NEOMETALS LTD — AGM Information 2007

Oct 25, 2007

Reed Resources Ltd

ABN 89 099 116 631

97 Outram Street West Perth WA 6005 Tel: + 61 8 9322 1182 Fax: + 61 8 9321 0556

26 October 2007

Company Announcements Office Australian Securities Exchange Limited Via Electronic Lodgement

Dear Sirs,

NOTICE OF ANNUAL GENERAL MEETING

Please find attached the Notice of Annual General Meeting that was dispatched to shareholders today.

Yours faithfully,

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Christopher Reed MANAGING DIRECTOR

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Reed Resources Ltd

ABN 89 099 116 631

97 Outram Street West Perth WA 6005 Tel: + 61 8 9322 1182 Fax: + 61 8 9321 0556

Dear Shareholder,

ANNUAL GENERAL MEETING

On behalf of the Board of Reed Resources Ltd ( Company ), it gives me pleasure to invite you to our Annual General Meeting ( AGM ) of Shareholders to be held at 3:00 pm on Monday 26 November 2007 at First Floor, 104 Marine Parade, Cottesloe, Western Australia.

The business of the AGM will be to receive the Annual Report of the Company for the year ended 30 June 2007 which includes the Directors’ Report, the Financial Report, the Remuneration Report and the Report of the Auditor.

Shareholders will also be asked to vote on:

• (a) re-election of David Reed as a Director of the Company;

• (b) ratification of the share placement to RAB Special Situations Master Fund Limited in March 2007;

• (c) ratification of the issue of shares and options to Transocean Securities Pty Ltd (the underwriter of the Reed Resources Share Purchase Plan) in May 2007;

• (e) ratification of options granted to certain employees and consultants of the Company in September 2007;

• (f) approval of the proposed grant of options to Christopher John Reed;

• (g) approval of the proposed issue of ordinary shares to sophisticated or professional investors as arranged by Transocean Securities Pty Ltd;

• (h) approval of the proposed grant of options to Transocean Securities Pty Ltd (by way of success fee);

• (i) approval of future issues of securities under the Reed Resources Employee Share Option Plan; and

• (j) adoption of the 2007 Remuneration Report of the Company.

Please find enclosed the following documents in relation to the AGM:

• (a) Notice of AGM together with Explanatory Statement;

• (b) Proxy Forms for the AGM together with instructions; and

• (c) Form for the Appointment of Corporate Representative for the AGM.

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If you are not able to attend the AGM in person, you are urged to complete and lodge the enclosed Proxy Form or Appointment of Corporate Representative (if a company).

Your Directors hope that you will be able to attend the AGM.

Yours sincerely

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David Reed Director

Date : 15 October 2007

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of members of Reed Resources Ltd ABN 89 099 116 631 ( Company ) will be held at First Floor, 104 Marine Parade, Cottesloe, Western Australia on Monday 26 November 2007 at 3:00 pm for the purpose of transacting the following business.

The Explanatory Statement and the Proxy Form accompanying this Notice are incorporated in and comprise part of this Notice. Information relevant to the proposed resolutions set out below, including information required by the ASX Listing Rules and the Corporations Act 2001 (Cth), can be found in the Explanatory Statement.

BUSINESS

1. Annual Report for year ended 30 June 2007

To receive the Annual Report of the Company for the period ended 30 June 2007 which includes the Financial Report of the Company, the Directors’ Report, the Remuneration Report and the Report of the Auditor, Deloitte. During the consideration of these items Shareholders are invited to ask questions or make comments on:

• the Financial Report of the Company for the period ended 30 June 2007;

• the Directors’ Report in relation to that period; and

• the Report of the Auditor on the Financial Report.

A representative of the Company's Auditor is anticipated to be in attendance to respond to any questions raised of the Auditor or on the Auditor's Report in the terms of s 250T of the Corporations Act.

2. Re-election of David Reed as a Director

To consider and if thought fit to pass, with or without amendment, the following as an ordinary resolution:

Resolution 1

"THAT David Reed who will retire as a Director by rotation in accordance with Articles 11.3 and 11.5 of the Company’s Constitution, and who is eligible for re-election as a Director in accordance with Article 11.4 of the Company’s Constitution and who offers himself for re-election, be re-elected as a Director."

