RED MOUNTAIN MINING LIMITED — Interim / Quarterly Report 2013

Mar 14, 2013

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Red Mountain Mining Ltd Consolidated Interim Financial Report 31 December 2012

Red Mountain Mining Ltd and Controlled Entities

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Interim Consolidated Financial Report For the Half-Year Ended 31 December 2012

These general purpose interim financial statements have been prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 Interim Financial Reporting . They do not include all of the information required in annual financial statements in accordance with AIFRS, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2012 and any public announcements made by the Group during the half-year in accordance with continuous disclosure requirements arising under the Australian Stock Exchange Listing Rules and the Corporations Act 2001.

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

Contents

Director’s Report	3
Auditor’s Independence Declaration	7
Consolidated Statement of Profit or Loss and Other Comprehensive Income	8
Consolidated Statement of Financial Position	9
Consolidated Statement of Changes in Equity	10
Consolidated Statement of Cash Flows	11
Notes to the Interim Consolidated Financial Statements	12
1 Basis of preparation	12
2 Segment reporting	13
3 Plant and equipment	14
4 Exploration and evaluation expenditures	15
5 Acquisition of exploration and evaluation assets	15
6 Earnings per share	16
7 Share capital	17
8 Options	18
9 Reserves and accumulated losses	19
10 Share-based payments	19
11 Events subsequent to reporting date	20
12 Dividends	20
13 Contingent liabilities	20
14 Commitments for expenditure	20
15 Related Parties	21
Directors’ Declaration	22
Independent Auditor’s Review Report	23

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

Director’s Report

The Directors of Red Mountain Mining Ltd present their Report together with the financial statements of the consolidated entity, being Red Mountain Mining Ltd (‘the Company’) and its controlled entities (‘the Group’) for the half year ended 31 December 2012 and the Independent Auditor’s Review Report thereon.

Director details

The following persons were Directors of the Company during or since the end of the half-year:

• Mr Michael Wolley

• Mr Keith Rowe

• Mr Neil Warburton

• Mr Jon Dugdale became part-time Director on 1[st] November 2012, and became a full time Executive Director on 21January 2013.

Review of operations and financial results

The Group has recorded an operating loss of $1.85m (2011: $3.78m) and acquired new gold projects and copper gold tenements in the Philippines from Mindoro Resources Ltd (“Mindoro”) and commencement of exploration activities, including drilling, on these projects.

Financial Position

As of 31 December 2012, the Company had cash balances of $3.25m (2011: $5.83m) and net assets of $16.88m (2011: $5.64m).

Commentary

As detailed in Note 5 of the financial statements, on 30 October 2012, the Company formally completed the acquisition of advanced gold projects and copper gold tenements in the Philippines. The acquisition included a 100% direct and indirect interest in the Batangas Gold Project, Luzon Island, and a 75% direct and indirect interest in tenements at the Tapian San Francisco copper-gold project, Mindanao Island, the Philippines. Transfer of certain tenements is subject to further restructure, to be completed within 12 months of closing.

This acquisition is consistent with the Company’s strategy to unlock the potential of ‘under-developed’ gold and polymetallic projects in the Asian region.

The initial drilling program commenced on 5 August targeting high grade gold zones at the Archangel prospect within the Batangas Project. A total of 10 diamond drillholes holes were completed at Archangel for 1,793m of drilling. All 10 drillholes intersected gold mineralisation. The objectives of the program were met namely: i) to better define and structurally orient the higher grade zones for Mineral Resource estimation and ii) to extend the higher-grade zones at depth below the Mineral Resources.

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

In parallel with the Archangel drilling program, a review was conducted of available data at Lobo, Batangas, that highlighted potential for the discovery of additional high-grade gold mineralisation within the over 10 kilometre strike-length of epithermal vein-breccia structures that have been mapped at Lobo. Key initial targets are the West Drift lode structure at depth below the historic Lobo copper mine, and the South West Breccia (SWB) lode structure along strike from existing high grade resources at SWB. Subsequently a 10 drillhole program to test the West Drift epithermal lode structure was commenced on the 27 November 2012 and a trenching program was commenced at SWB and immediately to the south at Japanese Tunnel.

