RED MOUNTAIN MINING LIMITED — Capital/Financing Update 2013

May 15, 2013

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16 May 2013

Dear Optionholder

Notice to Optionholders 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 Rights 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 Rights Issue is as follows*:

Event
Lodgement of Prospectus with the ASIC	16 May2013

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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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 entitlementtoparticipate in the Offer)and Rights Tradingcommences	21 May 2013
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.

Under the terms of the options you currently hold, there is no entitlement to participate in the Rights Issue unless you exercise your options, and are entered onto the register as a shareholder on or before the Record Date.

If you wish to participate in the Rights Issue, it will be necessary for you to exercise all or part of your options. Accordingly, you should complete a Notice of Exercise of Options ( Notice ) and lodge the Notice with the Company, together with your payment for the number of shares you wish to take up. If payment for the exercise of options is not received prior to 27 May 2013 ( Record Date ), you will not be able to participate in the Rights Issue.

If you do not wish to participate in the Rights Issue (in respect of your options), you do not need to take any action.

Before deciding whether to exercise any or all of your options, you should consider the terms of the Rights Issue carefully. If in any doubt, consult with your professional adviser.

Each New Share allotted as a result of the exercise of an option will rank pari-passu with all other ordinary shares of the Company on issue.

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

Yours faithfully

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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