 were issued to Directors, as approved by shareholders. 33,413,985 RMXOG options (post-consolidation) exercisable at $0.015 each on or before 21 November 2017 were issued pursuant to the Loyalty Options Offer as approved by shareholder. A total of 16,687,708 options of various classes were exercised during the year.

Performance Rights granted during the year

During the financial year 20,050,500 performance rights as share based payments (pre-consolidation) were cancelled. Refer Notes 13 and 17.

No performance rights were issued during the year.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

The following Performance Rights were granted/(cancelled) during the year, on a pre-consolidation basis:

Performance rights	Number issued/ (cancelled)	Grant date/ Cancellation date	Vesting date	Expiry date	Fair value per performance right ($)S	Total value at grant date ($)	Underlying security spot price ($)
Class A	(1,500,000)	11/08/2016	Subject to vesting conditions	18/11/2016	0.019	28,500	0.004
Class B	(2,250,000)	11/08/2016	Subject to vesting conditions	18/11/2017	0.018	40,500	0.004
Class C	(2,250,000)	11/08/2016	Subject to vesting conditions	18/11/2018	0.016	28,518	0.002
Class F	(4,683,500)	11/08/2016	Subject to vesting conditions	01/12/2017	0.004	10,010	0.004
Class H	(4,683,500)	11/08/2016	Subject to vesting conditions	01/12/2017	0.004	10,010	0.004
Class I	(4,683,500)	11/08/2016	Subject to vesting conditions	01/12/2018	0.002	3,087	0.002

Performance Rights A,B,C,F,H and I were cancelled upon the resignation of Mr Geoff Boswell as of 11 August 2016 and in accordance with the terms and conditions of the recipient remaining an employee/director of the Company. Performance Rights that do not vest in accordance with their terms and conditions have automatically lapsed.

On 1 July 2016, 59,800,000 performance rights lapsed upon the resignation of Directors Jon Dugdale, Neil Warburton and Michael Wolley. At 11 August 2016, 20,050,500 performance rights lapsed upon the resignation of Geoff Boswell. Refer Note 17.

Share-based payments

Options without market based vesting conditions can be exercised at any time following vesting up to expiry date, and as such are more suitable valued using a Black scholes option valuation model. Option pricing models assume that the exercise of an option does not affect the value of the underlying asset. There were 45,000,000 options (post-consolidation) exercisable at $0.018 each on or before 13 December 2019, granted as share-based payments during the year.

Dividends

No dividends were paid to members during the financial period and the Directors do not recommend the payment of a dividend.

Proceedings on behalf of the Company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001 .

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

REMUNERATION REPORT (AUDITED)

The Directors of Red Mountain Mining present the Remuneration Report which has been audited as required by section 308 (3C) of the Corporations Act 2001. Information regarding the remuneration of key management personnel (Key Management Personnel) is required by Corporations Regulations 2M.3.03. Key Management Personnel are those individuals who have the authority and responsibility for planning, directing and controlling the activities of the Company and the Group.

The Remuneration Report covers the following matters:

a. Directors and Key Management Personnel disclosed;
b. Remuneration governance;
c. Principles used to determine the nature and amount of remuneration;
d. Executive service agreements;
e. Details of remuneration;
f. Share-based remuneration; and
g. Other information.
(a) Directors and Key Management Personnel disclosed

Key Management Personnel include the following Non-Executive Directors, Executive Director, and Senior Executives who were in office during or since the end of financial year 2017:

(i) Non-Executive Directors Jeremy King Non-executive Director (Appointed 19 July 2016) Jason Bontempo Non-executive Director (Appointed 1 July 2016, resigned 1 December 2016) Lincoln Ho Non-executive Director (Appointed 1 July 2016) Robert Parton Non-executive Director (Appointed 1 July 2016, resigned 19 July 2016, reappointed 1 December 2016) Neil Warburton Non-executive Chairman (Removed 1 July 2016) Michael Wolley Non-executive Director (Removed 1 July 2016)

(ii) Executive Directors

Jon Dugdale Managing Director (Resigned 1 July 2016)

(iii) Other Key Management Personnel Geoff Boswell Country Manager – Philippines (Resigned 11 August 2016)

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

(b) Remuneration governance

Nomination and Remuneration Committee

From 1 July 2016, the full Board assumed the responsibilities of the Nomination and Remuneration Committee in accordance with its Charter.

The Nomination and Remuneration Committee is primarily responsible for making recommendations to the Board on:

the over-arching remuneration framework;
operation of the incentive plans which apply to the Executive team, including key performance indicators and performance hurdles;
remuneration levels of executive Directors and other Key Management Personnel; and
• Non-executive Director fees.

The Committee’s objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term interests of the Group.

(c) Principles used to determine the nature and amount of remuneration

The principles of the Group’s executive strategy and supporting incentive programs and frameworks are:

motivating senior executives to pursue the long-term growth and success of the Group;
demonstrating a clear relationship between senior executives’ performance and remuneration;
attracting and retaining senior executives and Directors; and
not paying excessive remuneration.

Red Mountain Mining has structured a remuneration framework that is market competitive and complementary to the reward strategy of the Group. The remuneration packages are reviewed annually by the Nomination and Remuneration Committee (or the Board in accordance with the Nomination and Remuneration Committee Charter) and evaluation is based on specific criteria including business performance of the Company (e.g. share price, market capitalisation, performance against budget) and its subsidiaries, whether Company objectives are being achieved and the development of management and personnel. The remuneration structure that has been adopted by the Group consists of the following components:

fixed remuneration being annual salary;
short term incentives, being cash bonuses and
long term incentives, being employee share schemes.

Executive Directors’ remuneration has been structured to reflect short and long-term performance objectives appropriate to the Group’s circumstances and Company objectives.

Executive Directors’ and senior executives’ remuneration packages involve a balance between fixed and incentive-based pay, reflecting short and long-term performance objectives appropriate to the Group’s circumstances and strategic objectives.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Non-Executive Directors’ remuneration has been formulated with regard to the following guidelines:

Non-Executive Directors will be remunerated by way of fees, in the form of cash, non-cash benefits, superannuation contributions or equity (being shares, options, performance rights and other share-based payments. Refer to section (f) of the Remuneration Report for share based payment detail), usually without participating in schemes designed for the remuneration of executives;
Non-Executive Directors will not be provided with retirement benefits other than superannuation;
no Director is involved in setting their own remuneration or terms and conditions and in such a case relevant Directors are required to be absent from the full Board discussion;
Non-Executive Directors do not have other responsibilities incurring fees beyond the Director fees; and
the maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at the Annual General Meeting is currently set at $500,000.

Use of remuneration consultants

The Group did not engage external remuneration consultants for the financial year ended 30 June 2017 but conducted reviews of similar sized peer group companies.

Consequences of performance on shareholder wealth

In considering the Group’s performance and benefits for shareholder wealth, the Board has regard to the following indices in respect of the current financial year and the previous four financial years:

	2017	2016	2015	2014	2013
EPS (cents)	(2.63)	(0.004)	(0.19)	(0.42)	(2.80)
Dividends (cents per share)	-	-	-	-	-
Net (loss)	(27,187,743)	(378,807)	(1,533,578)	(2,444,927)	(4,249,630)
Closing share price (cents)	0.024	0.1	0.3	1.0	0.8
Change in share price during the year (cents)	(0.076)	(0.2)	(0.7)	0.2	(7.2)

Company performance and link to remuneration

The remuneration policy has been tailored to increase goal congruence between shareholders, Directors and executives.

During the year ended 30 June 2017, a total of 20,050,500 Performance Rights (pre-consolidation) held by Geoff Boswell, issued in previous years were cancelled upon his resignation. Refer note 17.

(d) Service agreements

All Non-Executive Directors were appointed by a letter of appointment. Directors can retire in writing as set out in the Constitution.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

(e) Details of remuneration

Director and other Key Management Personnel Remuneration

Details of the nature and amount of each element of the remuneration of each Key Management Personnel of Red Mountain Mining are shown in the table below:

Name	Year	Short term benefits, cash salary and fees	Superannu- ation ($)	Other benefits	Other benefits	Termina- tion payments	Share-based payments	Total	% of Remuneratio n which is performance based
		($)		($)			Options and Performance Rights	($)
				Annual Leave	Long Service Leave		($)
J King1	2017	110,100	-	-	-	-	282,911	393,011	72.0%
J King	2016	-	-	-	-	-	-	-	-
L Ho3	2017	31,000	-	-	-	-	70,478	101,478	69.5%
L Ho	2016	-	-	-	-	-	-	-	-
R Parton4	2017	14,000	-	-	-	-	-	14,000	0.0%
R Parton	2016	-	-	-	-	-	-	-	-
J Bontempo2	2017	19,000	-	-	-	-	71,478	90,478	79.0%
J Bontempo	2016	-	-	-	-	-	-	-	-
J Dugdale6	2017	-	-	-	-	-	-	-	-
J Dugdale	2016	305,552	26,499	18,984	-	65,000(^)	-(+)	416,035	-
N Warburton5	2017	-	-	-	-	-	-	-	-
N Warburton	2016	57,600	-	-	-	-	-	57,600	-
M Wolley7	2017	-	-	-	-	-	-	-	-
M Wolley	2016	28,000	-	-	-	-	-	28,000	-
G Boswell8	2017	-	-	-	-	-	(120,265)	(120,265)	-
G Boswell	2016	288,579	19,368	6851	-	-	127,906	442,704	29.0%
Total	2017	174,100	-	-	-	-	304,602	478,702
Total	2016	679,731	45,867	25,835	-	65,000	127,906	944,339

Appointed as a Director 19 July 2016.
Appointed as a Director 1 July 2016, resigned 1 December 2016.
Appointed as a Director 1 July 2016.
Appointed as a Director 1 July 2016, resigned 19 July 2016, re-appointed 1 December 2016.
Removed as a Director 1 July 2016.
Resigned as a Director 1 July 2016.
Removed as a Director 1 July 2016.
Resigned 11 August 2016. Performance Rights A,B,C,F,H and I were cancelled upon the resignation of Mr Geoff Boswell as of 11 August 2016 and in accordance with the terms and conditions of the recipient remaining an employee/director of the Company. The total value of cancelled Performance Rights included in the current financial year accounts is ($120,625).

^ The termination payment to Mr Dugdale has been included in his remuneration for the year ended 30 June 2016 and paid on 1 July 2016 as Mr Dugdale had notified the Company of his intention to resign and that the termination payment/cancellation were negotiated at 30 June 2016.

Performance Rights issued to Jon Dugdale during the year were cancelled upon his resignation.

Performance Rights issued as performance incentives as of 30 June 2017 are described in (f).

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

The proportion of remuneration linked to performance and the fixed proportion are as follows:

Name	Year	Fixed Remuneration	At-risk – STI	At-risk – LTI
J King1	2017	28%	-	72%
J King	2016	-	-	-
L Ho3	2017	31%	-	69%
L Ho	2016	-	-	-
R Parton4	2017	100%	-	-
R Parton	2016	-	-	-
J Bontempo2	2017	21%	-	79%
J Bontempo	2016	-	-	-
J Dugdale6	2017	-	-	-
J Dugdale	2016	100%	-
N Warburton5	2017	-	-	-
N Warburton	2016	100%	-	-
M Wolley7	2017	-	-	-
M Wolley	2016	100%	-	-
G Boswell8	2017	-	-	-
G Boswell	2016	71%	-	29%

(f) Share-based remuneration

Details of share-based payments in the Company held during the financial year by each Key Management Personnel, including their personally related parties, are set out below, on a pre-consolidation basis.