Two drillholes were completed at West Drift during the December 2012 quarter, LB-66 and LB-67, for a total of 415.5m. Both drillholes produced significant gold intercepts that confirmed a general trend of increasing gold grade with depth. The program has continued with the addition of a second drilling rig during Q1 2013.

In addition to the drilling program, a surface trenching and detailed (1m sample intervals) “channel” sampling program was initiated to define the surface expression of the Mineral Resources at SWB and extend the drilling target along strike to the southwest to Japanese Tunnel prospect. Significant highgrade results were announced on the 11 November 2012 from this program. Further trenching and channel sampling is planned for other identified structures at both Lobo and Archangel.

The Company’s near term strategy is to upgrade the JORC compliant Mineral Resources at Batangas and complete a scoping study to establish the viability of a gold development project by Q4 2013.

The Company also intends to continue to evaluate and where possible acquire majority interests in other mineral projects in the Asian region.

The Company is aware of the risks inherent in operating in foreign jurisdictions. It has been mindful to maintain the community and local government relations and environmental programs established by the team that have been transferred to the Company through the Philippines projects acquisition.

The Company has also maintained an experienced team of financial and technical advisors to assist the Company to meet its objectives.

As detailed in Note 5 and Note 7 to the financial statements, upon completion of the acquisition of key gold and copper-gold projects in the Philippines, the Company issued 100 million fully paid ordinary shares and 50 million performance shares in consideration for the advanced mineral assets. Conversion of the performance shares to ordinary shares is conditional upon certain milestones being met by 30 October 2013. Otherwise the performance shares will be cancelled.

Furthermore, Cygnet Capital Pty Ltd was issued with 10 million options as detailed in Note 10 to the financial report. These options were issued in accordance with the Lead Manager Mandate Agreement outlined in the Share Sale Agreement dated 24 July 2012.

Furthermore, Mr Zeffron Reeves was issued 5 million options as disclosed in Note 10 to the financial statements. These options were issued in consideration for professional services provided in relation to the acquisition of the Philippines properties.

Additional options issued from 1 July 2012 to 31 December 2012 are outlined as follows:

• 4 million options to Neil Warburton as part of Director’s remuneration package;

• 1 million options to Gloria Li under the Company’s Employee Share Option Plan.

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

Significant and subsequent events and transactions

Subsequent to 31 December 2012, the Company issued 8,412,000 fully paid ordinary shares on 2 January 2013 and 100,000 fully paid ordinary shares on 7 January, in a placement raising net capital of $1million.

New Indicated and Inferred Mineral Resource Estimates for the Archangel and Lobo SWB projects were released on the 30 January 2013. The Mineral Resources were estimated using a higher grade gold cut-off (0.85g/t Au) than previously applied and incorporated the results of fresh drilling by the Company at Archangel since August 2012, surface channel sampling at SWB, Lobo, and a revision and reinterpretation of all previous data. This resulted in a significantly increased grade with only modest reduction in ounces relative to the previous (Mindoro) Mineral Resource Estimates.

In line with the Company’s objective to continue to upgrade the Mineral Resources at Batangas the West Drift drilling program has been accelerated since 31 December 2012 with the deployment of an additional diamond drill rig to test the entire 400m+ strike length of the West Drift high-grade gold target. To date a further 11 diamond drillholes have been completed (LB-68 to LB-78) for an additional 2,202.35m, taking the total program at West Drift to 13 diamond drillholes for 2,617.85m.

The Company notes the likely need to raise funds to continue exploration activities at current levels. In mitigation, this requirement is at the Company’s election and will be subject to appropriate exploration success.

The Group's management believes that the Group is well positioned with the factors contributing to the Group's strong position being:

• Cash at hand to fund the current exploration program due to fundraising during the December 2012 quarter.

• Exploration and resource evaluation work continues to produce positive results at Batangas.

• The Company has no debt.

Overall, the Group is in a strong position in the current economic environment, and has sufficient capital and liquidity to service its operating activities. The Group's objectives and policies for managing capital, technical and commercial risks are described in its recent annual financial report.

Other than the above, the Directors are not aware of any significant and subsequent events since the end of the interim period.

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

Director’s Report

Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under s307C of the Corporations Act 2001 is included on page 7 of this financial report and forms part of this Directors report.