3. Ratification of previous issues of securities

3.1 March 2007 placement to RAB Special Situations (Master) Fund Limited

To consider and if thought fit to pass, with or without amendment, the following as an ordinary resolution:

Resolution 2

"THAT, for the purpose of ASX Listing Rule 7.4, and for all other purposes, this meeting approves and ratifies the issue and allotment by the Company of 4,761,905 fully paid ordinary shares in the Company to RAB Special Situations (Master) Fund Limited at $0.42 each, as issued and allotted on 26 March 2007 and announced to the ASX on the same date."

Voting Exclusion Statement

For the purposes of ASX Listing Rule 7.5.6, and for all other purposes, the Company will disregard any votes cast on the Resolution by RAB Special Situations (Master) Fund Limited and any associate of it. However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or (b) it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

3.2 Issue of shortfall shares (under Share Purchase Plan) to Transocean Securities Pty Ltd (ACN: 009 230 120)

To consider and if thought fit to pass, with or without amendment, the following as an ordinary resolution:

Resolution 3

"THAT, for the purpose of ASX Listing Rule 7.4, and for all other purposes, this meeting approves and ratifies the issue and allotment by the Company of 4,639,362 fully paid ordinary shares in the Company to Transocean Securities Pty Ltd (ACN: 009 230 120) at $0.42 each, as issued and allotted on 28 May 2007 and announced to the ASX on the same date."

Voting Exclusion Statement

For the purposes of ASX Listing Rule 7.5.6, and for all other purposes, the Company will disregard any votes cast on the Resolution by Transocean Securities Pty Ltd (ACN: 009 230 120) and any associate of it. However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

(b) it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

3.3 Issue of options (as underwriting fee for Share Purchase Plan) to Transocean Securities Pty Ltd (ACN: 009 230 120)

To consider and if thought fit to pass, with or without amendment, the following as an ordinary resolution:

Resolution 4

"THAT, for the purpose of ASX Listing Rule 7.4, and for all other purposes, this meeting approves and ratifies the issue and allotment by the Company of 2,000,000 options to acquire fully paid ordinary shares of the Company to Transocean Securities Pty Ltd (ACN: 009 230 120), to be exercised at any time on or before 31 May 2009 at an exercise price of $0.60 each pursuant to the terms of the Underwriting Agreement between the Company and Transocean Securities Pty Ltd on or about 10 April 2007 as issued and allotted on 28 May 2007 and announced to the ASX on the same date."

Voting Exclusion Statement

For the purposes of ASX Listing Rule 7.5.6, and for all other purposes, the Company will disregard any votes cast on the Resolution by Transocean Securities Pty Ltd (ACN: 009 230 120) and any associate of it. However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

(b) it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

3.4 Issue of options to two employees and two consultants of the Company

To consider and if thought fit to pass, with or without amendment, the following as an ordinary resolution:

Resolution 5

"THAT, for the purpose of ASX Listing Rule 7.4, and for all other purposes, this meeting approves and ratifies the issue and allotment by the Company of an aggregate 1,000,000 options to acquire fully paid ordinary shares of the Company to two employees and two consultants of the Company (or their nominees), to be exercised at any time on or before 31 December 2012 at an exercise price of $0.85 each and issued on the terms and conditions particularised in Appendices 1 and 2 respectively of the Explanatory Statement forming part of this Notice of Meeting, as issued and allotted on 14 September 2007 and announced to the ASX on the same date."

Voting Exclusion Statement

For the purposes of ASX Listing Rule 7.5.6, and for all other purposes, the Company will disregard any votes cast on the Resolution by each of the employees and consultants to whom options were granted, and any associate of any of them. However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

(b) it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

4. Approval of proposed issue of options to Christopher John Reed

To consider and if thought fit to pass, with or without amendment, the following as an ordinary resolution:

Resolution 6

"THAT for the purpose of ASX Listing Rule 10.11 and section 208 of the Corporations Act 2001 (Cth), and for all other purposes, this meeting approves and authorises the Company to grant 1,000,000 options to acquire fully paid ordinary shares of the Company to Christopher John Reed, a director of the Company, to be exercised at any time on or before 31 December 2012 at an exercise price of $0.85 each, and to be issued on the terms and conditions particularised in Appendix 3 of the Explanatory Statement forming part of this Notice of Meeting."

