RED MOUNTAIN MINING LIMITED — Capital/Financing Update 2011

Sep 14, 2011

Red Mountain Intersects Significant Gold Mineralisation at Zhongqu

Date: 15 September 2011

China‐focused gold company, Red Mountain Mining ("the Company", "RMX") has intersected ignificant gold mineralisation during its initial underground drilling program at the hongqu project in Gansu Province, China. s Z

HIGHLIGHTS:

• Stage 1 drilling program intersected significant gold mineralisation at Zhongqu. The best of these are highlighted below and in Table 1:
  • o 31 m at 4.61 grams per tonne gold including 4 m at 9.51 g/t gold and 8m at 10.07 g/t gold
  • o 14.3m at 4.50 g/t gold including 6m at 7.14 g/t gold and 3m at 6.27 g/t gold
  • o 8m at 7.65 g/t gold
  • o 4m at 5.71 g/t gold

Red Mountain, which has an agreement to acquire 51% of the Zhongqu project, has drilled 7 holes for 2,352 metres at the Xinqu operating gold mine. Xinqu is one of three main xploration target areas within the Zhongqu project (Figures 1 and 2). 1 e

Figure 2. Zhongqu project showing main prospect locations within the tenement.

Andrew Richards, Red Mountain Chief Executive Officer said the primary objectives of the program were to expand and better understand the known mineralisation at Xinqu. It represents the first stage in bringing the gold prospects into JORC Code compliance.

"We are encouraged by the width and tenor of the gold ore system as it confirms that the project is capable of hosting mine grade mineralisation amenable to modern mechanised nderground mining methods. These results will contribute to the estimation of an initial esource model by Red Mountain Mining," said Mr Richards. u r

The deepest intersection was approximately 200 metres vertically below the 6 Level and nly 400 metres below surface. This is considered shallow by Australian standards and asily accessed by a decline." " o e

Table 1. Highlights of RMX drilling at XinQu mine, Zhongqu project
Hole No	From	To	Intersection
XQ6L 002	22m	26m	4 m at 5.71 g/t Au
XQ6L 005	40m	47m	7 m at 5.70 g/t Au
XQ6L 009	37m	43m	6 m at 4.21 g/t Au
XQ6L 010	48m	56m	8 m at 7.65 g/t Au
	75m	77m	2 m at 5.07 g/t Au
	79m	84m	5 m at 5.31 g/t Au
XQ6L 013	183.5m	192.5m	9 m at 5.59 g/t Au
XQ6L 014	95m	126m	31 m at 4.61 g/t Au
	Including:
	95m	99m	4m at 9.51 g/t Au, and
	118m	126m	8m at10.07 g/tAu
	134m	135m	1 m at 4.62 g/t Au
XQ6L 015	107.5m	121.8m	14.3 m at 4.50 g/ Au
	Including:
	107.5m	113.5m	6 m at 7.14 g/t Au,and
	116m	119m	3 m at 6.27 g/t Au
XQ6L 017	120m	124.5m	4.5m at 6.33 g/t Au

Figure 3. Plan of Xinqu mine 6 Level showing trace of underground drilling and intercepts of gold mineralisation obtained below the 6 level. The outlined "zone of mineralisation' is as proposed by Chinese workers following geochemical studies and expected to dip or plunge to the SSW SSE.

Another program of underground drilling of approximately 2,000m is planned to commence in October. This will aim to gain a better understanding of the newly encountered mineralisation as well some infill drilling to establish tonnage potential. Two shallow metallurgical drill holes will be drilled to test each style of mineralisation.

Drilling commenced from the deepest working "6 Level" of the Xinqu mine (Figure 3) which has been mining hematitic brecciated ore at or near a granodiorite ‐ limestone contact. RMX drilling encountered mineralisation in 13 of 17 drillholes with intercepts encountering the same style of mineralisation as seen in the Xinqu mine as well as another style of gold mineralisation located in hematitic, often brecciated and carbonated, structures within the limestone unit. The spatial orientation of the limestone hosted structures has yet to be fully understood but they have returned significant gold intersections.

Table 2 provides more details of the significant drill intercepts and the style of mineralisation while the hole details are tabulated in Appendix 1. Some of these assays are onsidered preliminary while a review of standards as per QA/QC procedures are ompleted. c c

Table 2. Xinqu underground drilling – Significant gold intercepts
Hole No.	FromTo		Intersection	Style of mineralisation
XQ6L 001	14m	16m	2m at 3.92	Granodiorite contact
XQ6L 002	22m	26m	4m at 5.71 g/t Au	Granodiorite contact
XQ6L 003	12.1m	15m	2.9m at 2.86	Limestone hosted
XQ6L 004	15m	15m	1m at 1.94 g/t Au	Granodiorite contact
	18m	19m	1m at 13.5 g/t Au	Granodiorite contact
	22m	23m	1m at 0.92 g/t Au	Limestone hosted
XQ6L 005	23m	24m	1 m at 1.64 g/t Au	Limestone hosted
	40m	47m	7m at 5.70 g/t Au	Granodiorite contact
XQ6L 006			NSI
XQ6L 007			TBA
XQ6L 008			TBA
XQ6L 009	26m	27m	1m at 3.69 g/t Au	Limestone hosted
	37m	43m	6m at 4.21 g/t Au	Limestone hosted
	Including:
	37m	40m	3m at 4.54 g/t Au	Limestone hosted
	41m	42m	2m at 5.82 g/t Au	Limestone hosted
XQ6L 010	48m	56m	8m at 7.65 g/t Au	Granodiorite contact
	75m	77m	2mat 5.07 g/t Au	Limestone hosted
	79m	84m	5mat 5.31 g/t Au	Limestone hosted
XQ6L 011			NSI
XQ6L 012			NSI
XQ6L 013	173.7m	174.7m	1m at 4.36 g/t Au	Limestone hosted
	183.5m	192.5m	9m at 5.59 g/t Au	Limestone hosted
XQ6L 014	95m	126m	31m at 4.61 g/t Au	Granodiorite contact
	Including:
	95m	99m	4m at 9.51 g/t Au	Granodiorite contact
	108m	116m	8m at 1.51 g/t Au	Granodiorite (internal)
	118m	126m	8m at 10.07 g/t Au	Granodiorite contact
	130m	132m	2m at 1.74 g/t Au	Limestone hosted
	134m	135m	1m at 4.62 g/t Au	Limestone hosted
XQ6L 015	107.5m	121.8m	14.3m at 4.50 g/ Au	Limestone hosted
	Including:
	107.5m	113.5m	6m at 7.14 g/t Au, and	Limestone hosted
	116m	119m	3m at 6.27 g/t Au	Limestone hosted
	148m	149.9m	1.9m at 6.74 g/t Au	Limestone hosted

