RED MOUNTAIN MINING LIMITED — Capital/Financing Update 2015

Jan 5, 2015

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6 January 2015

Dear Fellow Shareholder,

PRO RATA NON-RENOUNCEABLE RIGHTS ISSUE - RED MOUNTAIN MINING LIMITED

Red Mountain Mining is actively pursuing its dual strategy of developing an initial low cost, early payback, gold mining operation whilst continuing exploration and building the high grade gold resource base at its Batangas gold project ( Batangas Project ),located 120 kilometres south of Manila in the Philippines.

To assist the Company in pursuing this strategy, I am pleased to offer you the opportunity to further invest via a pro rata, non-renounceable Rights Issue that also incudes includes additional incentives - namely, free attaching Options, which will be independently tradeable on the ASX ( Rights Issue ).

New shares will be offered under the Rights Issue on a one for four basis at an issue price of $0.004 ( New Shares ). The New Shares will be offered together with one free attaching Listed Option exercisable at $0.012 (1.2c Option) on or before 31 March 2016 ( RMXO ) and one free attaching Option exercisable at $0.006 ( 0.6c Option ) on or before 30 June 2016 for every two New Shares subscribed for under the Rights Issue ( Offer ). Subject to a minimum of 50 individual shareholders taking up their entitlement, the new 0.6c Options will be listed on the ASX.

I will be taking up New Shares to the equivalent of my full personal Rights Issue entitlement and encourage all shareholders to do the same. I also invite existing shareholders to apply for New Shares in addition to their entitlement (see the Entitlement and Acceptance Form with the Prospectus for more details).

On completion of the Rights Issue, the Company will have a market capitalisation of $4.46 million (based on a Share price of $0.004) and cash of circa $1.15 million (presuming the Rights Issue is fully subscribed and before costs of the Offer). It is intended that funds raised pursuant to the Rights Issue, together with existing cash, will be used for further exploration program of high priority gold targets and for general working capital.

Thank you in anticipation of your continued support.

Yours sincerely,

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Neil Warburton Chairman

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

RED MOUNTAIN MINING LIMITED ACN 119 568 106

PROSPECTUS

For the non renounceable pro-rata Rights Issue of up to approximately 224,061,991 New Shares, on the basis of 1 New Share for every 4 Shares held at an issue price of $0.004 per New Share, to raise approximately $896,248 and 0.5 free New RMXO Options (exercisable at $0.012 each on or before 31 March 2016) and 0.5 free New 0.6c Options (exercisable at $0.006 each on or before 30 June 2016) for every one New Share subscribed for under the Entitlement Offer (Offer).

The Entitlement Offer closes at 5:00pm WST on 28 January 2015

This document is a transaction-specific prospectus issued in accordance with section 713 of the Corporations Act. This Prospectus contains important information about the Offer. You should read the entire document including the Entitlement and Acceptance Form. If after reading this Prospectus you have any questions about the Offer or this Prospectus, you should speak to your professional adviser.

The New Securities offered by this Prospectus should be considered highly speculative.

IMPORTANT NOTICE

This Prospectus is dated 6 January 2015 and was lodged with the ASIC on that date. Neither the ASIC, ASX nor any of their respective officers take any responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates.

Certain terms and abbreviations used in this Prospectus have defined meanings, which are explained in the Glossary. In this Prospectus, the words "we", "our" and "us" refer to the Company. The words "you" or "your" refer to Shareholders.

No New Securities will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. Application for quotation of the New Securities will be made to ASX within 7 days after the date of this Prospectus.

We are an ASX listed company some of whose securities have been granted official quotation by ASX. In preparing this Prospectus regard has been had to the fact that we are a disclosing entity for the purposes of the Corporations Act and that certain matters may reasonably be expected to be known to investors and professional advisers who investors may consult.

No person is authorised to give any information or to make any representations in connection with this Prospectus which is not contained in this Prospectus. Any information or representation that is not contained in this Prospectus may not be relied upon as having been authorised by the Directors or by us in connection with this Prospectus.

It is important that investors read this Prospectus in its entirety and seek professional advice where necessary. The New Shares the subject of this Prospectus should be considered speculative.

Applications for New Securities offered pursuant to this Prospectus can only be submitted on an original Entitlement and Acceptance Form.

This Prospectus is a transaction specific prospectus for an offer of continuously quoted securities (as defined in the Corporations Act) and has been prepared in accordance with section 713 of the Corporations Act. It does not contain the same level of disclosure as an initial public offering prospectus. In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult.

Restrictions on distribution

The Offer is made in Australia and New Zealand only. This Prospectus does not, and is not intended to, constitute an offer in any place or jurisdiction where it would be unlawful to make the Offer or to issue this Prospectus. You must ensure compliance with all laws of any country relevant to your Application. We will take the return of a duly completed Entitlement and Acceptance Form as a representation by you that there has been no breach of any laws and that you are eligible to accept the Offer.

The Corporations Act prohibits any person passing on to another person an application form unless it is accompanied by or included in a hard copy, or the complete and unaltered electronic version of this Prospectus. Please contact us if you wish to obtain a hard copy of this Prospectus free of charge.

A copy of this Prospectus can be downloaded from our website at www.redmm.com.au. If you access the electronic version of this Prospectus you should ensure that you download and read the entire Prospectus accompanied by the Application Form. If you have not, please phone the Company on +61 8 9226 5668 and the Company will send you, for free, either a hard copy or a

Red Mountain Mining Limited Prospectus

further electronic copy of the Prospectus, or both. The electronic version of this Prospectus is only available to Australian residents.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

Risk factors

Potential investors should be aware that subscribing for New Securities in the Company involves a number of risks. The key risk factors of which investors should be aware are set out in section 2 of this Prospectus. These risks together with other general risks applicable to all investments in listed securities not specifically referred to, may affect the value of the New Securities in the future. Accordingly, an investment in the Company should be considered highly speculative. Investors should consider consulting their professional advisers before deciding whether to apply for New Securities pursuant to this Prospectus.

Forward-looking statements

This Prospectus contains forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place.

Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of our Company, the Directors and our management.

We cannot and do not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this prospectus will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements.

We have no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this prospectus, except where required by law.

These forward looking statements are subject to various risk factors that could cause our actual results to differ materially from the results expressed or anticipated in these statements. These risk factors are set out in section 2 of this Prospectus.

Competent Person Statement

The information in this report relating to Mineral Resources is based on information compiled by Mr Jon Dugdale who is a Fellow of the Australasian Institute of Mining and Metallurgy and has sufficient exploration experience which is relevant to the various styles of mineralisation under consideration to qualify as a Competent Person as defined in 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Dugdale is a full time employee and Managing Director of Red Mountain Mining Ltd. The Company confirms that the form and context in which the information is presented has not been materially modified and it is not aware of any new information or data that materially affects the information included in the relevant market announcements, as detailed in this prospectus. All material assumptions and

Red Mountain Mining Limited Prospectus

technical parameters underpinning the Mineral Resource estimates continue to apply and have not materially changed.

CORPORATE DIRECTORY

DIRECTORS

Mr Neil Warburton (Non-Executive Chairman) Mr Jon Dugdale (Managing Director) Mr Michael Wolley (Non-Executive Director)

SOLICITORS

Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street Perth WA 6000

**SHARE REGISTRY ***

COMPANY SECRETARY

Ms Shannon Coates

Computershare Investor Services Pty Limited Level 2, 45 St George's Terrace Perth WA 6000 Tel: (AUS) 1300 557 010 +61 3 9415 4000 (outside Australia)

BUSINESS OFFICE

Suite 1, 2 Richardson Street West Perth WA 6005

Tel: +61 8 9226 5668 Fax: +61 8 9486 8616

*The name of the Share Registry is included for information purposes only. It has not been involved in the preparation of any part of this Prospectus and has not consented to being named in the Prospectus.

