RED MOUNTAIN MINING LIMITED — Annual Report 2019

Sep 26, 2019

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Red Mountain Mining Limited ACN 119 568 106

Annual Report for the Year Ended 30 June 2019

Red Mountain Mining Limited – Annual Report 2019

Annual Report For the year ended 30 June 2019

Contents

CORPORATE DIRECTORY	3
DIRECTORS’ REPORT	4
AUDITOR’S INDEPENDENCE DECLARATION	14
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME	15
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	16
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	17
CONSOLIDATED STATEMENT OF CASH FLOWS	18
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	19
DIRECTORS’ DECLARATION	43
INDEPENDENT AUDITOR’S REPORT	44
CORPORATE GOVERNANCE STATEMENT	47
ASX ADDITIONAL INFORMATION	47

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Red Mountain Mining Limited – Annual Report 2019

Corporate Directory

Board of Directors

Mr Jeremy King Mr Lincoln Ho Mr Robert Parton

(Non-Executive Director) (Non-Executive Director) (Non-Executive Director)

Secretary

Mr Mauro Piccini

Registered Office

Suite 2, Level 1 1 Altona Street West Perth WA 6005

Telephone: 08 6381 0054 Facsimile: 08 9481 4950 Website: https://www.redmountainmining.com.au/

Securities Exchange Listing

Listed on the Australian Securities Exchange (ASX Code: RMX)

Auditors

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

Solicitors

Nova Legal Level 2/50 Kings Park Road West Perth WA 6005

Bankers

Westpac Banking Corporation Level 13, 109 St Georges Terrace Perth WA 6000

Share Registry

Computershare Limited 172 St Georges Terrace, Perth WA 6000 Telephone: 08 6188 0800

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Red Mountain Mining Limited – Annual Report 2019

Directors’ Report

The Directors of Red Mountain Mining Limited (“RMX” or “the Company”) present their report, together with the financial statements on the consolidated entity consisting of Red Mountain Mining Limited and its controlled entities (the “Group”) for the financial year ended 30 June 2019.

DIRECTORS

The names and particulars of the Company’s directors in office during the financial year and at the date of this report are as follows. Directors held office for this entire period unless otherwise stated.

Jeremy King | Non-Executive Director

Mr King is a corporate lawyer and adviser with over 20 years’ experience in domestic and international legal, financial and corporate matters. Mr King is a director of a boutique corporate advisory and compliance business where he specializes in corporate and strategic advice and managing legal issues associated with clients. He spent several years in London where he worked with Allen and Overy LLP and Debevoise & Plimpton LLP and has extensive 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. He regularly advises ASX listed companies on corporate and commercial matters.

During the past three years, Mr King held the following directorships in other ASX listed companies:

• Executive Director of ECS Botanics Holdings Limied (current);

• Non-Executive Director of Transcendence Technologies Limited (current);

• Non-Executive Director of Smart Parking Limited (current);

• Non-Executive Director of EHR Resources Limited (current);

• Non-Executive Director of Sultan Resources Limited (current);

• Non-Executive Chairman of Aldoro Resources Limited (current);

• Non-Executive Director of Tando Resources Limited (Resigned July 2019);

• Non-Executive Director of DTI Group Limited (Resigned January 2019);

• Non-Executive Chairman of Pure Minerals Limited (Resigned November 2018) and

• Non-Executive Director of Aquaint Capital Holdings Limited (resigned October 2017).

Lincoln Ho | Non-Executive Director

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

During the past three years Mr Ho has held directorships in the following ASX listed companies:

• Sultan Resources Limited (resigned) and

• Pure Minerals Limited (resigned)

Rob Parton | Non-Executive Director

Commencing in 1987, Mr Parton 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 2006, Mr Parton 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.

During the past three years Mr Parton has held directorships in the following ASX listed companies:

• Pure Minerals (resigned);

• Directmoney limited (resigned);

• Telesso Technologies Limited (resigned);

• Motopia Limited (resigned); and

• Lanka Graphite Limited (resigned)

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Red Mountain Mining Limited – Annual Report 2019

Directors’ Report

COMPANY SECRETARY

Mr Mauro Piccini

Mr Piccini spent 7 years at the ASX and possesses core competencies in publicly listed and unlisted company secretarial, administration and governance disciplines. Mr Piccini is a Chartered Accountant (CA) and a member if the Governance Institute of Australia (GIA). Mr Piccini started his career in the Perth office of Ernst and Young (EY) where he spent several years in their assurance division.

INTERESTS IN SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE

The following table sets out each current Director’s relevant interest in shares, options and performance rights of the Company or a related body corporate as at the date of this report.

Director	Ordinary Shares	Unlisted Share Options	Performance rights
Mr Jeremy King Mr Lincoln Ho Mr Robert Parton	10,000,000	10,000,000	19,000,000
	4,000,000	2,500,000	9,000,000
	-	-	1,000,000
Total	14,000,000	12,500,000	29,000,000

PRINCIPAL ACTIVITIES

The principal activity of the Company is mineral exploration.

REVIEW AND RESULTS OF OPERATIONS

Overview

Mukabe-Kasari Cobalt-Copper Project

As announced on 13 March 2019, the Company in conjunction with its technical consultants is planning further reconnaissance groundwork on the Mukabe-Kasiri Cobalt-Copper Project. Access has been challenging during the relevant period, however a work programme has been designed and is expected to be implemented in the near term.

Batangas Gold Project

The Company retains its leverage to the Philippines based Batangas Gold project by way of its 1% NSR production royalty and as at the end of the year ended held approximately 5.6 million shares in London listed Bluebird Merchant Ventures Ltd (share price as at 30 June 2019: 2.10 pence per share).

Financial Performance

The financial results of the Group for the year ended 30 June 2019 are:

Cash and cash equivalents Net Assets Revenue Net loss after tax	30-June-19	30-June-18
	$	$
	2,275,421 3,137,270 92,026 (1,164,964)	2,951,942 3,863,596 80,781 (1,348,989)

DIVIDENDS

No dividends have been paid or declared by the Group since the end of the previous financial year.

No dividend is recommended in respect of the current financial year.

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Red Mountain Mining Limited – Annual Report 2019

Directors’ Report

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There have been no significant changes in state of affairs during the financial year.

MATTERS SUBSEQUENT TO THE REPORTING PERIOD

On the 12[th] of August 2019, the Group executed an earn in agreement to acquire up to a 100% interest in the Mt Mansbridge Rare Earths Project in Western Australia. The Group extended the due diligence period to review additional data on a separate, complementary metals project.

Other than the above, there has been no other matter or circumstance that has arisen since the end of the financial year that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

The board are currently completing a new strategy to both fast track the project and expand future processing and commercialisation objectives.

DIRECTORS’ MEETINGS

The number of Directors’ meetings held during the financial year and the number of meetings attended by each Director during the time the Directors held office are:

Director	Number Eligible to Attend	Number Attended
Mr JeremyKing	1	1
Mr Lincoln Ho	1	1
Mr Robert Parton	1	1

In addition to the scheduled Board meetings, Directors regularly communicate by telephone, email or other electronic means, and where necessary, circular resolutions are executed to effect decisions.

Due to the size and scale of the Company, there is no Remuneration and Nomination Committee or Audit Committee at present. Matters typically dealt with by these Committees are, for the time being, managed by the Board. For details of the function of the Board, refer to the Corporate Governance Statement.

REMUNERATION REPORT (AUDITED)

This remuneration report for the year ended 30 June 2019 outlines the remuneration arrangements of the Group in accordance with the requirements of the Corporations Act 2001 (“the Act”) and its regulations. This information has been audited as required by section 308(3C) of the Act.

The Remuneration Report details the remuneration arrangements for Key Management Personnel (“KMP”) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Parent company.

Voting and comments made at the company's 2018 Annual General Meeting ('AGM')

At the 2018 AGM, 92% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2018. The company did not receive any specific feedback at the AGM regarding its remuneration practices.

a) Key Management Personnel Disclosed in this Report

Key Management Personnel of the Group during or since the end of the financial year were:

Mr Jeremy King (Non-Executive Director) Mr Lincoln Ho (Non-Executive Director) Mr Robert Parton (Non-Executive Director)

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Red Mountain Mining Limited – Annual Report 2019

Directors’ Report

There have been no other changes after reporting date and up to the date that the financial report was authorised for issue.