(fa) Performance Rights issued as remuneration to Key Management Personnel during 2017 financial year

No Performance Rights were granted during the year to Key Management Personnel.

(fb) Options as remuneration to Key Management Personnel

As detailed in the table below, 15,000,000 options were granted as remuneration to Key Management Personnel for 2017 (2016: nil). Directors paid a cash consideration of $0.0001 per option.

	Options Jeremy King Lincoln Ho Jason Bontempo	Number granted Grant date Value each at grant date ($) Number vested Number lapsed/ cancelled Exercise price Last exercise date
		10,000,000 20/09/2016 0.027 10,000,000 - 0.02 14/10/2019 2,500,000 20/09/2016 0.027 2,500,000 - 0.02 14/10/2019 2,500,000 20/09/2016 0.027 2,500,000 (2,500,000) 0.02 14/10/2019

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

(fc) Shares as remuneration to Key Management Personnel

As per the table below, 14,000,000 shares were granted as remuneration to Key Management Personnel for financial years 2017 (2016: nil). Directors paid a cash consideration of $0.0001 per share.

Options Jeremy King Lincoln Ho Jason Bontempo	Number granted Grant date Value each at grant date ($)
	9,000,000 20/09/2016 0.001 2,000,000 20/09/2016 0.001 3,000,000 20/09/2016 0.001

Equity instrument disclosures relating to Key Management Personnel

Share holdings

The numbers of shares in the Company held during the financial year by each Director of Red Mountain Mining and other Key Management Personnel of the Group, including their personally related parties, are set out below on a preconsolidation basis.

consolidation basis.	consolidation basis.
2017 Name		Balance at the start of the year	Received during the year on the exercise of options	Granted as remuneration (i)	Other changes during the year1	At resignation/ appointment	Balance at the end of the year
	*Directors*
J King L Ho J Bontempo(iii) N Warburton(ii) R Parton M Wolley(ii) J Dugdale		- - - 51,909,641 - - 25,000,000	- - - - - - -	9,000,000 2,000,000 3,000,000 - - - -	- - - - - - -	- - (3,000,000) (51,909,641) - - (25,000,000)	9,000,000 2,000,000 - - - - -

(i) Directors paid a cash consideration of $0.0001 per share.

(ii) Removed as Director 1 July 2016

(iii) Appointed as a Director 1 July 2016, resigned 1 December 2016.

Options

The numbers of options over ordinary shares in the Company held during the financial year by each Director of Red Mountain Mining and other Key Management Personnel of the Group, including their personally related parties, are set out below, on a pre-consolidation basis.

2017 Name	2017 Name	Balance at the start of the year	Granted as remuneration (i)	Exercise of options	Bought & (Sold)/ (Cancelled)	Balance at the end of the year	Total number at resignation/ appointment	Total number of options vested	Total number of options exercisable
	*Directors*
J King L Ho J Bontempo (iii) N Warburton (ii) R Parton M Wolley (ii) J Dugdale		- - - 10,381,930 - - 5,000,000	10,000,000 2,500,000 2,500,000 - - - -	- - - - - - -	- - - - - - -	10,000,000 2,500,000 - - - - -	- - (2,500,000) (10,381,930) - - (5,000,000)	10,000,000 2,500,000 - - - - -	10,000,000 2,500,000 - - - - -

(i) Directors paid a cash consideration of $0.0001 per option.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

(ii) Removed as Director 1 July 2016

Performance Rights

No Performance Rights in the Company were held during the financial year by each Director of Red Mountain Mining and other Key Management Personnel of the Group. Refer Notes 13 and 17.

(g) Other information

(i)

There have been no transactions during the financial year or prior year to Directors and other Key Management Personnel and their related parties of Red Mountain Mining Ltd or the Consolidated Entity, other than Director’s remuneration.

(ii) Amounts outstanding and payable to related parties at 30 June Director fees payable to Bushwood Nominees, an entity related to Mr Jeremy King Director fees payable to TPG Australasia Pty Ltd, an entity related to Mr Robert Parton Salary and related fees payable to Underhill & Associates Ltd, an entity related to Mr Geoff Boswell	2017 2016 $ $
	10,000 - 2,200 - - 20,840

(iii)

No loans have been made to any Director or any of their related parties, during the year or prior year. There were no further transactions with Directors including their related parties, not disclosed above.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Voting and Comments at the Company’s 2016 Annual General Meeting

The adoption of the Remuneration Report for the financial year ended 30 June 2016 was put to the shareholders of the Company at the Annual General Meeting held on 15 November 2016. The resolution was passed unanimously without amendment on a show of hands. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration policies.

Hedging of securities

In accordance with the Group’s general share trading policy and Employee Share Option Plan rules, participants are prohibited from engaging in hedging arrangements over unvested securities issued pursuant to any employee or Director share plan.

END OF AUDITED REMUNERATION REPORT

Environmental regulations

The operations of the Group are not subject to any particular and significant environmental regulations under a law of the Commonwealth or state. There have been no known significant breaches of any other environmental requirement.

The National Greenhouse and Energy Reporting Act (NGER) legislation was considered and not determined to be applicable to the entity at the current stage.

Indemnities given and insurance premiums paid to officers and auditors

During the year, Red Mountain Mining paid a premium to insure officers of the Group. The officers of the Group covered by the insurance policy include all Directors.

The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnity any current or former officer or auditor of the Group against a liability incurred as such by an officer or auditor.

Non-audit services

Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 15 to the financial statements. The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

The Directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit services have been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and none of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board.

Auditor’s Independence Declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is included within the financial report.

This report is made in accordance with a resolution of the Directors.

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Jeremy King Non-Executive Director

Perth, Western Australia 29 September 2017

Red Mountain Mining Annual Report – 30 June 2017

==> picture [117 x 62] intentionally omitted <==

RSM Australia Partners

Level 32, Exchange Tower 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111

www.rsm.com.au

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Red Mountain Mining Ltd for the year ended 30 June 2017, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.

==> picture [73 x 38] intentionally omitted <==

Perth, WA Dated: 29 September 2017

RSM AUSTRALIA PARTNERS

==> picture [101 x 46] intentionally omitted <==

TUTU PHONG Partner

THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING

RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each memb er of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036

Liability limited by a scheme approved under Professional Standards Legislation

Red Mountain Mining Ltd and its controlled entities

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME as at 30 June 2017

COMPREHENSIVE INCOME as at 30 June 2017
Notes Revenue from continuing operations 2 Consultancy costs Depreciation expense 2 Employee benefits expenses 2 Exploration consulting costs Finance cost 2 Gain on disposal of subsidiary 2 Exploration asset write off expense 6 Impairment of other assets Disposal of exploration assets 2,6 Legal fees Loss on financial instrument revaluation 5 Net foreign exchange loss 2 Other expenses Professional fees Share-based payment expenses 2,17 Travelling expenses Loss before income tax Income tax benefit/(expense) 3 Net loss after income tax for the year Other comprehensive income: Items that may be reclassified to profit or loss: Revaluation of the Philippines Exchange differences on translation of foreign operations Other comprehensive income/(loss) for the year Total comprehensive income/(loss) for the year (net of tax) Profit/(Loss)attributable to: Members of the parent entity Non-controlling interest Total Comprehensive income/(loss) attributable to: Members of the parent entity Non-controlling interest Basic and diluted loss per share attributable to members of Red Mountain Mining Ltd 19	2017 $ 2016 $
	87,333 122,070 (305,724) (308,778) (5,117) (37,988) (197,855) (551,877) - (2,164) (1,773) (51,042) 191,153 2,370,951 (505,661) (121,436) (219,702) - (24,614,713) - (28,368) (147,354) (283,305) (320,922) (138,889) (112,827) (689,893) (448,416) (401,076) (352,214) (301,342) (399,750) (16,678) (16,365)
	(27,431,610) (378,112)
	243,867 (695)
	(27,187,743) (378,807)
	(1,018) - (418,892) (168,820)
	(419,910) (168,820)
	(27,607,653) (547,627)
	(26,953,068) (61,806) (234,675) (317,001)
	(27,187,743) (378,807)
	(25,585,205) (56,031) (2,022,448) (491,596)
	(27,607,653) (547,627)
	Cents Cents (2.63) (0.004)

The above Consolidated Statement of Profit or Loss and other Comprehensive Income should be read in conjunction with the accompanying notes.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2017

Notes Current assets Cash and cash equivalents 4 Trade and other receivables 5 Available for sale financial assets 5 Total current assets Non-current assets Exploration & evaluation expenditure 6 Plant and Equipment 7 Total non-current assets Total assets Current liabilities Trade and other payables 8 Provisions 9 Current tax liability 11 Total current liabilities Non-Current liabilities Other non-current liabilities 10 Total non-current liabilities Total liabilities Net assets Equity Contributed equity 12 Reserves 13 (a) Accumulated losses 13 (b) Capital & reserves attributable to the owners of Red Mountain Mining Ltd Non-controlling interest Total equity	2017 $ 2016 $
	2,416,752 757,642 160,196 203,744 256,914 607,238
	2,833,862 1,568,624
	99,171 25,149,974 762 6,047
	99,933 25,156,021
	2,933,795 26,724,645
	264,689 663,898 - 61,189 - 252,616
	264,689 977,703
	- 182,006
	- 182,006
	264,689 1,159,709
	2,669,106 25,564,936
	38,986,385 35,773,150 10,373,269 7,506,816 (44,256,531) (17,303,463)
	5,103,123 25,976,503
	(2,434,017) (411,567)
	2,669,106 25,564,936

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the financial year ended 30 June 2017

Note Consolidated Group Balance at 30 June 2015 Loss for the year Other comprehensive income/(loss) Total comprehensive income/(loss) for the year Transactions with owners in their capacity as owners: Prior period adjustment Contributions of equity, net of transaction costs Share based payment 13,17 Issue of options 13,17 Balance at 30 June 2016 Loss for the year Other comprehensive income/(loss) Total comprehensive income/( loss) for the year Transactions with owners in their capacity as owners: Cancellation of performance rights 13,17 Contributions of equity, net of transaction costs Share based payment 13,17 Issue of options 13 Balance at 30 June 2017	Contributed equity $ Accumulated losses $ Foreign currency translation reserve $ Share- based payments reserve $ Other reserves $ Total $ Non- Controlling interest $ Total $
	34,254,662 (17,542,854) 3,563,595 3,368,744 44,666 23,688,813 80,029 23,768,842
	- (61,806) - - - (61,806) (317,001) (378,807) - - 732 - 5,039 5,771 (174,595) (168,824)
	- (61,806) 732 - 5,039 (56,035) (491,596) (547,631) - 301,197 - (301,197) - - - - 1,518,488 - - - - 1,518,488 - 1,518,488 - - - 40,289 - 40,289 - 40,289 - - - 784,948 - 784,948 - 784,948
	35,773,150 (17,303,463) 3,564,327 3,892,784 49,705 25,976,503 (411,567) 25,564,936
	- (26,953,068) - - - (26,953,068) (234,677) (27,187,745) - - 1,368,881 - (1,018) 1,367,863 (1,787,773) (419,910)
	- (26,953,068) 1,368,881 - (1,018) (25,585,205) (2,022,450) (27,607,655) - - - (120,625) - (120,625) - (120,625) 3,213,235 - - - - 3,213,235 - 3,213,235 - - - 1,544,300 - 1,544,300 - 1,544,300 74,915 74,915 74,915
	38,986,385 (44,256,531) 4,933,208 5,391,374 48,687 5,103,123 (2,434,017) 2,669,106

