RED MOUNTAIN MINING LIMITED

ASX ANNOUNCEMENT

31 OCTOBER 2011

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September Quarter 2011 Report

Red Mountain is a newly listed gold producer with two initial projects in China. The Company’s strategy is to secure interests in privately owned Chinese operating gold mines and advanced exploration projects to unlock the potential of “under-developed” gold projects in China by introducing Australian mining methods and improving efficiencies to gain significant production and exploration upside.

HIGHLIGHTS

Red Mountain Mining Ltd listed on the Australian Securities Exchange after successfully raising $8 million (before costs) in 50% oversubscribed IPO.
Sufficient cash to fund exploration drilling through to 2013.
Significant gold mineralisation intersected at Zhongqu Project during Stage 1 drilling programme.
Mineralisation occurs below current operating mine. Best results include:
31m at 4.61g/t gold, incl 4m at 9.51g/t gold and 8m at 10.07g/t gold
14.3m at 4.50g/t gold, incl 6m at 7.14g/t gold and 3m at 6.27g/t gold
o 8m at 7.65 g/t gold o 4m at 5.71 g/t gold
Stage 2 underground drilling programme to commence at Zhongqu.
Previously unknown zone of limestone hosted mineralisation intersected in the hanging wall of the main ore zone.
Andrew Richards appointed Chief Executive Officer.

ZHONGQU PROJECT EXPLORATION

Red Mountain Mining Ltd (ASX:RMX) (“Red Mountain” or “the Company”) has an acquisition agreement to acquire 51% of the Zhongqu Project, located 259 kilometres southwest of the provincial capital of Lanzhou, in the Gansu Province of China (Figure 1). Zhongqu is an operating gold mine with existing infrastructure. Red Mountain established site facilities and mobilised a Chinese based, Australian drilling contractor to commence the Stage 1 underground drilling programme.

ASX code: RMX ABN 40 119 658 106

COMPANY DIRECTORS CONTACT DETAILS Michael Wolley Neil Warburton RED MOUNTAIN MINING LTD Chairman Non-Executive Director Head Office Keith Rowe Bo Zhou Unit 2, 2 Richardson Street Executive Director Non-Executive Director West Perth Western Australia 6005 Shannon Coates www.redmm.com.au Company Secretary [email protected]

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Figure 1. Zhongqu Project location

Stage 1 Drilling Programme

Red Mountain drilled 17 holes for a total of 2,352 metres in the Xinqu mine, located within the Zhongqu Project, prior to listing. Xinqu is one of three main exploration target areas within the Zhongqu Project (Figure 2).

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Figure 2 - Zhongqu Project showing main prospect locations within the tenement

Logging was completed and assays received in the September Quarter, 2011.

ASX code: RMX ABN 40 119 658 106

Drilling commenced from the 6 Level, the lowest point of the Xinqu mine (Figures 2 and 3) which has been mining hematitic, brecciated ore at or near a granodiorite - limestone sheared contact (Figure 4). Red Mountain’s drilling encountered mineralisation in 13 of 17 drill holes, with intercepts encountering the same style of mineralisation as seen in the Xinqu mine.

In addition, another previously unrecognised style of gold mineralisation was encountered in the overlying limestone unit within hematitic, often brecciated and carbonated structures (Figure 5). The spatial orientation of the limestone hosted structures has yet to be fully understood but they have returned significant gold intersections and provide another target for potentially economic mineralisation.

Assay results were very encouraging and Table 1 summarises the drilling highlights, while Table 2 demonstrates the significant mineralisation encountered in the granodiorite-shear contact related style of mineralisation as well as the mineralised structures hosted by the overlying limestone units.

Numerous intercepts identified the width and tenor of grade that showed the potential of the mine to host mineralisation amenable to modern, mechanised mining methods.

The deepest intersection was approximately 200 metres vertically below the 6 Level and only 400 metres below surface. This is considered shallow by Australian standards and easily accessed by a decline.