The Remuneration Report is set out under the following main headings:

A Remuneration Philosophy B Remuneration Governance, Structure and Approvals C Remuneration and Performance D Details of Remuneration E Service Agreements F Share-based Compensation G Equity Instruments Issued on Exercise of Remuneration Options H Loans with KMP I Other Transactions with KMP

A Remuneration Philosophy

KMP have authority and responsibility for planning, directing and controlling the activities of the Group. KMP of the Group comprise of the Board of Directors.

The Group’s broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest quality.

No remuneration consultants were employed during the financial year.

B Remuneration Governance, Structure and Approvals

Remuneration of Directors is currently set by the Board of Directors. The Board has not established a separate Remuneration Committee at this point in the Group’s development, nor has the Board engaged the services of an external remuneration consultant. It is considered that the size of the Board along with the level of activity of the Group renders this impractical. The Board is primarily responsible for:

• The over-arching executive remuneration framework;

• Operation of the incentive plans which apply to executive directors and senior executives, including key performance indicators and performance hurdles;

• Remuneration levels of executives; and

• Non-Executive Director fees.

Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the longterm interests of the Group.

 Non-Executive Remuneration Structure

The remuneration of Non-Executive Directors consists of Directors’ fees, payable in arrears. The total aggregate fixed sum per annum to be paid to Non-Executive Directors in accordance with the Company’s Constitution shall be no more than A$500,000 and may be varied by ordinary resolution of the Shareholders in a General Meeting.

Remuneration of Non-Executive Directors is based on fees approved by the Board of Directors and is set at levels to reflect market conditions and encourage the continued services of the Directors. The chair’s fees are determined independently to the fees of the Non-Executive Director’s based on comparative roles in the external market. In accordance with the Company’s Constitution, the Directors may at any time, subject to the Listing Rules, adopt any scheme or plan which they consider to be in the interests of the Company and which is designed to provide superannuation benefits for both present and future Non-Executive Directors, and they may from time to time vary this scheme or plan.

The remuneration of Non-Executive is detailed in Table 1 in “Section D – Details of Remuneration” and their contractual arrangements are disclosed in “Section E – Service Agreements”.

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Red Mountain Mining Limited – Annual Report 2019

Directors’ Report

Remuneration may also include an invitation to participate in share-based incentive programmes in accordance with Company policy.

The nature and amount of remuneration is collectively considered by the Board of Directors with reference to relevant employment conditions and fees commensurate to a company of similar size and level of activity, with the overall objective of ensuring maximum stakeholder benefit from the retention of high performing Directors.

 Executive Remuneration Structure

The nature and amount of remuneration of executives are assessed on a periodic basis with the overall objective of ensuring maximum stakeholder benefit from the retention of high performance Directors.

The main objectives sought when reviewing executive remuneration is that the Group has:

• Coherent remuneration policies and practices to attract and retain Executives;

• Executives who will create value for shareholders;

• Competitive remuneration offered benchmarked against the external market; and

• Fair and responsible rewards to Executives having regard to the performance of the Group, the performance of the Executives and the general pay environment.

C Remuneration and Performance

The following table shows the gross revenue, losses, earnings per share (“EPS”) and share price of the Group as at 30 June 2019 and 30 June 2018.

Revenue ($) Net loss after tax ($) EPS ($) Shareprice($)	30-Jun-19	30-Jun-18
	92,026 (1,164,964) (0.53) 0.004	80,781 (1,348,989) (0.25) 0.008

Relationship between Remuneration and Company Performance

Given the current phase of the Company’s development, the Board does not consider earnings during the current and previous financial year when determining, and in relation to, the nature and amount of remuneration of KMP.

The pay and reward framework for key management personnel may consist of the following areas:

• a) Fixed Remuneration – Base Salary

• b) Variable Remuneration – Short-Term Incentives

• c) Variable Remuneration – Long-Term Incentives

The combination of these would comprise the key management personnel’s total remuneration.

a) Fixed Remuneration – Base Salary

The fixed remuneration for each senior executive is influenced by the nature and responsibilities of each role and knowledge, skills and experience required for each position. Fixed remuneration provides a base level of remuneration which is market competitive and comprises a base salary inclusive of statutory superannuation. It is structured as a total employment cost package.

Key management personnel are offered a competitive base salary that comprises the fixed component of pay and rewards. External remuneration consultants may provide analysis and advice to ensure base pay is set to reflect the market for a comparable role. No external advice was taken this year. Base salary for key management personnel is reviewed annually to ensure the executives’ pay is competitive with the market. The pay of key management personnel is also reviewed on promotion. There is no guaranteed pay increase included in any key management personnel’s contract.

b) Variable Remuneration – Short -Term Incentives (STI)

Discretionary cash bonuses may be paid to senior executives annually, subject to the requisite Board and shareholder approvals where applicable. No bonus payments were made during the financial year.

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Red Mountain Mining Limited – Annual Report 2019

Directors’ Report

• c) Variable Remuneration – Long-Term Incentives (LTI)

• Options are issued at the Board’s discretion. Other than options disclosed in section D of the Remuneration Report there have been no options issued to employees at the date of this financial report.

D Details of Remuneration

Details of the nature and amount of each major element of the remuneration of each KMP of the Group during the financial year are:

Table 1 – Remuneration of KMP of the Group for the year ended 30 June 2019 is set out below:

	Short-term Employee Benefits	Short-term Employee Benefits	Short-term Employee Benefits	Post-	Share Based	Total
				Employment	Payments
	Salary & fees	Non-monetary	Other	Superannuation	Options
		benefits
	$	$	$	$	$	$
30 June 2019
Directors Mr Jeremy King Mr Lincoln Ho Mr Robert Parton	120,000 36,000 24,000	- - -	- - -	34,200 9,785 -	- - -	154,200 45,785 24,000
	180,000	-	-	43,985	-	223,985

30 June 2018	Short-term Employee Benefits	Short-term Employee Benefits	Short-term Employee Benefits	Post- Employment	Share Based Payments	Total
	Salary & fees	Non-monetary benefits	Other	Superannuation	Options
	$	$	$	$	$	$
Directors Mr Jeremy King Mr Lincoln Ho Mr Robert Parton		- - -	- - -
	120,000			-	220,000	340,000
	36,000			-	110,000	146,000
	24,000			-	15,000	39,000
Total	180,000	-	-	-	345,000	525,000

The following table shows the relative proportions of remuneration that are linked to performance and those that are fixed, based on the amounts disclosed as statutory remuneration expense in the tables above:

Table 2 – Relative proportion of fixed vs variable remuneration expense

	Fixed Remuneration	Fixed Remuneration	At Risk	– STI(%)	At Risk	– LTI(%)
Name	2019	2018	2019	2018	2019	2018
Directors Mr Jeremy King Mr Lincoln Ho		35% 25%		- -		65% 75% 38%
	100%		-		-
	100%		-		-
Mr Robert Parton	100%	62%	-	-	-

Table 3 –Performance Rights of KMP (direct and indirect holdings)

30 June 2019	Balance at 01/07/2018	Granted as Remuneration	Cancelled	Net Change – Other	Balance at 30/06/2019
Directors Mr Jeremy King Mr Lincoln Ho Mr Robert Parton Total	22,000,000 11,000,000 1,500,000	- - -	(3,000,000) (2,000,000) (500,000)	- - -	19,000,000 9,000,000 1,000,000
	34,500,000	-	(5,500,000)	-	29,000,000

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Red Mountain Mining Limited – Annual Report 2019

Directors’ Report

Table 4 – Shareholdings of KMP (direct and indirect holdings)

30 June 2019	Balance at 01/07/2018	Issued as Remuneration	Received during the year on the exercise of options	Net Change – Other*	Balance at 30/06/2019
Directors Mr Jeremy King Mr Lincoln Ho Mr Robert Parton Total	9,000,000 3,000,000 -	- - -	- - -	1,000,000 1,000,000 -	10,000,000 4,000,000 -
	12,000,000	-	-	2,000,000	14,000,000

*Shares purchased on market

Table 5 – Options of KMP (direct and indirect holdings)

30 June 2019	Balance at 01/07/2018	Issued as Remuneration	Exercise of options	Net Change – Other	Balance at 30/06/2019
Directors Mr Jeremy King Mr Lincoln Ho Mr Robert Parton Total	10,000,000 2,500,000 -	- - -	- - -	- - -	10,000,000 2,500,000 -
	12,500,000	-	-	-	12,500,000

E Service Agreements

• Jeremy King – Non-Executive Director

• Contract: Commenced on 19 July 2016

• Director’s Fee: $120,000 per annum

• Term: No fixed term

• Lincoln Ho – Non-Executive Director

• Contract: Commenced on 1 July 2016

• Director’s Fee: $36,000 per annum

• Term: No fixed term

• Robert Parton – Non-Executive Director

• Contract: Commenced on 1 July 2016

• Director’s Fee: $24,000 per annum

• Term: No fixed term

F Share-based Compensation

The Company rewards Directors for their performance and aligns their remuneration with the creation of shareholder wealth by issuing share options. Share-based compensation is at the discretion of the Board and no individual has a contractual right to receive any guaranteed benefits.