Voting Exclusion Statement

For the purposes of ASX Listing Rule 10.13.6 and Section 224 of the Corporations Act 2001 (Cth), and for all other purposes, the Company will disregard any votes cast on the Resolution by Christopher John Reed and any of his associates. However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or (b) it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

5. Approval of future capital raising

To consider and if thought fit to pass, respectively as separate and independent ordinary resolutions, with or without amendment, each of the following:

Resolution 7A

"THAT for the purpose of ASX Listing Rule 7.1, and for all other purposes, this meeting approves and authorises the Company to issue up to 25,000,000 new fully paid ordinary shares of the Company at a price of $0.65 each to clients of Transocean Securities Pty Ltd (ACN: 009 230 120) (in every case, provided such client is a sophisticated or professional investor for the purposes of s708 of the Corporations Act 2001(Cth)) to raise gross funds of approximately $16,250,000, pursuant to the terms of the Corporate Finance Agreement dated 18 July 2007 between the Company and Transocean Securities Pty Ltd (ACN: 009 230 120)."

Voting Exclusion Statement

For the purposes of ASX Listing Rule 7.3.8, and for all other purposes, the Company will disregard any votes cast on the Resolution by Transocean Securities Pty Ltd (ACN: 009 230 120) or other person participating in the proposed issue of fully paid ordinary shares, and any associate of any of them. However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or (b) it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in

Resolution 7B

"THAT for the purpose of ASX Listing Rule 7.1, and for all other purposes, this meeting approves and authorises the Company to issue up to 2,500,000 options to acquire fully paid ordinary shares of the Company to Transocean Securities Pty Ltd (ACN: 009 230 120), to be exercised any time on or before 31 December 2009 at an exercise price of $0.78 each, by way of a success fee pursuant to the terms of the Corporate Finance Agreement dated 18 July 2007 between the Company and Transocean Securities Pty Ltd (ACN: 009 230 120)."

Voting Exclusion Statement

For the purposes of ASX Listing Rule 7.3.8, and for all other purposes, the Company will disregard any votes cast on the Resolution by Transocean Securities Pty Ltd (ACN: 009 230 120), and any associate of it.

However, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

(b) it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

6. Approval of future issues of securities under the Reed Resources Employee Share Option Plan

To consider and if thought fit to pass, with or without amendment, the following as an ordinary resolution:

Resolution 8

"THAT for the purpose of ASX Listing Rule 7.2 Exception 9, and for all other purposes, the Reed Resources Employee Share Option Plan, pursuant to which options to acquire fully paid ordinary shares of the Company may be issued and allotted to eligible participants as an exception to ASX Listing Rule 7.1, be approved and the issue and allotment of options pursuant to that plan be approved."

Voting Exclusion Statement

For the purposes of ASX Listing Rule 7.2 Exception 9, and for all other purposes, the Company will disregard

any votes cast on the Resolution by a Director of the Company and any associate of each of them. However, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (b) it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

7. Adoption of Remuneration Report

To consider and if thought fit to pass, with or without amendment, the following as an ordinary resolution:

Resolution 9

"THAT for the purposes of section 250R (2) for the Corporations Act 2001 (Cth) the Remuneration Report for the year ended 30 June 2007 be adopted."

The Remuneration Report is set out on pages 20 and 21 of the 2007 Annual Report. Please note that in accordance with section 250R (3) of the Corporations Act 2001 (Cth) the vote on this resolution is advisory only, and does not bind the Directors or the Company.

8. Other Business

In compliance with section 250S(1) of the Corporations Act 2001 (Cth) the members are invited to ask questions about or make comments on the management of the Company and to raise any other business which may lawfully be brought before the meeting.