Table 1. Highlights of RMX drilling at Xinqu mine, Zhongqu project	Table 1. Highlights of RMX drilling at Xinqu mine, Zhongqu project	Table 1. Highlights of RMX drilling at Xinqu mine, Zhongqu project	Table 1. Highlights of RMX drilling at Xinqu mine, Zhongqu project
Hole No.	From	To	Intersection
XQ6L 002	22m	26m	4m at 5.71 g/t Au
XQ6L005	40m	47m	7mat 5.70 g/tAu
XQ6L 009	37m	43m	6m at 4.21 g/t Au
XQ6L 010	48m 75m 79m	56m 77m 84m	8m at 7.65 g/t Au 2m at 5.07 g/t Au 5mat 5.31g/tAu
XQ6L013	183.5m	192.5m	9mat 5.59 g/tAu
XQ6L 014	95m Including: 95m 118m 134m	126m 99m 126m 135m	31m at 4.61 g/t Au 4m at 9.51 g/t Au, and 8m at 10.07 g/t Au 1m at 4.62 g/t Au
XQ6L 015	107.5m Including: 107.5m 116m	121.8m 113.5m 119m	14.3m at 4.50 g/ Au 6m at 7.14 g/t Au, and 3m at 6.27 g/t Au
XQ6L017	120m	124.5m	4.5mat 6.33 g/tAu

ASX code: RMX ABN 40 119 658 106

COMPANY DIRECTORS Michael Wolley Neil Warburton Chairman Non-Executive Director Keith Rowe Bo Zhou Executive Director Non-Executive Director Shannon Coates Company Secretary

CONTACT DETAILS RED MOUNTAIN MINING LTD Head Office Unit 2, 2 Richardson Street West Perth Western Australia 6005 www.redmm.com.au [email protected]

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Figure 3 - Plan of Xinqu mine 6 Level showing trace of underground drilling and intercepts of gold mineralisation obtained below the 6 level. The outlined “zone of mineralisation” is expected to dip or plunge to the SSW - SSE.

Table 2. Xinqu underground drilling – Significant gold intercepts

Table 2. Xinqu underground drilling – Significant gold intercepts	Table 2. Xinqu underground drilling – Significant gold intercepts	Table 2. Xinqu underground drilling – Significant gold intercepts	Table 2. Xinqu underground drilling – Significant gold intercepts	Table 2. Xinqu underground drilling – Significant gold intercepts
Hole No.	From	To	Intersection	Style of mineralisation

XQ6L 001	14m	16m	2m at 3.92	Granodiorite contact
XQ6L 002	22m	26m	4m at 5.71g/t Au	Granodiorite contact
XQ6L 003	12.1m	15m	2.9m at 2.86	Limestone hosted
XQ6L 004	15m 18m 22m	15m 19m 23m	1m at 1.94g/t Au 1m at 13.5g/t Au 1mat 0.92g/tAu	Granodiorite contact Granodiorite contact Limestonehosted
XQ6L 005	23m 40m	24m 47m	1m at 1.64g/t Au 7mat 5.70g/tAu	Limestone hosted Granodiorite contact
XQ6L 006			NSI
XQ6L 007			NSI
XQ6L 008			NSI
XQ6L	26m	27m	1mat 3.69g/tAu	Limestonehosted

ASX code: RMX COMPANY DIRECTORS ABN 40 119 658 106 Michael Wolley Chairman Keith Rowe Executive Director

CONTACT DETAILS Neil Warburton RED MOUNTAIN MINING LTD Non-Executive Director Head Office Bo Zhou Unit 2, 2 Richardson Street Non-Executive Director West Perth Western Australia 6005 Shannon Coates www.redmm.com.au Company Secretary [email protected]

Table 2. Xinqu underground drilling – Significant gold intercepts

Table 2. Xinqu underground drilling – Significant gold intercepts	Table 2. Xinqu underground drilling – Significant gold intercepts	Table 2. Xinqu underground drilling – Significant gold intercepts	Table 2. Xinqu underground drilling – Significant gold intercepts	Table 2. Xinqu underground drilling – Significant gold intercepts
Hole No.	From	To	Intersection	Style of mineralisation

009	37m Including: 37m 41m	43m 40m 42m	6m at 4.21g/t Au 3m at 4.54g/t Au 2mat 5.82g/tAu	Limestone hosted Limestone hosted Limestonehosted
XQ6L 010	48m 75m 79m	56m 77m 84m	8m at 7.65g/t Au 2m at 5.07g/t Au 5m at 5.31g/t Au	Granodiorite contact Limestone hosted Limestone hosted
XQ6L 011			NSI
XQ6L 012			NSI
XQ6L 013	173.7m 183.5m	174.7m 192.5m	1m at 4.36g/t Au 9mat 5.59g/tAu	Limestone hosted Limestonehosted
XQ6L 014	95m Including: 95m 108m 118m 130m 134m	126m 99m 116m 126m 132m 135m	31m at 4.61g/t Au 4m at 9.51g/t Au 8m at 1.51g/t Au 8m at 10.07g/t Au 2m at 1.74g/t Au 1m at 4.62g/t Au	Granodiorite contact Granodiorite contact Granodiorite (internal) Granodiorite contact Limestone hosted Limestone hosted
XQ6L 015	107.5m Including: 107.5m 116m 148m	121.8m 113.5m 119m 149.9m	14.3m at 4.50g/ Au 6m at 7.14g/t Au, and 3m at 6.27g/t Au 1.9mat 6.74g/tAu	Limestone hosted Limestone hosted Limestone hosted Limestonehosted
XQ6L 016			NSI
XQ6L 017	120m 128m 144m 146m	124.5m 129m 145.5m 147m	4.5m at 6.33g/t Au 1m at 0.92g/t Au 1.5m at 3.63g/t Au 1mat1.9g/tAu	Limestone hosted Limestone hosted Limestone hosted Limestonehosted

