RED MOUNTAIN MINING LIMITED — Capital/Financing Update 2014

Oct 23, 2014

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12

Name of entity

Red Mountain Mining Limited

ABN

119 568 106

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued

Fully Paid Ordinary Shares

Options

• 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued
• 3 Principal terms of the +securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

56,402,833 Shares

37,480,000 Options

Fully Paid Ordinary Shares

Options exercisable at $0.012 each on or before 31 March 2016

+ See chapter 19 for defined terms.

4	Do the +securities rank equallyin all respects from the date ofallotment with an existing +classof quoted +securities?If the additional securities donot rank equally, please state:the date from which they dothe extent to which theyparticipateforthenextdividend, (in the case of atrust,distribution)orinterest paymentthe extent to which they donot rank equally, other thaninrelationtothenextdividend,distributionorinterest payment	The Shares will rank equally with existing Shares.Options exercisable at $0.012 each on or before 31March 2016.
5	Issue price or consideration	56,402,833 Shares at an issue price of $0.006 perShare ($338,417)
		37,480,000 Options for nil cash consideration
6	Purpose of the issue(If issued as consideration forthe acquisition of assets, clearlyidentify those assets)	56,402,833Fully Paid OrdinaryShares issuedpursuant to a Placement to raise approximately $0.34million to continue sampling and selective drilling ofthe 5 priority targets on the Lobo prospect at theBatangas Project and general working capital, asannounced 16 October 2014.37,480,000 Options issued in conjunction withPlacement announced on 15 September 2014.
6a	Is the entity an +eligible entitythathasobtainedsecurityholder approval under rule 7.1A?If Yes, complete sections 6b – 6hin relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i	Yes
6b	The date the security holderresolution under rule 7.1A waspassed	18 November 2013
6c	Number of +securities issuedwithout security holder approvalunder rule 7.1	56,402,833 Shares37,480,000 Options
6d	Number of +securities issuedwith security holder approvalunder rule 7.1A	Nil

• 6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)
• 6f Number of securities issued under an exception in rule 7.2
• 6g If securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the issue date and both values. Include the source of the VWAP calculation.
• 6h If securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements
• 6i Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements
• 7 Dates of entering +securities into uncertificated holdings or despatch of certificates
• 8 Number and +class of all +securities quoted on ASX (including the securities in section 2 if applicable)

Number	+Class
819,920,844	FullypaidordinaryShares
97,839,460	Listed Optionsexercisable at $0.03 eachon or before 30 June2016

Nil.

N/A.

N/A

N/A

164,601 under rule 7.1 0 under rule 7.1A

24 October 2014

• See chapter 19 for defined terms.

	Number	+Class
+class9Numberandofall+securities not quoted on ASX(includingthesecuritiesinsection 2 if applicable)	37,480,000	Optionsexercisableat$0.012 each on or before31 March 2016
	15,000,000	Options exercisable at 20cents on or before 15September 2016
	7,000,000	ClassAPerformanceRightsconvertibletoShares on or before 18November 2016, subjecttovestingconditions($0.05 share price and 12monthscontinuedservice from grant date).
	10,500,000	ClassBPerformanceRightsconvertibletoShares on or before 18November 2017, subjecttovestingconditions($0.10 share price and 24monthscontinuedservice from grant date).
	10,500,000	ClassCPerformanceRightsconvertibletoShares on or before 18November 2018, subjecttovestingconditions($0.15 share price and 36monthscontinuedservice from grant date).

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

N/A

Part 2 - Bonus issue or pro rata issue

11	Issecurityholderapprovalrequired?	N/A
12	Is the issue renounceable or nonrenounceable?	N/A
13	Ratio in which the +securitieswill be offered	N/A

01/08/2012 Appendix 3B Page 5

15	+Recorddatetodetermineentitlements	N/A
16	Willholdingsondifferentregisters(orsubregisters)beaggregatedforcalculatingentitlements?	N/A
17	Policy for deciding entitlementsin relation to fractions	N/A
18	Names of countries in which theentity has +security holders whowillnotbesentnewissuedocumentsNote: Security holders must be told how theirentitlements are to be dealt with.Cross reference: rule 7.7.	N/A
19	Closingdateforreceiptofacceptances or renunciations	N/A
20	Names of any underwriters	N/A
21	Amount of any underwriting feeor commission	N/A
22	Names of any brokers to theissue	N/A
23	Fee or commission payable tothe broker to the issue	N/A
24	Amountofanyhandlingfeepayable to brokers who lodgeacceptances or renunciations onbehalf of +security holders	N/A
25	If the issue is contingent on+security holders' approval, the	N/A

• See chapter 19 for defined terms.

offer relates

N/A

	the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control
1

14 +Class of +securities to which the

• 19 Closing date for receipt of acceptances or renunciations

• 21 Amount of any underwriting fee or commission

• 22 Names of any brokers to the issue

• 25 If the issue is contingent on +security holders' approval, the date of the meeting