Red Mountain Mining Limited Prospectus

TABLE OF CONTENTS

INVESTMENT OVERVIEW ............................................................................................................. 2	INVESTMENT OVERVIEW ............................................................................................................. 2
1.	REASON FOR THE RIGHTS ISSUE AND EFFECT ON THE COMPANY .......................... 6
1.1	Background ............................................................................................................... 6
1.2	Use of Funds ............................................................................................................. 7
1.3	Effect on shareholders’ equity and cash reserves ..................................................... 8
1.4	Effect on capital structure .......................................................................................... 8
1.5	Details of Substantial Shareholders .......................................................................... 9
1.6	Pro forma Statement of financial position .................................................................. 9
2.	RISK FACTORS ................................................................................................................ 11
2.1	Introduction ............................................................................................................. 11
2.2	Specific Risks .......................................................................................................... 11
2.3	General Investment Risks ....................................................................................... 14
2.4	Speculative investment ........................................................................................... 15
3.	DETAILS OF THE OFFERS .............................................................................................. 16
3.1	The Entitlement Offer .............................................................................................. 16
3.2	What Eligible Shareholders may do under the Entitlement Offer ............................ 16
3.3	Payment .................................................................................................................. 17
3.4	Excluded Shareholders ........................................................................................... 19
3.5	Shortfall ................................................................................................................... 19
3.6	Allotment and quotation ........................................................................................... 20
4.	ADDITIONAL INFORMATION .......................................................................................... 22
4.1	Rights attaching to New Shares .............................................................................. 22
4.2	Terms of New RMXO Options ................................................................................. 23
4.3	Terms of New 0.6 cent Options ............................................................................... 24

Red Mountain Mining Limited Prospectus

4.4	Litigation .................................................................................................................. 25
4.5	Transaction specific prospectus and continuous disclosure obligations .................. 25
4.6	Market Price of Shares ............................................................................................ 25
4.7	Board and Management .......................................................................................... 28
4.8	Directors’ Interests .................................................................................................. 28
4.9	Interests of experts and advisers............................................................................. 30
4.10	Expenses of the Offers ............................................................................................ 31
4.11	Consents ................................................................................................................. 31
4.12	Privacy Act .............................................................................................................. 32
5.	DIRECTORS' AUTHORISATION AND CONSENT ........................................................... 33
6.	GLOSSARY ...................................................................................................................... 34

Red Mountain Mining Limited Prospectus

Page 1

INVESTMENT OVERVIEW

Question	Response	Where to
		find more
		information
What is the Offer?	Entitlement Offer: We are offering to issue New Shares and	Section 3.1
	New Options to Eligible Shareholders by a pro-rata non-
	renounceable Rights Issue.
	Under the Rights Issue, Eligible Shareholders may subscribe for
	1 New Shares for every 4 Shares held on the Record Date.
	Each Eligible Shareholder will also be entitled to 0.5 free New
	RMXO Option and 0.5 free New 0.6c Option for every one New
	Share subscribed for under the Prospectus. Application will be
	madeforquotationoftheNewShares andNewOptions.
What is the Issue	The Issue Price is $0.004 per New Share and nil for the New	Section 3.1
Price for the New	RMXO Options and New 0.6c Options.
Securities?
What are the	The New RMXO Options have an exercise price of $0.012 and	Section 4.2
terms of the New	an expiry date of 31 March 2016. The New 0.6c Options have an	and 4.3
Options?	exercise price of $0.006 and an expiry date of 30 June 2016.
	The full terms of the New Options are set out in Section 4.2 and
	4.3 respectively. Application will be made for quotation of the
	NewOptions ontheASX.
Who is an Eligible	The Entitlement Offer is made to Eligible Shareholders only. An	Section
Shareholder?	Eligible Shareholder is a Shareholder with a registered address	3.1(a)
	in Australia or New Zealand on the Record Date.
How many New	The expected maximum number of New Securities that will be	Section 1.4
Securities will be	issued under the Entitlement Offer is approximately 224,061,991
issued?	New Shares, approximately 112,030,995 New RMXO Options
	and approximately 112,030,995 New 0.6c Options.
	Where Option holders who reside in Australia or New Zealand
	exercise their Options before the Record Date, they will be
	entitled to participate in the Entitlement Offer. This will increase
	the maximum number of New Shares and New Options that may
	beissued undertheEntitlement Offer.
What is the	At the date of this Prospectus, the maximum amount that may	Section 1.2
amount that will	be raised under the Prospectus is $896,248 before expenses. If
be raised under	existing Option holders exercise their Options before the Record
the Entitlement	Date so as to participate in the Entitlement Offer, the amount
Offer?	raised under the Entitlement Offer may increase.
	The Offer isnot underwritten.

Red Mountain Mining Limited Prospectus

Page 2

Question	Response	Where to
		find more
		information
What is the	The purpose of the Entitlement Offer is to raise funds for:	Section 1.2
purpose of the	•Selective exploration of high grade gold targets at Lobo.
Offer?	•General working capital.
	•Payment of the costs of the Rights Issue process.
	A budget of how we intend to use the funds raised is set out in
	Section 1.2. As with any budget, new circumstances may
	change the way we apply the funds.
What is the effect	The effect of the Entitlement Offer is to:	Sections
of the Offer?	•Increase the number of Shares and Options on issue.	1.3 and 1.4
	•Increase our cash reserves by up to approximately $896,248
	before the costs of the Entitlement Offer.
What are the risks of a further investment in the Company?	The investment in New Securities should be considered speculative. Before deciding to subscribe under the Entitlement Offer, you should consider the risk factors set out in this Prospectus and all other relevant material including our public announcements and reports. Some of the specific risks relevant	Section2
	to an investment in the Company are:
	•Exploration and development risk – Resource exploration
	and development is by its nature a high risk undertaking. The
	key focus of the Company is the development of the
	Batangas Gold Project in the Philippines. There is no
	assurance that the Company's activities on its projects
	including the further development of the Batangas Gold
	Project will result in a commercially viable operation.

• Future capital needs and additional funding – The Company will need to raise further capital (equity or debt) in the future. No assurance can be given that future funding will be available to the Company on favourable terms or at all which would prejudice the development of projects and the viability of the Company.

• Philippines based risks – There are various risks by reason of the Company's operations in the Philippines including foreign acquisition laws, potential mining policy changes, sovereign and political risks and renewal of licences.

• Gold price – The Company is seeking to develop gold projects. Adverse fluctuations in the gold price may detrimentally affect the Company.

• Project acquisition – As part of its business strategy the Company may make acquisitions of or significant investments in other gold or polymetallic projects. Any such transactions would be accompanied by risks commonly encountered in making such acquisitions.

Red Mountain Mining Limited Prospectus

Page 3

Question	Response			Where to
				find more
				information
	•Reliance on key personnel – The Company's success largely
	depends on the core competencies of its Directors and
	management and their familiarisation		with, and ability to
	operate in, the resource industry and the Company's ability to
	retain its key executives.
What are the	The Entitlement Offer is non-renounceable		so you are not able	Section 3.1
alternatives for	to trade your Rights.
Eligible
Shareholders?	As an Eligible Shareholder, you may:
	•take up all of your Rights;
	•take up all of your Rights and apply for additional Shortfall
	Securities;
	•take up part of your Rights and allow the		balance to lapse; or
	•allow all of your Rights to lapse.
What happens if	Any Entitlement not accepted will form	part of the Shortfall.		Sections
Eligible Shareholders don’t accept their Entitlement?	Eligible Shareholders are entitled Securities. The Shortfall Securities discretion of the Directors.	to will	apply for Shortfall be placed at the	3.21 and 3.5
What will happen	Excluded Shareholders’ Rights will form part of the Shortfall.			Section 3.4
to Excluded
Shareholders’
Rights?
What are the key	Prospectus lodged with ASIC and ASX		6 January 2015
dates of the
Offer?	Appendix 3B lodged with ASX		6 January 2015
	Notice sent to Optionholders		6 January 2015
	Notice sent to Shareholders		7 January 2015
	"Ex" date (date from which Shares trade on		9 January 2015
	ASX without the entitlement to participate
	in the Offer)
	Record Date (to determine eligibility of		13 January 2015
	Shareholders to participate in	the
	Entitlement Offer)
	Anticipated despatch of Prospectus and		16 January 2015
	Entitlement and Acceptance Forms	to
	Eligible Shareholders
	Last day to extend closing date		22 January 2015

Red Mountain Mining Limited Prospectus

Page 4

Question	Response		Where to
			find more
			information
	Closing Date	28 January 2015
	ASX notified of under-subscriptions	29 January 2015
	Issue date of the New Securities	2 February 2015
	Deferred settlement trading ends	2 February 2015
	New Securities commence normal trading	3 February 2015
	on ASX.
	Please note that these dates are subject to change. We reserve
	the right, subject to the Corporations Act and	the Listing Rules to
	amend the timetable at any time, and in particular, to extend the
	Closing Date or to withdraw the Offers without prior notice.

Red Mountain Mining Limited Prospectus

Page 5

1. REASON FOR THE RIGHTS ISSUE AND EFFECT ON THE COMPANY

1.1 Background

Red Mountain Mining (ASX: RMX) is primarily a gold explorer/developer and project acquisition company which listed on the ASX in September 2011. The Company’s strategy is to unlock the potential of ‘under-developed’ gold and polymetallic projects in the greater Asian region by introducing Australian exploration and mining methods and improving efficiencies to gain significant exploration and production upside.