NSI: No Significant Intersection

On the basis of these results, Red Mountain approved commencement of a Stage 2 drilling programme, which will target both styles of gold mineralisation, with up to 15 drill holes expected to total approximately 2,430 metres. Provision has been made to follow up encouraging drill intercepts during the programme with additional holes.

The drilling will aim to establish the down dip extension of the main granodioritecontact shear zone and provide the Company with a better understanding of the orientation and tonnage potential of the high-grade hematitic limestone hosted structures.

Site preparation has commenced with a programme of dewatering and drill cuddy preparation on the 6 Level. The Company already has one rig on site and is investigating the possibility of obtaining a second rig to fast track the programme.

ASX code: RMX COMPANY DIRECTORS CONTACT DETAILS ABN 40 119 658 106 Michael Wolley Neil Warburton RED MOUNTAIN MINING LTD Chairman Non-Executive Director Head Office Keith Rowe Bo Zhou Unit 2, 2 Richardson Street Executive Director Non-Executive Director West Perth Western Australia 6005 Shannon Coates www.redmm.com.au Company Secretary [email protected]

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Figure 4: Hole 10, Granodiorite contact shear zone mineralisation (part of an intersection assaying 8m at 7.65g/t gold).

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Figure 5: Hole 5, Limestone hosted structure showing distinctive brick red, hematitic alteration (grading 7m at 5.7g/t gold).

Appointment of Chief Executive Officer

Red Mountain Mining appointed Mr Andrew Richards as Chief Executive Officer on 5 September 2011 following a solid market debut on the Australian Securities Exchange.

Mr Richards is a trained geologist with 30 years experience in the mining industry, including seven years in a senior project finance role. He was also chief geologist for Newcrest Mining’s Telfer and New Celebration gold mines between 1991 and 1996. Mr Richards has extensive corporate mining experience throughout Asia and South America, including several years operating in China.

For further information please visit www.redmm.com.au or contact:

Andrew Richards Chief Executive Officer (61 8) 9226 5668

Media : Investors Melanie Gray Stokes Ronn Bechler FTI Consulting Market Eye (61) 424 135 294 (61) 400 009 774 (61 8) 9386 1233 (61 3) 9591 8901

ASX code: RMX ABN 40 119 658 106

About Red Mountain Mining Ltd

Red Mountain was incorporated in Australia in May 2006 and was listed on the ASX in September 2011. It has spent more than five years examining potential project acquisitions in China.

The Company has binding acquisition agreements to acquire 51% of the Zhongqu Project (operating gold mine and infrastructure) and 90% of the Diebu Project .

The Zhongqu Project is an operational gold mine with substantial exploration potential. The Project has been operational since 2002 using labour intensive manual mining methods. Covering 7.19km[2] , the Project has a modern gold treatment plant with 400,000 tonnes per annum capacity.

Zhongqu has a Chinese classified non-JORC compliant gold mineralisation. Please refer to Red Mountain's prospectus of 4 July 2011. A further Exploration Target estimate exists with an estimated range of 400,000 to 550,000 tonnes at 7.0 to 9.5 g/t of gold.[1] . Red Mountain is conducting a drilling programme to bring the existing gold mineralisation into JORC compliance.

The Diebu Project has an exploration target of between 400,000 to 550,000 tonnes at 3.5 to 4.5 g/t of gold[1] . The Company obtained encouraging results from its first comprehensive examination of Diebu in 2008. Mineralisation occurs irregularly over 6kms but has not yet been adequately explored and in particular, has not been drilled.

