RED MOUNTAIN MINING LIMITED — Capital/Financing Update 2013

May 19, 2013

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20 May 2013

Dear Shareholder

Notice to Shareholders of Rights Issue

We write to you as the registered holder of Red Mountain Mining Limited ( Red Mountain or Company ) shares as at today’s date. As announced on 15 May 2013, the Directors of Red Mountain have resolved to offer a pro-rata renounceable rights issue of approximately 281,358,039 shares, on the basis of 3 New Shares for every 2 Shares held on the Record Date at an issue price of 1 cent per New Share ( New Shares ), with 1 free attaching New Short-Dated Option exercisable at 1.5 cents each on or before 30 June 2014 for every 2 New Shares subscribed for under the Prospectus and 1 free attaching New Long-Dated Option exercisable at 3 cents each on or before 30 June 2016 for every 4 New Shares subscribed for under the Prospectus to raise approximately $2,813,580 ( Rights Issue or Offer ).

The Offer is partially and conditionally underwritten by Patersons Securities Limited ( Underwriter or Patersons ) up to the Minimum Subscription amount of $550,000. In consideration, Patersons or its nominees will be entitled to a $60,000 corporate advisory fee, $35,750 underwriting fee (being 6.5% of the Underwritten Amount) and one Long Dated option, exercisable at 3 cents each on or before 30 June 2016, for every two (2) shares of underwriting committed ( Underwriter Options ) payable on completion of the offer, plus 6.5% of the amount of any Shortfall Securities beyond the Underwritten Amount that are placed and which is payable upon completion of the Offer.

The funds raised from the Entitlement Issue are intended to be used for:

• a) Drilling high-grade gold targets at Lobo and Archangel prospects to seek to increase and upgrade Mineral Resources at the Batangas Gold Project;

• b) Undertaking a preliminary scoping study into a gold project development at the Batangas Gold Project;

• c) General working capital; and

• d) Payment of the costs of the Rights Issue process including the underwriting fee.

Participation in the Rights Issue is available to Red Mountain shareholders registered on the record date of 27 May 2013 ( Record Date ) and who reside in Australia, New Zealand or Canada ( Eligible Shareholders ).

The Rights Issue is being made pursuant to a prospectus which was lodged with the Australian Securities and Investments Commission on 16 May 2013 ( Prospectus ). The Prospectus is available at the Company’s website: www.redmm.com.au or on the ASX website (company announcements section, ASX code: RMX) at www.asx.com.au.

Key Dates:

The current proposed timetable for the Entitlement Issue is as follows*:

Event
Lodgement of Prospectus with the ASIC	16 May2013
Red Mountain Mining LtdACN 119 568 106Unit 1, No. 2 Richardson Street, West Perth, Western Australia, 6005. PO Box 1928, West Perth, W.A. 6872T: +61 (08) 9226 5668 F: +61 (08) 9486 8616 E: info@redmm.com.auW: www.redmm.com.au

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Lodgement of Prospectus & Appendix 3B with ASX	16 May2013
Notice sent to Optionholders	16 May2013
Notice sent to Shareholders	20 May2013
Ex date (date from which Shares trade on ASX without the entitlement	21 May 2013
toparticipate in the Offer)and Rights Tradingcommences
Record Date for determiningEntitlements	27 May2013
Prospectus despatched to Shareholders	31 May2013
Last Day of Rights Trading	7 June 2013
Closing Date	17 June 2013
ASX notified of under subscriptions	20 June 2013
Issue date	25 June 2013
Deferred settlement trading ends	25 June 2013
New Securities commence normal trading on ASX	26 June 2013

• Dates subject to change and indicative only. The Company reserves the right to amend this timetable, including, subject to the Corporations Act 2001 (Cth) and the Listing Rules of ASX, to extend the Closing Date.

A copy of the Prospectus will be sent to you on 31 May 2013 if you are an Eligible Shareholder. If you wish to participate in the Rights Issue, it will be necessary for you to complete an Entitlement and Acceptance Form, which will accompany your Prospectus, and return it with the appropriate application monies, to the Company before the Closing Date.