The Company holds a 100% direct and indirect contractual right interest in tenements in the Philippines that contain significant gold resources. Total Mineral Resources at the Batangas Gold Project include Indicated Resources of 2.97 million tonnes @ 2.4 g/t Au, 227,000 oz Au and Inferred Resources of 3.22 million tonnes @ 2.1 g/t Au, 218,000oz Au for a total of 6.19 million tonnes at 2.2 g/t Au, 444,000oz Au ((ASX announcement 30 June 2014 which was issued with the prior written consent of Mr Jon Dugdale), JORC 2012).

The Entitlement Offer is made on the basis of 1 New Share for every 4 Shares held by Eligible Shareholders on the Record Date at an issue price of $0.004 per New Share and 0.5 free New RMXO Option and 0.5 free New 0.6c Option for every one (1) New Shares subscribed for under the Entitlement Offer (" Rights Issue "). On this basis, the Rights Issue will seek to raise up to approximately $896,248 (before costs). Fractional entitlements will be rounded down to the nearest whole number.

The Entitlement Offer is non-renounceable. Eligible Shareholders who do not wish to take up some or all of their Entitlement are not able to sell or otherwise transfer all or part of their Entitlement through the financial market operated by ASX or by way of an off-market transfer. Refer to Section 3.2 for more information.

As at the date of this Prospectus, we have 896,247,966 Shares, 269,769,329 Options and 79,850,500 performance rights on issue. The conversion terms of the performance rights are set out in Section 1.4. Option holders with an address in Australia or New Zealand may exercise their Options before the Record Date and participate in the Entitlement Offer. In this event, the number of New Securities to be issued under the Entitlement Offer and the funds raised as a result of the Rights Issue may vary. Based on the capital structure of the Company as at the date of this Prospectus, (and assuming no existing Options are exercised prior to the Record Date) a maximum of 224,061,991 New Shares and 224,061,990 New Options will be issued pursuant to this Offer to raise up to $896,248. No funds will be raised from the issue of the New Options.

All of the New Shares offered under this Prospectus will rank equally with the Shares on issue at the date of this Prospectus. Please refer to section 4.1 for further information regarding the rights and liabilities attaching to the Shares.

All of the New Options offered under this Prospectus will be issued on the terms and conditions set out in sections 4.2 and 4.3 of this Prospectus.

All Shares issued on conversion of the New Options will rank equally with the Shares on issue at the date of this Prospectus. As announced to the ASX on 16 December 2014 and 23 December 2014, the Company entered into a joint venture arrangement with Bluebird Merchant Ventures Ltd (BMVL), a company incorporated in the British Virgin Islands (Bluebird Agreement).

Red Mountain Mining Limited Prospectus

Page 6

The Bluebird Agreement includes a two stage funding arrangement totalling US$5.5 million (m) (~A$6.7m), earning BMVL up to 50% of the Company’s wholly owned subsidiary, Red Mountain Mining Singapore Ltd (RMMS), which is the holder of the Company’s Philippines based Batangas Gold Project assets.

The two stage funding Agreement includes Stage 1, US$1m (~A$1.2m) to complete the Definitive Feasibility Study (DFS) and final mine permitting. This will entitle BVML to earn a 15% equity interest in RMMS. The Stage 1 funding amount is to be paid by monthly payments of US$100,000 commencing on 9 January 2015. Should BMVL fail to pay the full US$1m, then the amount that it has paid at the time of default by BMVL shall, subject to all necessary shareholder and regulatory approvals, be converted to RMX shares at the prevailing market price10 day VWAP and the Bluebird Agreement shall be terminated. The settlement of Stage 1 will be completed on the earlier of of 6 months following 9 January 2015 or 5 business days after the admission of BMVL to the AIM market.

Stage 2 is an amount of US$4.5m (~A$5.5m) and will be used to part fund the development of the Batangas Gold Project and will enable BVML to earn an additional 35% equity in RMMS. Exercise of Stage 2 funding is subject to conditions precedent including completion of final mine permitting; completion of a DFS producing a >25% internal rate of return (IRR); and the definition of proved and probable ore reserves to support production recovering >100,000 oz of gold equivalent over the initial mine life.

Upon settlement of the Stage 1 and the Stage 2 investments, RMMS will be a 50:50 incorporated joint venture, with each party entitled to hold two seats on an RMMS board of five, together with a local independent director. The parties have agreed to enter into a formal joint venture agreement to govern the operation of RMMS.

1.2 Use of Funds

The purpose of the Offer is to raise up to $896,248. No funds will be raised from the issue of the New Options. Presented below is how the Company intends to use its current funds at the date of this Prospectus and the proceeds of the Entitlement Offer:

Use of Funds
Exploration of high grade gold targets at Lobo		$400,000
General working capital, including:2		$496,248
ASX and share registry fees, legal, tax and audit fees, insurance	$100,000
Directors Fees and Salaries	$200,000
Corporate administration including rent, utilities, travel and
promotional expenses	$196,248
Estimated expenses of the Offer3		$50,000
Total		$896,248

1. The table assumes that none of the existing Option holders exercise their Options and the Company does not otherwise issue any new Shares before the Record Date to allow further participants under the Entitlement Offer. In the event that more funds are raised than $896,248, we will allocate those additional funds to general working capital.

Red Mountain Mining Limited Prospectus

Page 7

1. General working capital includes but is not limited to corporate administration and operating costs and may be applied to Directors’ fees, ASX and share registry fees, legal, tax and audit fees, insurance and travel costs. Further, general working capital may be applied to evaluating new gold or polymetallic project opportunities that may complement the existing projects of the Company.

2. The table is a statement of our proposed application of cash on hand and the funds raised as at the date of this Prospectus. As with any budget, intervening events and new circumstances have the potential to affect our decisions and we reserve the right to vary the way the funds are applied.

3. To the extent that less than the full subscription of $896,248 is raised, less funds will be allocated to each of the above items in the following order: general working capital, exploration of high-grade gold targets at Lobo and expenses of the Offer.

1.3 Effect on shareholders’ equity and cash reserves

The principal effects of the Entitlement Offer on the Company will be to:

• (a) increase the total number of Shares and Options on issue (see Section 1.4); and

• (b) increase our cash reserves by approximately $896,248 before taking into account the expenses of the Offers (see Section 1.5).

A pro forma statement of financial position, which contains further information about the effect of the Entitlement Offer on the Company, is provided in Section 1.5.

1.4 Effect on capital structure

Assuming that no existing Options are exercised before the Record Date, the effect of the Entitlement Offer on the Company’s issued share capital as at the date of this Prospectus will be as shown in the following table:

Shares
Existing Shares New Shares issued under Rights Issue Total Shares on issue after completion of the Rights Issue	896,247,966 224,061,991
	1,120,309,957
Options
Existing RMXO Options (exercise price $0.012 expiring 31.3.2016) Existing RMXOA Options (exercise price $0.03 expiring 30.6.16) Existing Options (exercise price $0.20 expiring 15.9.16)	126,267,369 128,501,960 15,000,000

Red Mountain Mining Limited Prospectus

Page 8

New RMXO Options (exercise price $0.012 expiring 31.3.2016) New 0.6c Options (exercise price $0.006 expiring 30.6.2016) Total Options on issue after completion of the Rights Issue	112,030,995 112,030,995
	493,831,319

Performance Rights

Performance Rights[1] 79,850,500

1. 7,000,000 Class A Performance Rights convertible to Shares on or before 18 November 2016, 10,500,000 Class B Performance Rights convertible to Shares on or before 18 November 2017, 10,500,000 Class C Performance Rights convertible to Shares on or before 18 November 2018, 12,600,000 Class D Performance Rights convertible to Shares on or before 1 December 2017, 12,600,000 Class E Performance Rights convertible to Shares on or before 1 December 2017, 17,283,500 Class F Performance Rights convertible to Shares on or before 1 December 2017, 4,683,500 Class G Performance Rights convertible to Shares on or before 1 December 2017 and 4,683,500 Class H Performance Rights convertible to Shares on or before 1 December 2017, all subject to vesting conditions.

The capital structure on a fully diluted basis as at the date of this Prospectus would be 1,166,017,295 Shares and on completion of the Offer (assuming all Entitlements are accepted and no Options are exercised prior to the Record Date) would be 1,614,141,276 Shares.

No Shares or Options on issue are subject to escrow restrictions, either voluntary or ASX imposed.

1.5 Details of Substantial Shareholders

As at 6 January 2015, those persons which (together with their associates) hold a relevant interest in 5% or more of the Shares on issue are set out below:

Shareholder	Shares	%
E Pishas & SonsPtyLtd1	63,400,000	7.07%

In the event all Entitlements are accepted there will be no change to the substantial holders on completion of the Entitlement Offer.

1.6 Pro forma Statement of financial position

To illustrate the effect of the Entitlement Offer on the Company, a pro forma statement of financial position has been prepared based on the unaudited balance sheet as at 30 November 2014.

The pro-forma balance sheet has been prepared assuming all Entitlements are accepted, no Options are exercised prior to the Record Date and including expenses of the Offer.