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes

Red Mountain Mining Annual Report – 30 June 2016

Red Mountain Mining Ltd and its controlled entities

CONSOLIDATED STATEMENT OF CASH FLOWS

for the financial year ended 30 June 2017

Notes Cash flows from operating activities Other receipts Payments to employees and suppliers Interest received Interest paid Net cash (outflows) from operating activities 18 Cash flows from investing activities Payment for new projects Payment for exploration properties JV related cash inflows Research and development claim received 6 Net cash (outflows) from investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds from issue of options Share issue costs Net cash inflows from financing activities Net increase in cash held Cash at the beginning of the year Effect of exchange rate changes on Cash & Cash equivalents Cash at the end of the year 4	2017 $ 2016 $
	- 49,283 (1,658,061) (1,661,200) 37,880 81,743 - (50,000)
	(1,620,181) (1,580,174)
	(99,171) - (505,661) (1,454,751) - 917,466 - 336,943
	(604,832) (200,342)
	4,066,016 2,163,049 74,915 - (252,190) (220,694)
	3,888,741 1,942,355
	1,663,728 161,839 757,642 594,528 (4,618) 1,275
	2,416,752 757,642

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies

These financial statements are general purpose financial statements, which have been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations and comply with other requirements of the law.

The financial statements comprise the consolidated financial statements for the Group. For the purposes of preparing the consolidated financial statements, the Company is a for-profit entity.

The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated. This financial report is for the Group consisting of Red Mountain Mining Ltd and its controlled entities.

This financial report is presented in Australian dollars.

A description of the nature of the Consolidated Entity’s operations and its principal activities is included in the Directors’ Report, which is not part of this financial report.

The financial report was authorised for issue by the Directors on 29 September 2017. The Company has the power to amend and reissue the financial report.

Red Mountain Mining Limited (“Red Mountain Mining” or the “Company”) is a limited company incorporated in Australia. The address of its registered office is Level 1, 1 Altona Street, West Perth WA 6005.

Statement of Compliance

Red Mountain Mining is a for-profit entity. These financial statements are general purpose financial statements which have been prepared in accordance with International Financial Reporting Standards (IFRS), other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

These financial statements comprise the consolidated financial statements of Red Mountain Mining and its controlled entities (“the Group”).

Basis of preparation of the financial report

The consolidated financial statements have been prepared on the basis of historical cost convention and the accrued basis, as explained in the accounting policies below.

Adoption of New and Revised Accounting Standards

The Company has adopted all the new and revised Standards that are relevant to its operations and effective for the reporting period starting from 1 July 2016.

At the date of authorisation of the financial statements, the Company has not applied the new Standards and Interpretations that were in issue but not yet effective.

Significant accounting estimates and judgements

(i) Significant accounting judgments

The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies (continued)

(ii) Exploration and evaluation assets

The Group’s accounting policy for exploration and evaluation expenditure is set out in Note 6. The application of this policy necessarily requires management to make certain estimates and assumptions as to future events and circumstances, in particular, the assessment of whether economic quantities of reserves are found. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised expenditure under this policy, the Directors conclude that the Group is unlikely to recover the expenditure by future exploration or sale, then the relevant capitalised amount will be written off to profit or loss.

(iii) Share-based payment transactions

The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of options issued is determined by using BlackScholes valuation model taking into account the terms and conditions upon which the instruments were granted. For performance rights issued, the fair value is determined by using the share price on grant date taking into account the probability of meeting the market based conditions at grant date. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.

Basis of consolidation

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Company as at 30 June 2017 and the results of all controlled entities for the financial year then ended. The Company and its controlled entities together are referred to in this financial report as the Group or the Consolidated Entity.

Subsidiaries are all those entities (including special purpose entities) over which the parent entity has control if it is exposed, or has rights, to variable returns from its involvement with the subsidiaries and has the ability to affect those returns through its power over the subsidiaries, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies (continued)

Intercompany transactions, balances and unrealised income and expenses on transactions between Group companies are eliminated in preparing the consolidated financial statements. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Foreign currency translation

Both the functional and presentation currency of Red Mountain Mining Ltd and its subsidiaries is Australian dollars.

Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date.

All exchange differences in the consolidated financial report are taken to profit or loss with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss.

Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

The functional currency of the foreign operations, Red Mountain Mining (Singapore) Pte Ltd is USD, Red Mountain (Hong Kong) Holdings is HKD and RMX USA Corporation is USD.

As at the reporting date, the assets and liabilities of these subsidiaries are translated into the presentation currency of Red Mountain Mining Ltd at the rate of exchange ruling at the reporting date and income and expense items are translated at the average exchange rate for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used.

The exchange differences arising on the translation are taken directly to a separate component of equity, being recognised in the foreign currency translation reserve.

On disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

In addition, in relation to the partial disposal of a subsidiary that includes a foreign operation that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or jointly arrangements that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of the reporting period. Exchange differences are recognised in other comprehensive income.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies (continued)

Goods and Services Tax (‘GST’) and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

New Accounting Standards and Interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2017. The Directors’ assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Group, are set out below.

AASB 9 Financial Instruments

This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional new disclosures. The Group will adopt this standard from 1 July 2018 and has assessed the impact to be insignificant.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AASB 15 Revenue from Contracts with Customers

This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or implied) to be identified, together with the separate performance obligations within the contract; determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the performance obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied when the service has been provided, typically for promises to transfer services to customers. For performance obligations satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to understand the contracts with customers; the significant judgments made in applying the guidance to those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The Group will adopt this standard from 1 July 2018 and expects the impact to be insignificant as there is no revenue contract in the Group.

AASB 16 Leases

This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position, measured at the present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. The Group will adopt this standard from 1 July 2019. The Group has material operating leases with a term 12 months or longer. Therefore it is expected the impact as above will be significant.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Revenue and expenses

te 2. Revenue and expenses
(a) Revenue Interest received Gain on disposal of asset Service fee	2017 $ 2016 $
	45,053 81,762 42,280 - - 40,308
	87,333 122,070

Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.

Interest income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be reliably measured. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assets’ net carrying amount on initial recognition.

(b) Other Income Gain on disposal of assets (c) Expenses Depreciation expense Employee benefits expense - Salary, wages and retirement benefits Share based payment expense - Equity based payments issued to employees and consultants - Options issued in respect to conversion of convertible note - Performance Rights expensed/(cancelled) for period Loss on disposal of exploration assets Exploration asset written off Finance cost - Interest expense Net foreign exchange loss		191,153 2,370,951 191,153 2,370,951 5,117 37,988


		197,855 551,877
		421,967 254,609 - 104,852 (120,625) 40,289
		301,342 399,750
		24,614,713 - 505,661 -
		1,773 51,042
		138,889 112,827

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Income tax

Note 3. Income tax
	2017	2016
	$	$
(a) Income tax expense
Current tax (expense)/benefit	243,867	(695)
Deferred tax	-	-
	243,867	(695)
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax
expense	(27,431,610)	(61,111)
Tax at the Australian tax rate of 27.5% (2016: 30%)	(7,543,693)	(17,417)
Tax effect of amounts which are not deductible
(taxable) in calculating taxable income:
Legal fees	3,700	34,938
Equity based payments	225,883	41,365
Impairment – BMVL investment	-	91,463
Other non-assessable	-	-
Other non-deductible	257	347
	(7,313,853)	(150,696)
Current year tax assets not recognised	7,069,986	150,001
Income tax expense/(benefit)	(243,867)	695
(c) The estimated potential deferred tax benefits not brought to account at 27.5% (2016: 30%)
Revenue losses - Australia	(3,099,423)	(2,848,794)
Capital Losses	(883,990)	(875,594)
Temporary differences - Australia	188,786	(31,692)
Temporary differences – Overseas	-	-

The potential future income tax benefit will only be obtained if:

(i) the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit to be realised;

(ii) the Company continues to comply with the conditions for deductibility imposed by law; and

(iii) no changes in tax legislation adversely affect the Company in realising the benefit.

No deferred tax assets have been recognised due to the fact that it is not probable that future taxable profit will be available against which the unused tax losses can be utilised.

The franking account balance at year end was nil.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Income tax (continued)

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

when the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Income tax (continued)

Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

Note 4. Current Assets – Cash and cash equivalents

Cash at bank and on hand Short term deposits and deposits on call	2017 2016 $ $
	2,416,752 731,767 - 25,875
	2,416,752 757,642

The Group’s exposure to interest rate and credit risk is disclosed in Note 22.

Cash comprises cash at bank and in hand.

Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

Note 5. Current assets

Trade and other receivables Advances Prepayments Other	2017 $ 2016 $ 154 2,133 34,352 142,768 125,690 58,843
	160,196 203,744

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 5. Current assets (continued)

Note 5. Current assets (continued)
Available for sale financial assets 7,595,652 (2016: 8,345,652) fully paid ordinary shares held in Bluebird Merchant Ventures Ltd (LSE: BMV)2 1. Prepayments are payments made or advances for the right to receive future good or services. 2. Includes impairment of $283,305 (2016: $320,922)	2017 2016 $ $ 256,914 607,238

Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method, less any allowance for impairment. Trade receivables are generally due for settlement within periods ranging from 10 days to 30 days.

Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written off by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the Group will not be able to collect all amounts due according to the original contractual terms. Factors considered by the Group in making this determination include known significant financial difficulties of the debtor, review of financial information and significant delinquency in making contractual payments to the Group. The impairment allowance is set equal to the difference between the carrying amount of the receivable and the present value of estimated future cash flows, discounted at the original effective interest rate. Where receivables are short-term discounting is not applied in determining the allowance.

The amount of the impairment loss is recognised in profit or loss. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of comprehensive income.

The Group’s maximum exposure to credit risk is disclosed in Note 22. Carrying value of trade and other receivables approximates fair value due to short-term nature. There are no impaired receivables as at the reporting date.

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales for such asset (or disposal groups) and the sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a complete sale within one year from the date of classification.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest om it former subsidiary, after the sale.

When the Group is committed to a sale plan involving disposal of an investment, or a portion of an investment, in an associate or joint venture, the investment or the portion of the investment that will be disposed of is classified as held for sale when the criteria described above are met, and the Group discontinues the use of the equity method in relation to the portion that is classified as held for sale. Any retained portion of an investment in an associate or joint venture that has not been classified as held for sale continues to be accounted for using the equity method. The Group discontinues the use of the equity method at the time of disposal when the disposal results in the Group losing significant influence over the associate or joint venture.