Table 2. Xinqu underground drilling – Significant gold intercepts
Hole No.	From	To	Intersection	Style of mineralisation
XQ6L 016			NSI
XQ6L 017	120m	124.5m	4.5m at 6.33 g/t Au	Limestone hosted
	128m	129m	1m at 0.92 g/t Au	Limestone hosted
	144m	145.5m	1.5m at 3.63 g/t Au	Limestone hosted
	146m	147m	1m at 1.9 g/t Au	Limestone hosted

NSI: No Significant Intersection

ROM ockp le sampling St i

Prior to the latest drilling results, and as part of its original due diligence process, Red Mountain also assayed the surface Run Of Mine stockpile comprising approximately 40,000 nnes ore. Sampling across the surface averaged 8.58 g/t Au from 30 composite samples. to The composites were collected from within a 3 metre radius of evenly spaced sample points.

Andrew Richards said "While sampling of stockpiles can be prone to issues of representivity, he tenor of grade returned is similar to that back‐calculated for the ore treated during the ine's production history". t m

For further information please visit www.redmm.com.au or contact:

Andrew Richards	Media	Investors
Chief Executive Officer	Melanie Gray Stokes	Ronn Bechler
(61 8) 9226 5668	FTI Consulting	Market Eye
	(61) 424 135 294	(61) 400 009 774
	(61 8) 9386 1233	(61 3) 9591 8901

About the Company

Red Mountain Mining is a China‐focused gold explorer . The Company's strategy is to unlock the potential of 'under‐developed' gold projects in China by introducing Australian mining methods and improving efficiencies to gain significant production and exploration upside.

The Company has binding agreements to acquire 51% of the Zhongqu project and 90% of the Diebu project. Zhongqu has been operational since 2005 and has a modern gold treatment plant with 400,000 tpa capacity, which is currently under‐utilised. Zhongqu has already outlined Chinese classified non‐JORC compliant gold mineralisation and the project also has an initial exploration target of approximately 400,000 to 550,000 tonnes at 7.0 to 9.5 g/t of gold.

The Diebu Project has an exploration target estimate of between 400,000 to 550,000 tonnes at 3.5 to 4.5 g/t of gold with the mineralisation occurring irregularly over 6kms of strike.

The information in this report that relates to Exploration Results or Mineral Resources is based on information compiled by Andrew Richards, who is a member of The Australasian Institute of Mining and Metallurgy. He is a full time employee of Arc Resources Pty Ltd which is providing consulting services to Red Mountain Resources Ltd.

Andrew Richards has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Andrew Richards consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Appendix 1.

HoleName	Easting Y	Northing X	Elevation Z	Azimuth	Depression	HoleType	DrillDepth	DateCollared
XQ6L001	34515331.482	3773322.148	3578.854	25	20	HQDD	114.20	4/05/2011
XQ6L002	34515330.316	3773322.662	3578.887	360	18	HQDD	106.00	12/05/2011
XQ6L003	34515327.596	3773320.043	3578.706	315	45	HQDD	95.90	17/05/2011
XQ6L004	34515327.817	3773319.784	3578.684	315	70	HQDD	70.10	23/05/2011
XQ6L005	34515332.229	3773321.330	3578.840	45	20	HQDD	120.90	26/05/2011
XQ6L006	34515258.560	3773256.646	3578.709	360	35	HQDD	149.50	1/06/2011
XQ6L007	34515258.585	3773256.615	3578.808	360	10	HQDD	138.20	8/06/2011
XQ6L008	34515258.775	3773256.747	3578.994	25	25	HQDD	159.10	14/06/2011
XQ6L009	34515332.171	3773321.191	3578.778	60	40	HQDD	173.50	22/06/2011
XQ6L010	34515345.516	3773257.505	3578.782	10	20	HQDD	160.20	28/06/2011
XQ6L011	34515345.990	3773255.669	3578.519	25	60	HQDD	100.70	5/07/2011
XQ6L012	34515345.785	3773255.238	3578.575	25	75	HQDD	100.30	9/07/2011
XQ6L013	34515266.182	3773173.350	3579.328	25	63	HQDD	215.00	13/07/2011
XQ6L014	34515266.301	3773173.571	3579.196	25	40	HQDD	151.10	25/07/2011
XQ6L015	34515266.502	3773173.569	3579.085	40	50	HQDD	199.10	29/07/2011
XQ6L016	34515265.498	3773173.292	3579.416	350	70	HQDD	216.00	2/08/2011
XQ6L017	34515266.618	3773172.840	3579.400	60	50	HQDD	182.10	9/08/2011