Signed in accordance with a resolution of the Directors.

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……………………………………………………………………………………………….... Keith Rowe Director

Dated this 15[th] day of March 2013

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Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au

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38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

15 March 2013

Red Mountain Mining Ltd The Board of Directors Level 1, 672 Murray Street WEST PERTH WA 6005

Dear Sirs,

DECLARATION OF INDEPENDENCE BY CHRIS BURTON TO THE DIRECTORS OF RED MOUNTAIN MINING LTD

As lead auditor for the review of Red Mountain Mining Ltd for the half-year ended 31 December 2012, I declare that to the best of my knowledge and belief, there have been:

• no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Red Mountain Mining Ltd and the entities it controlled during the period.

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Chris Burton Director

BDO Audit (WA) Pty Ltd

Perth, Western Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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Red Mountain Mining Ltd Consolidated Interim Financial Report 31 December 2012

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the half-year ended 31 December 2012

Notes Revenue Interest income Other income Expenses Impairment expenses Capital raising costs Consultancy fees Depreciation expense 3 Employee benefits expenses Share-based payment expenses 10 Legal fees Travelling expenses Other expenses Loss for the period from continuing operations Loss for the period attributable to the owners of Red Mountain Mining Ltd Other comprehensive loss: Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations Items that cannot be subsequently reclassified to profit or loss Other comprehensive loss for the period Total loss and other comprehensive loss for the period attributable to the owners of Red Mountain Mining Ltd Earnings per share Basic and diluted loss per share (cents) 6	31 December 2012 $ 37,915 38,630 (678,919) - (213,860) (5,873) (563,390) (19,506) (28,299) (82,630) (335,311) (1,851,243) (1,851,243) (56,472) - (56,472) (1,907,715) (0.02)	31 December 2011 $ 81,768 56,576 - (1,100,000) (1,209,247) (918) (114,832) (789,069) (215,765) (89,176) (383,374)
		(3,764,037)
		(3,764,037)
		(12,134) -
		(12,134)
		(3,766,171)
		(5.32)

The accompanying notes form part of these financial statements.

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

Consolidated Statement of Financial Position

As at 31 December 2012

Notes Assets Current Cash and cash equivalents Trade and other receivables Total current assets Non-current Plant and equipment 3 Exploration & evaluation expenditure 4 Total non-current assets Total assets Liabilities Current Trade and other payables Provisions Total current liabilities Non-current Retirement benefits Total non-current liabilities Total liabilities Net assets Equity Contributed Equity 7 Reserves 9 (a) Retained earnings 9 (b) Total equity	31 December 2012 $ 3,251,510 172,010 3,423,520 33,713 15,216,850 15,250,563 18,674,083 1,540,858 27,255 1,568,113 230,797 230,797 1,798,910 16,875,173 25,408,460 2,636,067 (11,169,354) 16,875,173	30 June 2012 $ 4,380,150 144,784
		4,524,934
		31,371 -
		31,371
		4,556,305
		258,490 21,545
		280,035
		-
		-
		280,035
		4,276,270
		11,657,848 1,936,533 (9,318,111)
		4,276,270

The accompanying notes form part of these financial statements.

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Red Mountain Mining Ltd Consolidated Interim Financial Report 31 December 2012

Consolidated Statement of Changes in Equity

For the half-year ended 31 December 2012

Balance at 1 July 2012 Loss for the period Other comprehensive loss Total comprehensive loss Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs Issue of options to employees and consultants Total transactions with owners in their capacity as owners: Balance at 31 December 2012 Balance at 1 July 2011 Loss for the period Other comprehensive los Total comprehensive loss Transaction with owners in their capacity as owners: Contribution of equity , net of transactions costs Issue of options to consultant and employees Total transactions with owners in their capacity as owners: Balance at 31 December 2011	Share capital Share option reserve Accumulated losses Foreign currency translation reserve Total equity $ $ $ $ $ 11,657,848 2,038,272 (9,318,111) (101,739) 4,276,270
	- - (1,851,243) (1,851,243) (56,472) (56,472)
	(1,851,243) (56,472) (1,907,715) 13,750,612 - - 13,750,612 - 756,006 - - 756,006
	13,750,612 756,006 (1,851,243) (56,472) 12,598,903
	25,408,460 2,794,278 (11,169,354) (158,211) 16,875,173
	Share capital Share option reserve Accumulated losses Foreign currency translation reserve Total equity $ $ $ $ $ 4,139,848 149,204 (4,139,630) (101,412) 48,010 - - (3,764,037) - (3,764,037) - - - (12,134) (12,134) - - (3,764,037) (12,134) (3,776,171) 7,472,000 - - - 7,472,000 - 1,899,069 - - 1,899,069 7,472,000 1,899,069 - - 9,371,069 11,611,848 2,048,273 (7,903,667) (113,546) 5,642,908