After the disposal takes place, the Group accounts for any retained interest in the associate or joint venture in accordance with AASB 139 unless the retained interest continues to be an associate or a joint venture, in which case the Group uses the equity method.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 6. Exploration & Evaluation Expenditure

Note 6. Exploration & Evaluation Expenditure
Carrying amount at 1 July Additions Research and development claim received Disposal of exploration assets(i) Write off for tenements relinquished Exchange difference on translating foreign operations Carrying amount at 30 June	2017 $ 2016 $
	25,149,974 24,484,254 876,589 1,791,695 - (336,943) (24,614,713) - (505,661) (121,436) (807,018) (667,596)
	99,171 25,149,974

(i) On 30 November 2016, the Company’s wholly owned subsidiary, Red Mountain Mining (Singapore) Pte Ltd (RMMS) entered into a transaction with the Batangas Gold Pproject joint venture partner, Bluebird Merchant Ventures Ltd (BMVL). Under the terms of the transaction, BMVL will acquire 100% of the Batangas Gold Pproject in exchange for issuing 1.25 million shares in BMVL plus a perpetual 1% net smelter production royalty over the Batangas Gold Project and the return of BMVL’s 25% shareholding interest in RMMS.

The shareholders of RMMS approved the transaction at an EGM held 16 February 2017.

Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:

the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortised of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 7 . Plant and Equipment

At cost Accumulated depreciation Currency translation adjustment Carrying amount at 30 June Computer equipment Carrying amount at 1 July Less depreciation Less disposals Currency translation adjustment Carrying amount at 30 June Office equipment Carrying amount at 1 July Disposals Less depreciation Currency translation adjustment Carrying amount at 30 June Furniture and fittings Carrying amount at 1 July Additions Less depreciation Carrying amount at 30 June	2017 2016 $ $
	38,380 119,209 (37,618) (113,432) - 270
	762 6,047
	3,268 22,734 (2,464) (19,604) (256) - - 138
	548 3,268
	1,788 6,807 (102) - (1,876) (5,049) 190 30
	- 1,788
	991 2,713 - - (777) (1,722)
	214 991

Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation.

Depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset Depreciation Rate Plant and equipment 18.75%-50%

The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 7 . Plant and Equipment (continued)

Derecognition and disposal

An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

Impairment

The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.

The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cashgenerating unit to which the asset belongs, unless the asset's value in use can be estimated to approximate fair value.

An impairment exists when the carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.

For plant and equipment, impairment losses are recognised in profit or loss.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 8. Current liabilities – Trade and other payables

Note 8. Current liabilities – Trade and other payables
Trade payables Other payables Insurance financing1	2017 $ 2016 $
	141,569 355,345 90,521 308,553 32,599 -
	264,689 663,898

Insurance funding payable at 30 June 2017 is payable at $4,657 per month incurring interest at 7.53% flat expiring 30 January 2018.

The Group’s exposure to liquidity and foreign exchange risk related to trade and other payables is disclosed in Note 22. The carrying amount approximates fair value due to short-term nature.

Trade and other payables

Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months.

Note 9. Current liabilities – Provisions

Note 9. Current liabilities – Provisions
Provisions for employee benefits	2017 $ 2016 $
	- 61,189

Employee leave benefits

Wages, salaries, annual leave and sick leave

Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave and vesting sick leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.

Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave and vesting sick leave not expected to be settled within 12 months of the reporting date are recognised in non-current other payables in respect of employees’ services up to the reporting date. They are measured as the present value of the estimated future outflows to be made by the Group.

Note 10. Non-Current liabilities

Note 10. Non-Current liabilities
Insurance financing Retirement benefits	2017 $ 2016 $ - 11,665 - 170,341
	- 182,006

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 11. Current – Tax Liabilities

Note 11. Current – Tax Liabilities
Income tax payable – Philippines	2017 $ 2016 $
	- 252,616

Note 12. Contributed equity

(a) Share capital

hare capital
Notes Ordinary shares fully paid (pre consolidation) 12(b)	Parent entity Shares 2017 $ Shares 2016 $
	430,518,513 38,986,385 3,233,331,117 35,773,150

(b) Movements in ordinary share capital

Date Details	Share No. Issue price $	$
30 June 2015 Balance (pre consolidation) 9 September 2015 Share Purchase Plan 9 September 2015 Shares issued in lieu of services – Stocksdigital 9 September 2015 Placement deed – Acuity 19 February 2016 Placement 19 February 2016 Share issued in lieu of capital raising fees – Pac Partners 15 March 2016 Shares issued in lieu of capital raising fees – Stocksdigital 15 March 2016 Rights Issue 6 April 2016 Exercise of options - RMXOF $0.0015 expiring 31 March 2018 15 April 2016 Exercise of options - RMXOF $0.0015 expiring 31 March 2018 31 May 2016 Shares issued in lieu of services - various 16 June 2016 Shares issued in lieu of services – Stocksdigital 27 June 2016 Placement 27 June 2016 Exercise of options - RMXOF $0.0015 expiring 31 March 2018 27 June 2016 Shares issued in lieu of services – to an employee and consultant	1,185,768,679 240,000,000 0.0025 10,000,000 0.0025 1,405,000 0.00405 130,760,000 0.001 9,240,000 0.001 15,000,000 0.001 1,036,449,119 0.001 49,170 0.0015 15,813 0.0015 97,608,666 0.001 29,000,000 0.001 390,000,000 0.001 34,670 0.0015 38,000,000 0.001	34,254,662
		600,000 25,000 5,690 130,760 9,240 15,000 1,036,449 74 24 97,608 29,000 390,000 52 38,000

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Contributed equity (continued)

(b) Movements in ordinary share capital (continued)

Date Details 29 June 2016 Shares issued in lieu of services – various Share issue expenses 30 June 2016 Balance 22 Sept 2016 Securities reorganisation – 32:1 07 Oct 2016 Placement - $0.01 14 Oct 2016 Shares in lieu – Pac Partners 14 Oct 2016 Shares in lieu – Directors 11 Nov 2016 Share purchase plan 15 Nov 2016 Shares in lieu – Stocksdigital 15 Nov 2016 Shares in lieu – Waugh services 15 Nov 2016 Exercise of RMXOG Options 31 Dec 2016 Exercise of RMXOF options 03 Feb 2017 Exercise of RMXOG options 03 Feb 2017 Exercise of unlisted options 03 Mar 2017 Placement - $0.031 03 Mar 2017 Placement - $0.029 03 Mar 2017 Exercise of RMXOG options 25 May 2017 Exercise of RMXOG options 30 May 2017 Exercise of RMXOH options 01 June 2017 Exercise of RMXOH options 27 June 2017 Shares issued in lieu - Stocksdigital Share issue expenses 30 June 2017 Balance	Share No. Issue price $ 50,000,000 0.001 - 3,233,331,117 (3,132,288,935) - 167,500,000 0.010 28,000,000 0.001 14,000,000 0.001 35,000,000 0.010 3,000,000 0.0125 6,000,000 0.0126 164,063 0.015 125,000 0.015 2,195,000 0.015 2,500,000 0.020 34,648,307 0.031 23,306,983 0.029 3,700,000 0.015 3,645 0.015 2,000,000 0.018 6,000,000 0.018 1,333,333 0.030 - 430,518,513	$ 50,000 (908,409)
		35,773,150
		- 1,675,000 26,880 14,000 350,000 37,540 75,600 2,462 1,875 32,925 50,000 1,074,098 675,904 55,500 55 36,000 108,000 40,000 (1,042,604)
		38,986,385

(c) Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 13. Reserves and Accumulated Losses (Continued)

(a) Reserves Share-based payments reserve (i) Foreign currency translation reserve (ii) Other reserves (iii) Total reserves at the end of the financial year (i)Share-based payments reserve Movements: Balance at beginning of year Share-based payments cancelled during the year*(1) Share-based payments expense during the year(2)(ai) Options issued(2)(aii) Options issued in lieu of services(2)(ai) Balance at the end of the financial year	2017 $ 2016 $
	5,391,374 3,892,784 4,933,208 3,564,327 48,687 49,705
	10,373,269 7,506,816
	2017 $ 2016 $ 3,892,784 3,368,744 (120,625) (301,197) 410,865 40,289 71,665 - 1,136,685 784,948
	5,391,374 3,892,784

includes adjustment for performance rights cancelled 11 August 2016. Refer note (refer to Note 17)

(ai) Total of $1,547,550 includes $3,250 which was received as cash consideration. Total included in share based payment in the statement of changes in equity is $1,544,300 which is net of the $3,250 cash consideration.

(aii) Total in issue of options in the Statement of changes in equity is $74,915 which is inclusive of the $3,250 cash consideration as noted in (ai).

(1) Performance Rights

Performance Rights
Performance Rights (pre consolidation)	Parent entity Performance Rights 2017 $ Performance Rights 2016 $
	- - 79,850,500 120,625

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 13. Reserves and Accumulated Losses (Continued)

Movement in Performance Rights

Date Details 30 June 2015 Balance 2 December 2015 Cancellation of Class D 2 December 2015 Cancellation of Class G 31 December 2015 Share based payment expensed – Performance Rights – A,B,C,E,F,H,and I 30 June 2016 Share based payment expensed – Performance Rights – A,B,C,F,H,and I 30 June 2016 Adjustment for Performance Rights1 30 June 2016 Balance 1 July 2016 Cancellation of Class A, B,C,E,F1 11 August 2016 Cancellation of Class A, B,C,F,H,I1 30 June 2017 Balance	Performance Rights No. $ 79,850,500 381,538 (12,600,000) (10,274) (4,683,500) (3,819) 17,283,500 104,862 - 16,191 - (367,873)
	79,850,500 120,625
	(59,800,000) - (20,050,500) (120,625)
	- -

1 On 1 July 2016, 59,800,000 performance rights lapsed upon the resignation of Directors Jon Dugdale, Neil Warburton and Michael Wolley. At 11 August 2016, 20,050,500 performance rights lapsed upon the resignation of Geoff Boswell. Refer Note 17.