Options

There were no options issued to directors during the year ended 30 June 2019.

At the date of this report, the unissued ordinary shares of the Company under option carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share of the Company.

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Red Mountain Mining Limited – Annual Report 2019

Directors’ Report

G Equity Instruments Issued on Exercise of Remuneration Options

No remuneration options were exercised during the financial year.

H Loans with KMP

There were no loans made to any KMP during the year ended 30 June 2019.

I Other Transactions with KMP

The following transactions occurred with related parties: Company secretarial and financial management services from Mirador Corporate Pty Ltd (director related entity of Jeremy King) Receipt of rental income from Mirador Corporate Pty Ltd, an entity related to Mr Jeremy King.	2019 $	2018 $
	128,100	90,625
	3,000	22,500
Receipt of rental income from Pure Minerals Limited, an entity related to Mr Jeremy King and Mr Lincoln Ho	33,750	3,500
Trade and other payables to related parties:	2019 $	2018 $
Company secretarial and financial management services from Mirador Corporate Pty Ltd (director related entity of Jeremy King)	13,125	13,125
Amounts outstanding and receivable to related parties at 30 June Receipt of rental income from Pure Minerals Limited, an entity related to Mr Jeremy King and Mr Lincoln Ho	2019 $	2018 $
	11,250	-
Receipt of rental income from Mirador Corporate Pty Ltd, an entity related to Mr Jeremy King.	3,000	-

Terms and conditions

All transactions were made on normal commercial terms and conditions and at market rates.

J Additional Information

The earnings of the consolidated entity for the five years to 30 June 2019 are summarised below:

	2019	2018	2017	2016	2015
	$	$	$	$	$
Sales Revenue EBITDA EBIT Loss after income tax Share Price ($) EPS(centsper share)	- (1,181,316) (1,181,316) (1,164,964) 0.004 (0.53)	- (1,377,618) (1,377,618) (1,348,989) 0.008 (0.25)	- (27,187,743) (27,187,743) (27,187,743) 0.024 (2.63)	- (387,807) (387,807) (387,807) 0.1 (0.004)	- (1,533,578) (1,533,578) (1,533,578) 0.3 (.19)

End of Audited Remuneration Report.

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Red Mountain Mining Limited – Annual Report 2019

Directors’ Report

INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS

The Company has indemnified the Directors and Executives of the Company for costs incurred, in their capacity as a Director or Executive, for which they may be held personally liable, except where there is a lack of food faith.

During the financial year, the Company paid a premium in respect of a contract to insure the Directors and Executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor.

During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity.

ENVIRONMENTAL REGULATIONS

The Company is not currently subject to any specific environmental regulation. There have not been any known significant breaches of any environmental regulations during the year under review and up until the date of this report.

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 purposes of taking responsibility on behalf of the Company for all or part of these proceedings.

AUDITOR

RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.

OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF RSM AUSTRALIA PARTNERS

There are no officers of the Company who are former partners of RSM Australia Partners.

AUDITOR’S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration for the year ended 30 June 2019 has been received and included within these financial statements.

SHARE UNDER OPTION

At the date of this report there were the following unissued ordinary shares for which options were outstanding:

67,210,653 RMXOG Listed options exercisable at $0.015 each on or before 21 November 2019

37,000,000 RMXOH Listed options exercisable at $0.018 each on or before 13 December 2019

12,500,000 Options exercisable at $0.02 each on or before 14 October 2019

35,000,000 Options exercisable at $0.02 each on or before 28 June 2023

SHARE ISSUED ON THE EXERCISE OF OPTIONS

No ordinary shares of Red Mountain Mining Limited were issued during the year ended 30 June 2019 on the exercise of options granted. No further shares have been issued since that date. No amounts are unpaid on any of the shares.

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Red Mountain Mining Limited – Annual Report 2019

Directors’ Report

NON-AUDIT SERVICES

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the group are important.

Details of the amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 18 to the financial statements.

The Board of Directors has considered the position and is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditors, as set out below, did not compromise the auditor independent requirements of the Corporations Act 2001 for the following reasons:

• all non-audit services have been reviewed by the Board of Directors to ensure they do not impact the impartiality and objectivity of the auditor; and

• None of the services undermine the general principles relating to the auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

This report is signed in accordance with a resolution of Board of Directors.

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Jeremy King Director 26 September 2019

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Red Mountain Mining Limited for the year ended 30 June 2019, 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.

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Perth, WA Dated: 26 September 2019

RSM AUSTRALIA PARTNERS

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TUTU PHONG Partner

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Red Mountain Mining Limited – Annual Report 2019

Consolidated Statement of Profit or Loss and Other Comprehensive Income For the Financial Year Ended 30 June 2019

Note Revenue from continuing operations Other income 4 Expenses Consultancy costs Depreciation expense Employee benefits expenses Exploration consulting expenditure Finance cost Impairment of other assets Legal fees (Loss)/Gain on financial instrument revaluation Other expenses Professional fees Share-based payment expenses Travelling expenses Loss from continuing operations before income tax Income tax expense Loss from continuing operations after income tax Other comprehensive income for the year Other comprehensive loss for the year, net of tax Total comprehensive loss attributable to the members of Red Mountain Mining Limited: Loss per share for the year attributable to the members Red Mountain Mining Limited: Basic loss per share (cents) 7 Diluted loss per share (cents) 7	Consolidated Entity 2019 Consolidated Entity 2018 $ $
	92,026 80,781 (196,936) (528,473) - (762) (223,985) (180,000) (186,488) (114,209) (2,740) (8,820) - (57,017) (8,601) (8,605) (94,876) 108,967 (329,448) (408,477) (202,040) (223,868) (8,000) (1,702) (3,876) (6,804)
	-
	(1,164,964) (1,348,989) 5,638 -
	(1,159,326) (1,348,989)
	(1,159,326) (1,348,989)
	(0.53) (0.25) (0.53) (0.25)

The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the notes to the financial statements.

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Red Mountain Mining Limited – Annual Report 2019

Consolidated Statement of Financial Position

As at 30 June 2019

Note ASSETS Current assets Cash and cash equivalents 8 Trade and other receivables 9 Financial assets at fair value through profit or loss 9 Total current assets Non-Current assets Exploration and evaluation 11 Trade and other receivables Total Non-Current assets Total assets LIABILITIES Current liabilities Trade and other payables 10 Total current liabilities Non-Current liabilities Trade and other payables Total non-current liabilities Total liabilities Net assets EQUITY Contributed equity 12 Reserves 13 Accumulated losses Total equity	Consolidated Entity 2019 Consolidated Entity 2018 $ $
	2,275,421 2,951,942 228,684 144,239 205,316 300,192
	2,709,421 3,396,373
	645,998 641,208 - 38,840
	645,998 680,048
	3,355,419 4,076,421
	218,149 173,985
	218,149 173,985
	- 38,840
	- 38,840
	218,149 212,825
	3,137,270 3,863,596
	41,645,240 41,220,240 10,695,531 10,681,893 (49,203,501) (48,038,537)
	3,137,270 3,863,596

The Consolidated Statement of Financial Position should be read in conjunction with the notes to the financial statements.