BY ORDER OF THE BOARD

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Christopher Reed Director Perth, Western Australia Date: 15 October 2007

EXPLANATORY STATEMENT

THIS EXPLANATORY STATEMENT accompanies and forms part of the Notice of Meeting convening the Annual General Meeting ( AGM ) of Shareholders of Reed Resources Ltd ABN 89 099 116 631 ( Company ) to be held at First Floor, 104 Marine Parade, Cottesloe, Western Australia, on Monday 26 November 2007 at 3:00pm.

This Explanatory Statement is to provide Shareholders with explanatory notes and information relevant to the meeting and its business, it comprises of a Part A, a Part B and three Appendices. This Explanatory Statement should be read in conjunction with the accompanying Notice.

Part A: Voting

1. Definitions

AASB means the Australian Accounting Standards Board.

Annual General Meeting means the annual general meeting notified to the Shareholders by the Notice.

ASIC means Australian Securities and Investments Commission.

ASX means Australian Stock Exchange Limited.

Board means the board of Directors of the Company.

Business Day has the meaning ascribed to it in the Listing Rules.

Company means Reed Resources Ltd (ABN 89 099 116 631).

Corporations Act means Corporations Act 2001 (Cth).

Corporations Regulations means the Corporations Regulations 2001 (Cth).

Director means a Director of the Company.

Listing Rules means the Listing Rules from time to time of the ASX.

Notice means the notice of annual general meeting incorporating this Explanatory Statement.

Share means an ordinary share in the Company.

Shareholders means the shareholders of the Company.

2. Required Majority

• (a) In accordance with the Corporations Act for the resolutions to be effective:

• (i) the resolutions must be passed at a meeting of which not less than 28 days written notice specifying the intention to propose the resolutions has been given (satisfied by this Notice); and

• (ii) in the case of ordinary resolutions, must be passed by more than 50% of all the votes cast by Shareholders present and entitled to vote on the resolutions (whether in person or by proxy, attorney or representative); and

• (iii) in the case of special resolutions, must be passed by not less than 75% of all the votes cast by Shareholders present and entitled to vote on the resolutions (whether in person or by proxy, attorney or representative).

• (b) On a show of hands every Shareholder has one vote and, on a poll, every Shareholder has one vote for each Share.

3. Proxies

• (a) The Company has determined that, for the purposes of this Annual General Meeting, each Share in the Company shall be taken to be held by the person who held the Share as registered Shareholder at 3:00pm Saturday 24 November 2007 ( Effective Time ).

• (b) All holders of shares in the Company as at the Effective Time are entitled to attend and vote at this Annual General Meeting and may appoint a proxy to attend this Annual General Meeting and vote in that member’s stead.

• (c) A proxy need not be a member of the Company.

• (d) The proxy form sent with this Notice should be used for this Annual General Meeting.

• (e) Each Shareholder who is entitled to cast 2 or more votes at this Annual General Meeting, may appoint 2 persons to act as proxies and may specify the proportion or number of votes that each proxy is entitled to exercise. If a Shareholder does not specify the proportion or number of that Shareholder’s votes each proxy may exercise, then each proxy will be entitled to exercise half of the votes. An additional proxy form will be supplied by the Company on request.

• (f) In the case of a member who is an individual, a proxy must be under the hand of the individual or his or her attorney duly authorised in writing and, in the case of a member that is a corporation, a proxy must be executed by the corporation under common seal, pursuant to Section 127 of the Corporations Act or under the hand of its duly authorised officer or attorney.

• (g) Any member may by power of attorney appoint an attorney to act on his or her behalf and such power of attorney or certified copy thereof must be received by the Company as specified in paragraph (i).

• (h) Any corporation which is a member of the Company may appoint a representative to attend and vote for that corporation at the Annual General Meeting. Appointments of representatives by corporations must be received by the Company as specified in paragraph (i) or handed in at the Annual General Meeting when registering as a company representative.

• (i) In accordance with Article 10.34 of the Company’s Constitution, proxies and powers of attorney granted by Shareholders must be received by the Company by 5:00 pm on Friday 23 November 2007 at:

• (i) The registered office of the Company – 97 Outram Street, West Perth, Western Australia; or

• (ii) By facsimile at the registered office of the Company – facsimile number (08) 9321 0556.

