RED MOUNTAIN MINING LIMITED — Capital/Financing Update 2017

May 21, 2017

ASX ANNOUNCEMENT RED MOUNTAIN MINING LTD ASX : RMX Company Directors Jeremy King Lincoln Ho Robert Parton Company Secretary Shannon Coates

RED MOUNTAIN MINING LTD 22 May 2017

MUKABE-KASARI COBALT-COPPER PROJECT UPDATE

• Additional high-grade Cobalt results – > 1% Co
• Significant improvement in earn-in terms negotiated
• Further results from rock chip samples to follow prior to official site visit

Red Mountain Mining Ltd (Company or RMX) is pleased to provide an update on the Mukabe-Kasari Cobalt-Copper Project (Project), Lualaba Province, Democratic Republic of Congo (DRC).

Recent Trenching and Sampling Results

Further reconnaissance exploration work including trenching and rock chip sampling work together with laboratory analysis has been undertaken in the Project area. Rock chip samples continue to show high grade cobalt, with some samples above 1%. Set out below are the results from the recent trenching and sampling work:

SampleID	Easting	Northing	Sampledepth	Cu%	Co%
99106	417633	8898276	1m	3.09%	0.37%
99107	417633	8898276	1m	2.70%	0.69%
99110	421517	8898210	1m	2.50%	0.78%
99111	421372	8898210	1m	2.43%	0.91%
99112	422753	8898125	1m	2.58%	0.34%
99113	421978	8897841	1m	2.68%	1.10%
99114	421450	8898201	1m	2.34%	0.92%
99115	421450	8898250	1m	2.34%	0.77%
99116	421450	8898300	1m	2.42%	0.92%
99130	417590	8898065		0.28%	0.81%
99131	417590	8898051		0.28%	0.95%
99133	421446	8898300		0.25%	0.53%
99135	421446	8898450		0.27%	1.47%
99136	416380	8898480		6.75%	0.063%
99137	416920	8898400		7.6%	0.089%

Director Jeremy King commented:

"The recent results from trenching and rock chip sampling at Mukabe-Kasari continue to be highly encouraging for both Copper and Cobalt exploration. The results indicate a greater lateral spread and consisted high-grades within the project area. These results warrant the Company investigating the Project more closely, and we are expecting further trenching and sampling results in June as part of final due diligence work.

"These sample results, within a region of world-class operating Cobalt-Copper mines and recent world-class discoveries, make it an exciting area to be working in."

Amendments to Tenure and Commercial Terms

Following key due diligence and negotiations, RMX is pleased to enter into an amendment agreement (Amendment Agreement) in respect of the term sheet in place with CoCu Metals Ltd relating to the Mukabe-Kasari Cobalt-Copper Project, DRC.

Tenure

After an extensive review, the Mukabe-Kasari Project is now proposed to comprise a total contiguous land package of 116km2 (see Map 1). This represents a more targeted approach to the Project, while preserving the optionality required for a highly prospective exploration project.

Map 1: Mukabe-Kasari Project Area with certain Regional Mining Interests

Trenching Work at Mukabe-Kasari

Commercial Terms

The parties have agreed to extend RMX's exclusivity period over the Project to 30 June 2017 in order to finalise due diligence, most importantly obtaining final sample results, completing tenure paperwork and conducting a thorough site visit with CSA Global Pty Ltd in order to assist and complete the Project assessment.

In addition, revised earn-in terms have been agreed as part of the Amendment Agreement, representing a significant improvement from RMX's perspective.

Pursuant to the Amendment Agreement:

▪ RMX has the right, solely at its election, to earn-in to the Project by way of incurring expenditure as follows:

Phase	ExplorationExpenditure	CoCuinterest	RMXinterest
1	A$250,000	50%	50%
2	A$250,000	30%	70%
3	A$250,000	20%	80%

• RMX shall issue to CoCu:
  • o 2m shares upon RMX exercising its right to earn into the Project and entering into formal joint venture documentation;
  • o 1m shares in each instance on election to proceed to Phase 2, Phase 3 and to take out CoCu's remaining 20% interest (should RMX elect to do so).
• Upon RMX earning an 80% interest in the Project, the joint venture will be a customary pro rata contributing arrangement, provided that RMX has the right to acquire the remaining interest in the project for A$3.5m (by mix of cash and shares) and a 1% NSR over the Project.

-Ends-

For and on behalf of the Board.

Shannon Coates, Company Secretary

Competent Person Statement

Information in this report that relates to Exploration Results has been compiled from recent and historic data by Mr Simon Dorling, who is a member of the Australian Institute of Geoscientists. Mr. Dorling is a consultant to Red Mountain, and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Dorling consents to the inclusion of the data in the form and context in which it appears.