The accompanying notes form part of these financial statements.

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Red Mountain Mining Ltd Consolidated Interim Financial Report 31 December 2012

Consolidated Statement of Cash Flows

For the half-year ended 31 December 2012

Notes Operating activities Cash receipt from customers Payments to employees and suppliers (inclusive of goods and services tax) Interest received Interest paid Net cash (outflow) from operating activities Investing activities Cash received from acquisition Acquisition costs Payment for exploration properties Net cash (outflow) from investing activities Financing activities Application funds received Proceeds from issue of options Interest paid Share issue costs Net cash inflow from financing activities Net Increase/(decrease) in cash held Net foreign exchange difference Cash at the beginning of period Cash at the end of period	31 December 2012 67,843 (1,278,178) 51,783 - (1,158,552) 182,553 (278,055) (924,429) (1,019,931) 1,051,500 - (8) - 1,051,492 (1,126,991) (1,649) 4,380,150 3,251,510	31 December 2011 - (2,168,200) 81,678 -
		(2,086,432)
		- - -
		-
		8,000,000 10,000 - (528,000)
		7,482,000
		5,395,568 (12,134) 446,894
		5,830,328

The accompanying notes form part of these financial statements.

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

Notes to the Interim Consolidated Financial Statements

1 BASIS OF PREPARATION

Red Mountain Mining Ltd (“the Company”) is domiciled in Australia.

The consolidated interim financial report of the Company as at and for the six months ended 31 December 2012 comprises the Company and its subsidiaries (together referred to as (the “Group”).

For the purpose of preparing the consolidated financial report, the Group is a for profit entity.

The functional currency of each of the Group’s entities is the currency of the primary economic environment in which that entity operates.

The interim financial statements have been approved and authorised for issue by the board of Directors on 15 March 2013.

Going concern

For the half year ended 31 December 2012, the Group recorded a loss of $1,851,243 and had operating and investing cash outflows of $2,178,483. At 31 December 2012, the cash balance was $3,251,510.

The interim consolidated financial report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. The Directors have determined in order to continue to rapidly develop the newly acquired Philippines’ assets; the Group is likely to require raising capital in the next 12 months.

Although these conditions indicate the existence of a material uncertainty in relation to the going concern basis of this financial report, the Directors are confident that funding activities within the next 12 months will be successful and therefore the financial report has been prepared on a going concern basis.

a) Statement of compliance

The interim consolidated financial statements (“the interim financial statements”) of the Group are for the six months ended 31 December 2012 and are presented in Australian dollar ($), which is the functional currency of the parent company. These general purpose interim financial statements have been prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 Interim Financial Reporting . They do not include all of the information required in annual financial statements in accordance with AIFRS, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2012 and any public announcements made by the Group during the half-year in accordance with continuous disclosure requirements arising under the Australian Stock Exchange Listing Rules and the Corporations Act 2001.

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

b) Significant accounting policies

The accounting policies applied by the Group in this consolidated interim financial report are consistent with those applied by the Group in its consolidated financial report as at and for the year ended 30 June 2012.

New policies, revised or amending Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Any significant impact on the accounting policies of the consolidated entity from the adoption of these Accounting Standards and Interpretations are disclosed in the relevant accounting policy. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity.

The following Accounting Standards and Interpretations are most relevant to the consolidated entity:

AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income

The consolidated entity has applied AASB 2011-9 amendments from 1 July 2012. The amendments requires grouping together of items within other comprehensive income on the basis of whether they will eventually be ‘recycled’ to the profit or loss (reclassification adjustments). The change provides clarify about the nature of items presented as other comprehensive income and the related tax presentation.