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Red Mountain Mining Limited – Annual Report 2019

Consolidated Statement of Changes in Equity

For the Financial Year Ended 30 June 2019

At 1 July 2018 Loss for the year Other comprehensive income for the year Total comprehensive loss for the year after tax Transactions with owners in their capacity as owners: Issued Capital (net of costs) Performance rights At 30 June 2019 At 1 July 2017 Loss for the year Total comprehensive loss for the period after tax Transactions with owners in their capacity as owners: Issued Capital (net of costs) RMXOG Options Issue of options Performance rights Transfer of NCI on disposal At 30 June 2018	Issued Capital Accumulated Losses $ $	Foreign Currency Reserve Share-based Payment Reserve Other Reserve Non- Controlling Interest Total $ $ $ $ $
	41,220,240 (48,038,537)	4,933,209 5,699,997 48,687 - 3,863,596
	- (1,164,964) - -	- - - - (1,164,964)
		5,638 - - - 5,638
	- (1,164,964) 425,000 - - -	5,638 - - - (1,159,326)
		- - - - 425,000 - 8,000 - - 8,000
	41,645,240 (49,203,501)	4,938,847 5,707,997 48,687 - 3,137,270
	38,986,385 (44,255,531)	4,933,209 5,391,374 48,687 (2,434,017) 2,670,107
	- (1,348,989)	- - - - (1,348,989)
	(1,348,989) 2,233,621 - 234 - - - - - - (2,434,017)	(1,348,989) - - - - 2,233,621 - - - 234 - 306,921 - - 306,921 - 1,702 - - 1,702 - - - 2,434,017 -
	41,220,240 (48,038,537)	4,933,209 5,699,997 48,687 - 3,863,596

The Consolidated Statement of Changes in Equity should be read in conjunction with the notes to the financial statements.

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Red Mountain Mining Limited – Annual Report 2019

Consolidated Statement of Cash Flows

For the Financial Year ended 30 June 2019

Note Cash flows from operating activities Payments to suppliers and employees Other income received Interest received Net cash used in operating activities 8(a) Cash flows from investing activities Payment of exploration activities capitalised Payment for investment in listed shares Receipt of proceeds from sale of shares Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds from issue of options Share issue costs Net cash from financing activities Net (decrease)/increase in cash and cash equivalents Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 8	Consolidated Entity 2019 Consolidated Entity 2018 $ $ (1,168,132) (1,235,093) 55,049 50,874 16,352 28,629
	(1,096,731) (1,155,590)
	(4,790) (372,037) - (18,720) - 84,408
	(4,790) (306,349)
	500,000 2,235,160 - 234 (75,000) (239,544)
	425,000 1,995,850
	(676,521) 533,911 - 1,279 2,951,942 2,416,752
	2,275,421 2,951,942

The Consolidated Statement of Cash Flows should be read in conjunction with the notes to the financial statements.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Reporting Entity

Red Mountain Mining Limited (referred to as “Company” or “parent entity”) is a company domiciled in Australia. The address of the Company’s registered office and principal place of business is disclosed in the Corporate Directory of the Annual Report. The consolidated financial statements of the Company as at and for the year ended 30 June 2019 comprise the Company and its subsidiaries (together referred to as the “Consolidated Entity” or the “Group”).

(b) Basis of Preparation

Statement of compliance

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').

Basis of measurement

The consolidated financial statements have been prepared on a going concern basis in accordance with the historical cost convention, unless otherwise stated.

Parent entity information

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in Note 20.

Adoption of new and revised accounting standards

A number of new or amended standards became applicable for the current reporting period for which the Group has adopted

• AASB 15 Revenue from Contracts with Customers; and

• AASB 9 Financial Instruments.

• There is no impact on the Group for the year ended 30 June 2019.

Basis of preparation and changes to the Group’s accounting policies

AASB 15 Revenue from contracts with Customers

AASB 15 Revenue from contracts with Customers replaces AASB 118 Revenue. AASB 15 was adopted by the Company on 1 July 2018. AASB 15 provides a single, principles-based five-step model to be applied to all contracts with customers.

The Group has considered AASB 15 in detail and determined that the impact on the Group sales revenue from contracts under AASB 15 is insignificant for the year.

The Group’s new revenue accounting policy is detailed below:

Revenue is recognised when or as the Group transfers control of goods or services to a customer at the amount to which the Company expects to be entitled. If the consideration promised includes a variable component, the Group estimates the expected consideration for the estimated impact of the variable component at the point of recognition and re-estimated at every reporting period.

Impact of adoption

AASB 15 was adopted using the modified retrospective approach and such comparatives have not been restated. There was no impact of adoption on opening accumulated losses as at 1 July 2018.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

AASB 9 Financial Instruments

AASB 9 Financial Instruments replaces the provisions of AASB 139 Financial Instruments: Recognition and Measurement that relate to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting.

The adoption of AASB 9 Financial Instruments from 1 July 2018 did not give rise to any material transitional adjustments. The new accounting policies (applicable from 1 July 2018) are set out below.

Classification and measurement

Except for certain trade receivables the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

Under AASB 9 financial assets are subsequently measured at fair value through profit or loss (FVPL), amortised cost, or fair value through other comprehensive income (FVOCI). The classification is based on two criteria: the Group ’s business model for managing the assets; and whether the instruments’ contractual cash flows represent ‘solely payments of principal and interest’ on the principal amount outstanding (the ‘SPPI criterion’).

Impairment

From 1 July 2018 the Group assesses on a forward looking basis the expected credit losses (ECLs) associated with its debt instruments carried at amortised cost and FVOCI. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive. The shortfall is then discounted at an approximation to the asset’s original effective interest rate.

The Group assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. For trade and other receivables, the Group applies the simplified approach permitted by AASB 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Group ’s historical credit loss experience.

Significant Judgements and Estimates

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2.

(c) Comparatives

Comparative balances for the Group are for the financial year, 1 July 2017 to 30 June 2018.

(d) Principles of Consolidation

Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Red Mountain Mining Limited (‘Company’ or ‘parent entity’) as at 30 June 2019 and the results of all subsidiaries for the year then ended. Red Mountain Mining Limited and its subsidiaries together are referred to in this financial report as the consolidated entity.

Subsidiaries are all entities (including special purpose entities) over which the consolidated entity has the power to govern the financial and operating policies, 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 consolidated entity controls another entity.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

(d) Principles of Consolidation (continued)

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

Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

The acquisition method of accounting is used to account for business combinations by the consolidated entity. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss and other comprehensive income, statement of changes in equity and statement of financial position respectively.

(e) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board. Management has determined that based on the report reviewed by the Board and used to make strategic decisions, that the consolidated entity has one reportable segment.

(f) Foreign Currency Translation

Functional and presentation currency

Items included in the financial statements of each of the consolidated entity’s entities are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The consolidated financial statements are presented in Australian dollars, which is Red Mountain Mining Limited’s functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Consolidated entity companies

The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• Assets and liabilities for each statement of financial position account presented are translated at the closing rate at the date of that statement of financial position;

• Income and expenses for each statement of profit or loss and other comprehensive income account are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

• All resulting exchange differences are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

(f) Foreign Currency Translation (continued)

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.

(g) Revenue Recognition

Interest revenue

Interest revenue is recognised as it accrues, using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

(h) Income Tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

(i) Exploration and evaluation expenditure

Acquisition, exploration and evaluation costs associated with mining tenements are accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that the Group’s rights of tenure to that area of interest are current and that the costs are expected to be recouped through the successful commercial development or sale of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.

(j) Cash and Cash Equivalents

Cash on hand and in bank and short-term deposits are stated at nominal value. For the purpose of the statement of cash flows, cash includes cash on hand and in bank, and bank securities readily convertible to cash, net of outstanding bank overdrafts.

(k) Trade and Other Receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.

The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.

Other receivables are recognised at amortised cost, less any allowance for expected credit losses.

(l) Impairment of non-financial assets

Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.

(m) Investments and other financial assets

Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being avoided.

Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off.

Financial assets at fair value through profit or loss

Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

(m) Investments and other financial assets (continued)

Financial assets at fair value through other comprehensive income

Financial assets at fair value through other comprehensive income include equity investments which the consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.

Impairment of financial assets

The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.

Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.

For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.

(n) Impairment of Assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows. Where an impairment loss subsequently reverses, the carrying amount of the asset, other than goodwill, is increased to the revised estimate of its recoverable amount, but only to the extent the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

(o) Trade and Other Payables

Liabilities are recognised for amounts to be paid in the future for goods and services received whether or not billed to the Group. Trade payables are usually settled within 30 days of recognition.