Actions required of Eligible Shareholders

There are a number of actions Eligible Shareholders may take:

• Taking up all of your Rights : If you wish to take up all of your Rights, complete the accompanying Entitlement and Acceptance Form for New Shares and New Options in accordance with the instructions set out in that form. You should then forward your completed Entitlement and Acceptance Form together with your application moneys to reach the Company's Share Registry no later than 5.00pm (WST) on the Closing Date.

• Taking up all your Rights and applying for Shortfall Securities: Eligible Shareholders may, in addition to taking up all their Rights, apply for Shortfall Shares. A single cheque should be used for the application moneys for your Rights and the number of Shortfall Shares you wish to apply for as stated on the Entitlement and Acceptance Form.

• Selling all of your Rights on the ASX: If you wish to sell all of your Rights on the ASX, complete the appropriate section in the accompanying Entitlement and Acceptance Form and lodge the Entitlement and Acceptance Form with your stockbroker as soon as possible, or otherwise provide instructions to your stockbroker regarding the number of Rights you wish to sell on the ASX. The Company accepts no responsibility for any failure by your stockbroker to carry out your instructions.

• Taking up part of your Rights and selling the balance on the ASX : If you wish to take up only part of your Rights, complete the accompanying Entitlement and Acceptance Form for the number of New Shares and New Options you wish to take up. You may then provide instructions to your stockbroker regarding the number of Rights you wish to sell on the ASX.

Red Mountain Mining Ltd ACN 119 568 106 Unit 1, No. 2 Richardson Street, West Perth, Western Australia, 6005. PO Box 1928, West Perth, W.A. 6872 T: +61 (08) 9226 5668 F: +61 (08) 9486 8616 E: info@redmm.com.au W: www.redmm.com.au

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• Taking up part of your Rights and allowing the balance to lapse: If you wish to take up part of your Rights and allow the balance to lapse, complete the accompanying Entitlement and Acceptance Form for the number of New Shares and New Options you wish to take up. If you take no further action, the balance of your Rights will lapse and you will have forfeited any potential benefit to be gained from selling/trading your Rights.

• Dealing with part or all of your Rights other than on the ASX: You may transfer all or part of your Rights to another person other than on the ASX provided that the purchaser is not an Excluded Shareholder or would not be an Excluded Shareholder if the purchaser was the registered holder of Shares.

If you wish to transfer all of your Rights to another person other than on the ASX, forward a completed standard renunciation and acceptance form (obtainable from the Company's Share Registry) and the applicable transferee's cheque or bank draft for the New Shares and New Options they wish to subscribe for to the Company's Share Registry by 5.00pm (WST) on the Closing Date.

If you wish to transfer part of your Rights to another person other than on the ASX only, but also want to take up some or all of the balance of your Rights, you will need to take the steps described above in relation to the Rights you wish to transfer and complete the accompanying Entitlement and Acceptance Form in respect of the Rights you wish to take up.

If the Share Registry receives both a completed renunciation and acceptance form and a completed Entitlement and Acceptance Form in respect of the same Rights, the renunciation will be given effect in priority to the acceptance.

• Allow all or part of your Rights to lapse: Your Rights may have value. Rights are renounceable, which enable Eligible Participants who do not wish to accept some or all of their Rights, to sell or trade all or part of their Rights on the ASX.

The Directors of Red Mountain Mining recommend that if you are in doubt as to the value of the Rights Issue then you should contact your financial adviser.

If you have any queries in relation to the Rights Issue, please do not hesitate to contact Shannon Coates, the Company Secretary on (08) 9226 5668.

Yours faithfully Shannon Coates Company Secretary

Red Mountain Mining Ltd ACN 119 568 106 Unit 1, No. 2 Richardson Street, West Perth, Western Australia, 6005. PO Box 1928, West Perth, W.A. 6872 T: +61 (08) 9226 5668 F: +61 (08) 9486 8616 E: info@redmm.com.au W: www.redmm.com.au