The Group’s objectives and policies for managing capital, credit risk and liquidity risk are described in its recent annual financial statements.

Retirement liabilities

The Company’s subsidiary, MRL Gold Inc , has a provision for unfunded defined retirement benefit plan covering all of its regular employees in the Philippines. Under the provisions of the plan, the normal retirement age is 60 but employees with at least 5 years of service can avail of early retirement. The most recent actuarial valuation of the retirement benefit plan for the year ended 31 December 2012.

c) Comparative figures

Where required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

2 SEGMENT REPORTING

The Consolidated Group has identified its reportable operating segments based on the internal reports that are reviewed and used by the chief operating decision makers. The chief operating decision makers, who

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

are responsible for allocating resources and assessing performance of the operating segments, have been identified as the Board of Directors (“Board”).

The Group segments are structured as corporate in Australia and exploration in the Philippines.

	Half-year ended 31	December 2012
	Corporate	Exploration	Eliminations	Total
	$	$	$	$
Revenue	18,850	19,065		37,915
Other income	38,538	92		38,630
Depreciation	(4,277)	(1,596)		(5,873)
Employee Costs	(437,119)	(145,777)		(582,896)
Consulting fees	(194,170)	(19,690)		(213,860)
Impairment loss	(678,919)	-		(678,919)
Other expenditures	(403,929)	(42,311)	-	(446,240)
Loss before income tax	(1,661,026)	(190,217)		(1,851,243)
Total assets	36,561,383	18,700,360	(36,587,660)	18,674,083
Total liabilities	1,239,697	19,108,941	(18,549,728)	1,798,910

The Company only had one operating segment at the end of the financial year 30 June 2012.

Half-year ended 31 December 2011

Revenue Other income Depreciation Employee Costs Consulting fees Capital raising expenditures Share-based payment Other expenditures Loss before income tax Total assets Total liabilities	Exploration $ 81,768 56,576 (918) (114,832) (1,209,247) (1,100,000) (789,069) (688,315)
	(3,764,037)
	5,908,801
	265,893

3 PLANT AND EQUIPMENT

The following tables show the movements in plant and equipment

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

Carrying amount Balance at 1 July 2012 Additions Depreciation Balance at 31 December 2012 Carrying amount at 31 December 2012 Carrying amount Balance at 1 July 2011 Additions Depreciation Balance at 30 June 2012 Carrying amount at 30 June 2012 EXPLORATION AND EVALUATION Carrying amount Balance at 1 July 2012 Acquisition Additions Exchange differences on translating foreign operations Depreciation Balance at 31 December 2012 Carrying amount at 31 December 2012

Plant and equipment Total $ $ 31,371 31,371 8,215 8,215 (5,873) (5,873) 33,713 33,713 33,713 33,713 Plant and equipment Total $ $ 4,221 4,221 31,069 31,069 (3,919) (3,919) 31,371 31,371 31,371 31,371 EXPENDITURES Exploration and evaluation expenditures Total $ $ - - 14,765,167 14,765,167 503,699 503,699 (52,016) (52,016) - - 15,216,850 15,216,850 15,216,850 15,216,850

4 EXPLORATION AND EVALUATION EXPENDITURES

The Company did not have Exploration and evaluation expenditures as of 30 June 2012.

5 ACQUISITION OF EXPLORATION AND EVALUATION ASSETS

On 24 July 2012, the Company signed a binding Share Sale Agreement (“SSA”) with Mindoro Resources Limited (“Mindoro”) to acquire Mindoro’s gold and copper gold assets in the Philippines in consideration for 100,000,000 fully paid ordinary shares and 50,000,000 performance shares. On 30 October 2012, upon the completion of the acquisition, the Company, via subsidiaries, obtained a 100% interest in the Batangas Project and a 75% interest in the Tapian San Francisco Project. Transfer of certain tenements is subject to further restructure, to be completed within 12 months of closing.

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

The transaction is not a business combination as the Company’s acquired assets did not meet the definition of a business as defined in the Australian Accounting Standards. The substance and intent was for the Company to acquire the exploration and evaluation assets in the Philippines for the purpose of building the Company’s resource base in line with the Company’s strategy. Therefore, this transaction has been accounted for under AASB2 Share Based Payments.