JORC Code, 2012 Edition – Table 1

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria	JORC Code explanation	Commentary
Sampling techniques	•Nature and quality of sampling (eg cut channels,random chips, or specific specialised industry standardmeasurement tools appropriate to the minerals underinvestigation, such as down hole gamma sondes, or handheldXRF instruments, etc). These examples should not be taken aslimiting the broad meaning of sampling.•Include reference to measures taken to ensure samplerepresentivity and the appropriate calibration of anymeasurement tools or systems used.•Aspects of the determination of mineralisation that areMaterial to the Public Report.•In cases where 'industry standard' work has been donethis would be relatively simple (eg 'reverse circulation drillingwas used to obtain 1 m samples from which 3 kg was pulverisedto produce a 30 g charge for fire assay'). In other cases moreexplanation may be required, such as where there is coarse goldthat has inherent sampling problems. Unusual commodities ormineralisation types (eg submarine nodules) may warrantdisclosure of detailed information.	•The samples represent selective "grab samples" for near surfacemineralisation that is extracted from the property by artisanal miners. A smallnumber of selected rock chipsamplesweretakenby the currentowners frompiles ofextracted artisanal materialand outcrop. As such the sample resultrepresent the tenor of mineralisation that is exploited by the artisanal minerswhich may not be the same for drill deliniated body of mineralisation.•The rock chip samples were all submitted a to GAClaboratories inLubumbashi where they were analysed byAAS.•Photographic evidence, geological descriptionsand geologicalcontext suggest that the samples reflect the nature and style of mineralisationexploited by artisanal miners.
Drilling techniques	•Drill type (eg core, reverse circulation, open-holehammer, rotary air blast, auger, Bangka, sonic, etc) and details(eg core diameter, triple or standard tube, depth of diamondtails, face-sampling bit or other type, whether core is orientedand if so, by what method, etc).	•Not applicable to this announcementas no drilling was undertaken.
Drill sample recovery	•Method of recording and assessing core and chipsample recoveries and results assessed.	•Not applicable to this announcementas no drilling was undertaken
	•Measures taken to maximise sample recovery andensure representative nature of the samples.•Whether a relationship exists between sample recoveryand grade and whether sample bias may have occurred due to

Criteria	JORC Code explanation	Commentary
	preferential loss/gain of fine/coarse material.
Logging	•Whether core and chip samples have been geologicallyand geotechnically logged to a level of detail to supportappropriate Mineral Resource estimation, mining studies andmetallurgical studies.•Whether logging is qualitative or quantitative innature. Core (or costean, channel, etc) photography.•The total length and percentage of the relevantintersections logged.	•Not applicable to this announcementas no drilling was undertaken
Sub-sampling techniquesand sample preparation	•If core, whether cut or sawn and whether quarter, halfor all core taken.•If non-core, whether riffled, tube sampled, rotary split,etc and whether sampled wet or dry.•For all sample types, the nature, quality andappropriateness of the sample preparation technique.•Quality control procedures adopted for all subsampling stages to maximise representivity of samples.•Measures taken to ensure that the sampling isrepresentative of the in situ material collected, including forinstance results for field duplicate/second-half sampling.•Whether sample sizes are appropriate to the grain sizeof the material being sampled.	•Not applicable to this announcementas no drilling was undertaken
Quality of assay data andlaboratory tests	•The nature, quality and appropriatenessof the assayingand laboratory procedures used and whether the technique isconsidered partial or total.•For geophysical tools, spectrometers, handheld XRFinstruments, etc, the parameters used in determining theanalysis including instrument make and model, reading times,calibrations factors applied and their derivation, etc.•Nature of quality control procedures adopted (egstandards, blanks, duplicates, external laboratory checks) andwhether acceptable levels of accuracy (ie lack of bias) andprecisionhave been established.	•Quality assurance data are not available for the sampling conducted.•GACLaboratories (Lubumbashi) was used for all analysis work carriedout on the rock chipsamples.The laboratory techniques below are for allsamples submitted to GACand are considered appropriate for the style ofmineralisation defined at the prospect:•Samples were analysed using inductively coupled plasma atomicabsorption spectroscopy (ICP-AAS) aftera four acid digest.•No QAQC procedures are reported
Verification of samplingand assaying	•The verification of significant intersections by eitherindependent or alternative company personnel.•The use of twinned holes.•Documentation of primary data, data entry procedures,	•Not applicable to this announcementas no drilling was undertaken

Criteria	JORC Code explanation	Commentary
	data verification, data storage (physical and electronic)protocols.•Discuss any adjustment to assay data.
Location of data points	•Accuracy and quality of surveys used to locate drillholes (collar and down-hole surveys), trenches, mine workingsand other locations used in Mineral Resource estimation.•Specification of the grid system used.•Quality and adequacy of topographic control.	•Samplelocationshave UTM (WGS84) coordinates. Grid system used is UTM(WGS84).
Dataspacinganddistribution	•Data spacing for reporting of Exploration Results.•Whether the data spacing and distribution is sufficientto establish the degree of geological and grade continuityappropriate for the Mineral Resource and Ore Reserveestimation procedure(s) and classifications applied.•Whether sample compositing has been applied.	•Not applicable to this announcementas no drilling was undertaken
Orientation of data inrelation to geologicalstructure	•Whether the orientation of sampling achievesunbiased sampling of possible structures and the extent towhich this is known, considering the deposit type.•If the relationship between the drilling orientation andthe orientation of key mineralised structures is considered tohave introduced a samplingbias, this should be assessed andreported if material.	•Not applicable to this announcementas no drilling was undertaken
Sample security	•The measures taken to ensure sample security.	•Information on sampling security protocols are not available.
Audits or reviews	•The results of any audits or reviews of samplingtechniques and data.	•The company has engaged consulting group CSA Global (AUS) toevaluate and comment on the validity, prospectively and geological context ofthe licence area and the data presented to date.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	Commentary
Mineral tenement and	•Type, reference name/number, location and ownership	•The proposed project area is currently covered under artisanal
land tenure status	including agreements or material issues with third parties such as	exploitation licences ZEA: 556, 557, 558, 559, 560, 561, 562, 563, Comialu,
	joint ventures, partnerships, overriding royalties, native title	Comiko, Comiku-1 and Comiku-2. The land-holdingis in the name of
	interests, Historical sites, wilderness or national park and	Province du Lualaba.The licences are currently in the process of being