The following Performance Rights were issued/(cancelled) to the Company’s Directors and Key Management Personnel on during the year:

	J Dugdale	N Warburton	MWolley	G Boswell	Total
Performance Rights A	(3,000,000)	(1,500,000)	(1,000,000)	(1,500,000)	(7,000,000)
Performance Rights B	(4,500,000)	(2,250,000)	(1,500,000)	(2,250,000)	(10,500,000)
Performance Rights C	(4,500,000)	(2,250,000)	(1,500,000)	(2,250,000)	(10,500,000)
Performance Rights E	(12,600,000)	-	-	-	(12,600,000)
Performance Rights F	(12,600,000)	-	-	(4,683,500)	(17,283,500)
Performance Rights H	-	-	-	(4,683,500)	(4,683,500)
Performance Rights I	(12,600,000)	-	-	(4,683,500)	(17,283,500)
Total	(49,800,000)	(6,000,000)	(4,000,000)	(20,050,500)	(79,850,500)

There are no voting rights for Performance Rights holders.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 13. Reserves and Accumulated Losses (continued)

(2) Options
				Parent entity
			2017		2016
			Options	$	Options	$
Options over ordinary shares of			170,081,898	5,391,374	2,138,760,791	3,772,159
the Company (pre consolidation)
Movement in options on issue
			Options
Date	Details	Notes	No.		$
30 June 2015	Balance		702,372,285		2,987,206
1. During the reporting period, 68,162,500 options were		issued to	consultants in lieu of capital raising services. The value of			these
equity-settled transactions is measured at the value of the services received.
	Options issued $0.0037
	expiring 15 September
15 September	2017 as capital raising
2015	costs		240,000,000		399,941
	Options issued $0.003
	expiring 24 December
	2018 as part consideration
24 December	for convertible note
2015	funding		35,000,000		41,285
	Rights issue - free
	attaching - $0.0015
15 March 2016	expiring 31 March 2018		525,724,558			-
	Rights issue - free
	attaching - $0.0015
21 March 2016	expiring 31 March 2018		70,000,000			-
	Options issued $0.0015
	expiring 31 March 2018
	as part consideration for
21 March 2016	convertible note funding		53,888,889		63,571
	Options issued $0.0015
	expiring 31 March 2018
21 March 2018	as capital raising costs		587,862,309		280,156
	Expiry of unexercised
	$0.012 expiring 31 March
31 March 2016	2016		(270,987,597)			-
	Option exercise –
6 April 2016	RMXOF		(49,170)			-
	Option exercise -
15 April 2016	RMXOF		(15,813)			-
	Placement – free attaching
	- $0.0015 expiring 31
27 June 2016	March 2018		195,000,000			-
	Option exercise –
27 June 2016	RMXOF		(34,670)			-
30 June 2016	Balance		2,138,760,791		3,772,159

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 13. Reserves and Accumulated Losses (continued)

(2) Options (continued)

Movement in options on issue (continued)

Date Details 30 June 2016 Balance 15 Sept 2016 Expiry of unexercised $0.20 15 Sept 2016 22 Sept 2016 Securities reorganization – 32:1 RMXOE 22 Sept 2016 Securities reorganization – 32:1 RMXOF 22 Sept 2016 Securities reorganization – 32:1 14 Oct 2016 Unlisted options – Director incentive - $0.02 expiring 14 Oct 2019 15 Nov 2016 Options issued in lieu – Pac Partners – RMXOG(1) 15 Nov 2016 Loyalty options offer – RMXOG 13 Dec 2016 Options issued in lieu – Asenna Wealth - RMXOH(1) 31 Dec 2016 Option exercise – RMXOG 03 Jan 2017 Option exercise - RMXOG 03 Feb 2017 Option exercise – RMXOG 03 Feb 2017 Option exercise – unlisted $0.02 on or before 14 Oct 2019 3 Mar 2017 Option exercise – RMXOG 12 Apr 2017 Options issue in lieu – Xcel Capital – RMXOH(1) 25 May 2017 Option exercise – RMXOG 30 May 2017 Option exercise – RMXOH 1 June 2017 Option exercise – RMXOH	Options No. $ 2,138,760,791 3,772,159 (15,000,000) - (232,500,000) - (1,803,998,921) - (33,906,250) - 15,000,000 410,865 1,750,000 49,647 71,663,986 71,665 20,000,000 366,908 (164,063) - (125,000) - (2,195,000) - (2,500,000) - (3,700,000) - 25,000,000 720,130 (3,645) - (2,000,000) - (6,000,000) -
	170,081,898 5,391,374

Date
Details
30 June
2016
Balance
15 Sept 2016
Expiry of unexercised $0.20
15 Sept 2016
22 Sept 2016
Securities reorganization –
32:1 RMXOE
22 Sept 2016
Securities reorganization –
32:1 RMXOF
22 Sept 2016
Securities reorganization –
32:1
14 Oct 2016
Unlisted options – Director
incentive - $0.02 expiring 14
Oct 2019
15 Nov 2016
Options issued in lieu – Pac
Partners – RMXOG(1)
15 Nov 2016
Loyalty options offer –
RMXOG
13 Dec 2016
Options issued in lieu –
Asenna Wealth - RMXOH(1)
31 Dec 2016
Option exercise – RMXOG
03 Jan 2017
Option exercise - RMXOG
03 Feb 2017
Option exercise – RMXOG
03 Feb 2017
Option exercise – unlisted
$0.02 on or before 14 Oct
2019
3 Mar 2017
Option exercise – RMXOG
12 Apr 2017
Options issue in lieu – Xcel
Capital – RMXOH(1)
25 May 2017
Option exercise – RMXOG
30 May 2017
Option exercise – RMXOH
1 June 2017
Option exercise – RMXOH

Options No.
$
2,138,760,791
3,772,159
(15,000,000)
-
(232,500,000)
-
(1,803,998,921)
-
(33,906,250)
-
15,000,000
410,865
1,750,000
49,647
71,663,986
71,665
20,000,000
366,908
(164,063)
-
(125,000)
-
(2,195,000)
-
(2,500,000)
-
(3,700,000)
-
25,000,000
720,130
(3,645)
-
(2,000,000)
-
(6,000,000)
-

170,081,898
5,391,374

During the reporting period, 26,750,000 options were issued to consultants in lieu of capital raising services and 20,000,000 options were issued in lieu of consulting services and 15,000,000 options were issued to Directors as incentive. The value of these equity-settled transactions is measured at the fair value of the services received.

(1) Total value of $1,136,685 in lieu of capital raising and consulting services.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 13. Reserves and Accumulated Losses (continued)

(2) Options (continued)

Terms and conditions of options on issue

	Listed options expiry 15/09/2017 @ $0.0037 (reorg $0.1184)	Listed options expiry 31/03/2018 @ $0.0015 (reorg $0.048)	Listed options expiry 31/03/2018 @ $0.0015 (reorg $0.048)	Listed options expiry 21/11/2019 @ $0.015	Listed options expiry 21/11/2019 @ $0.015	Listed options expiry 13/12/2019 @ $0.018	Listed options expiry 13/12/2019 @ $0.018	Unlisted options expiry 24/12/2018 @ $0.003 (reorg $0.096)	Unlisted options expiry 24/12/2018 @ $0.003 (reorg $0.096)	Unlisted options expiry 14/10/2019 @ $0.02
No. of options	7,500,003	44,761,867		67,226,278		37,000,000		1,093,750		12.500,000

				2017				2016
			No. of Options		Weighted average exercise price($)		No.	of Options	Weighted average exercise price ($)


Balance at beginningofyear			2,138,760,791		$0.0015		702,372,285		0.07
Granted duringtheyear			133,413,986		$0.0242		1,707,475,756		0.0015
Securities reorganisation			(2,070,405,171)		-		-		-
Exercised duringtheyear			(16,687,708)		-		(99,653)		-
Expired duringtheyear			(15,000,000)		-		(270,987,597)		-
Balance at the end of theyear			170,081,898		$0.0242		2,138,760,791		0.0015
Exercisable at the end of the year			170,081,898		$0.0242		2,138,760,791		0.0015

(ii) Foreign currency translation reserve Movements: Balance at beginning of year Exchange differences on translation of foreign operation Balance at the end of the financial year (iii) Other reserves Movements: Balance at beginning of year Pension remeasurement in the Philippines Balance at the end of the financial year	3,564,327 3,563,595 1,368,881 732
	4,933,208 3,564,327
	49,705 44,666 (1,018) 5,039
	48,687 49,705

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 13. Reserves and Accumulated Losses (continued)

(b) Accumulated losses

(b) Accumulated losses
Accumulated losses at the beginning of the financial year Cancellation of Performance Rights1 Net loss attributable to members of the Company Accumulated losses at the end of the financial year 1. Adjustment for Performance Rights cancelled 11 August 2016. Refer note (refer to Note 17).	(17,303,463) (17,542,854) - 301,197 (26,953,068) (61,806)
	(44,256,531) (17,303,463)

(c) Nature and purpose of reserve

(i) Share-based payments reserve

The share-based payments reserve is used to recognise the value of equity benefits provided to Directors as remuneration or to suppliers as payment for products and services. The details of share-based payments are disclosed in Note 17.

(ii) Foreign currency translation reserve

Exchange differences arising from translation of the foreign controlled entities are taken to the foreign currency translation reserve, as prescribed in Note 1. The reserve is recognised in the profit or loss when the net investment is disposed of.

(iii) Other reserves

Differences arising from the pension revaluation of the foreign controlled entities are taken to the other reserves. The reserve is recognised in the profit or loss when the net value is expensed.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 14. Related party disclosure

(a) Directors

The following persons were Directors or Key Management Personnel of Red Mountain Mining Ltd during the financial year:

Directors:

Jeremy King Non-Executive Director (Appointed 19 July 2016) Jason Bontempo Non-Executive Director (Appointed 1 July 2016, resigned 1 December 2016) Lincoln Ho Non-Executive Director (Appointed 1 July 2016) Robert Parton Non-Executive Director (Appointed 1 July 2016, resigned 19 July 2016, re-appointed 1 December 2016) N Warburton Non-executive Chairman (Removed 1 July 2016) J Dugdale Managing Director (Resigned 1 July 2016) M Wolley Non-executive Director (Removed 1 July 2016) Other Key Management Personnel: G Boswell Country Manager – Philippines (Resigned 11 August 2016)

(b) Key management personnel compensation

Detail of remuneration paid to Key Management Personnel has been disclosed in the Directors’ Report.

Aggregate of remuneration paid to Key Management Personnel during the financial year as follows:

Short-term employee benefits - Cash salaries and fees Other benefits – annual leave Early termination payments Long-term benefits – Superannuation Share-based payments – Options, Performance Rights and short term incentives (refer to Note 17)	2017 $ 2016 $
	174,100 679,731 - 25,835 - 65,000 - 45,867 304,602 127,906
	478,702 944,339

(c) Key management personnel compensation disclosure

The Board policy in determining the nature and amount of compensation and discussion of the relationship between the Board’s policy and the entity’s performance are provided in the Remuneration Report section of the Directors’ Report.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 14. Related party disclosure (continued)

(c) Key management personnel compensation disclosure (continued)

(i)

(ii) Amounts outstanding and payable to related parties at 30 June Director fees payable to Bushwood Nominees, an entity related to Mr Jeremy King Director fees payable to TPG Australasia Pty Ltd, an entity related to Mr Robert Parton Salary and related fees payable to Underhill & Associates Ltd, an entity related to Mr Geoff Boswell	2017 2016 $ $
	10,000 - 2,200 - - 20,840

(iii)

(e) Wholly-owned group

The wholly-owned group consists of Red Mountain Mining Ltd and its wholly-owned subsidiaries as described in Note 16.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 15. Remuneration of auditors

During the year the following services were paid or payable to the auditors of the Group, its related entities and non-related audit firms: BDO Australia Audit services – Parent entity Other BDO affiliates Audit services – subsidiaries RSM Australia Audit services – Parent entity Non-audit services – Parent entity Other RSM affiliates Non-audit services – subsidiary	2017 $ 2016 $ - 54,484 - 22,882 46,000 - 12,500 - 1,278 - 59,778 77,366