• 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled

N/A

27	If the entity has issued options,and the terms entitle optionholderstoparticipateonexercise,thedateonwhichnotices will be sent to optionholders	N/A
28	Date rights trading will begin (ifapplicable)	N/A
29	Date rights trading will end (ifapplicable)	N/A
30	How do +security holders selltheir entitlements in full througha broker?	N/A
31	How do +security holders sellpartoftheirentitlementsthrough a broker and accept forthe balance?	N/A
32	How do +security holders disposeof their entitlements (except bysale through a broker)?	N/A
33	+Despatch date	N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities (tick one) (a) Securities described in Part 1 (Shares only) (b) All other securities
  • Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35	If the +securities are +equity securities, the names of the 20 largest holders of theadditional +securities, and the number and percentage of additional +securitiesheld by those holders
36	If the +securities are +equity securities, a distribution schedule of the additional+securities setting out the number of holders in the categories1 - 1,0001,001 - 5,0005,001 - 10,00010,001 - 100,000100,001 and over
37	Entities that have ticked box 34(b)	A copy of any trust deed for the additional +securities
38	Number of securities for which+quotation is sought
39	Class of +securities for whichquotation is sought
40	Do the +securities rank equally inall respects from the date ofallotment with an existing +classof quoted +securities?
	If the additional securities do notrank equally, please state:the date from which they dotheextenttowhichtheyparticipateforthenextdividend, (in the case of atrust, distribution) or interestpaymentthe extent to which they donot rank equally, other than inrelation to the next dividend,distributionorinterestpayment
41	Reason for request for quotationnow
	Example: In the case of restricted securities, endof restriction period
	(if issued upon conversion ofanother security, clearly identifythat other security)

+ See chapter 19 for defined terms.

42 Number and +class of all +securities quoted on ASX (including the securities in clause 38)

Number	+Class

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
• 2 We warrant the following to ASX.
  • The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those +securities should not be granted +quotation.
  • An offer of the + securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.
• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: Date: 24 October 2014

(Company Secretary)

Print name: SHANNON COATES

== == == == ==

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for +eligible entities

Introduced 01/08/12

Part 1

Rule 7.1 –Issues exceeding 15% of capital
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
Insert number of fully paid ordinary481,442,015securities on issue 12 months before dateof issue or agreement to issue
Add the following:•Number of fully paid ordinary securitiesissued in that 12 month period under anexception in rule 7.2•Number of fully paid ordinary securitiesissued in that 12 month period withshareholder approval•Number of partly paid ordinarysecurities that became fully paid in that12 month periodNote:•Include only ordinary securities here –other classes of equity securities cannotbe added•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline itemsSubtract the number of fully paid ordinarysecurities cancelled during that 12 month	60,000,000 Shares issued 21/01/2014144,398,375 Shares issued 11/02/20142,807,201 Shares issued 13/02/2014431,000 Shares issued 04/03/2014110,000 Shares issued 05/03/201433,750 Shares issued 30/06/201430,000 Shares issued 3/07/201417 Shares issued 25/09/2014= 207,810,343 Shares
period"A"	689,252,358
Step 2: Calculate 15% of "A"
"B"	0.15[Note: this value cannot be changed]

+ See chapter 19 for defined terms.

Multiply "A" by 0.15	103,387,853
Step 3: Calculate "C", the amount of placement capacity under rule 7.1that has already been used
Insert number of equity securities issued oragreed to be issued in that 12 month periodnot counting those issued:•Under an exception in rule 7.2•Under rule 7.1A•With security holder approval under rule7.1 or rule 7.4Note:•This applies to equity securities, unlessspecifically excluded – not just ordinarysecurities•Include here (if applicable ) thesecurities the subject of the Appendix3B to which this form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items	1 Share issued 01/11/20131,695,652 Shares issued 09/04/20147,644,766 Shares issued 18/09/201456,402,833 Shares issued 24/10/2014(subject of this Appendix 3B)37,480,000 Options to be issued on24/10/2014 (subject of this Appendix 3B)
"C"	103,223,252
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1
"A" x 0.15Note: number must be same as shown inStep 2	103,387,853
Subtract "C"Note: number must be same as shown inStep 3	103.223,252
Total ["A" x 0.15] – "C"	164,601[Note: this is the remaining placementcapacity under rule 7.1]

Part 2

Rule 7.1A –Additional placement capacity for eligible entities
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
"A"	689,252,358
Note: number must be same as shown inStep 1 of Part 1
Step 2: Calculate 10% of "A"
"D"	0.10
	Note: this value cannot be changed
Multiply "A" by 0.10	68,925,235
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
Insert number of equity securities issued oragreed to be issued in that 12 month periodunder rule 7.1A	68,925,235
Notes:•This applies to equity securities – notjust ordinary securities•Include here – if applicable – thesecurities the subject of the Appendix3B to which this form is annexed•Do not include equity securities issuedunder rule 7.1 (they must be dealt within Part 1), or for which specific securityholder approval has been obtained•It may be useful to set out issues ofsecurities on different dates as separateline items
"E"	68,925,235

+ See chapter 19 for defined terms.

	Step 4: Subtract "E" from ["A" x "D"] to calculate remaining
placement capacity under rule 7.1A

"A" x 0.10	68,925,235
Note: number must be same as shown inStep 2
Subtract "E"	68,925,235
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	0
	Note: this is the remaining placementcapacity under rule 7.1A