Pursuant to the SSA, the Company issued 10,000,000 options to Cygnet Capital and 5,000,000 options to Zeffron Reeves subsequent to the completion of the acquisition.

The fair value of the assets acquired at the date of acquisition and share based payments are outlined as follows:

Consideration Ordinary shares issued to vendor Share-based payments issued to consultants () Acquisition related costs () Total consideration Value of assets acquired Cash and cash equivalents Other receivables Exploration and evaluation expenditures () Fixed assets Trade and other payables Provisions Fair value of asset acquired**	30 October 2012 $ 13,750,612 736,500 278,055
	14,765,167
	182,553 46,702 14,794,556 7,027 (154,410) (111,261)
	14,765,167

• The details of share-based payments are referred to notes 10.

** The Company had incurred acquisition related costs of $278,055 since July 2012.

*** The fair value of exploration and evaluation expenditures was calculated on the basis of independent valuation report and acquisition adjustments.

6 EARNINGS PER SHARE

Earnings used to calculate basic EPS	6 months to 31 December 2012 6 months to 31 December 2011 $ $ (1,851,243) (3,764,037)
	(1,851,243) (3,764,037)

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

No. No. Weighted average number of shares used in calculating basic earnings per share 112,326,005 70,754,015 112,326,005 70,754,015 The effect of the options and performance shares on issue is deemed to be non-dilutive. SHARE CAPITAL 6 months to 31 December 2012 Year to 30 June 2012 $ $ 179,060,026 (2011: 79,060,026) fully paid ordinary shares At the beginning of the reporting period 11,657,848 4,139,848 Shares issued during the year 13,750,612 8,000,000 Share issue costs - (482,000) 25,408,460 11,657,848 No. No. Ordinary Shares At the beginning of the reporting period 79,060,026 39,060,026 Shares issued during the year 100,000,000 40,000,000 At the end of the reporting period 179,060,026 79,060,026	No. No. Weighted average number of shares used in calculating basic earnings per share 112,326,005 70,754,015 112,326,005 70,754,015 The effect of the options and performance shares on issue is deemed to be non-dilutive. SHARE CAPITAL 6 months to 31 December 2012 Year to 30 June 2012 $ $ 179,060,026 (2011: 79,060,026) fully paid ordinary shares At the beginning of the reporting period 11,657,848 4,139,848 Shares issued during the year 13,750,612 8,000,000 Share issue costs - (482,000) 25,408,460 11,657,848 No. No. Ordinary Shares At the beginning of the reporting period 79,060,026 39,060,026 Shares issued during the year 100,000,000 40,000,000 At the end of the reporting period 179,060,026 79,060,026	No. No. Weighted average number of shares used in calculating basic earnings per share 112,326,005 70,754,015 112,326,005 70,754,015 The effect of the options and performance shares on issue is deemed to be non-dilutive. SHARE CAPITAL 6 months to 31 December 2012 Year to 30 June 2012 $ $ 179,060,026 (2011: 79,060,026) fully paid ordinary shares At the beginning of the reporting period 11,657,848 4,139,848 Shares issued during the year 13,750,612 8,000,000 Share issue costs - (482,000) 25,408,460 11,657,848 No. No. Ordinary Shares At the beginning of the reporting period 79,060,026 39,060,026 Shares issued during the year 100,000,000 40,000,000 At the end of the reporting period 179,060,026 79,060,026
		179,060,026 79,060,026

7 SHARE CAPITAL

On 30 October 2012, 100,000,000 Shares were issued to Mindoro in exchange for its gold and copper gold assets in the Philippines. Mindoro intends to make an in specie distribution of the 100,000,000 shares on a pro rata basis after 12 months of the sale.

The 100,000,000 shares are escrowed for 12 months until 31 October 2013.

Furthermore, 50,000,000 performance shares were issued to Mindoro on 30 October 2012 as a result of the completion of acquisition. The performance shares are voluntarily escrowed up to 12 months from vesting. Pursuant to the SSA, the performance shares will be converted to ordinary shares upon achievement of milestones on or before 12 months after Settlement. In the event the vesting conditions are not met by 30 October 2013, the 50,000,000 performance shares will be cancelled. Due to the conditions, the performance shares have not been accounted as contributed equity for this reporting period.