Note 16. Investments in controlled entities

(a) Material subsidiaries

			Equity holding
			2017	2016
Name of entity	Country of incorporation	Class of	%	%
		shares
Red Mountain Mining (Hong	Hong Kong	Ordinary	100	100
Kong) Holdings Ltd
Red Mountain Mining	Singapore	Ordinary	1003	751
(Singapore) Pte Ltd (RMMS)
RMX USA LLC	USA	Ordinary	1002	-
MRL Gold Inc	Philippines	Ordinary	-3	100
Egerton Gold Philippines Inc	Philippines	Ordinary	-3	403

On 29 April 2016, the Subscription agreement between the Company and Bluebird Merchant Ventures Ltd (BMVL) settled earning BMVL 25% interest in RMMS, the holder of the Batangas Gold Project in the Philippines.
On 29 November 2016, the company incorporated RMX USA Corporation, a wholly owned subsidiary of the Company.
During the year, the Company disposed of its exploration asset, MRL Gold Inc. including its investment in Egerton Gold Philippines Inc. (“EGPI”) that pertains to 40% ownership to BMVL . As part of the disposal, BMVL returned its 25% interest in RMMS.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 17. Share-based payments

The Group provides the following in the form of share-based payment transactions:

Shares and options to acquire ordinary shares are issued to Directors and contractors of the Group as an incentive to improve the Board and shareholders goal congruence;
In lieu of services provided, and
Performance rights are issued to Directors and executives of the Group.

i. During the year, 14,000,000 fully paid ordinary shares in the Company were issued to Key Management Personnel in lieu of cash as a short term incentive payment grant in the financial year ending 30 June 2017. A total cash consideration of $1,400 was received. Total value of shares was $14,000. Refer to Remuneration Report for details.

ii. During the year, 28,000,000 fully paid ordinary shares in the Company were issued to consultants in lieu of capital raising services. A total cash consideration of $2,800 was received. Total value of shares was $26,080. 9,000,000 fully paid ordinary shares in the Company were issued to consultants in lieu of consulting services provided to the Company. Total value of shares was $113,140.

Options

Terms and conditions of options as share-based payments issued during the year:

	Listed options Expiry 21/11/2019 @ $0.015	Listed options Expiry 13/12/2019 @$ 0.018	Unlisted options expiry 14/10/2019 @ $0.02
No. of options	1,750,000	45,000,000	15,000,000

iii. The Company issued 15,000,000 unlisted options $0.02 expiring on or before 14 October 2019 to Directors or other Key Management Personnel as performance based remuneration during the financial year ended 30 June 2017. A cash consideration of $0.0001 per option was paid with a total of $1,500 received. Total value of options was $410,865.

iv. The Company issued 1,750,000 unlisted options $0.015 expiring on or before 21 November 2019 to consultants in lieu of capital raising services. A total cash consideration of $1,750 was received. Total value of options was $49,647.

v. The Company issued 20,000,000 unlisted options $0.018 expiring on or before 13 December 2019 to consultants in lieu of consulting services. Total value of options was $366,908.

vi. The Company issued 25,000,000 unlisted options $0.018 expiring on or before 13 December 2019 to consultants in lieu of consulting services. Total value of options was $720,130.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 17. Share-based payments (continued)

Performance Rights

Performance rights were issued to Directors and executives as part of their remuneration under the Group’s Performance Rights Plan which was approved at the annual general meeting held on 18 November 2013 (refer to the Remuneration Report).

Terms and conditions of performance rights as share-based payments issued/(cancelled) during the financial year:

	Tranche A @ $0.004 per right1	Tranche B @ $0.004 per right1	Tranche C @ $0.004 per right1	Tranche F @ $0.002 per right1	Tranche H @ $0.002 per right2	Tranche I @ $0.002 per Right3
No. of Performance Rights Issued	-	-	-	-	-	-
No. of Performance Rights cancelled	(1,500,000)	(2,250,000)	(2,250,000)	(4,683,500)	(4,683,500)	(4,683,500)
Total value	($28,500)	($40,500)	($28,518)	($10,010)	($10,010)	($3,087)

Vesting conditions of the Performance Rights issued during the year are as follows:

1. Performance Rights A,B,C,F,H and I were cancelled upon the resignation of Mr Geoff Boswell as of 11 August 2016 and in accordance with the terms and conditions of the recipient remaining an employee/director of the Company. The total value of cancelled Performance Rights included in the current financial year accounts is ($120,625).

Total expenses arising from share-based payment transactions recognised during the year were as follows:

Note
Performance Rights expensed during the period
Shares expensed during the period
Options expensed during the period(1)
Share based payment expense
Shares expensed during the period in lieu of consulting services
Options expensed during the period consulting services(1)
Shares issued in lieu of capital raising expenses
17(ii)
Options issued in lieu of capital raising expenses(1)
17(iv),(vi)
(1)Share based payment recorded in share based payment reserve in the statement of equity.

2017
$ 2016
$ (120,625)
40,289
12,600
254,609
409,367
104,852
301,342
399,750
153,142
-
366,906
-
24,080
-
768,027
680,097

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 17. Share-based payments (continued)

Equity settled transactions

The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using an appropriate valuation model.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The statement of comprehensive income charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 18. Reconciliation of loss from ordinary activities after income tax to net cash outflow used in operating activities

(i) Reconciliation of cash and cash equivalent: Cash at Bank (ii) Reconciliation of cash flows from operating activities with loss after income tax Operating loss after income tax Non-cash items Loss on revaluation of available for sale financial assets Depreciation Share based payments expense Share based payments – investor relations and corporate advisory Exploration asset write off expense Disposal of exploration asset Gain on disposal of subsidiary Write back of income tax liability Net foreign exchange (gains)/losses Change in operating assets and liabilities Other receivables Trade creditors Current tax liability Other operating assets / liabilities Net cash used in operating activities	2017 $ 2016 $
	2,416,752 757,642
	(27,187,743) (378,807) 283,305 320,922 5,117 37,988 301,342 399,750 520,505 - 505,661 121,436 24,614,713 - (191,153) (2,370,951) 243,867 - 138,889 184,201 43,548 20,006 (429,207) 72,323 (252,616) (2,239) (216,409) 15,197
	(1,620,181) (1,580,174)

(iii) Non-cash financing and investing activities

2017

Other than as detailed in Note 17 and the Directors’ Report, there were no non-cash financing or investing activities during the financial year ended 30 June 2017.

2016

Other than as detailed in Note 17 and the Directors’ Report, there were no non-cash financing or investing activities during the financial year ended 30 June 2016.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 19. Loss per share

Basic and diluted loss per share Weighted average number of shares used as the denominator Weighted average number of ordinary shares used as the denominator in calculating basic and diluted loss per share. Losses used in calculating loss per share	2017 Cents 2016 Cents
	(2.63) (0.004) 2017 Number 2016 Number
	1,023,627,990 1,760,517,380
	2017 $ 2016 $
	(26,953,068) (61,806)

Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:

costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

Note 20. Dividends

The Board does not recommend the payment of a dividend for the financial year ended 30 June 2017. No dividends were paid during the financial year.

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.

Note 21. Operating Segments

Based on AASB 8, Red Mountain Mining Ltd operates predominantly in one segment, being the mining and exploration industry.

AASB 8 Operating Segments requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker in order to allocate resources to the segment and to assess its performance.

The Group’s operating segments have been determined with reference to the monthly management accounts used by the Chief Operating Decision maker to make decisions regarding the Group’s operations and allocation of working capital. Due to the size and nature of the Group, the Board as a whole has been determined as the Chief Operating Decision Maker.

The revenues and results of this segment are those of the Group as a whole and are set out in the consolidated statement of profit or loss and other comprehensive income and the assets and liabilities of the Group as a whole are set out in the consolidated statement of financial position.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 22. Financial Instruments

(a) Capital risk management

The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to fund investment opportunities and develop or secure access to a producing mining asset.

Consistently with others in the industry, the Group monitors capital on the basis of working capital requirements.

During 2017, the Group’s strategy - which was unchanged from 2016 - was to maintain a current account balance sufficient to meet the Group’s day to day expenses with the balance held in term deposits.

Cash and cash equivalents Trade and other receivables Available for sale financial assets Trade and other payables Short term employee benefits Working capital position	2017 $ 2016 $
	2,416,752 757,642 160,196 203,744 256,914 607,238 (264,689) (663,898) - (61,189)
	2,569,173 843,537

(b) Financial Instruments

The following details the Group’s financial instruments at the reporting date:

Financial Assets Cash and Cash equivalents Trade and other receivables Available for sale financial assets Total Financial Assets Financial Liabilities Trade and other payables Total Financial Liabilities	2017 $ 2016 $ 2,416,752 757,642 160,196 203,744 256,914 607,238
	2,833,862 1,568,624
	264,689 663,898
	264,689 663,898

The Group’s activities expose it to a variety of financial risks: liquidity risk, market risk (including fair value interest rate risk, currency risk and price risk) and credit risk.

The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.

Risk management is carried out by the full Board of Directors. The Board identifies and evaluates financial risks in close co-operation with management and provides written principles for overall risk management.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 22. Financial Instruments (continued)

The Board meets regularly to analyse and monitor the financial risks associated to the business operations.

(i) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash, prudent oversight of future funding requirements and maintaining ongoing contact to facilitators of further funding.

The Group has implemented a creditors policy, authorisation matrix and purchase order system in order to consistently improve the quality of control over contractual obligations, cash flow and budgeting.

It is the Group’s policy to review the Group’s liquidity position including cash flow forecasts, actual cash flows and variation reports regularly to determine the forecast liquidity position and maintain appropriate liquidity levels.

Contractual maturities of financial liabilities	Less than 6 months $	6 months to 1 year	1 to 5 years $	Carrying amount of liabilities $
30 June 2017
Non-derivatives Trade payables	232,090	32,599	-	264,689
30 June 2016
Non-derivatives Trade and other payables	663,898	-	-	663,898

The Group funds its activities through capital raising in order to limit its liquidity risk.

The Group does not have any unused credit facilities.

(ii) Market risk

Fair value interest rate risk

As the Group’s major assets are cash deposits held in fixed and variable interest rate deposits, the Group’s income and operating cash flows are materially exposed to changes in market interest rates. The Group manages this risk by only investing in A+ rated institutions and maintaining an appropriate mix between different terms.

At reporting date, the Group had the following exposure to variable interest rate risk.

		2017	2016
		$	$
Financial assets
Cash	and cash equivalents
-	Australia	2,416,645	666,817
-	Hong Kong	-	715
-	Singapore	107	1,045
-	Philippines	-	89,065
		2,416,752	757,642

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 22. Financial Instruments (continued)

Interest rate sensitivity analysis

Weighted average interest rate for the financial year ended 30 June 2017 was 2.09% (2016: 10.46%). At 30 June 2017, if interest rates had been 1% higher or lower than the prevailing rates realised, with all other variables held constant, the effect on post-tax profit as a result of changes in the interest rates would be as follows:

Judgments of reasonably possible movements: Post tax profit +1.0% (100 basis points) -1.0% (100 basis points)	Higher/(Lower) 2017 $ 2016 $
	24,167 7,576 (24,167) (7,576)

Currency risk

The Group’s subsidiary based in Hong Kong and its sustainability is dependent on the provision of cash from the parent entity. Cash funds in Hong Kong are held in Hong Kong dollars, US dollars and Australian Dollars. The Group’s subsidiary based in Singapore and its sustainability is dependent on the provision of cash from its parent entity. Cash funds in Singapore are held in US Dollars.