Red Mountain Mining Limited Prospectus

Page 9

The historical and pro forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

	Unaudited	Pro-Forma
	30-Nov-14	30-Nov-14
	$	$
CURRENT ASSETS
Cash and cash equivalents	763,661	1,656,832
Trade and other receivables	220,969	220,969
TOTAL CURRENT ASSETS	984,630	1,877,811
NON-CURRENT ASSETS
Fixed assets	70,057	70,057
Exploration	21,077,197	21,077,197
TOTAL NON-CURRENT ASSETS	21,147,254	21,147,254
TOTAL ASSETS	22,131,884	23,025,065
CURRENT LIABILITIES
Trade and otherpayables	479,901	479,901
Provisions	113,972	113,972
Current taxespayable	-596	-596
TOTAL CURRENT LIABILITIES	593,277	593,277
NON-CURRENT LIABILITIES
Other non-current liabilities	141,061	141,061
TOTAL CURRENT LIABILITIES	141,061	141,061
TOTAL LIABILITIES	734,338	734,338
NET ASSETS(LIABILITIES)	21,397,546	22,290,727
EQUITY
Share capital	32,870,897	33,764,068
MinorityInterest	-246,297	-246,297
Reserves	5,113,658	5,113,658
Retained loss	-16,340,712	-16,340,712
TOTAL EQUITY	21,397,546	22,290,727

1. The pro forma statement of financial position represents the position as at 30 November 2014 plus total funds raised pursuant to the Placement announced on 23 December 2014 which raised $245,300 (less costs) and expected to be raised pursuant to the Entitlement Offer, less estimated costs of the Entitlement Offer in accordance with the terms outlined in this Prospectus.

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2. RISK FACTORS

2.1 Introduction

An investment in the securities the subject of this Prospectus is highly speculative as the Company is a gold explorer and project acquisition company. The Company currently has an interest in projects in the Philippines, with its primary focus being the continued exploration and development of the Batangas Gold Project.

There are a number of factors that may have a material impact on our future operating and financial performance and the market price of the Securities. The key material risks are described below.

You should carefully consider the risks described below, the information contained in other sections of this Prospectus, and all other relevant material including our public announcements and reports.

The specific risks below are some of the risks specific to the Company including by reason of its involvement in the resource industry and having operations in the Philippines. The general investment risks below are some of the risks to the Company of a general economic nature, many of which are largely beyond the control of the Company and the Directors.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

2.2 Specific Risks

Exploration

Investors should understand that exploration and development is by its nature a high risk undertaking. There can be no assurance that the Company's exploration of its existing projects or any other exploration projects that may be acquired in the future will result in a commercially viable discovery.

Definitive Feasibility Study and Project Development

The Definitive Feasibility Study into the future development of a mining operation at any of the Company's projects is dependent on, and may be affected by, a number of factors including, but not limited to, failure to determine feasibility to economically recover ore bodies, determination of unfavourable geological conditions, unanticipated technical and operational factors encountered when examining extraction and production methods, complexities determined with respect to operating plant and equipment, unexpected shortages or increases in the price of consumables, spare parts and plant and equipment, cost overruns, risk of access to the required level of funding and contracting risks from third parties providing essential services.

Having determined feasibility there is a risk of failure to receive the necessary approvals from all relevant authorities and parties. Unseasonal weather patterns, excessive seasonal weather patterns when developing the project may effect successful commissioning.

In the event that the Company commences production, its operations may be disrupted by a variety of risks and hazards which are beyond its control, including environmental

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hazards, industrial accidents, technical failures, labour disputes, unusual or unexpected rock formations, flooding and extended interruptions due to inclement or hazardous weather conditions and fires, explosions and other accidents.

Future Capital Needs and Additional Funding

The funds raised by the Entitlement Offer will be used to carry out the Company's objectives as detailed in this Prospectus and the Company’s announcements to ASX. The Company's ability to raise further capital (equity or debt) within an acceptable time, of a sufficient amount and on terms acceptable to the Company will vary according to a number of factors, including prospectivity of projects (existing and future), the results of exploration, feasibility studies, development and mining, stock market and industry conditions and the price of relevant commodities and exchange rates.

No assurance can be given that future funding will be available to the Company on favourable terms (or at all). If adequate funds are not available on acceptable terms the Company may not be able to further develop its projects and it may impact on the Company's ability to continue as a going concern.

Potential for significant dilution

Upon implementation of the Offer, assuming all Entitlements are accepted and no Options are exercised prior to the Record Date the number of Shares in the Company will increase from 896,247,966 currently on issue to 1,120,309,957. This means that each Share will represent a significantly lower proportion of the ownership of the Company.

It is not possible to predict what the value of the Company or a Share will be following the completion of the Offer being implemented and the Directors do not make any representation as to such matters.

The last trading price of Shares on ASX prior to the prospectus being lodged of $0.004 is not a reliable indicator as to the potential trading price of Shares after implementation of the Offer.

Sovereign and Political Risks Associated with Operating in the Philippines

The projects of the Company are located in the Philippines and the Company will be subject to the risks associated with operating in that country, including various levels of political, economic and other risks and uncertainties.

Philippines Government Mining Policy, Executive Order 079

In January 2012 the Philippines Government issued a new mining policy termed Executive Order 079 (“EO79”). The Implementing Rules and Regulations (IRR) of the EO79 have been issued. However there is a risk that further changes under the EO79 policy will involve increases to royalties and taxes that will affect the revenue derived by the Company from any future operation.

Philippine Foreign Acquisition Laws

An entity not of Philippine nationality may only acquire up to 40% of a Philippine MPSA (mineral production sharing agreement) or the holder of an MPSA directly. The restriction on foreign ownership relates to the ownership of an MPSA and its holder, the operation of an MPSA, the total physical area that may be held by a foreign held entity and the role that

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a foreign person may have in an entity that has more than 40% of an MPSA or MPSA holder.

The Company has considered this in structuring the holding of interests and contractual rights in the MPSAs, such that the direct holding is only 40% of the holder of the MPSAs and the remaining 60% is held as a contractual right. However, there is a risk that the current or future structure of the Company’s holdings may be subject to legal challenge.

Conditions and Renewal of Licences

The permits and agreements on the projects are governed by the Philippine legislation and are evidenced by the granting of permits and agreements, extension of permits and/or extension of specific stages of the MPSA’s. Each permit, agreement or extension is for a specific term and carries with its annual expenditure and reporting commitments, as well as other conditions requiring compliance.

Consents from Surface Land Holders

The Philippines Mining Act sets out the requirement for entities wishing to access mineral permits for the purpose of exploration, development and utilisation to receive the consent of the surface owners or occupants of the land in writing prior to such access and to pay them an appropriate amount of compensation.

Although seeking such consent is a common task for mining companies in the Philippines, there is no guarantee that it will be a fast or cost effective process for the Company.

Gold and Commodity Price Volatility

It is anticipated that any revenues derived from mining will be derived from the sale of gold. Consequently, any future earnings are likely to be closely related to the price of gold and the terms of any offtake agreements which the Company enters into.

Gold and metal prices fluctuate and are affected by numerous factors beyond the control of the Company. These factors include world demand for gold and metals, forward selling by producers and production cost levels in mineral producing regions.

Moreover, gold and metal prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and global and regional demand for, and supply of, the relevant commodity as well as general global economic conditions. These factors may have an adverse effect on the Company's exploration, development and production activities, as well as on its ability to fund those activities.

Potential Acquisitions

As part of its business strategy, the Company may make acquisitions of or significant investments in other gold or polymetallic projects. Any such transactions would be accompanied by risks commonly encountered in making such acquisitions.

Reliance on Key Personnel

The Company's success largely depends on the core competencies of its Directors and management and their familiarisation with, and ability to operate in, the resource industry and the Company's ability to retain its key executives.

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Resource Estimations

Resource estimates are expressions of judgment based on knowledge, experience and resource modelling. As such, resource estimates are inherently imprecise and rely to some extent on interpretations made. They are also influenced by the recoverability of the value component from the defined resource.

Additionally, resource estimates may change over time as new information becomes available. Should the Company encounter mineralisation or geological formations different from those predicted by past drilling, sampling and interpretations, resource estimates may need to be altered in a way that could adversely affect the Company's operations.

Environmental

The Company's projects are subject to laws and regulations regarding environmental matters. As with all mineral projects, the Company's projects are expected to have a variety of environmental impacts should development proceed. Development of any of the Company's projects will be dependent on the Company satisfying environmental guidelines and, where required, being approved by government authorities.

2.3 General Investment Risks

Securities Investments and Share Market Conditions

There are risks associated with any securities investment. The prices at which the securities of the Company trade may fluctuate in response to a number of factors, such as:

• general economic outlook;

• introduction of tax reform or other new legislation;

• interest rates and inflation rates;

• changes in investor sentiment toward particular market sectors;

• the demand for, and supply of, capital; and

• terrorism or other hostilities.