Criteria	JORC Code explanation	Commentary
	environmental settings.•The security of the tenure held at the time of reportingalong with any known impediments to obtaining a license tooperate in the area.	converted to Prospecting Licences (PR) under the DRC Mining Law.
Explorationdonebyother parties	•Acknowledgment and appraisal of exploration by otherparties.	•The project area has not been subject to previous exploration.
Geology	•Deposit type, geological setting and style ofmineralisation.	•The mineralisation in the project areais considered an example ofa weathered, sediment-hosted copper deposit typical for the sedimenthosted stratiform copper mineralisation. Primary sulphide mineralisation isoxidisedand re-distributed during weathering in ex-dolomitic siltstones. Thehost rocks are weakly deformed and occur as tabular stratanear the marginofthe Lufilian Fold Belt.•Mineralisation appears to be preferentially hosted in stratiformsedimentary rocks of the KundelunguGroup of rocks.•Mineralisation is predominantly secondary, and is mostlystratabound. The principle copper oxide mineral is malachite, with minoramounts of azurite and chrysocolla. Cobalt occurs as heterogenite.
Drill hole Information	•A summary of all information material to theunderstanding of the exploration results including a tabulation ofthe following information for all Material drill holes:easting and northing of the drill hole collaroelevation or RL (Reduced Level –elevation above seaolevel in metres) of the drill hole collardip and azimuth of the holeodown hole length and interception depthohole length.o•If the exclusion of this information is justified on the basisthat the information is not Material and this exclusion does notdetract from the understanding of the report, the CompetentPerson should clearly explain why this is the case.	•Not applicable to this announcementas no drilling was undertaken
Dataaggregationmethods	•In reporting Exploration Results, weighting averagingtechniques, maximum and/or minimum grade truncations (egcutting of high grades) and cut-off grades are usually Material andshould be stated.•Where aggregate intercepts incorporate short lengths ofhigh grade results and longer lengths of low grade results, the	•Not applicable to this announcementas no drilling was undertaken

Criteria	JORC Code explanation	Commentary
	procedure used for such aggregation should be stated and sometypical examples of such aggregations should be shown in detail.•The assumptions used for any reporting of metalequivalent values should be clearly stated.
Relationshipbetweenmineralisation widths andintercept lengths	•These relationships are particularly important in thereporting of Exploration Results.•If the geometry of the mineralisation with respect to thedrill hole angle is known, its nature should be reported.•If it is not known and only the down hole lengths arereported, there shouldbe a clear statement to this effect (e.g.'down hole length, true width not known').	•Not applicable to this announcementas no drilling was undertaken
Diagrams	•Appropriate maps and sections (with scales) andtabulations of intercepts should be included for any significantdiscoverybeing reported These should include, but not be limitedto a plan view of drill hole collar locations and appropriatesectional views.	•A map of the sample location has been provide in this release. Thereis insufficient information available to provide more detailed technicaldescriptions.
Balanced reporting	•Where comprehensive reporting of all ExplorationResults is not practicable, representative reporting of both lowand high grades and/or widths should be practiced to avoidmisleading reporting of Exploration Results.	•There is insufficient information available to provide detailedtechnical descriptions.
Othersubstantiveexploration data	•Other exploration data, if meaningful and material,should be reported including (but not limited to): geologicalobservations; geophysical survey results; geochemical surveyresults; bulk samples –size and method of treatment;metallurgical test results; bulk density, groundwater, geotechnicaland rock characteristics; potential deleterious or contaminatingsubstances.	•The project area is located on the fringe of the Lufilian Arcin an areaof less intense deformed Katanga Basin sediments, near the basin margin.The area has not seen the same level of historic exploration as other parts ofKatanga. Howevercolonial geological maps show several copper occurrencesin the region(approximately 40 km away). The same stratigraphic positionappears to be mineralised elsewhere in his part of the basin.
Further work	•The nature and scale of planned further work (egtestsfor lateral extensions or depth extensions or large-scale step-outdrilling).•Diagrams clearly highlighting the areas of possibleextensions, including the main geological interpretations andfuture drilling areas, provided this information is not commerciallysensitive.	•The Company and its technical advisors believe the area warrantsfurther reconnaissance work and systematic exploration targeting. TheCompany plans to undertake a reconnaissance site visit and subsequent workplans.