(p) Employee Benefits

Short-term employee benefits

Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled within 12 months of the reporting date are recognised in current liabilities in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

(p) Employee Benefits (continued)

Other long-term employee benefits

The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability. The liability is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to the expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Defined contribution superannuation expense

Contributions to defined contribution plans are expensed in the period in which they are incurred.

(q) Share-based Payments

Equity-settled and cash-settled share-based compensation benefits are provided to Key Management Personnel and employees.

Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price.

The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using an appropriate valuation model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.

The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying an appropriate valuation model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:

• During the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period.

• From the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date.

All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability.

Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.

If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

(q) Share-based Payments (continued)

If the non-vesting condition is within the control of the Company or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.

If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification.

(r) Contributed equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.

If the entity reacquires its own equity instruments, for example as a result of a share buy-back, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly in equity.

(s) Earnings Per Share

Basic earnings per share

Basic earnings per share are calculated by dividing:

• The profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares

• By the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares.

Diluted earnings per share

Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into account:

• The after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and

• The weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(t) Goods and Services Tax (“GST”)

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

Receivables and payables area stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included as a current asset or liability in the statement of financial position.

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

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

(u) Current and Non-Current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.

An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.

A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities are always classified as non-current.

(v) Dividends

Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.

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 2019.

The Group's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Group, are set out below.

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.

Impact of adoption

The Group will adopt this standard from 1 July 2019 and its impact on adoption is expected to result in total assets increasing by $183,560 with total liabilities also increasing by $183,560.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 2 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS AND ASSUMPTIONS

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Share based payments

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 is determined by using an appropriate valuation model taking into account the terms and conditions upon which the instruments were granted. 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.

Exploration and evaluation costs

Exploration and evaluation costs have been capitalised on the basis that activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised.

NOTE 3 SEGMENT INFORMATION

The Group operates only in one reportable segment being predominately in the area of mineral exploration in Democratic Republic of the Congo. The Board considers its business operations in mineral exploration to be its primary reporting function. Results are analysed as a whole by the chief operating decision maker, this being the Board of Directors. Consequently, revenue, profit, net assets and total assets for the operating segment are reflected in this financial report.

NOTE 4 REVENUE Revenue Interest received Other income Foreign exchange gain Subleasing income	2019 2018 $ $
	16,352 28,629 - 4,373 674 1,279 75,000 46,500
	92,026 80,781

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

Notes to the Consolidated Financial Statements
NOTE 5 SHARE BASED PAYMENTS EXPENSE Shares issued in lieu of consulting work performed (i) Options issued in lieu of consulting work performed (ii) Performance rights amortised during the period (iii)	2019 2018 $ $
	- 68,000 - 306,921 8,000 1,702
	8,000 376,623

(i) Shares

During 2018, 4,000,000 fully paid ordinary shares in the Company were issued to consultants in lieu of consulting services relating to the introduction to the Mukabe Kasari Project. Total value of shares was $68,000.

(ii) Options

Terms and conditions of options as share-based payments issued during the 2018 year:

	Listed options Expiry 15/05/2023 @ $0.02
No. of options	35,000,000
Grant date	15 May2018
Expirydate	28 June 2023
Fair value atgrant date($)	$0.009
Shareprice atgrant date	$0.008
Exerciseprice	$0.02
Expected volatility	150%
Dividendyield	-
Risk-free interest rate	2.44%

The Company issued 35,000,000 unlisted options $0.02 expiring on or before 28 June 2023 to consultants in lieu of marketing services for nil consideration. Total value of options was $306,921.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

(iii) Performance Rights

34,500,000 performance rights were granted during the 2018 year to Key Management Personnel. During the year ended 30 June 2019 5,500,000 rights lapsed as the condition was not met by 15 May 2019.

Set out below are summaries of performance rights granted by the Company to directors during the 2018 year.

Refer to Remuneration Report for details of the performance rights granted during the 2019 year to Key Management Personnel.

	Number of rights	Number of Shares	Grant date	Hurdle
Tranche 1 (lapsed)	5,500,000	5,500,000	15/05/2018	Performance Rights will vest upon the VWAP for 10 consecutive Trading Days of Shares equalling or exceeding $0.02 within 12 months of the date of issue;
Tranche 2	9,500,000	9,500,000	15/05/2018	Performance Rights will vest upon the VWAP for 10 consecutive Trading Days of Shares equalling or exceeding $0.03 within 24 months of the date of issue;and
Tranche 3	19,500,000	19,500,000	15/05/2018	Performance Rights will vest upon the VWAP for 10 consecutive Trading Days of Shares equalling or exceeding $0.05 within 36 months of the date of issue.

	Grant date	Expiry date	Balance at the start of the year	Expired during the year	Balance at end of the year	Fair value at grant date $	Share- based payment expense in 2019 $	Share- based payment expense in 2018 $
Tranche 1 Tranche 2	15/05/2018 15/05/2018	1/06/2019 1/06/2020	5,500,000 9,500,000	(5,500,000) -	- 9,500,000	55,000 95,000	- 4,750	985 426 291
Tranche 3	15/05/2018	1/06/2021	19,500,000	-	19,500,000	195,000	3,250

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 6 INCOME TAX

Prima facie tax benefit on loss before income tax at 30% (2018: 30%) Tax effect of amounts which are not deductible (taxable) in calculating taxable income Foreign operations – non deductible Legal fees Equity based payments Impairment – BMVL investment Other non-assessable Other non-deductible Current year tax assets not recognised Income tax expense (c) The estimated potential deferred tax benefits not brought to account at 30% (2018: 30%) Revenue losses- Australia Capital losses Temporary differences - Australia NOTE 6 INCOME TAX (a) The components of tax expense comprise: Current tax Deferred tax Income tax expense reported in the of profit or loss and other comprehensive income (b) The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows: Loss before income tax expense	2019 2018 $ $ - - - -
	- -
	(1,164,964) (1,348,989)
	(349,489) (404,697)
	56,777 - - 2,799 2,400 112,987 - 6,727 (4,500) - 16,190 37,920
	(278,622) (244,264) 278,622 244,264
	- -
	(3,986,667) (3,688,482) (1,004,271) (1,003,449) (195,414) (201,611)

Potential deferred tax assets attributable to tax losses and other temporary differences have not been brought to account at 30 June 2019 because the directors do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this point in time.

The benefit for tax losses will only be obtained if:

• (i) The Group derives future assessable income in Australia of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised;

• (ii) The Group continues to comply with the conditions for deductibility imposed by tax legislation in Australia; and

• (iii) There are no changes in tax legislation in Australia which will adversely affect the Group in realising the benefit from the deductions for the losses.

At 30 June 2019, there is no recognised or unrecognised deferred income tax liability for taxes that would be payable on the unremitted earnings of certain of the Group’s subsidiary as the Group has no liability for additional taxation should such amounts be remitted.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 7 LOSS PER SHARE

Basic loss per share amounts are calculated by dividing net loss for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.

Diluted loss per share amounts are calculated by dividing the net loss attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

Net loss for the year Weighted average number of ordinary shares for basic and diluted loss per share.	2019 2018 $ $
	(1,164,964) (1,348,989)
	221,752,948 545,234,941

Options on issue are not considered dilutive to the earnings per share as the Company is in a loss-making position.

Continuing operations

• Basic and diluted loss per share (cents) (0.53) (0.25)

NOTE 8 CASH AND CASH EQUIVALENTS Cash at bank and on hand Short-term deposits	2,167,300 2,843,821 108,121 108,121
	2,275,421 2,951,942

Cash at bank earns interest at floating rates based on daily deposit rates. Short-term deposits are made in varying periods between one day and three months, depending on the immediate cash requirements of the Group and earn interest at the respective short-term deposit rates.

The Group’s exposure to interest rate and credit risks is disclosed in Note 14.