Furthermore, the stock market, and in particular the market for exploration and mining companies may experience extreme price and volume fluctuations that may be unrelated or disproportionate to the operating performance of such companies. These factors may materially adversely affect the market price of the securities of the Company regardless of the Company's operational performance. Neither the Company nor the Directors warrant the future performance of the Company, or any return of an investment in the Company.

Economic Risk

Changes in the general economic climate in which the Company operates may adversely affect the financial performance of the Company, as well as the Company’s exploration, development and production activities and the Company’s ability to fund those activities. Factors that may contribute to that general economic climate include the level of direct and indirect competition against the Company, industrial disruption, the rate of growth of gross domestic product in Australia, interest rates and the rate of inflation.

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Legislative

Changes in relevant taxes, legal and administration regimes, accounting practices and government policies in countries in which the Company operates may adversely affect the financial performance of the Company.

2.4

Speculative investment

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the New Securities offered under this Prospectus.

Therefore, the New Securities to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those New Securities.

Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for New Securities pursuant to this Prospectus.

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3. DETAILS OF THE OFFER

3.1 The Entitlement Offer

(a) Overview

All Eligible Shareholders are entitled to participate in the Rights Issue. You are an Eligible Shareholder if you are a Shareholder with a registered address in Australia or New Zealand on the Record Date. The Record Date is 5.00pm WST, 13 January 2015.

As an Eligible Shareholder you are entitled to subscribe for 1 New Share for every 4 Shares held on the Record Date at the Issue Price of $0.004 per New Share. You are also entitled to one free New RMXO Option and one free New 0.6c Option for every two New Shares subscribed for.

When calculating your Rights, we will round down fractions to the nearest whole number.

The Company’s Share Registry must receive your Entitlement and Acceptance Form by the Closing Date (being 5.00pm WST on 28 January 2015).

The Entitlement Offer is non-renounceable. This means that you cannot sell your Rights.

(b) Entitlement Offer is not underwritten

The Entitlement Offer is not underwritten. Any Entitlement not accepted will form part of the Shortfall.

(c) Rights attaching to New Shares and terms of New Options

A summary of the rights attaching to the New Shares and the terms of the New Options are set out in Sections 4.1, 4.2 and 4.3.

(d) Taxation

There may be taxation implications in relation to the Rights Issue and subscribing for New Shares and New Options. These taxation implications vary depending on your individual circumstances. You should seek and rely on your own taxation advice regarding an investment in the Company. Neither the Company nor any of its officers, employees, agents and advisers accepts any liability or responsibility with respect to the taxation consequences connected with the Rights Issue or the New Shares and New Options.

(e) Minimum subscription

There is no minimum subscription under the Entitlement Offer.

3.2 What Eligible Shareholders may do under the Entitlement Offer

(a) Alternatives

The number of New Shares to which Eligible Shareholders are entitled (your Entitlement or Rights) is shown on the accompanying Entitlement and Acceptance Form. Your acceptance

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of the Offer must be made on the Entitlement and Acceptance Form accompanying this Prospectus. Your acceptance must not exceed your Entitlement as shown on that form. If it does, your acceptance will be deemed to be for the maximum Entitlement.

If you do not take up your Rights, then your percentage holding in the Company will be diluted.

As an Eligible Shareholder, you may:

• take up all of your Rights (refer Section 3.2(b));

• take up all of your Rights and apply for Shortfall Securities (refer Section 3.2(c));

• take up part of your Rights and allow the balance to lapse (refer Section 3.2(d)); or

• allow all of your Rights to lapse (refer Section 3.2(e)).

(b) 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 in accordance with Section 3.3 to reach the Company's Share Registry no later than 5.00pm (WST) on the Closing Date.

(c) Taking up all your Rights and applying for Shortfall Securities

Eligible Shareholders may, in addition to taking up all their Rights, apply for Shortfall Securities as described in Section 3.5.

A single cheque should be used for the application moneys for your Rights and the number of Shortfall Securities you wish to apply for as stated on the Entitlement and Acceptance Form.

(d) 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 in accordance with Section 3.2(b). If you take no further action, the balance of your Rights will lapse.

(e) Allow your Rights to lapse

If you do nothing, your Rights will lapse.

3.3

Payment

The price for New Shares is payable in full on application by a payment of $0.004 per New Share by way of:

• an Entitlement and Acceptance Form, accompanied by a cheque or bank draft of the Application Moneys; or

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• a BPAY® payment.

Cheques or bank drafts must be drawn in Australian currency on an Australian bank and made payable to " Red Mountain Mining Limited – Rights Issue Account " and crossed "Not Negotiable". Applicants must not forward cash. Receipts for payment will not be issued. You should ensure that sufficient funds are held in the relevant account(s) to cover the cheque(s). If the amount of your cheque(s) is not sufficient to pay for the number of New Shares you have applied for, you may be taken to have applied for such lower number of New Shares as your cleared moneys will pay for or your application may be rejected. Your completed Entitlement and Acceptance Form and cheque must reach the Company’s share registry no later than 5:00 pm WST on the Closing Date.

If you pay by BPAY®, please follow the procedure set out in the Entitlement and Acceptance Form. You can only make a payment via BPAY® if you are the holder of an account with an Australian financial institution that supports BPAY® transactions. You do not have to send us a completed Entitlement and Acceptance Form if you pay by BPAY®. It is your responsibility to ensure that we receive your payment by the Closing Date. We do not accept any responsibility for incorrectly completed BPAY® payments.

Please note that should you choose to pay by BPAY®:

• you do not need to submit the Entitlement and Acceptance Form but are taken to have made the declarations on that Entitlement and Acceptance Form; and

• if you do not pay for your Entitlement in full, you are deemed to have taken up your Entitlement in respect of such whole number of Shares which is covered in full by your application monies.

It is your responsibility to ensure that your BPAY® payment is received by the share registry by no later than 5.00 pm (WST) on the Closing Date. You should be aware that your financial institution may implement earlier cut-off times with regards to electronic payment and you should therefore take this into consideration when making payment. Any application monies received for more than your final allocation of Shares (only where the amount is $1.00 or greater) will be refunded. No interest will be paid on any application monies received or refunded.

Returning a completed Entitlement and Acceptance Form or paying any application monies by BPAY® will be taken to constitute a representation by you that:

• you have received a copy of this Prospectus and the accompanying Entitlement and Acceptance Form, and read them both in their entirety; and

• you acknowledge that once the Entitlement and Acceptance Form is returned, or a BPAY® payment instruction is given in relation to any application monies, the application may not be varied or withdrawn except as required by law.

1 New Option with an exercise price of $0.012 and an expiry date of 31 March 2016 and 1 New Option with an exercise price of $0.03 and an expiry date of 30 June 2016 will be issued for every 2 Shares subscribed for and issued under the Offer.

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3.4 Excluded Shareholders

The Company is of the view that it is unreasonable to make an offer to Excluded Shareholders (a Shareholder whose registered address is not in Australia or New Zealand) having regard to the number of Excluded Shareholders, the number and value of Shares these Excluded Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction. Accordingly, the Entitlement Offer is not being extended, and New Securities will not be issued, to Shareholders with a registered address which is outside Australia or New Zealand.

The Entitlement Offer is being made in New Zealand pursuant to the Securities Act (Overseas Companies) Exemption Notice 2013. The New Securities are not being offered or sold to the public within New Zealand other than to existing Shareholders of the Company with registered addresses in New Zealand. This Prospectus has not been registered, filed with or approved by any New Zealand regulatory authority. This Prospectus is not an investment statement or prospectus under New Zealand law and is not required to, and may not, contain all the information that an investment statement or prospectus under New Zealand law is required to contain.

Eligible Shareholders holding shares on behalf of persons who are resident overseas are responsible for ensuring that taking up an Entitlement under the Entitlement Offer does not breach regulations in the relevant overseas jurisdiction. Return of a duly completed Entitlement and Acceptance Form will be taken by the Company to constitute a representation that there has been no breach of those regulations.

3.5

Shortfall

Any New Shares and New Options under the Rights Issue that are not applied for will form the Shortfall Securities, with the New Shares to be issued at the same price as under the Entitlement Offer. The Shortfall Securities will be placed at the discretion of the Directors.

Under this Prospectus, the Company offers to issue the Shortfall Securities to a party (which may include investors other than Eligible Shareholders) at the same price as the New Shares offered under the Rights Issue. The offer to issue Shortfall Securities is a separate offer under this Prospectus, which will be open for up to three months after the Closing Date.

