ASX ANNOUNCEMENT

RED MOUNTAIN MINING LTD

ASX : RMX

Company Directors Jeremy King Lincoln Ho

Robert Parton Company Secretary Shannon Coates

RED MOUNTAIN MINING LTD

6 September 2017

COMPANY UPDATE

  • RMX to proceed with earn-in to acquire up to 90% of Mokabe-Kasari Cobalt Copper project located in world famous DRC Copper belt
  • Due diligence finalised, including site visit by CSA Global - grades up to 0.5% Cobalt
  • Phase 1 exploration to commence immediately and to target high-grade Cobalt zones
  • Improved Earn-in terms completed
  • Placement to fund work programme together with assessment of additional opportunities completed

Red Mountain Mining Limited (the Company, Red Mountain or RMX) is pleased to advise that it will proceed with phase 1 of exploration to earn into the Mokabe-Kasari Cobalt-Copper project in the DRC.

Director Jeremy King commented:

"The final stages of due diligence on Mokabe-Kasari have taken longer than we would have liked. Nevertheless, this delay has provided the opportunity to re-negotiate the economics of our staged deal and we view this as a good outcome for shareholders. We will now move to immediately implement a work programme with the focus on the encouraging Cobalt grades that have been identified within the tenure package."

Update on Mokabe-Kasari Project

The Mokabe-Kasari Cobalt Copper Project is located in the Congolese part of the prolific Central African Copper belt. It comprises artisanal licenses covering approximately 116km2. For further detail on the region and nearby Cobalt and copper mines and previous sample work, see the Company's ASX announcements dated 21 March 2017 and 22 May 2017.

Recently, RMX's technical advisor, CSA Global Pty Ltd, conducted a short reconnaissance site visit to the Project and carried out validation ground-work across the tenure package to ensure there existed the opportunity for sufficient scale, to assess geologic prospectivity as well as to scope future exploration work. Additional samples were also taken which included Cobalt grades of up to 0.5%. See Figure 1 for the full table of such sampling results. The Board has been encouraged by the final due diligence results, and is looking forward to commencing phase 1 exploration.

Improved Commercial Terms

Following ongoing negotiations with the introducing party, CoCu Pty Ltd, commercial terms have been revised and RMX may earn up to 90% of the Mokabe Kasari Cobalt-Copper Project via:

  1. The issue of 14 million shares in RMX (7.5 million of which will be subject to 12 months escrow) These shares will be issued pursuant to the Company's existing placement capacity pursuant to Listing Rule 7.1;

  2. Payment of A$70,000 on commencement of phase 1 exploration;

  3. Payment of A$75,000 90 days after phase 1 exploration commencement provided that RMX notifies CoCu that it wishes to continue with the Project; and

  4. Payment of US$100,000 on issue of Mining Licence (or equivalent) over Project area or portion thereof.

Capital Management

RMX further advises that it has received firm commitments from professional and sophisticated investors to raise $735,000 (before costs) via the issue of 66,818,182 new fully paid ordinary shares at an issue price of

$0.011 (1.1 cent) per share (Placement), which represents a 25% discount to the 15 day trading VWAP to 1 September 2017. The Placement will be issued pursuant to the Company's existing placement capacity, with 23,898,101 shares to be issued pursuant to Listing Rule 7.1 and 42,920,081 shares to be issued pursuant to Listing Rule 7.1A.

Xcel Capital will act as Lead Manager to the Placement.

The Company shall utilise funds raised towards earn-in exploration activities at the Mokabe-Kasari Cobalt- Copper Project, ongoing identification and due diligence on additional asset and project opportunities, general working capital and cost of the offer.

New Asset Opportunities

Following successful completion of the capital raising RMX is well funded to complete phase 1 of exploration on Mokabe-Kasari as well as potentially acquiring complementary assets. The Board continues to regularly review new opportunities in the new energy metals, base metals and gold sector.

For and on behalf of the Board.

Shannon Coates, Company Secretary

-Ends-

Competent Person Statement

Information in this report that relates to Exploration results has been compiled from historic data by Mr. Simon Dorling, who is a member of the Australian Institute of Geoscientists. Mr. Dorling is a consultant to RMX, 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.

Figure 1: Sample Results from CSA Global site visit:

Sample_No

East

North

RL

Cu%

Co%

Sample Type

S099011

416386

8898468

1222

0.6

vertical channel sample, 0.8m

S099012

416385

8898461

1215

0.0

vertical channel sample, 1.3m

S099013

421402

8898199

1141

0.0

0.5

gravel; sample from 7-9m

S099014

421549

8898296

1137

0.0

0.3

black coated transported material, 1-2m

S099015

421446

8898296

1137

gravel; rock pebbles with black staining

S099016

421830

8906524

1307

0.0

rock chip,

S099017

421811

8906663

1325

0.9

vertical channel sample 0.4m

S099018

421933

8906617

1323

1.0

vertical channel sample 0.4m

S099019

419981

8908218

1503

rock chip,

S099020

418976

8905286

1353

0.6

rock chip,

S099021

416935

8902925

1325

2.0

rock chip, lifted Co-plant up and found stratiform mineralisation

S099022

421977

8897850

1132

0.0

S099023

421446

8898296

1137

0.0

0.3

duplicate-homogenised and split sample of S099014

S099024

416386

8898468

1222

0.7

duplicate-homogenised and split sample of S099011

S099025

416086

8896999

1175

0.7

vertical Channel sample

S099026

416091

8896932

1174

0.1

vertical Channel sample

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 standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

  • Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

  • Aspects of the determination of mineralisation that are Material to the Public Report.

  • In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

  • Near surface mineralisation is extracted from the property by artisanal miners. A small number of selected rock chip samples were taken by the current owners from piles of extracted artisanal material and outcrop.

  • The rock chip samples were all submitted a to SGS Minerals RDC SARL, 760 Avenue De 30 Juin in Lubumbashi where they were analysed by MULTI-ACID 3/4 DIGESTION) AAS42S - Four acid digest (DIG42S), 0.4g- 100ml, Ore grade; AAS22S - Three acid digest, 0.4g-100ml, Ore grade.

  • Photographic evidence, geological descriptions and geological context suggest that the samples reflect the nature and style of mineralisation exploited by artisanal miners.

Drilling techniques

  • Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

Not applicable to this announcement as no drilling has occurred.

Drill sample recovery

  • Method of recording and assessing core and chip sample recoveries and results assessed.

  • Measures taken to maximise sample recovery and ensure representative nature of the samples.

Not applicable to this announcement as no drilling has occurred.

Red Mountain Mining Limited published this content on 06 September 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 07 September 2017 04:37:09 UTC.

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