(a) Reconciliation of net loss after tax to net cash outflows from operations

Loss for the financial year Adjustments for: Loss/(Gain) on revaluation of financial assets at fair value through profit or loss Depreciation Share-based payments Impairment of investments and assets Net foreign exchange losses Changes in assets and liabilities Trade and other receivables Trade and other payables Net cash used in operating activities	(1,164,964) (1,348,989) 94,876 (108,966) - 762 8,000 376,623 - 57,019 - 1,279 (45,605) (9,619) 10,962 (123,699)
	(1,096,731) (1,155,590)

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 9 TRADE AND OTHER RECEIVABLES & FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Trade and other receivables - current Advances Prepayments Other Lease incentive asset Trade and other receivables -Non- current Lease incentive asset Financial assets at fair value through profit or loss- current 1,440,000 fully paid ordinary shares held in Greenpower Limited(i) 960,000 options held in Greenpower Limited 5,595,652 (2018: 5,595,652) fully paid ordinary shares held in Bluebird Merchant Ventures Ltd (LSE: BMV) (ii)

2019 2018 $ $ 28,057 67,274 120,220 14,209 41,567 28,760 38,840 33,996 228,684 144,239 - 38,840 1,440 7,200 960 - 202,916 292,992 205,316 300,192

*Lease incentive relates to office premise and is amortised over the lease term.

(i) Includes impairment of $4,800 ($11,520 in 2018)

(ii) Includes impairment of $90,076 (gain of $120,487 in 2018)

Loss on financial instruments revaluation is $94,876 during the year ended 30 June 2019 (2018: net gain on financial instruments revaluation is $108,967).

Refer to note 21 for further information on fair value measurement.

(a) Allowance for expected credit losses

The Group did not recognise any loss in the profit or loss in respect of the expected credit losses for the year ended 30 June 2019 and 30 June 2018.

NOTE 10 TRADE AND OTHER PAYABLES Trade payables (i) Accrued expenses Lease incentive liability(ii)	2019 2018 $ $
	68,017 72,671 111,292 67,318 38,840 33,996 218,149 173,985

(i) Trade payables are non-interest bearing and are normally settled on 30-day terms.

(ii) Lease incentive relates to office premises and is amortised over the lease term.

NOTE 11 EXPLORATION AND EVALUATION Opening balance Additions capitalised during the period Cost of Earn in to Mukabe Kasari project	2019 2018 $ $
	641,208 99,171 4,790 372,037 - 170,000
	645,998 641,208

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 12 CONTRIBUTED EQUITY

NOTE 12 CONTRIBUTED EQUITY
(a) Issued and fully paid Ordinary shares	2019 2018 No. $ No. $
	778,036,755 41,645,240 678,036,775 41,220,240

Ordinary shares entitle the holder to participate in dividends and the proposed winding up of the Company in proportion to the number and amount paid on the share hold.

(b) Movement reconciliation At 1 July 2017 Conversion RMXOG options at $0.015 Issue of shares- $0.011 Less capital raising costs Shares issued for consideration of Mukabe Kasari earn in Shares issued in lieu of services Issue of shares- $0.009 Less capital raising costs Shares issued pursuant to share purchase plan - $0.009 At 30 June 2018 Issue of Shares - $0.005 placement Capital raising costs At 30 June 2019 NOTE 13 RESERVES Share-based payments reserve (i) Foreign currency translation reserve (ii) Other reserves (iii) Total reserves at the end of the financial year	Number $
	430,518,513 38,986,385
	15,625 234
	66,818,182 735,000
	- (96,288)
	10,000,000 170,000
	4,000,000 68,000
	111,128,888 1,000,160
	- (143,251)
	55,555,567 500,000
	678,036,755 41,220,240
	100,000,000 500,000
	- (75,000)
	778,036,755 41,645,240
	2019 2018 $ $
	5,707,997 5,699,997 4,938,847 4,933,209 48,687 48,687
	10,695,531 10,681,893

(i) Share-based payment reserve

The share-based payment reserve is used to record the value of share-based payments provided to outside parties, and share-based remuneration provided to employees and directors.

and share-based remuneration provided to employees and directors.
Performance rights(1) Options(2) Total	9,702 1,702
	5,698,295 5,698,295
	5,707,997 5,699,997

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 13 RESERVES (CONT.)

1. Performance rights Performance rights Movement reconciliation Performance rights At 1 July 2017 Performance rights issue At 30 June 2018 Performance rights amortisation Lapsed performance rights At 30 June 2019*	2019 No. $	2018 No. $
	29,000,000 9,702	34,500,000 1,702
		- - 34,500,000 1,702 34,500,000 1,702 - 8,000 (5,500,000) - 29,000,000 9,702

*On 15 May 2018 34,500,000 performance rights were granted to Directors as a part of their remuneration.

The following performance rights were issued to the Company’s Directors during the 2018 year:

	J King	L Ho	R Parton	Total
Tranche 1*	3,000,000	2,000,000	500,000	5,500,000
Tranche 2	6,000,000	3,000,000	500,000	9,500,000
Tranche 3	13,000,000	6,000,000	500,000	19,500,000
Total	22,000,000	11,000,000	1,500,000	34,500,000

*During the year ended 30 June 2019, 5,500,000 (2018: Nil) performance rights lapsed as the condition was not met by 15 May 2019.

There are no voting rights for Performance Rights holders.

2. Options Options over ordinary shares of the Company Movement reconciliation Options At 1 July 2017 Options issued Lapsed Options Exercise of options At 30 June 2018 Lapsed Options – 24 December 2018 At 30 June 2019	2019 2018 No. $ No. $	2019 2018 No. $ No. $
	151,710,653 5,698,295 152,804,403 5,698,295
		Weighted Average price ($)
		0.024 152,804,403 5,391,374
		35,000,000 306,921
		(52,261,870) -
		(15,625) -
		0.017 152,804,403 5,698,295 (1,093,750) -
		0.017 151,710,653 5,698,295

The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.23 years (2018: 2.22 years)

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 13 RESERVES (CONT.)

ii) Foreign currency translation reserve

Movement reconciliation Balance at the beginning year Movement Balance at the end of the financial year iii) Other reserve Movement reconciliation Balance at the beginning and end of year	2019 2018 $ $
	4,933,209 4,933,209
	5,638 -
	4,938,847 4,933,209
	2019 2018 $ $
	48,687 48,687

NOTE 14 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of the financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of market forecasts for interest rate and foreign exchange prices. Ageing analysis and monitoring of specific credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through the development of future cash flow forecasts.

Risk management is carried out by Management and overseen by the Board of Directors with assistance from suitably qualified external advisors.

The main risks arising for the Group are foreign exchange risk, interest rate risk, credit risk and liquidity risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.

The carrying values of the Group’s financial instruments are as follows:

Financial Assets Cash and cash equivalents Trade and other receivables (less lease incentive asset) Financial assets at fair value through profit or loss Financial Liabilities Trade and other payables (less lease incentive liability)	2019 2018 $ $
	2,275,421 2,951,942 189,844 110,243 205,316 300,192
	2,670,581 3,362,377
	179,309 140,990
	179,309 140,990

(a) Market risk

(i) Foreign exchange risk

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 2019	USD
Cash and cash equivalents	13,502
Total foreign currencies	13,502
Total converted into AUD	19,173

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 14 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)

30 June 2018	USD
Cash and cash equivalents	1,618
Total foreign currencies	1,618
Total converted into AUD	2,185

Based on the financial instruments held at 30 June 2019, had the Australian dollar strengthened/weakened by 10% against the US dollar with all other variables held constant, the Group’s post-tax loss for the financial year would have been $1,917 lower/higher (2018: $218 lower/higher) and equity would have been $1,917 lower/higher (2018: $218 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.

(ii) Interest rate risk

The Group is exposed to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in the market interest rates on interest bearing financial instruments. The Group’s exposure to this risk relates primarily to the Group’s cash and any cash on deposit. The Group does not use derivatives to mitigate these exposures. The Group manages its exposure to interest rate risk by holding certain amounts of cash in fixed and floating interest rate facilities. At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was:

Cash and cash equivalents	2019 2018 Weighted average interest rate(iii) Balance $ Weighted average interest rate Balance $
	0.6% 2,275,421 1.76% 2,951,942

(iii) This interest rate represents the average interest rate for the period.

Sensitivity

Within the analysis, consideration is given to potential renewals of existing positions and the mix of fixed and variable interest rates. The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date. The 1% increase and 1% decrease in rates is based on reasonably expected possible changes over a financial year, using the observed range of historical rates for the preceding five-year period.