Shareholders may apply for any Shortfall Securities by completing the relevant Shortfall Securities section in the Entitlement and Acceptance Form and sending it to the Company's share registry (refer to Section 3.2 above) together with a cheque in the amount of Shortfall applied for. Shortfall may not be applied for by way of BPAY®.

Application for Shortfall with moneys does not guarantee any allotment of any Shortfall Securities. The Directors may determine that an applicant for Shortfall Securities will receive a lesser number of Shortfall Securities than the number applied for or may reject an application for Shortfall Securities. All application moneys in relation to which Shortfall Securities are not allocated will be returned without interest as soon as practicable after the closing date of the Shortfall Offer.

It is your responsibility to ensure that you will not breach the takeovers provisions in the Corporations Act by applying for Shortfall Securities.

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3.6 Allotment and quotation

(a) Allotment of New Securities

The New Securities issued pursuant to the Entitlement Offer will be allotted in accordance with the ASX Listing Rules and the timetable set out in the Investment Overview section, other than the Shortfall Securities, which will be issued on a progressive basis.

Pending the allotment and issue of New Securities or payment of refunds under this Prospectus, we will hold all Application Money on trust for you in a separate bank account as required by the Corporations Act. We will, however, be entitled to retain all interest that accrues on any Application Money we hold and each Appilcant waives the right to claim interest.

No securities will be allotted and issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

Holding statements for New Securities issued under the Offer will be mailed in accordance with the ASX Listing Rules and timetable set out at the commencement of this Prospectus and for Shortfall Securities issued under the Shortfall Offer as soon as practicable after their issue.

(b) Quotation by ASX

We intend to apply to ASX for quotation of the New Securities in accordance with the timetable set out at the commencement of this Prospectus. If the ASX accepts our application, quotation of the New Shares and New RMXO Options will commence after the issue of the New Shares and New RMXO Options. The fact that ASX may grant Official Quotation to the New Shares and New RMXO Options is not to be taken in any way as an indication of the merits of the Company or the New Shares and New RMXO Options now offered.

If any New Shares and/or New RMXO Options are not granted quotation on ASX within 3 months after the date of this Prospectus, or such longer period as is permitted by the Corporations Act, the issue of those New Shares and/or New RMXO Options will be void and any Application Money in respect of the New Shares will be refunded to you without interest within the time prescribed by the Corporations Act.

The Company intends for the New 0.6c Options to be quoted on ASX. Accordingly, the Company will apply for quotation of the New 0.6c Options in accordance with the timetable set out at the commencement of this Prospectus. However, the quotation of the New 0.6c Options is subject to the satisfaction of the ASX Listing Rules requirements (particularly in regards to spread). Accordingly, if the Company does not receive sufficient applications for the New Shares and therefore the New 0.6c Options to satisfy these requirements (or does not otherwise satisfy the requirements), the Company will withdraw the application for Official Quotation in respect of the New 0.6c Options and the New 0.6c Options will not be quoted and will remain unlisted, until such time as the Company can satisfy the ASX Listing Rule requirements.

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(c) Holding statements

We participate in the security transfer system known as CHESS. CHESS is operated by ASX Settlement Pty Ltd (ACN 008 504 532) (a wholly owned subsidiary of ASX) in accordance with the Listing Rules and the ASX Settlement Operating Rules. Under CHESS you will not receive a share or option certificate. You will receive a holding statement setting out the number of New Securities issued to you under this Prospectus. If you are broker sponsored, ASX Settlement will send you a CHESS statement.

Electronic registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with a statement (similar to a bank account statement) that sets out the number of Shares issued to them under this Prospectus. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship.

Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month.

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4. ADDITIONAL INFORMATION

• 4.1 Rights attaching to New Shares

The rights attaching to ownership of Shares in the Company (including the New Shares) are:

• (a) set out in the Company’s Constitution; and

• (b) in certain circumstances, regulated by the Corporations Act, the Listing Rules and the general law.

A summary of the more significant rights attaching to Shares is set out below. This summary is not exhaustive nor does it constitute a definitive statement of the rights and liabilities of our Shareholders.

Voting Rights

Subject to any rights or restrictions for the time being attached to any class or classes of shares, at a general meeting of members every member has one vote on a show of hands and one vote per Share on a poll. The person who holds a share which is not fully paid shall be entitled to a fraction of a vote equal to that proportion of a vote that the amount paid on the relevant share bears to the total issue price of the share excluding amounts credited or paid in advance of a call. Voting may be in person or by proxy, attorney or representative.

Dividends

Subject to the rights of holders of shares issued with any special rights (at present there are none), the value of the profits of the Company which the Board may from time to time determine to distribute by way of dividend are divisible to each share of a class on which the Board resolves to pay a dividend in proportion to the amount for the time being paid on a share (not credited) bears to the total issue price of the share (excluding amounts credited). All Shares currently on issue and the shares to be issued under this Prospectus are fully paid Shares.

Future Issues of Securities

Subject to the Corporations Act and the Listing Rules, the Directors may issue, grant options over, or otherwise dispose of unissued shares in the Company at the times and on the terms that the Directors think proper and a share may be issued with preferential or special rights.

Transfer of Shares

A shareholder may transfer Shares by a market transfer in accordance with any computerised or electronic system established or recognised by ASX for the purpose of facilitating transfers in Shares or by an instrument in writing in a form approved by ASX or the Board.

Meetings and Notices

Each shareholder is entitled to receive notice of, and to attend, general meetings for the Company and to receive all notices, accounts and other documents required to be sent to

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shareholders under the Constitution, the Corporations Act or the Listing Rules. Shareholders may requisition meetings in accordance with the Corporations Act.

Election of Directors

There must be a minimum of three Directors. At every annual general meeting one third of the Directors (or the number nearest to one third) must retire from office together with any Director who would have held office for more than three years since that Director's election or last election. These retirement rules do not apply to certain appointments including the managing director.

Winding Up

If the Company is wound up, the liquidator may, with the sanction of a special resolution of the shareholders:

• divide the assets of the Company among the members in kind;

• for that purpose fix the value of assets and decide how the division is to be carried out as between the members and different class of members; and

• vest assets of the Company in trustees on any trusts for the benefit of the members as the liquidator thinks appropriate.

Amendment of Constitution

The Constitution of the Company can only be amended by a special resolution, passed by at least three quarters of the votes cast by holders of Shares entitled to vote on the resolution, at general meeting. At least 28 days’ written notice specifying the intention to propose the resolution as a special resolution must be given.

Predominance of Listing Rules

While the Company is admitted to trading on the Official List, then despite anything in the Constitution, if the Listing Rules prohibit an act being done, the act must not be done. Nothing in the Constitution prevents an act being done that the Listing Rules require to be done. If the Listing Rules require an act to be done or not to be done, authority is given for that act to be done or not to be done (as the case may be). If the Listing Rules require the Constitution to contain a provision and it does not contain such a provision, the Constitution is deemed to contain that provision. If the Listing Rules require the Constitution not to contain a provision and it contains such a provision, the Constitution is deemed not to contain that provision. If a provision of the Constitution is inconsistent with the Listing Rules, the Constitution is deemed not to contain that provision to the extent of the inconsistency.

4.2 Terms of New RMXO Options

The terms of the issue of the New RMXO Options are:

• (a) Each Option entitles the holder to one Share in the capital of the Company.

• (b) The Options may be exercised at any time prior to 5.00pm WST on 31 March 2016.

• (c) The exercise price of the Options is $0.012 each.

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• (d) Application will be made for the Options to be quoted and the Options will, subject to quotation, be freely tradeable.

• (e) The Company will provide to each Option holder a notice that is to be completed when exercising the Options (" Notice of Exercise "). Options may be exercised by the Option holder in whole or in part by completing the Notice of Exercise and forwarding the same to the Secretary of the Company to be received prior to the expiry date. The Notice of Exercise must state the number of Options exercised, the consequent number of Shares to be allotted and the identity of the proposed allottee. The Notice of Exercise by an Option holder must be accompanied by payment in full for the relevant number of Shares being subscribed, being an amount of the exercise price per Share.

• (f) All Shares issued upon the exercise of the Options will rank equally in all respects with the Company's then issued Shares. The Company must apply to the ASX within 7 business days after the date of issue of all Shares pursuant to the exercise of Options to be admitted to quotation.

• (g) There are no participating rights or entitlements inherent in the Options and the holders will not be entitled to participate in new issues or pro-rata issues of capital to Shareholders during the term of the Options. Thereby, the Option holder has no rights to a change in the exercise price of the Option or a change to the number of underlying securities over which the Option can be exercised. The Company will ensure, for the purposes of determining entitlements to any issue, that Option holder will be notified of a proposed issue after the issue is announced. This will give Option holders the opportunity to exercise their Options prior to the date for determining entitlements to participate in such issues.

