RED MOUNTAIN MINING LIMITED — Interim / Quarterly Report 2017

Jul 25, 2017

RED MOUNTAIN MINING LTD (ASX:RMX)

26 July 2017

ASX ANNOUNCEMENT

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Quarterly Activities and Cashflow Report for quarter ending 30 June 2017

Mokabe-Kasiri Project

As announced on 21 March 2017, the Company entered into a binding exclusivity and earn-in agreement with CoCu Metals Ltd ( CoCu ) which controls 100% of the Mokabe-Kasiri Cobalt-Copper project ( Mokabe CobaltCopper Project ) in the Katanga Province of the Democratic Republic of Congo, Africa ( Agreement ). During the period, by mutual agreement with CoCu, the Company extended the due diligence period to 19 May 2017 before a further extension until 30 June 2017.

As announced on 22 May 2017, the Company and CoCu varied the Agreement ( Amendment Agreement ) such that the Mokabe Cobalt-Copper Project comprised a total contiguous land package of 116km[2] . This represents a more targeted approach to the Project, while preserving the optionality required for a highly prospective exploration project.

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

Phase	Exploration Expenditure	CoCu interest	RMX interest
1	A$250,000	50%	50%
2	A$250,000	30%	70%
3	A$250,000	20%	80%

Further details on the Amendment Agreement can be found in the announcement released 22 May 2017.

Subsequent to the quarter, the Company’s technical advisor on the Mokabe-Kasari Cobalt-Copper Project in the Lualaba Province, Democratic Republic of Congo (DRC), CSA Global, conducted a site visit. Ground work due diligence has been completed, including verification and fresh sampling. The Company expects to be able to report on such results in the near term. As a result of the site visit, CSA has begun work on designing a detailed ground-work programme. To allow for results and analysis, the Company has been granted an extension of exclusivity over the project

Red Valley Project

On 29 May 2017, the Company provided a drilling update noting that drill hole 2 had been slower than anticipated.

The Red Valley Lithium Brines Project had encountered inclemental weather, including unusually late snowfall have reduced drilling uptime. In addition, a hard basalt aquifer zone was encountered at 130 feet with higher than expected amounts of water overflow. This ultimately caused a loss in circulation to the open hole rotary drill. In order to address this, the decision was taken to (i) convert the drill to a Reverse Circulation (RC) system, and (ii) implement the Robit casing advanced tooling system. Accordingly, the new strategies caused further time consumptions as tools and equipment were required from both Salt Lake City and Cedar City.

After careful consideration with both on-site geologists and Red Mountain's experienced JV partner, it was decided that the Company would extend hole 2 depth to a depth of 1300-1500 feet to test and determine the maximum amount of water producing zones available.

Subsequent to the quarter, the Company received laboratory results from drilling operations at its Red Valley Lithium Brines Project in western Utah, USA. While anomalous levels of Lithium were present in brine samples for a reasonable portion of both hole 1 and hole 2, the Board has concluded that there was insufficient Lithium enrichment present in order to justify continued work at Red Valley. The Company will therefore not be proceeding with hole 3, and nor will it proceed with its joint venture in respect of the Red Valley Lithium Brines Project, and no consideration payments shall be made.

Batangas Gold Project

The Company retains its leverage to the Philippines based Batangas Gold project by way of its 1% NSR production royalty and currently holds approximately 7.35 million shares in Bluebird Merchant Ventures Ltd.

Business Development

The Board continues to identify and review additional opportunities in the gold, energy metals and base metals space and will provide updates as and when required in this respect.

Corporate

During the quarter, 8,000,000 RMXOH options and 3,645 RMXOG options were exercised.

In addition, 1,333,333 Shares were issued to a consultant of the Company in lieu of cash payment for the provision of marketing services.