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

8 OPTIONS

OPTIONS
58,287,474 (2011: 38,287,474) options At the beginning of the reporting period Options issued during the year At the beginning of the reporting period Options issued during the year At the end of the reporting period	6 months to 31 December 2012 Year to 30 June 2012 $ $ 2,038,272 149,204 756,006 1,889,068
	2,794,278 2,038,272
	No. No. 38,287,474 19,446,558 20,000,000 18,840,916
	58,287,474 38,287,474

The numbers of options granted during the reporting period are set out in the following table.

Name	No. of options	Grant date	Vesting date	Underlying Security spot price ($)	Exercise price($)	Expirydate
Neil Warburton	2,000,000	04/09/2012	Subject to vesting conditions¹	0.105	0.25	01/07/2014
Neil Warburton	2,000,000	04/09/2012	03/04/2016²	0.105	0.50	01/07/2016
Cygnet Capital	10,000,000	30/10/2012	30/10/2012	0.089	0.20	15/09/2016
Zeffron Reeves	5,000,000	30/10/2012	30/10/2012	0.089	0.20	15/09/2016
Gloria Li	250,000	30/10/2012	30/06/2013	0.089	0.20	30/10/2017
Gloria Li	250,000	30/10/2012	30/06/2014	0.089	0.20	30/10/2017
Gloria Li	250,000	30/10/2012	30/06/2015	0.089	0.20	30/10/2017
Gloria Li	250,000	30/10/2012	30/06/2016	0.089	0.20	30/10/2017

1. The options will best if and when the trading price of the Company’s shares is 20 cents or greater (on a pre-consolidation basis) or at or above an equivalent post-consolidation price for more than 30 consecutive trading days on which the shares in the Company trade.

2. The options will vest on Mr Neil Warburton completing 4 years continuous service as a Director or Chief Executive Officer of the Company form his commencement date of 3 April 2012.

3. The options will vest annually in four equal tranches of 250,000 each, with the first tranche vest on 30 June 2013, the second tranche to vest on 30 June 2014, the third tranche to vest on 30 June 2015, and the fourth tranche to vest on 30 June 2016.

4. Refer to note 10 for the fair value of options issued.

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

9 RESERVES AND RETAINED EARNINGS

(a) Reserves

At the beginning of the reporting period Share based payment reserve Foreign currency translated reserve Retained earnings At the beginning of the reporting period Net loss attributable to members of the Company Accumulated loss at the end of the reporting period	6 months to 31 December 2012 Year to 30 June 2012 $ $ 1,936,533 149,204 756,006 1,889,068 (56,472) (101,739)
	2,636,067 1,936,533
	6 months to 31 December 2012 Year to 30 June 2012 $ $ (9,318,111) (4,139,630) (1,851,243) (5,178,481)
	(11,169,354) (9,318,111)

(b) Retained earnings

10 SHARE-BASED PAYMENTS

The Company provides benefits to directors and employees in the form of share-based payment transactions, whereby options to acquire ordinary shares are issued as an incentive to improve Board and shareholder goal congruence.

4,000,000 options were issued to Neil Warburton as part of his director’s remuneration package.

10,000,000 options were granted to Cygnet Capital in consideration for successful introduction fees upon completion of the Mindoro’s acquisition.

5,000,000 options were granted to Zeffron Reeves in consideration for professional services provided in relation to the Mindoro’s acquisition.

1,000,000 options were provided to Gloria Li under the company’s Employee Share Option Plan (ESOP).

Share-based payment reserve Director’s incentive options ESOP Consultant options	6 months to 31 December 2012 $ 13,664 5,842 736,500
	756,006

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

The share-based payment to consultants of $736,500 was attributed to the total consideration of the acquisition disclosed in note 5.

