RED MOUNTAIN MINING LIMITED — Capital/Financing Update 2011

Aug 29, 2011

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RED MOUNTAIN MINING LIMITED (ABN 40 119 658 106)

STATEMENT OF COMMITMENTS BASED ON FUNDS RAISED UNDER THE PROSPECTUS

Red Mountain Mining Limited (" Company ") raised $8,000,000 under its Prospectus dated 4 July 2011 (" Prospectus ").

The Company intends to use the $8,000,000 raised under the Prospectus together with $450,000 cash on hand at 30 June 2011 as follows:

Application of Proceeds	A$
Two year exploration and development budget for Zhongqu Project	1,874,000
Diebu Framework Agreement deposit payment	1,939,315
Two year exploration budget for Diebu Project	1,330,000
Two year corporate administration costs	1,317,000
Costs of the Offer	678,600
General working capital	1,311,085
Total	$8,450,000

The above statement of commitments is an estimate only and intervening events (including exploration success or failure) and new circumstances have the potential to affect the ultimate way funds will be applied. The board of the Company reserves the right to vary the way funds are applied on this basis.

The Diebu Framework Agreement deposit payment has been paid by the Company into an escrow account in Hong Kong pending Lingbao Xuanrui Mineral Resources Company Limited obtaining relevant Chinese approvals to the receipt of the moneys within China.

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