• (h) In the event of any reconstruction (including consolidation, subdivisions, reduction or return) of the authorised or issued capital of the Company, all rights of the Option holder shall be reconstructed (as appropriate) in accordance with the Listing Rules.

4.3 Terms of New 0.6c Options

The terms of the issue of the New 0.6c Options are:

• (a) Each Option entitles the holder to one Share in the capital of the Company.

• (b) The Options may be exercised at any time prior to 5.00pm WST on 30 June 2016.

• (c) The exercise price of the Options is $0.006 each.

• (d) Application will be made for the Options to be quoted and the Options will, subject to quotation, be freely tradeable.

• (e) The Company will provide to each Option holder a notice that is to be completed when exercising the Options (" Notice of Exercise "). Options may be exercised by the Option holder in whole or in part by completing the Notice of Exercise and forwarding the same to the Secretary of the Company to be received prior to the expiry date. The Notice of Exercise must state the number of Options exercised, the consequent number of Shares to be allotted and the identity of the proposed allottee. The Notice of Exercise by an Option holder must be accompanied by payment in full for the relevant number of Shares being subscribed, being an amount of the exercise price per Share.

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• (f) All Shares issued upon the exercise of the Options will rank equally in all respects with the Company's then issued Shares. The Company must apply to the ASX within 7 business days after the date of issue of all Shares pursuant to the exercise of Options to be admitted to quotation.

• (g) There are no participating rights or entitlements inherent in the Options and the holders will not be entitled to participate in new issues or pro-rata issues of capital to Shareholders during the term of the Options. Thereby, the Option holder has no rights to a change in the exercise price of the Option or a change to the number of underlying securities over which the Option can be exercised. The Company will ensure, for the purposes of determining entitlements to any issue, that Option holder will be notified of a proposed issue after the issue is announced. This will give Option holders the opportunity to exercise their Options prior to the date for determining entitlements to participate in such issues.

• (h) In the event of any reconstruction (including consolidation, subdivisions, reduction or return) of the authorised or issued capital of the Company, all rights of the Option holder shall be reconstructed (as appropriate) in accordance with the Listing Rules.

4.4 Litigation

As at the date of this Prospectus, the Company is not involved in any legal proceedings and the Directors are not aware of any legal proceedings pending or threatened against the Company.

4.5 Transaction specific prospectus and continuous disclosure obligations

We are a disclosing entity under the Corporations Act and therefore are subject to regular reporting and disclosure obligations. Under those obligations, we are required to comply with all applicable continuous disclosure and reporting requirements in the Corporations Act and the Listing Rules. In particular, we must comply with the requirement to disclose to ASX any information held by us which a reasonable person would expect to have a material effect on the price or the value of the Company's securities.

As this Prospectus is a transaction specific prospectus issued under section 713 of the Corporations Act, it is only required to contain information in relation to the effect of the Offers on the Company and the rights and liabilities attaching to the securities offered. This Prospectus is not required to provide information regarding our assets and liabilities, financial position and performance, profits and losses or prospects.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest.

Having taken such precautions and having made such enquires as are reasonable, the Company believes that it has complied with the general and specific requirements of ASX as applicable from time to time throughout the 3 months before the issue of this Prospectus which required the Company to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX.

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Information that is already in the public domain has not been reported in this Prospectus other than that which is considered necessary to make this Prospectus complete.

The Company, as a disclosing entity under the Corporations Act, states that:

• (a) it is subject to regular reporting and disclosure obligations;

• (b) copies of documents lodged with ASIC in relation to the Company (not being documents referred to in section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of ASIC; and

• (c) it will provide a copy of each of the following documents, free of charge, to any person on request:

• (i) the annual financial report most recently lodged by the Company with ASIC;

• (ii) any half-year financial report lodged with ASIC after lodgement of the annual financial report and before lodgement of this Prospectus with ASIC; and

• (iii) any continuous disclosure notices given by the Company to ASX in accordance with the ASX Listing Rules as referred to in section 674(1) of the Corporations Act after the lodgement of the annual financial report and before the lodgement of this Prospectus with ASIC.

Copies of all documents lodged with the ASIC in relation to the Company can be inspected at the registered office of the Company during normal office hours.

We lodged our latest annual report with ASX on 15 October 2014. Since then, we have made the following announcements to ASX, shown in the table below.

Date	Description of Announcement
2 January 2015	Secondary Trading Notice
2 January 2015	Appendix 3B
23 December 2014	Reinstatement to Official Quotation
23 December 2014	Strategic financing partnership and capital raising underway
22 December 2014	Extension to voluntary suspension
18 December 2014	Suspension from Official Quotation
16 December 2014	Agrees terms for strategic financing partnership
16 December 2014	Trading Halt
15 December 2014	Results of Meeting
12 December 2014	New high grade gold intersections at Lobo
2 December 2014	Presentation

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Date	Description of Announcement
1 December 2014	Targets strategic financing partnership and cost reductions
21 November 2014	ASX Information for New Listed Options Class
20 November 2014	Change of Director's Interest Notice
20 November 2014	Appendix 3B
20 November 2014	Definitive Feasibility Study to date indicate robust project
17 November 2014	Reduction in non-executive director fees
17 November 2014	Results of Annual General Meeting
14 November 2014	Notice of General Meeting/Proxy Form
6 November 2014	Change of Director's Interest Notice
31 October 2014	Quarterly Activities and Cashflow Report
29 October 2014	Initial exploration target defined at Lobo
24 October 2014	Secondary Trading Notice
24 October 2014	Appendix 3B
16 October 2014	Red Mountain raises additional $0.34 million

ASX maintains files containing publicly available information for all listed companies. The Company’s file is available for inspection at ASX during normal office hours. The announcements are also available through the Company’s website www.redmm.com.au.

4.6

Market price of Shares

The Company is a disclosing entity for the purposes of the Corporations Act and its Shares are enhanced disclosure securities quoted on ASX.

The highest and lowest market price of the Company’s quoted Shares on ASX during the 4 months immediately preceding the date of lodgement of this Prospectus with ASIC and the respective dates of those sales and the last sale on the day prior to lodgement of this Prospectus with ASIC were:

	Price	Date
Highest	1.0 cent	11 September 2014
Lowest	0.4cent	5 January2015
Latest	0.4cent	6 January2015

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4.7 Board and Management

The Board consists of:

• Mr Neil Warburton (Non-Executive Chairman)

• Mr Jon Dugdale (Managing Director)

• Mr Michael Wolley (Non-Executive Director)

Messrs Warburton and Dugdale as current or former executive directors are not considered independent directors.

Mr Wolley is an independent director.

4.8 Directors’ Interests

(a) Interests of Directors

Other than as disclosed in this Prospectus, no Director or proposed Director holds, or has held at any time during the last two years, any interest in:

• (i) the formation or promotion of the Company; or

• (ii) any property acquired or proposed to be acquired by the Company in connection with its formation or promotion of the Company or the Offer; or

• (iii) the Offer;

and no amounts have been paid or agreed to be paid by any person and no benefits have been given or agreed to be given by any person to a Director or proposed Director to induce him or her to become, or to qualify as, a Director or for services provided by a Director or proposed Director in connection with the formation or promotion of the Company or the Offer.

(b) Interests in securities as at the date of this Prospectus

As at the date of this Prospectus, the Directors (and their respective associates) have relevant interests in the Shares and Options of the Company at set out in the table below. Interests include those held directly and indirectly.

Each Director who is an Eligible Shareholder will be entitled to participate in the Rights Issue.

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Director	Number of Shares	Number of Options	Number of
	currently held	currently held	Performance
			Rights currently
			held
Neil Warburton	15,566,6241	6,497,3502	6,000,0003
Jon Dugdale	5,032,2004	37,5004	49,800,0005
Michael Wolley	0	0	4,000,0006

Notes:

1. Comprising 125,000 Shares held directly; 4,565,625 Shares held indirectly by Michlange Pty Ltd of which Mr Warburton is a director and shareholder; 8,325,999 Shares held indirectly by Michlange Pty Ltd of which Mr Warburton is a director and shareholder and beneficiary of the trust; and 1,925,000 held indirectly by Michlange Pty Ltd of which Mr Warburton is a director and shareholder and beneficiary of the trust and 625,000 held indirectly by Australian Beijing Holdings Pty Ltd of which Mr Warburton is a director and shareholder.

2. Comprising 6,403,600 Options exercisable at 3 cents expiring 30 June 2016 held indirectly by Michlange Pty Ltd of which Mr Warburton is a director and shareholder and beneficiary of the trust and 93,750 Options exercisable at 3 cents expiring 30 June 2016 held indirectly by Michlange Pty Ltd of which Mr Warburton is a director and shareholder and beneficiary of the trust.