The Group manages its currency risks by closely monitoring exchange rate fluctuations.

Foreign currency risk sensitivity analysis

The Group’s exposure to foreign currency risk at the reporting date was as follows:

30 June 2017	USD
Cash and cash equivalents	1,275
Total foreign currencies	1,275
Total converted into AUD	1,658

30 June 2016	USD
Cash and cash equivalents	106,608
Total foreign currencies	106,608
Total converted into AUD	143,560

Based on the financial instruments held at 30 June 2017, had the Australian dollar strengthened/weakened by 10% against the US dollar with all other variables held constant, the Group’s post-tax profit for the financial year would have been $165 lower/higher (2016: $14,356 lower/higher) and equity would have been $165 lower/higher (2016: $14,356 lower/higher), mainly as a result of foreign exchange losses/gains on translation of US dollar denominated financial instruments as detailed in the above table. Profit or loss is more sensitive to movements in AUD/USD exchange rates. The Group’s exposure to other foreign exchange movements is not material.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 22. Financial Instruments (continued)

Fair value measurements

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (level 2), and
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

All financial assets, liabilities and borrowings have been recognised at the reporting date at their net fair values.

The carrying amount of cash and cash equivalents, trade receivable, payables and borrowings are assumed to approximate their fair values due to their short-term maturity.

Price risk

The Group is not exposed to equity securities price risk as it holds no investments in securities classified on the statement of financial position either as available-for-sale or at fair value through profit or loss. The Group is not exposed directly to commodity price risk.

Credit Risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group.

Trade receivables are recorded at the invoiced amount. The Group does not have any off-balance-sheet credit exposure related to the customers. The credit risk of the Group arises from cash and cash equivalents, deposits with banks and financial institutions, available- for-sale financial assets, as well as credit exposure to customers, including outstanding receivables. For banks and financial institutions, only independently rated parties with a minimum Standard & Poor’s credit rating of A (or equivalent) are accepted. The Group assesses credit risk and allowance for doubtful accounts on a customer specific basis. The Group has adopted the policy of only dealing with credit worthy counterparties. As of 30 June 2017 and 2016, the Group does not have an allowance for doubtful debt accounts.

The maximum credit risk exposure of the Group at 30 June 2017 is $2,799,511 (2016: $1,364,880). There are no impaired receivables at 30 June 2017 (2016: Nil).

The Group’s maximum exposures to credit risk at the reporting date in relation to each class of recognised financial asset is the carrying amount, net of any provision for doubtful debts, of those assets as indicated in the statement of financial position.

Note 23. Contingent liabilities

The Group has no contingent liabilities at 30 June 2017.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 24. Commitments

Note 24. Commitments
Lease Commitments within one year later than one year but not later than five years later than five years The Group has an office lease in Australia.		2017 $ 2016 $ 132,119 75,892 355,066 - - -
		487,185 75,892

The Group has no other commitments for expenditure at 30 June 2017.

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straightline basis over the term of the lease.

Note 25. Parent entity information

The following information relates to the parent entity, Red Mountain Mining Ltd, as at 30 June 2017. The information presented hereto has been prepared using accounting policies consistent with those presented in the respective notes to the consolidated financial statements.

Parent Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Contributed equity Share Based Payment Reserve Accumulated losses Net Assets Loss for the year Other comprehensive income Total comprehensive loss for the year	2017 $ 2016 $
	2,805,733 1,340,522 13,684 14,701,617
	2,819,417 16,042,139
	264,689 484,933 - 11,664
	264,689 496,597
	38,986,385 35,773,150 5,391,374 3,892,784 (41,823,031) (24,120,392)
	2,554,728 15,545,542
	(17,702,639) (9,757,433) 4,361 185,143
	(17,698,278) (9,572,290)

Contingent liabilities

The parent entity has no contingent liabilities as at 30 June 2017 and 30 June 2016.

Commitments

The parent entity has commitments as at 30 June 2017 and 30 June 2016 as noted in Note 24.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 26. Events occurring after reporting date

On 4 July 2017, the Company announced that the results of drilling at the Red Valley Lithium Brines project did not justify proceeding with the earn-in/acquisition of Red Valley.

On 17 July 2017, 15,625 shares were issued at $0.015 per share on exercise of RMXOG options.

On 6 September 2017, RMX announced its intention to proceed with an earn-in to acquire up to 90% of the MokabeKasiri Project with improved earn-in terms:

Issued of 14 million shares in RMX;
Payment of $70,000 on commencement of Phase 1 of exploration;
Payment of $75,000 90 days after Phase 1 of exploration commencement provided that RMX notifies CoCu Pty Ltd that it wishes to continue with the Project; and
Payment of US$100,000 on issue of Mining Licence (or equivalent) over the Project area or portion thereof.

On 6 September 2017, 66,818,182 shares were issued at $0.011 per share raising $735,000 before costs.

On 8 September 2017, 14 million shares were issued in part consideration if the revised terms of the Company’s proposed earn in of up to 90% of the Mokabe-Kasiri Project.

7,500,003 RMXOE options expired unexercised on 15 September 2017.

Other than as stated above, the Directors are not aware of any other subsequent matters.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Directors’ Declaration

In the Directors’ opinion:

(a) The financial statements and notes are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(ii) the attached financial statements are in compliance with International Financial Reporting Standards, as stated in Note 1 to the financial statements; and
(iii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and its performance for the year ended on that date; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
(c) the Directors have been given the declarations required by s.295A of the Corporations Act 2001.

Signed in accordance with a resolution of the Directors made pursuant to s.295 (4) of the Corporations Act 2001.

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Jeremy King Director

Perth, Western Australia 29 September 2017

Red Mountain Mining Annual Report – 30 June 2017

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RSM Australia Partners

Level 32, Exchange Tower 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111

www.rsm.com.au

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF RED MOUNTAIN MINING LTD

Opinion

We have audited the financial report of Red Mountain Mining Ltd (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:

(i) Giving a true and fair view of the Group's financial position as at 30 June 2017 and of its financial performance for the year then ended; and
(ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING

Liability limited by a scheme approved under Professional Standards Legislation

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Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter How our audit addressed this matte

Carrying Value of Exploration and Evaluation Expenditure Asset Refer to Note 6 in the financial statements

The Group has capitalised exploration and evaluation expenditure with a with a carrying value of $99,171 as at 30 June 2017 relating to the Mukabe-Kasiri Project, net of a write off loss recognised in the year ended 30 June 2017 of $505,661 relating to the Red Valley Lithium Brines Project.

We determined this to be a key audit matter due to the significant management judgments involved in assessing the carrying value of the asset including:

Determination of whether the exploration and evaluation expenditure can be associated with finding specific mineral resources and the basis on which that expenditure is allocated to the area of interest;
Determination of whether exploration activities have reached a stage at which the existence of an economically recoverable reserves may be determined; and

Our audit procedures in relation to the exploration and evaluation expenditure asset included:

Ensuring that the right to tenure of the area of interest was current for the Mukabe-Kasiri Project;
Agreeing a sample of additions to the exploration and evaluation expenditure asset during the year to supporting documentation and ensuring that the amounts were capital in nature and relate to the area of interest;
Through discussions with the management and review of the Board Minutes, ASX announcements and other relevant documentation, assessing management’s determination that exploration activities have not yet progressed to the stage where the existence or otherwise of an economically recoverable reserves may be determined;
Enquiring with management and reviewing the
Assessing whether any indicators of impairment budget to test that the Group will incur substantive are present, and if so, judgments applied to expenditure on further exploration for and determine and quantify any impairment loss. evaluation of mineral resources on the MukabeKasiri Project;
Critically assessing and evaluating management’s assessment that no indicators of impairment existed in relation to the Mukabe-Kasiri Project; and
Critically assessing and evaluating management’s assessment that the Red Valley Lithium Brines Project be written off by $505,661 and the appropriate carrying value of this asset at reporting date is $Nil.

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Other Information

The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2017, but does not include the financial report and the auditor's report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our auditor's report.

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Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2017.

In our opinion, the Remuneration Report of Red Mountain Mining Ltd, for the year ended 30 June 2017, complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

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Perth, WA Dated: 29 September 2017

RSM AUSTRALIA PARTNERS

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TUTU PHONG Partner

Red Mountain Mining Ltd and its controlled entities

Additional Shareholder Information

Additional information required by the ASX Listing Rules and not disclosed elsewhere in this report is set out below. The information is current as at 22 August 2017.

Substantial Shareholders

There were no shareholders holding 5% or more of the voting shares in the Company as at 22 August 2017.

Voting Rights

Ordinary shares On a show of hands, every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Performance Rights

Performance Rights carry no voting rights.

Options

Options carry no voting rights.

Unmarketable Parcels

There were 1651 holders of less than a marketable parcel of ordinary shares, which as at 22 August 2017 was 55,555.

Distribution Schedules

Quoted Securities

*Ordinary Shares* Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,000 and over	Number of Holders Shares 270 109,752 327 910,377 225 1,628,154 1,095 44,600,972 655 383,284,883
	2,572 430,534,138

RMXOE Listed Options, exercisable at $0.1184 on or before 15 September 2017

Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over	Number of Holders Options 0 0 1 4,688 0 0 8 343,750 13 7,151,565
	22 7,500,003

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

RMXOF Listed Options, exercisable at $0.048 on or before 31 March 2018

Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over	Number of Holders Options 32 10,872 83 191,818 26 178,516 65 2,021,463 64 42,359,198
	270 44,761,867

RMXOG Listed Options, exercisable at $0.015 on or before 21 November 2019

Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over	Number of Holders Options 7 2,038 34 77,056 16 104,543 56 3,181,733 100 63,845,283
	213 67,210,653

RMXOH Listed Options, exercisable at $0.018 on or before 31 December 2019

Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over	Number of Holders Options 13 885,077 39 36,114,923
	52 37,000,000

Unquoted Securities

For each class of unquoted securities, if a person holds 20% or more of the securities in a class, the name of the holder and number of securities held is disclosed.

Options, exercisable at $0.096 each on or before 24 December 2018

Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over	Number of Holders Shares - - - - - - - - 11 1,093,750
	1 1,093,750

Australia Special Opportunity Fund LP holds 1,093,750 options comprising 100.00% of this class.

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Options, exercisable at $0.02 each on or before 14 October 2019

Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over	Number of Holders Shares - - - - - - - - 21 2
	2 12,500,000

Bushwood Nominees Pty Ltd holds 10,000,000 options comprising 80.00% of this class and Saltus Corporate Pty Ltd holds 2,500,000 options comprising 20% of this class.