At 30 June 2019, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post-tax losses and equity would have been affected as follows:

	Loss higher/(lower)	Loss higher/(lower)
Judgements of reasonably possible	2019	2018
movements:	$	$
+ 1.0% (100 basis points)	22,754	29,519
- 1.0% (100 basis points)	(22,754)	(29,519)

(b) Credit risk

Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, trade and other receivables and other financial assets. The Group’s exposure to credit risk arises from potential default of the counterparty, with maximum exposure equal to the carrying amount of the financial assets.

The Group’s policy is to trade only with recognised, creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms will be subject to credit verification procedures.

In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. There are no significant concentrations of credit risk within the Group.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 14 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)

(c) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to its reputation.

The Group manages liquidity risk by maintaining adequate cash reserves from funds raised in the market and by continuously monitoring forecast and actual cash flows. The Group does not have any external borrowings. The following are the contractual maturities of financial liabilities:

2019 Trade and other payables 2018 Trade and other payables	6 months 6-12 months 1-5 years > 5 years Total $ $ $ $ $
	179,309 - - - 179,309
	140,990 - - - 140,990

• less lease incentive liability

(d) Capital risk management

The Group’s objectives when managing capital are to:

• Safeguard their ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and

• Maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the number of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Given the stage of the Group’s development there are no formal targets set for return on capital. There were no changes to the Group’s approach to capital management during the year. The Group is not subject to externally imposed capital requirements. The net equity of the Group is equivalent to capital. Net capital is obtained through capital raisings on the Australian Securities Exchange (“ASX”).

NOTE 15 RELATED PARTY DISCLOSURE

(a) Key Management Personnel Compensation

Details relating to key management personnel, including remuneration paid, are below.

Short-term benefits Post-employment benefits Share-based payments (refer to note 5)	2019 2018 $ $
	180,000 180,000 43,985 - - 345,000
	223,985 525,000

Information regarding individual Directors compensation and equity instruments disclosures is provided in the Remuneration Report section of the Directors’ Report.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 15 RELATED PARTY DISCLOSURE (CONT.)

Loans with KMP

There were no loans made to any KMP during the year ended 30 June 2019 (30 June 2018: Nil).

Other Transactions with KMP

The following transactions occurred with related parties:	2019	2018
	$	$
Company secretarial and financial management services from Mirador Corporate Pty Ltd
(director related entity of Jeremy King)	128,100	90,625
Receipt of rental income from Mirador Corporate Pty Ltd, an entity related to Mr Jeremy
King.	3,000	22,500
Receipt of rental income from Pure Minerals Limited, an entity related to Mr Jeremy King
and Mr Lincoln Ho	33,750	3,500
Trade and other payables to related parties:	2019	2018
	$	$
Company secretarial and financial management services from Mirador Corporate Pty Ltd
(director related entity of Jeremy King)	13,125	13,125
Amounts outstanding and receivable to related parties at 30 June	$	$
Receipt of rental income from Pure Minerals Limited, an entity related to Mr Jeremy King and Mr Lincoln Ho	11,250	-
Receipt of rental income from Mirador Corporate Pty Ltd, an entity related to Mr Jeremy King.	3,000	-

Terms and conditions

All transactions were made on normal commercial terms and conditions and at market rates.

NOTE 16 COMMITMENTS

Lease commitments Within one year Later than one year but not later than five years NOTE 17 CONTINGENCIES	2019 2018 $ $
	21,091 134,574
	133,720 160,483
	154,811 295,057

There are no contingent assets or contingent liabilities as at 30 June 2019 (2018: nil).

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statements

NOTE 18 AUDITOR’S REMUNERATION

NOTE 18 AUDITOR’S REMUNERATION
Amounts received or due and receivable by RSM Australia for: Audit and review of the annual and half-year financial report Other services - RSM Australia for: - Income tax return Amounts received or due and receivable by Other RSM affiliates for: Audit of the annual financial report – subsidiary Amounts received or due and receivable by BDO Singapore for: Audit of the annual financial report – subsidiary	2019 2018 $ $
	33,500 43,500
	13,000 13,250
	- 11,437
	9,265 9,015
	55,765 77,202

NOTE 19	INVESTMENT IN CONTROLLED ENTITIES	INVESTMENT IN CONTROLLED ENTITIES
			Country of
		Principal Activities	Incorporation	**Ownership **	interest
				2019	2018
				%	%
Red Mountain Mining Holdings Ltd*		Exploration	HongKong	-	100%
Red Mountain MiningPte Ltd		Exploration	Singapore	100%	100%

*During the period Red Mountain Mining Holdings Ltd was discontinued as at 30 June 2019, there was no balance associated with this company.

NOTE 20 PARENT ENTITY

NOTE 20 **PARENT ENTITY **
Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Equity Contributed equity Reserves Accumulated losses Total equity Loss for the year Total comprehensive loss	2019 2018 $ $
	2,704,380 3,392,333 174,474 680,048
	2,878,854 4,072,381
	218,154 173,985 - 38,840
	218,154 212,825
	41,645,240 41,220,240 5,224,587 5,698,295 (44,209,127) (43,059,980)
	2,660,700 3,858,555
	(1,149,147) (1,236,949)
	(1,149,147) (1,236,949)

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statement

NOTE 20 PARENT ENTITY (CONT.)

Contingent liabilities

The parent entity had no contingent liabilities as at 30 June 2019 and 30 June 2018.

Capital commitments - Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment as at 30 June 2019 and 30 June 2018.

Lease commitments

The parent entity had lease commitments as disclosed in Note 16.

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except for the following:

• Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.

NOTE 21 FAIR VALUE MEASUREMENT

Fair value hierarchy

The following tables detail the consolidated entity's assets and liabilities, measured or disclosed at fair value, using a threelevel hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3: Unobservable inputs for the asset or liability

Consolidated - 2019 Assets Ordinary shares at fair value through profit or loss Total assets Consolidated - 2018 Assets Ordinary shares at fair value through profit or loss Total assets	Level 1 $ 205,316	Level 2 $ -	Level 3 $ -	Total $ 205,316
	205,316	-	-	205,316
	Level 1 $ 300,192	Level 2 $ -	Level 3 $ -	Total $ 300,192
	300,192	-	-	300,192

There were no transfers between levels during the financial year.

The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their short-term nature.

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Red Mountain Mining Limited – Annual Report 2019

Notes to the Consolidated Financial Statement

NOTE 22 EVENTS AFTER THE REPORTING DATE

On the 12[th] of August 2019, the Group executed an earn in agreement to acquire up to a 100% interest in the Mt Mansbridge Rare Earths Project in Western Australia. The Group extended the due diligence period to review additional data on a separate, complementary metals project.

Other than the above, there has been no other matter or circumstance that has arisen since the end of the financial year that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group.

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Red Mountain Mining Limited – Annual Report 2019

Directors’ Declaration

In the Directors’ opinion:

• a) The financial statements and accompanying notes are in accordance with the Corporations Act 2001, including:

• i) complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

• ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2019 and of its performance for the year ended on that date.

• b) The financial statements and notes comply with International Financial Reporting Standards as described in Note 1 to the financial statements.

• c) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

The Directors have been given the declarations required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by:

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Jeremy King Director

26 September 2019

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

Opinion

We have audited the financial report of Red Mountain Mining Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2019, 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 2019 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.

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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 matter

Exploration and Evaluation Expenditure Refer to Note 11 in the financial statements

The Group has capitalised exploration and evaluation expenditure with a carrying value of $645,998 as at 30 June 2019.

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;

• Assessing whether exploration activities have reached a stage at which the existence of an economically recoverable reserves may be determined; and

• Assessing whether any indicators of impairment are present, and if so, judgments applied to determine and quantify any impairment loss.

Our audit procedures included:

• Obtaining evidence that the Group has valid rights to explore in the specific area of interest;

• Reviewing and enquiring with management the basis on which they have determined that the exploration and evaluation of mineral resources has not yet reached the stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves;

• • Enquiring with management and reviewing budgets and other documentation as evidence that active and significant operations in, or relation to, the area of interest will be continued in the future; and

• Critically assessing and evaluating management’s assessment that no indicators of impairment existed at the reporting date.

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 2019, 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.

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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.

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 2019.

In our opinion, the Remuneration Report of Red Mountain Mining Limited, for the year ended 30 June 2019, 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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RSM AUSTRALIA PARTNERS

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Perth, WA Dated: 26 September 2019

TUTU PHONG Partner

Red Mountain Mining Limited – Annual Report 2019

Corporate Governance Statement

The Board of Directors of Red Mountain Mining Limited is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and accountable. The Board continuously reviews its governance practices to ensure they remain consistent with the needs of the Company.