The option values were calculated in accordance with AASB 2 by using the Black-Scholes pricing model by applying the assumptions set out below:

Name	No. of options	Fair Value per option ($)	Underlying Security spot price ($)	Exercise price($)	Option life (year)	Expected volatility	Expected Dividend	Risk- free interest rate
Neil Warburton	2,000,000	0.023	0.105	0.25	1.82	85%	Nil	2.65%
Neil Warburton	2,000,000	0.031	0.105	0.50	3.82	85%	Nil	2.43%
Gloria Li	250,000	0.0448	0.089	0.20	5.00	100%	Nil	2.72%
Gloria Li	250,000	0.0482	0.089	0.20	5.00	100%	Nil	2.72%
Gloria Li	250,000	0.0520	0.089	0.20	5.00	100%	Nil	2.72%
Gloria Li	250,000	0.0551	0.089	0.20	5.00	100%	Nil	2.72%
Cygnet Capital	10,000,000	0.0491	0.089	0.20	3.88	100%	Nil	2.59%
Zeffron Reeves	5,000,000	0.0491	0.089	0.20	3.88	100%	Nil	2.59%

11 EVENTS SUBSEQUENT TO REPORTING DATE

On 2 January 2013, the Company issued 8,412,000 fully paid ordinary shares at an issue price of $0.125 and 100,000 fully paid ordinary shares at an issue price of $0.125 on 7 January 2013 to raise net capital of $1m.

No other matter or circumstance has arisen subsequent to 31 December 2012 that has significantly affected or may significantly affect the operations or the state of affairs of the Group in future financial years.

12 DIVIDENDS

No dividends were paid in the six months ended 31 December 2012.

13 CONTINGENT LIABILITIES

There has been no change in contingent liabilities since the last annual reporting period.

14 COMMITMENTS FOR EXPENDITURE

Within one year Later than one year but not later than five years	$ 133,651 95,109
	228,760

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

15 RELATED PARTIES

Directors

Disclosures relating to Directors are set out in note 10.

On 1 November 2012, Jon Dugdale was appointed as a new part time Director at $100,000 per annum salary plus superannuation. Subsequent to the reporting period, on 21 January 2013, Jon Dudgale became full time Executive Director of the Company. Full disclosure in relation to his full-time Executive roll will be disclosed in the annual report 30 June 2013.

Wholly-owned group

The wholly owned group consists of Red Mountain Mining Limited and the following subsidiaries:

	Country of	Class of	Equity	Functional
Name	incorporation	shares	holding	currency
Red Mountain Mining (Hong	Hong Kong	Ordinary	100%	Hong Kong dollar
Kong) Holdings Limited
Red Mountain Mining	China	Ordinary	100%	Chinese RMB
Consulting (Shenyang) Co Ltd
Red Mountain Mining	Singapore	Ordinary	100%	Singapore dollar
(Singapore) Pte Ltd
MRL Gold Inc.	Philippines	Ordinary	100%	Philippine peso
Egerton Gold Philippines Inc	Philippines	Ordinary	100%	Philippine peso

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Red Mountain Mining Ltd Interim Consolidated Financial Report 31 December 2012

Directors’ Declaration

1. In the opinion of the Directors of Red Mountain Mining Ltd:

2. a. the consolidated financial statements and notes of Red Mountain Mining Ltd and its controlled entities are in accordance with the Corporations Act 2001, including

   • i. giving a true and fair view of the consolidated entities’ financial position as at 31 December 2012 and of its performance for the half-year ended on that date; and

   • ii. complying with Accounting Standard AASB 134 Interim Financial Reporting; and

3. b. there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors:

Director Keith Rowe

Dated this 15[th] day of March 2013

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Tel: +8 6382 4600 38 Station Street Fax: +8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF RED MOUNTAIN MINING LTD

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Red Mountain Mining Ltd, which comprises the consolidated statement of financial position as at 31 December 2012, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the disclosing entity and the entities it controlled at the half-year’s end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the disclosing entity are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2012 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Red Mountain Mining Ltd, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Red Mountain Mining Ltd, would be in the same terms if given to the directors as at the time of this auditor’s review report.

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Red Mountain Mining Ltd is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2012 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001 .

Emphasis of Matter

Without modifying our conclusion, we draw attention to Note 1 in the half-year financial report which indicates that Red Mountain Mining Ltd incurred a net loss of $1,851,243 and net cash outflows of $1,126,991 during the half-year ended 31 December 2012. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

BDO Audit (WA) Pty Ltd

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Chris Burton Director

Perth, Western Australia Dated this 15[th] day of March 2013