For more details about Red Mountain Mining Ltd see http://www.redmm.com.au/

Tenement Table: ASX Listing Rule 5.3.3

Mining tenement interests held at the end of the quarter and their location

PERMIT NAME	PERMIT NUMBER	REGISTERED HOLDER/APPLICANT	AREA IN HECTARES	DATE OF RENEWAL PERIOD EXPIRATION	PERMIT TERM EXPIRY	INTEREST / CONTRACTUAL RIGHT
A1 – 10 , Utah	00197818-955 00197956-957	Amazona Enterprises	80.9	31-Aug-17	31-Aug-17	Contractual right to acquire 100%
W1 -10 , Utah	00197960-197967 00198117-198118	William Feyerabend	80.9	31-Aug-17	31-Aug-17	Contractual right to acquire 100%
RM1 – 270, Utah	00197618-197887	RMX USA Inc.	2,266	14-Feb-17	14-Feb-17	100%
Demiko1	ZEA 556	Tshiyaz Muneng Costa	340	N/A	N/A	Right to earn up to 80%
Comaki1	ZEA 557	Tshiyaz Muneng Costa	340	N/A	N/A	Right to earn up to 80%
Comialu1	ZEA 558	Tshiyaz Muneng Costa	425	N/A	N/A	Right to earn up to 80%
Comidel1	ZEA 559	Tshiyaz Muneng Costa	340	N/A	N/A	Right to earn up to 80%
KGCM1	ZEA 560	Tshiyaz Muneng Costa	425	N/A	N/A	Right to earn up to 80%
Psodema1	ZEA 561	Tshiyaz Muneng Costa	340	N/A	N/A	Right to earn up to 80%
CMAL1	ZEA 562	Tshiyaz Muneng Costa	340	N/A	N/A	Right to earn up to 80%
Comiko1	ZEA 563	Tshiyaz Muneng Costa	340	N/A	N/A	Right to earn up to 80%

*Note: Exploration Permits that have reached permit expiry have been submitted for renewal.

1. As announced 21 March 2017, the Company has executed a binding exclusivity and earn-in agreement ( Agreement ) with CoCu Metals Ltd, who controls 100% of the permits ZEA 556 – 563. Pursuant to the terms of the Agreement, the Company has the right to earn up to 80% interest in the permits, subject to meeting exploration expenditure commitments.

The mining tenement interests relinquished during the quarter and their location Nil.

The mining tenement interests acquired during the quarter and their location

Nil.

Beneficial percentage interests held in farm-in or farm-out agreements at the end of the quarter

Not applicable.

Beneficial percentage interests in farm-in or farm-out agreements acquired or disposed of during the quarter

Not applicable.

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas 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, 01/05/13, 01/09/16

Name of entity

RED MOUNTAIN MINING LIMITED

ABN Quarter ended (“current quarter”) 40 119 568 106 30 June 2017

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Research and development refunds 1.8 Other (New business) 1.9 Net cash from / (used in) operating activities	14 (217) - - - (268) - 14 - - - (58)	15 (753) - - - (1,338) - 38 - - - (188)
	(515)	(2,226)

2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets	- - - -	- - - -

• See chapter 19 for defined terms

1 September 2016

Page 1

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
2.2 Proceeds from the disposal of: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - - - - - -	- - - - - - -
	-	-
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (Monies from shares allotted from prior quarter) 3.10 Net cash from / (used in) financing activities	- - 144 - - - - - -	3,854 - 287 (246) - - - - -
	144	3,895
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	2,793 (515) - 144 -	757 (2,226) - 3,895 (4)
	2,422	2,422

• See chapter 19 for defined terms

1 September 2016

Page 2

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	2,422 - - -	2,768 25 - -
	2,422	2,793

).

6.	Payments to directors of the entity and their associates	Current quarter
		$A'000
6.1	Aggregate amount of payments to these parties included in item 1.2		74
6.2	Aggregate amount of cash flow from loans to these parties included		-
	in item 2.3
6.3	Include below any explanation necessary to understand the transactions included in
	items 6.1 and 6.2

1.2(e) Includes gross salaries and fees to directors.

7. Payments to related entities of the entity and their associates 7.1 Aggregate amount of payments to these parties included in item 1.2 7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3	Current quarter $A'000
	-
	-

• 7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

• See chapter 19 for defined terms 1 September 2016

Page 3

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

	Appendix 5B Mining exploration entity and oil andgas exploration entity quarterly report	oil andgas exploration	Appendix 5B entity quarterly report
	8. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 8.1 Loan facilities - - 8.2 Credit standby arrangements - - 8.3 Other (please specify) - 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-

9. Estimated cash outflows for next quarter	$A’000
9.1 Exploration and evaluation 9.2 Development 9.3 Production 9.4 Staff costs 9.5 Administration and corporate costs 9.6 Other (provide details if material) 9.7 Total estimated cash outflows	50 - - - 100 -
	150

10. Changes in tenements (items 2.1(b) and 2.2(b) above)	Tenement reference and location	Nature of interest	Interest at beginning of quarter	Interest at end of quarter
10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced
10.2 Interests in mining tenements and petroleum tenements acquired or increased

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

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Sign here: ............................................................ (Company secretary)

Date: 26 July 2017

Print name: Shannon Coates

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 that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, 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. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

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