RED MOUNTAIN MINING LIMITED — Capital/Financing Update 2014

Sep 18, 2014

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19 September 2014

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 September 2014, the Directors of Red Mountain have resolved to offer a pro-rata renounceable rights issue of approximately 169,670,665 shares ( New Shares ), on the basis of two New Shares for every nine Shares held on the Record Date at an issue price of $0.008 per New Share, with one free attaching Option exercisable at $0.012 each on or before 31 March 2016 for every two New Shares subscribed for ( New Options ) under the Prospectus to raise approximately $1,357,365 before costs ( Rights Issue or Offer ). New Shares will rank equally with all fully paid ordinary shares in the capital of the Company ( Shares ) already on issue.

The Offer is underwritten by Patersons Securities Limited ( Underwriter or Patersons ) to the extent of 169,670,665 New Shares and 84,835,333 New Options, being the number that would be issued under the Offer based on the number of Shares on issue on the date of lodgement of the Prospectus. The underwriting does not extend to any additional Shares issued prior to the Record Date, including as a result of the exercise of any options on issue. In consideration, Patersons or its nominees will be entitled to a $40,000 corporate advisory fee and a $81,441 underwriting fee (being 6% of the Underwritten Amount). In addition, the Company must issue 56,556,888 Options, each on the same terms as the New Options, to the Underwriter or its nominees.

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

• a) Further exploration, including drilling of high priority targets on the Batangas Gold Project.

• b) Completion of the Batangas Gold Project’s Definitive Feasibility Study and final permitting. c) General working capital.

• d) Payment of the costs of the rights issue process, including underwriting fee.

Participation in the Rights Issue is available to Red Mountain shareholders registered on the record date of 25 September 2014 ( Record Date ) and who reside in Australia or New Zealand

( Eligible Shareholders ).

The Rights Issue is being made pursuant to a prospectus which was lodged with the Australian Securities and Investments Commission and the ASX on 18 September 2014 ( 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.

In addition to the Offer, the following two offers are being made under the Prospectus:

• a) up to 37,480,000 options on the same terms as New Options, free attaching to the Shares issued as part of the placement announced on 15 September 2014; and

• b) the options to the sub-underwriters as noted above.

Following completion of the Offer and the other offers noted above, the Company will have issued approximately 169,670,665 New Shares and 84,835,333 New Options, together with 56,556,888 Underwriter Options, resulting in total Shares on issue of approximately 933,188,659 and total options to acquire Shares on issue of approximately 291,711,698.

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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For the purposes of calculating each Eligible Shareholders’ entitlement, fractions of entitlements have been rounded down to the nearest whole number of New Shares and New Options.

Key Dates:

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

Event
Lodgement of Prospectus with the ASIC	18 September 2014
Lodgement of Prospectus & Appendix 3B with ASX	18 September 2014
Notice sent to Optionholders	18 September 2014
Notice sent to Shareholders	19 September 2014
Ex date (date from which Shares trade on ASX without the entitlement toparticipate in the Offer)and Rights Tradingcommences	23 September 2014
Record Date for determiningEntitlements	25 September 2014
Prospectus despatched to Shareholders	29 September 2014
Last Day of Rights Trading	1 October 2014
Closing Date	9 October 2014
ASX notified of under subscriptions	13 October 2014
Issue date	16 October 2014
Deferred settlement trading ends	16 October 2014
New Securities commence normal trading on ASX	17 October 2014

• 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 is available on ASX’s and the Company’s website and will be sent to you on 29 September 2014 if you are an Eligible Shareholder. Your entitlement will be set out on the personalised Entitlement and Acceptance Form accompanying the Prospectus. 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.

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 selling the balance on the ASX: The Rights are renounceable which means that all or part of those Rights may be traded 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 and follow the steps required. You may then provide instructions to your stockbroker regarding the number of Rights you wish to sell on the ASX.

• Taking up part of your Rights and selling the balance other than 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 should then follow the process required (refer below) for the remaining Rights. 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.

• 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 and follow the steps required. 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.

• 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.

• Dealing with all of your Rights other than on the ASX: You may transfer all 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.

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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• 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. If you do nothing, your Rights will lapse and you will have forfeited any potential benefit to be gained from selling/trading your rights.

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