3. Comprising 1,500,000 Class A Performance Rights convertible to Shares on or before 18 November 2016 2,250,000 Class B Performance Rights convertible to Shares on or before 18 November 2017 and 2,250,000 Class C Performance Rights convertible to Shares on or before 18 November 2018, subject to various vesting conditions and held indirectly by Michlange Pty Ltd < Warburton Super A/C> of which Mr Warburton is a director and shareholder and beneficiary of the trust.

4. Held indirectly by LJ and Dr AL Dugdale of which Mr Dugdale is a beneficiary.

5. Comprising 3,000,000 Class A Performance Rights convertible to Shares on or before 18 November 2016, 4,500,000 Class B Performance Rights convertible to Shares on or before 18 November 2017, 4,500,000 Class C Performance Rights convertible to Shares on or before 18 November 2018, 12,600,000 Class D Performance Rights convertible to Shares on or before 1 December 2017, 12,600,000 Class E Performance Rights convertible to Shares on or before 1 December 2017 and12,600,000 Class F Performance Rights convertible to Shares on or before 1 December 2017, subject to various vesting conditions.

6. Comprising 1,000,000 Class A Performance Rights convertible to Shares on or before 18 November 2016, subject to vesting conditions, 1,500,000 Class B Performance Rights convertible to Shares on or before 18 November 2017 and 1,500,000 Class C Performance Rights convertible to Shares on or before 18 November 2018, subject to various vesting conditions

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Neil Warburton may participate in the Entitlement Offer by taking up his Entitlement. Neil Warburton has advised the Company that he intends to subscribe for a total of 3,735,406 New Shares in his capacity as a Shareholder. This represents Neil Warburton's full Entitlement, less the Entitlement held by Australian Beijing Holdings Pty Ltd.

Any New Shares subscribed for will result in the issue of New Options in accordance with the Entitlement Offer.

In the event that Neil Warburton subscribes for 3,735,406 New Shares, his relevant interest in Shares will be 1.72%.

Jon Dugdale may participate in the Entitlement Offer by taking up his Entitlement. Jon Dugdale has advised the Company that he intends to subscribe for up to 1,258,050 New Shares in his capacity as a Shareholder.

Any New Shares subscribed for will result in the issue of New Options in accordance with the Entitlement Offer.

In the event that Jon Dugdale subscribes for 1,258,050 New Shares, his relevant interest in Shares will be 0.56%.

(c) Remuneration of Directors

The following table shows the total (and proposed) annual remuneration paid to both executive and non-executive directors.

Directors are also entitled to be reimbursed for reasonable expenses incurred by them in providing their services to the Company.

Director	Financial year ended 30 June 2013	Financial year ended 30 June 2014	Financial year ending 30 June 2015 (Proposed)
Mr Neil Warburton	$335,395	$72,000	$63,600
Mr Jon Dugdale	$164,496	$279,949	$260,0001
Mr Michael Wolley	$42,583	$36,000	$31,333

1. Excludes superannuation.

4.9 Interests of experts and advisers

Other than as disclosed in this Prospectus, no expert, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of this Prospectus, promoter of the Company or underwriter to the Entitlement Offer or financial services licencee named in the Prospectus as a financial services licensee involved in the issue, nor any firm in which any of those persons is or was a partner nor any company in which any of those persons is or was associated with, has now, or has had, in the two year period ending on the date of this Prospectus, any interest in:

• (a) the formation or promotion of the Company; or

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• (b) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or

• (c) the Offer.

Other than as disclosed in this Prospectus, no amounts of any kind (whether in cash, securities or otherwise) have been paid or agreed to be paid to any person noted in the above paragraph, for services rendered by that person in connection with the formation or promotion of the Company or the Offers.

Steinepreis Paganin Lawyers has acted as lawyers to the Company in relation to the Rights Issue. We estimate that we will pay approximately $10,000 (excluding GST) for these services. In the past two years, Steinepreis Paganin Lawyers has been paid fees (excluding GST and disbursements) of approximately $82,787.53 by the Company.

4.10 Expenses of the Offers

The expenses connected to the Rights Issue payable by the Company are estimated at approximately $50,000, assuming maximum subscription. These estimated expenses include the following:

ASIC fees ASX fees Legal fees Management, printing and distribution (inc. postage) Miscellaneous Total	$ 2,290 20,260 10,000 12,000 5,450
	$50,000

4.11 Consents

The following parties have given their written consent to be named in this Prospectus and for the inclusion of statements made by that party (as described below in the form and context in which they are included), and have not withdrawn such consent before lodgement of this Prospectus with ASIC.

Steinepreis Paganin Lawyers has consented to being named as the Solicitors to the Offer.

Jon Dugdale has consented to being named as the Competent Person in this Prospectus and to the inclusion of the results in section 1.1.

The parties referred to above in this Section:

• do not make, or purport to make any statement in this Prospectus, or on which a statement made in this Prospectus is based other than as specified in this Section;

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• to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Prospectus other than a reference to its name and a statement included in the Prospectus with the consent of that party as specified in this Section; and

• have not caused or authorised the issue of this Prospectus.

4.12 Financial forecasts

The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

4.13 Privacy Act

If you complete an application for New Securities, you will be providing personal information to the Company (directly or by the Company’s share registry). The Company collects, holds and will use that information to assess your application, service your needs as a holder of equity securities in the Company, facilitate distribution payments and corporate communications to you as a securityholder and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the Company’s share registry.

You can access, correct and update the personal information that we hold about you. Please contact the Company or its share registry if you wish to do so at the relevant contact numbers set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for New Securities, the Company may not be able to accept or process your application.

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5 DIRECTORS' AUTHORISATION AND CONSENT

This Prospectus is authorised by the Company and lodged with the ASIC pursuant to section 718 of the Corporations Act.

Each Director has consented to lodgement of this Prospectus with ASIC in accordance with the terms of section 720 of the Corporations Act and has not withdrawn that consent.

Dated: 6 January 2015

Signed for and on behalf of Red Mountain Mining Limited By Mr Neil Warburton Chairman

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6 GLOSSARY

Where the following terms are used in this Prospectus they have the following meanings:

Applicant A person who submits an Entitlement and Acceptance Form. Application An application for New Securities under the Offer. Application Money The Issue Price multiplied by the total number of New Shares applied for by an Applicant under an Entitlement and Acceptance Form. AFSL Australian Financial Services Licence. ASIC Australian Securities and Investments Commission. ASX ASX Limited (ACN 008 624 691) and the Australian Securities Exchange it operates. Board The Board of Directors. Closing Date The time and date at which the Offer expires, being 5.00pm WST, 28 January 2014, subject to the Company varying this date in accordance with the Listing Rules. Company or Red Red Mountain Mining Limited (ACN 119 568 106). Mountain Mining Constitution The constitution of the Company. Corporations Act The Corporations Act 2001 (Cth). Director A director of the Company for the time being. Eligible Shareholders with a registered address in Australia or New Shareholders Zealand at the Record Date. Entitlement The entitlement to subscribe for New Shares and New Options under the Rights Issue. Entitlement and The entitlement and acceptance form attached to or Acceptance Form accompanying this Prospectus, personalised for each Eligible Shareholder, which allows each Eligible Shareholder to accept the Entitlement Offer. Entitlement Offer The offer to Eligible Shareholders of New Shares and New Options under the Rights Issue. Excluded A Shareholder whose registered address is not in Australia, or Shareholder New Zealand. Full Subscription The maximum amount to be raised under the Entitlement Offer being the sum of $896,248 assuming no existing Options are exercised.

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JORC Code The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia.

Issue Price $0.004 per New Share, being the price payable to subscribe for each New Share.

Listing Rules

The official listing rules of ASX.

New Options New RMXO Options and New 0.6c Options. New RMXO A New Option to subscribe for a Share on the terms set out in Options Section 4.2.

New 0.6c Options A New Option to subscribe for a Share on the terms set out in Section 4.3.

New Securities The New Shares and New Options.

New Shares The Shares offered under the Rights Issue. Offer The Entitlement Offer

Official List The official list of the ASX.

Option An option to acquire a Share.

Prospectus This prospectus dated 6 January 2015. Record Date The time and date for determining a Shareholder’s entitlement to participate in the Rights Issue, being 5.00pm WST, 13 January 2015.

Rights The right to subscribe for New Shares and New Options under this Prospectus.

Rights Issue The pro-rata non-renounceable offer to Eligible Shareholders of 1 New Shares for every 4 Shares held by Eligible Shareholders on the Record Date with 0.5 free New RMXO Option and 0.5 free new 0.6c Option for every one(1) New Share subscribed for.

• Share A fully paid ordinary share in the issued capital of the Company.

Shareholder Registered holder of Shares.

Shortfall Securities not applied for under the Offer before the Closing Date.

Shortfall Securities New Securities constituting the Shortfall.

WST Western Standard Time.

$ Australian dollars unless otherwise stated.

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