The mine openings (adits) have been developed following the common Chinese approach to “explore by mining”. Openings have been driven to intersect and follow the perceived main structures without consideration being given to adjacent potential replacement gold mineralisation. The system has gold, arsenic, antimony and mercury anomalism.

Competent Person Statement

The information in this report that relates to Exploration Results or Mineral Resources is based on information compiled by Andrew Richards, who is a member of The Australasian Institute of Mining and Metallurgy. He is a full time employee of Arc Resources Pty Ltd which is providing consulting services to Red Mountain Mining Ltd.

Andrew Richards has sufficient experience which is 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 in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Andrew Richards consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

1 The potential quantity and grade of the Exploration Targets are conceptual in nature and there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource.

ASX code: RMX ABN 40 119 658 106

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10

Name of entity

ABN 40 119 568 106	Quarter ended (“current quarter”)
40 119 568 106	30 SEPTEMBER 2011

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows	Current quarter $A’000	Year to date (3 months) $A’000
	0 (296) 0 0 (471) 0 19 0 0 0	0 (296) 0 0 (471) 0 19 0 0 0
	(748)	(748)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	0 0 0 0 0 0 0 0 0	0 0 0 0 0 0 0 0 0
	0	0
	(748)	(748)

See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(748)	(748)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows	7481 0 0 0 0 0	7481 0 0 0 0 0
	7481	7481
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	6733 447 17	6733 447 17
	7197	7197

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

Current quarter $A'000 (62) 0

related entities	related entities
		Current quarter $A'000
1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	(62)
		0
1.25	Explanation necessaryfor an understandingof the transactions
	Reversal of accruals at 30.6.11, and the subsequent payment of accruals in options, not cash affected 1.23

Non-cash financing and investing activities

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest
See chapter 19 for defined terms.

Appendix 5B Page 2

17/12/2010

Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	0	0
	12	7

Estimated cash outflows for next quarter

4.1 Exploration and evaluation (note (2)) 4.2 Development 4.3 Production 4.4 Administration	$A’000
	1492


	353
Total	1845

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as	Current quarter	Previous quarter
shown in the consolidated statement of cash flows)	$A’000	$A’000
to the related items in the accounts is as follows.
5.1 Cash on hand and at bank	2658	447
5.2 Deposits at call	4539	0
5.3 Bank overdraft	0	0
5.4 Other (provide details)	0	0
Total: cash at end of quarter(item 1.22)	7197	447

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed	Tenement reference	Nature of interest (note (3))	Interest at beginning ofquarter	Interest at end of quarter

See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 3

Appendix 5B Mining exploration entity quarterly report

6.2	Interests in mining
	tenements acquired or
	increased

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note4) (cents)	Amount paid up per security (see note4) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions	-	-	-	-
	-	-	-	-
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	79,060,026	64,546,875	-	-
	40,000,000	40,000,000	-	-
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	-	-	-	-
	-	-	-	-
7.7 Options (description and conversion factor)	31,264,778	-	Exercise price $0.20 $0.20 $0.25 $0.35	Expiry date 12/09/2013 30/06/2014 31/07/2014 31/07/2016

See chapter 19 for defined terms.

Appendix 5B Page 4

17/12/2010

Appendix 5B Mining exploration entity quarterly report

7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	10,000,000	-	$0.20	30/06/2014
	-	-	-	-
	-	-	-	-
7.11 Debentures (totals only)	-	-
7.12 Unsecured notes(totals only)	-	-

Compliance statement

1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 6).
2 This statement does give a true and fair view of the matters disclosed.

31 October 2011 Sign here: ............................................................ Date: ............................ (Company secretary) SHANNON COATES Print name: .........................................................

Notes

1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2 $1,000,000 of forecast expenditure next quarter is attributable to a payment to secure the agreement and acquire services related to the Diebu project as outlined in our Prospectus.
3 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
4 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 5

Appendix 5B Mining exploration entity quarterly report

5 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.
6 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
See chapter 19 for defined terms.

Appendix 5B Page 6

17/12/2010

AI assistant

RED MOUNTAIN MINING LIMITED Interim / Quarterly Report 2011

65719_rns_2011-10-30_9fabf625-f59d-4293-ab9c-ceafec676c57.pdf

September Quarter 2011 Report

HIGHLIGHTS

ZHONGQU PROJECT EXPLORATION

Stage 1 Drilling Programme

Appointment of Chief Executive Officer

For further information please visit www.redmm.com.au or contact:

About Red Mountain Mining Ltd

Competent Person Statement

Appendix 5B

Mining exploration entity quarterly report