RED MOUNTAIN MINING LIMITED — Capital/Financing Update 2015

Dec 28, 2015

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

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

Convertible Security Options

1 Convertible Security 35,000,000 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)

Convertible Security issued pursuant to the Convertible Security Funding Agreement, details of which were announced to ASX on 21 December 2015

Options exercisable at $0.003 each on or before 24 December 2018.

+ 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	Options: NoOptions over unissued shares may only be exercisedin accordance with their terms and conditions. Uponconversion of the Options to shares, the shares willrank equally with existing shares.Convertible Security: NoMay convert to fully paid ordinary shares that rankequally with existing shares in accordance with thetermsoftheConvertibleSecurityFundingAgreement, announced to ASX on 21 December2015.
5	Issue price or consideration	$150,000
6	Purpose of the issue(If issued as consideration forthe acquisition of assets, clearlyidentify those assets)	1 Convertible Security issued to provide workingcapital funding to the Company pursuant to theConvertible Security Funding Agreement.35,000,000 Options issued in part consideration forthe provision of funding pursuant to the ConvertibleSecurity Funding Agreement
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	16 November 2015
6c	Number of +securities issuedwithout security holder approvalunder rule 7.1	1 Convertible Security35,000,000 Options
6d	Number of +securitiesissuedwith security holder approvalunder rule 7.1A	None

• 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

None

None

N/A

N/A

7.1: 180,576,052

7.1A: 143,737,368

24 December 2015

Number +Class

• See chapter 19 for defined terms.

8	+classNumberandofall+securitiesquotedonASX	1,437,173,679	Fully paid ordinaryShares
	(includingthesecuritiesinsection 2 if applicable)	128,501,960	RMXOA Listed Optionsexercisable at $0.03 eachon or before 30 June2016
		270,987,597	RMXO Listed Optionsexercisable at $0.012each on or before 31March 2016
		287,882,728	RMXOD Listed Optionsexercisable at $0.006each on or before 30June 2016
		240,000,000	RMXOE Listed Optionsexercisable at $0.0037each on or before 15September 2017
		Number	+Class
	+classNumberandofall+securities not quoted on ASX(includingthesecuritiesinsection 2 if applicable)	15,000,000	Optionsexercisableat$0.20 on or before 15September 2016
		35,000,000	Optionsexercisableat$0.003 on or before 24December 2018
		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).

		Number	+Class
9	+classNumberandofall+securities not quoted on ASX(includingthesecuritiesinsection 2 if applicable)	10,500,000	ClassCPerformanceRightsconvertibletoShares on or before 18November 2018, subjecttovestingconditions($0.15 share price and 36monthscontinuedservice from grant date).
		12,600,000	ClassDPerformanceRightsconvertibletoShares on or before 1December 2017, subjectto vesting conditions.
		12,600,000	ClassEPerformanceRightsconvertibletoShares on or before 1December 2017, subjectto vesting conditions.
		17,283,500	ClassFPerformanceRightsconvertibletoShares on or before 1December 2017, subjectto vesting conditions.
		4,683,500	ClassGPerformanceRightsconvertibletoShares on or before 1December 2017, subjectto vesting conditions.
		4,683,500	ClassHPerformanceRightsconvertibletoShares on or before 1December 2017, subjectto vesting conditions.
		17,283,500	ClassIPerformanceRightsconvertibletoShares on or before 1December 2018, subjectto vesting conditions.
		1	ConvertibleSecurity(Face Value: $175,005)
10	Dividend policy (in the case of a	N/A

trust, distribution policy) on the increased capital (interests)

N/A

Part 2 - Bonus issue or pro rata issue

+ See chapter 19 for defined terms.

11	Issecurityholderapprovalrequired?	N/A
12	Is the issue renounceable or nonrenounceable?	N/A
13	Ratio in which the +securitieswill be offered	N/A
14	+Class of +securities to which theoffer relates	N/A
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 whowillnotbesentnewissuedocuments	N/A
	Note: Security holders must be told how their
	entitlements are to be dealt with.Cross reference: rule 7.7.
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 on	N/A
	behalf of +security holders

• See chapter 19 for defined terms.

• 25 If the issue is contingent on +security holders' approval, the date of the meeting N/A
• 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled
• 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders
• 28 Date rights trading will begin (if applicable) N/A
• 29 Date rights trading will end (if applicable)
• 30 How do +security holders sell their entitlements in full through a broker?
• 31 How do +security holders sell part of their entitlements through a broker and accept for the balance?
• 32 How do +security holders dispose of their entitlements (except by sale through a broker)?

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

(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

N/A

N/A

N/A

N/A

N/A

N/A

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	A copy of any trust deed for the additional +securities

Entities that have ticked box 34(b)

• 38 Number of securities for which +quotation is sought
• 39 Class of +securities for which quotation is sought
• 40 Do the +securities rank equally in all respects from the date of allotment with an existing +class of quoted +securities?

If the additional securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another security, clearly identify that other security)

	Number	+Class
+class42Numberand+securitiesquoted(including the securities in clause38)	ofallonASX

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

+ See chapter 19 for defined terms.

+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.

(Company Secretary)

Sign here: Date: 24 December 2015

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 ordinarysecurities on issue 12 months before dateof issue or agreement to issue	819,920,844
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 separate	76,327,122 Shares issued 2/01/2015111,480,599 Shares issued 10/02/2015165,000,000 Shares issued 11/03/201513,028,750 Shares issued 13/03/201511,364 Shares issued 27/03/2015251,405,000 Shares issued 9/09/2015= 617,252,835 Shares
line itemsSubtract the number of fully paid ordinarysecurities cancelled during that 12 monthperiod
"A"	1,437,173,679
Step 2: Calculate 15% of "A"
"B"	0.15[Note: this value cannot be changed]
Multiply "A" by 0.15	215,576,052
Step 3: Calculate "C", the amount of placement capacity under rule 7.1

+ See chapter 19 for defined terms.

that has already been used
Insert number of equity securities issued oragreed to be issued in that 12 month periodnot counting those issued:	35,000,000 Options issued 24/12/2015(subject of this Appendix 3B)
•Under an exception in rule 7.2
•Under rule 7.1A
•With security holder approval under rule7.1 or rule 7.4
Note:•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
"C"	35,000,000
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1
"A" x 0.15	215,576,052
Note: number must be same as shown inStep 2
Subtract "C"	35,000,000
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	180,576,052
	[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"	1,437,173,679
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	143,717,368
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
Insert number of equity securities issued orNoneagreed to be issued in that 12 month periodunder rule 7.1A
Notes:
•This applies to equity securities – notjust ordinary securities
•Include here – if applicable – thesecurities the subject of the Appendix
3B to which this form is annexed•Do not include equity securities issued
under rule 7.1 (they must be dealt within Part 1), or for which specific security
holder approval has been obtained
•It may be useful to set out issues ofsecurities on different dates as separate
line items"E"	0

+ See chapter 19 for defined terms.

Step 4: Subtract "E" from ["A" x "D"] to calculate remainingplacement capacity under rule 7.1A
"A" x 0.10	143,717,368
Note: number must be same as shown inStep 2
Subtract "E"	0
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	143,717,368
	Note: this is the remaining placementcapacity under rule 7.1A