Top Holders of Quoted Securities

Fully Paid Ordinary Shares

	Name	Number of Shares	%
1	MR LUIGI MILANESI	16,046,000	3.73
2	BUSHWOOD NOMINEES PTY LTD	9,000,000	2.09
3	MR AMIR BEKHIT	7,200,000	1.67
4	80 MILES & BEYOND PTY LTD <80 MILES & BEYOND S/F A/C>	6,200,000	1.44
5	MR MATTHEW STEVEN KLEIN	5,500,000	1.28
6	MR ROBERT JOHN NORTON	5,000,000	1.16
7	MS CHUK FAH POI	5,000,000	1.16
8	MR STEPHEN RUSSELL JONES	4,926,927	1.14
9	MR KEE KIM TAN	4,729,158	1.10
10	MR KRISHNAN MUTHU SANTHANA SIVANANTHAM	4,685,248	1.09
11	MR TROY RICHARD ELLIOTT	4,500,000	1.05
12	COMSEC NOMINEES PTY LIMITED	4,031,000	0.94
13	MS ANNETTE EVA CALDWELL	4,000,000	0.93
14	FIRST INVESTMENT PARTNERS PTY LTD	4,000,000	0.93
15	CITICORP NOMINEES PTY LIMITED	3,835,917	0.89
16	MR YIDONG QI	3,064,989	0.71
17	NELGRA SOLUTION PTY LTD	3,000,000	0.70
18	SALTUS CORPORATE PTY LTD	3,000,000	0.70
19	MR HOSSEIN SHIRAZI	2,550,087	0.59
20	MS MITSUKO HIRAKIMOTO	2,500,000	0.58
	Totals	102,769,326	23.87

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

RMXOE Listed Options exercisable at $0.1184 each on or before 15 September 2017

	Name		Number of Options	%
1	PAC PARTNERS PTY LTD		1,194,457	15.93
2	ROSS DIX HARVEY		1,100,000	14.67
3	BNP PARIBAS NOMINEES PTY LTD		1,028,125	13.71
4	MR GRANT WILLIAMS		578,125	7.71
5	MS PAMELA DELLY		500,075	6.67
6	MR PRABAKARAN PARAMASIVAM		500,000	6.67
7	MRS BROOKE LAUREN PICKEN		464,844	6.20
8	MR STEPHEN NANCARROW		400,000	5.33
9	MR MICHAEL GERGES GREGORY		392,189	5.23
10	MR RY LEITH CURTIS + MS SHARON JIT BOPARAI		369,500	4.93
11	MONEX BOOM SECURITIES (HK) LTD		281,250	3.75
12	MR PAUL ROBERT DALLA-LIBERA		200,000	2.67
13	MR DOMINIC KELSALL		143,000	1.91
14	BUCKINGHAM FAMILY SUPER PTY LTD		62,500	0.83
15	MR JENS FRITZ KORNER		62,500	0.83
16	MR GARY TATASCIORE		62,500	0.83
17	H M C S (AUST) PTY LTD		46,875	0.62
18	MR KEVIN BRUCE BEBBINGTON + MRS MARGARET PATRICIA BEBBINGTON		31,250	0.42
19	PROVISTA HOLDINGS PTY LTD		31,250	0.42
20	MR GARY TATASCIORE + MR ERIC TATASCIORE + MR LUKE A/C>	TATASCIORE <ELG	31,250	0.42
	Totals		7,479,690	99.73

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

RMXOF Listed Options exercisable at $0.048 each on or before 31 March 2018

	Name	Number of Options	%
1	MR PAUL ANTONY STONEHAM	3,016,027	6.74
2	MR PAUL ROBERT DALLA-LIBERA	3,009,687	6.72
3	WINGFAIR PTY LIMITED	3,009,115	6.72
4	ZAMAN PERAK PTY LTD	2,525,000	5.64
5	MR NIRAL PAW	2,250,000	5.03
6	MR MICHAEL REX HUNT	2,000,000	4.47
7	MR TROY O'KEEFE	1,750,000	3.91
8	CITICORP NOMINEES PTY LIMITED	1,687,673	3.77
9	AMCM SUPER PTY LTD	1,500,000	3.35
10	MR PAUL JAMES YORKE	1,050,000	2.35
11	MR BENJAMIN KESSLY	1,000,905	2.24
12	CZESLAW ENTERPRISES PTY LIMITED	1,000,000	2.23
13	MRS BROOKE LAUREN PICKEN	933,945	2.09
14	MR AARON CHARLES JASHARI	890,000	1.99
15	MR AHMET CAGRIER	800,000	1.79
16	MR KEN JOSEPH BURGESS	789,467	1.76
17	MR FAROUK AHMED	640,000	1.43
18	MR LAWRENCE PATHINATHER	602,865	1.35
19	MR JAMES HOWARD COOK	600,000	1.34
20	MR MARK SIMON TUART	557,239	1.24
	Totals	29,611,923	66.15

RMXOG Listed Options exercisable at $0.015 each on or before 21 November 2018

	Name	Number of Options	%
1	MR ANDREW JOHN MEEK	4,600,000	6.84
2	M & K KORKIDAS PTY LTD	4,403,959	6.55
3	MR BRIAN EDWARD FENTON	4,250,000	6.32
4	MR CHRIS ROBINSON	3,158,719	4.70
5	MRS PATRICIA PAULINE RUSSO	3,099,601	4.61
6	MR PAUL RICHARD JOB	2,500,000	3.72
7	MR KRISHNAN MUTHU SANTHANA SIVANANTHAM	1,766,157	2.63
8	SOUTHERN MANAGEMENT CONSULTANTS PTY LTD SOUTHERN MANAGEMENT PTY LTD	1,657,318	2.47
9	MR SIMON HANCOCK	1,600,000	2.38
10	MR RODNEY PATRICK CALLAHAN	1,400,000	2.08
11	MRS PENELOPE JANE GILL	1,200,000	1.79

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

12	MR MARK ANDREW TKOCZ	1,200,000	1.79
13	MR JOHN WEDDING	1,040,000	1.55
14	THIRD PARTY NOMINEES PTY LTD	1,036,443	1.54
15	DR SIVAGURUNATHAR BASKARANATHAN A/C>	1,000,000	1.49
16	MR TIM HANDLEY-GARBEN	1,000,000	1.49
17	MISS PAULA MORRELL	1,000,000	1.49
18	SOUTHERN MANAGEMENT CONSULTANTS PTY LTD A/C>	1,000,000	1.49
19	MR SIMON HANCOCK + MS BETH EILEEN JOYNER FUND A/C>	965,000	1.44
20	MR AARON CHARLES JASHARI	923,684	1.37
	Totals	38,800,881	57.73

RMXOH Listed Options exercisable at $0.018 each on or before 31 December 2018

	Name	Number of Options	%
1	XCEL CAPITAL PTY LTD	9,800,000	26.49
2	ZAMAN PERAK PTY LTD	2,665,000	7.20
3	MR PAUL VENDA DIVIN	2,400,000	6.49
4	MR MARK SIMON TUART	1,943,333	5.25
5	RIMOYNE PTY LTD	1,900,000	5.14
6	MR GREGORY JAMES	1,750,767	4.73
7	MR PAUL ROBERT DALLA-LIBERA	1,435,000	3.88
8	MR ANDREW GASHUMBA	1,160,000	3.14
9	SACCO DEVELOPMENTS AUSTRALIA PTY LIMITED A/C>	1,000,000	2.70
10	MR JOHN DEL BIANCO	980,000	2.65
11	YEOH SUPER PTY LTD	800,000	2.16
12	MR REX ALEXANDER HOOD + MRS JANE FRANCES HOOD	786,250	2.13
13	MR FAROUK AHMED	766,000	2.07
14	MR RICARDO COELHO	700,000	1.89
15	MR JACOB REID HIBBERD	609,499	1.65
16	MR SURAJ RAJ NEPAL	600,000	1.62
17	MR SCOTT ANDREW WAITE	539,500	1.46
18	MR JOHN CROFT	500,000	1.35
19	GAZUMP RESOURCES PTY LTD	500,000	1.35
20	MR STEPHEN NANCARROW	500,000	1.35
	Totals	31,335,349	84.69

Red Mountain Mining Annual Report – 30 June 2017

Red Mountain Mining Ltd and its controlled entities

Restricted Securities

There were no restricted securities at 22 August 2017.

On Market Buy Back

There is no current on market buy back.

Securities exchange

The Company is listed on the Australian Securities Exchange under the code RMX.

Corporate Governance Statement

The Company’s Corporate Governance Statement for the 2017 financial year can be accessed at:

http://www.redmm.com.au/corporate governance/

Red Mountain Mining Annual Report – 30 June 2017

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RED MOUNTAIN MINING LIMITED — Annual Report 2017

65719_rns_2017-09-28_68a53bd8-6bfe-45a7-80f7-37f2304eb786.pdf

Red Mountain Mining Ltd ACN 119 568 106

ACN 119 568 106 Red Mountain Mining Ltd

ACN 119 568 106 Red Mountain Mining Ltd

Corporate Directory

Directors

Secretary

Auditor

Solicitor

Bankers

Share Registry

Securities Exchange Listing

Principal registered office in Australia

Website

Red Mountain Mining Ltd and its controlled entities

Directors

Review of Operations

RED VALLEY LITHIUM BRINES PROJECT

Commentary

MOKABE-KASIRI COBALT COPPER PROJECT

Commentary

Red Mountain Mining Ltd and its controlled entities

BATANGAS GOLD PROJECT

Commentary

CORPORATE

Board Changes

Consolidation

Registered Office

Other Corporate Activities

Other Activities

Revenues and results

Financial Position

Red Mountain Mining Ltd and its controlled entities

Matters subsequent to the end of the financial year

Outlook

Information on Directors

Jeremy King LLB (Appointed 19 July 2016)

Non-Executive Director

Red Mountain Mining Ltd and its controlled entities

Jason Bontempo BComm, CA (Appointed 1 July 2016; Resigned 1 December 2016)

Non-Executive Director

Lincoln Ho B.Optom A.Mus.A (Appointed 1 July 2016)

Non-Executive Director

Robert Parton CPA (Appointed 1 July 2016; Resigned 19 July 2016; Re-appointed 1 December 2016)

Non-Executive Director

Neil Warburton Assoc MinEng WASM, MAUSIMM, FAICD (Removed 1 July 2016)

Non-executive Chairman

Red Mountain Mining Ltd and its controlled entities

Jon Dugdale BSc (Hons 1), FAUSIMM, MAICD (Resigned 1 July 2016)

Managing Director

Michael Wolley BE, MM, MAICD (Removed 1 July 2016)

Non-executive Director

Shannon Coates LLB, ACS, GAICD

Company Secretary

Red Mountain Mining Ltd and its controlled entities

Directorships of other listed companies

Red Mountain Mining Ltd and its controlled entities

Directors’ interests in shares and options

Directors’ Remuneration

Meetings of Directors

Shares and options on issue

Performance Rights granted during the year

Red Mountain Mining Ltd and its controlled entities

Share-based payments

Dividends

Proceedings on behalf of the Company

Red Mountain Mining Ltd and its controlled entities

REMUNERATION REPORT (AUDITED)

(ii) Executive Directors

Red Mountain Mining Ltd and its controlled entities

(b) Remuneration governance

Nomination and Remuneration Committee

(c) Principles used to determine the nature and amount of remuneration

Red Mountain Mining Ltd and its controlled entities

Use of remuneration consultants

Consequences of performance on shareholder wealth

Company performance and link to remuneration

(d) Service agreements

RED MOUNTAIN MINING LIMITED Annual Report 2017