The Company complies with each of the recommendations set out in the Australian Securities Exchange Corporate Governance Council’s Corporate Governance Principles and Recommendations 3[rd] Edition (“the ASX Principles”). This statement incorporates the disclosures required by the ASX Principles under the headings of the eight core principles. All of these practices, unless otherwise stated, are in place.

Further information on the Company’s corporate governance policies and practices can be found on the Company’s website at https://www.redmountainmining.com.au/

ASX Additional Information

Additional information required by the Australian Securities Exchange and not shown elsewhere in this Annual Report is as follows. The information is current as of 20 September 2019.

TWENTY LARGEST SHAREHOLDERS

		Number	Percentage
		Held
1	MCNEIL NOMINEES PTY LIMITED	63,750,000	8.19
2	MR DOMINIC VIRGARA	27,000,000	3.47
3	XCEL CAPITAL PTY LTD	22,193,124	2.85
4	80 MILES & BEYOND PTY LTD <80 MILES & BEYOND S/F A/C>	15,000,000	1.93
4	JAMORA NOMINEES PTY LTD	15,000,000	1.93
6	KALCON INVESTMENTS PTY LTD	12,000,000	1.54
7	MS CHUK FAH POI	10,500,000	1.35
8	BUSHWOOD NOMINEES PTY LTD	10,000,000	1.29
8	CHATENOIS PTY LTD	10,000,000	1.29
8	DEMPSTER PTY LTD	10,000,000	1.29
11	MR MATTHEW STEVEN KLEIN	9,666,667	1.24
12	PAPILLON HOLDINGS PTY LTD	9,000,000	1.16
13	HIGHLAND COMPANY PTY LTD	7,966,667	1.02
13	JALAVER PTY LTD	7,966,667	1.02
15	VOLTA INVESTMENTS PTY LTD	7,478,426	0.96
16	SPARKCHOICE PTY LTD	7,000,000	0.90
17	BR CORPORATION PTY LTD	6,750,000	0.87
18	MR ZHONGLI LI	6,400,000	0.82
19	MR GARO PETE IRIKIAN	6,044,044	0.78
20	SURF COAST CAPITAL PTY LTD	6,000,000	0.77
Total:	Top 20 holders of ORDINARY FULLY PAID SHARES	269,715,595	34.67%

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Red Mountain Mining Limited – Annual Report 2019

ASX Additional Information

DISTRIBUTION OF EQUITY SECURITIES

(i) Ordinary share capital

The number of shareholders, by size of holding, is:

**Range **	Total holders	Units	% of Issued Capital
1 - 1,000	49	5,907	0.00
1,001 - 5,000	28	74,922	0.01
5,001 - 10,000	28	207,705	0.03
10,001 - 100,000	330	20,561,491	2.64
100,001 Over	731	757,186,750	97.32
Total	1,166	778,036,775	100.00

(ii) listed Options

• 67,210,653 quoted options with an exercise price of $0.015 and an expiry of 21/11/2019.

TWENTY LARGEST LISTED OPTION HOLDERS

		Number Held	Percentage
1 2 3 4 5 6 7 8 9 10 11 11 13 14 15 16 17 18 19 20	M & K KORKIDAS PTY LTD S/FUND A/C> MR HOSSEIN SHIRAZI MR ANDREW JOHN MEEK MR BRIAN EDWARD FENTON YEOH SUPER PTY LTD MR CHRIS ROBINSON MR SIMON HANCOCK MR PAUL ROBERT DALLA-LIBERA MRS VANESSA RUBEN MR MARK SIMON TUART MISS PAULA MORRELL MRS VANESSA RUBEN MR RODNEY PATRICK CALLAHAN MR KRISHNAN MUTHU SANTHANA SIVANANTHAM MR CHARLIE MING CHAI YEOH MR PAUL AIVALIOTIS MRS DEEPA RANI MR TRAVIS MICHAEL SAMUELL MR PAUL RICHARD JOB MR RAYMOND BRADWELL + MRS JULIEANN ELIZABETH BRADWELL	6,307,244 5,000,000 4,600,000 4,250,000 3,952,790 3,158,719 3,000,000 2,228,350 1,605,000 1,500,103 1,500,000 1,500,000 1,400,000 1,346,157 1,307,698 1,294,800 1,187,333 1,164,000 1,000,000 970,000	9.38 7.44 6.84 6.32 5.88 4.70 4.46 3.32 2.39 2.23 2.23 2.23 2.08 2.00 1.95 1.93 1.77 1.73 1.49 1.44
	Total: Top 20 holders of listed options	48,272,194	71.82

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Red Mountain Mining Limited – Annual Report 2019

ASX Additional Information

**Range **	Total holders	Units	% of Options
1 - 1,000	9	2,234	0.00
1,001 - 5,000	33	72,368	0.11
5,001 - 10,000	16	104,543	0.16
10,001 - 100,000	40	1,980,653	2.95
100,001 Over	70	65,050,855	96.79
Total	168	67,210,653	100.00

(iii) Listed options

37,000,000 quoted options with an exercise price of $0.018 and an expiry date of 13/12/2019.

TWENTY LARGEST LISTED OPTION HOLDERS

		Number Held	Percentage
1	MR LUIGI MILANESI	4,830,000	13.05
2	MR SEWA SINGH	4,000,000	10.81
3	MR FAROUK AHMED	2,826,500	7.64
4	ZAMAN PERAK PTY LTD S/F A/C>	2,500,000	6.76
5	MR PAUL VENDA DIVIN	2,400,000	6.49
6	MR CHARLIE MING CHAI YEOH	2,250,000	6.08
7	MR PAUL ROBERT DALLA-LIBERA	2,166,695	5.86
8	SACCO DEVELOPMENTS AUSTRALIA PTY LIMITED	2,000,000	5.41
9	RIMOYNE PTY LTD	1,900,000	5.14
10	MR ROBERT ALFRED JURGENS	1,298,200	3.51
11	MR ZAKI-ANDREW AYOUB	1,211,302	3.27
12	MRS DEEPA RANI	1,005,000	2.72
13	MR VICTOR LAWRENCE JOYCE + MRS SUSAN JOAN ABRA	1,000,000	2.70
14	MR MARK SIMON TUART	977,772	2.64
15	MR AMARJEET SANDHU	800,000	2.16
16	MR SCOTT ANDREW WAITE	580,000	1.57
17	MISS EMILY CHAI	541,589	1.46
18	MS CHUK FAH POI	450,000	1.22
19	MR ANDREW GORDON ANDERSON	420,336	1.14
20	MR TIMOTHY JOSEPH MADDOCK	300,000	0.81
	Total: Top 20 holders of listed options	33,457,394	90.43

**Range **	Total holders	Units	% of Options
1 - 1,000	-	-	-
1,001 - 5,000	-	-	-
5,001 - 10,000	-	-	-
10,001 - 100,000	12	891,917	2.41
100,001 Over	34	36,108,083	97.59
Total	46	37,000,000	100.00

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Red Mountain Mining Limited – Annual Report 2019

ASX Additional Information

Unquoted options

• 12,500,000 unquoted options with an exercise price of $0.02 and an expiry date of 14 October 2019; and

• 35,000,000 unquoted options with an exercise price of $0.02 and an expiry date of 28 June 2023.

SUBSTANTIAL SHAREHOLDERS

The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2001 are:

	Holding	% of Issued
	Balance	Capital
MCNEIL NOMINEES PTY LIMITED	63,750,000	8.19

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.

Options

Options carry no voting rights.

UNMARKETABLE PARCELS

There were 287 holders of less than a marketable parcel of ordinary shares, which as at 20 September 2019 was 6,642,640.

RESTRICTED SECURITIES

There are no restricted securities as at 20 September 2019.

ON-MARKET BUY-BACK

There is currently no on-market buyback program for any of Red Mountain Mining listed securities.

ACQUISITION OF VOTING SHARES

No issues of securities have been approved for the purposes of Item 7 of Section 611 of the Corporations Act 2001.

TAX STATUS

The Company is treated as a public company for taxation purposes.

FRANKING CREDITS

The Company has no franking credits.

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