Part B: Explanatory Notes

1. Re-election of David Reed as Director

Resolution 1: Re-election of David Reed as a Director

It is a requirement under Article 11.3 of the Company’s Constitution that at the Annual General Meeting in every year one-third of the Directors retire from office. The Directors to retire are those who have been longest in office since their last election. Accordingly, David Reed will retire at the end of the Annual General Meeting in accordance with this requirement and offers himself for re-election.

Information in respect of David Reed is set out below:

David John Reed, OAM, FCPA, age 61

Position: Executive Chairman

Term of Office: Appointed 20 December 2001

Independent: No

Company Board Committee Membership: Nomination and Remuneration Committee.

Current External Directorships: None

Skills, Experience and Expertise: Mr David Reed is a Fellow member of CPA Australia, and graduated in accountancy in 1965. He has 40 years experience in stockbroking including 22 years based in Kalgoorlie. In 1985 he became chairman of stock-broking firm Eyres Reed Ltd in Perth until its sale to CIBC World Markets in 1997. He has extensive public company experience having sat as chairman of several listed exploration companies. He has a long history in the gold mining industry, including chairman of Fund Raising for the Australian Prospectors and Miners Hall of Fame. He is also a Founder and Session Chairman of the Diggers and Dealers Forum in Kalgoorlie, and a past Secretary of the amalgamated Prospectors and Leaseholders Association.

Recommendation of Board

The Board after considering the recommendations of the Nomination and Remuneration Committee recommends that Shareholders vote in favour of the resolution re-electing David Reed.

2. Ratification of previous issues of securities

Background of relevant issues

Resolution 2: Ratification of Share Placement to RAB Special Situations (Master) Fund

On 26 March 2007 the Company issued and allotted 4,761,905 fully paid ordinary shares of the Company at an issue price of $0.42 per Share to the RAB Special Situations (Master) Fund Limited. The Shares were issued within the discretionary capacity of the board under ASX Listing Rule 7.1, and the placement was arranged by Transocean Securities Pty Ltd (ACN: 009 230 120).

The issue raised gross funds of $2,000,000, which have been or are intended to be used for the purpose of funding the Company's ongoing exploration activities and to provide working capital to assist with the Company's evolution as a gold producer, and otherwise for the Company's operational and administration expenses.

Resolutions 3 and 4: Ratification of issues to Transocean Securities Pty Ltd (ACN: 009 230 120) in connection with the Company's Share Purchase Plan

On 28 May 2007 the Company issued and allotted:

4,639,362 fully paid ordinary shares of the Company at an issue price of $0.42 per Share; and

2,000,000 options to acquire fully paid ordinary shares of the Company, to be exercised at any time on or before 31 May 2009 at an exercise price of $0.60 each,

to Transocean Securities Pty Ltd (ACN: 009 230 120) ( Transocean ). The Shares and options were issued within the discretionary capacity of the board under ASX Listing Rule 7.1.

On 10 April 2007 the Company entered into an Underwriting Agreement with Transocean whereby Transocean agreed to underwrite the issue of 11,904,762 fully paid ordinary shares in the Company. These Shares were offered to eligible Shareholders of the Company pursuant to the Company's Share Purchase Plan, undertaken between 6 April 2007 and 30 April 2007 and as announced to the ASX on 22 March 2007. Pursuant to the terms of the Underwriting Agreement:

• (i) Transocean was issued and allotted the Shares for which valid applications under the Share Purchase Plan were not received, being 4,639,362 Shares; and

• (ii) Transocean was issued and allotted a further 2,000,000 options to acquire fully paid ordinary shares of the Company, as part of its remuneration for underwriting the issue, in connection with the Share Purchase Plan.

The issue of Shares pursuant to the Company's Share Purchase Plan in aggregate raised gross funds of $5,000,000, of which $1,948,532 was raised from the issue of the shortfall shares to Transocean. These funds have been or are intended to be used for the purpose of funding the Company's ongoing exploration activities and to provide working capital to assist with the Company's evolution as a gold producer, and otherwise for the Company's operational and administration expenses.

Resolution 5: Ratification of issue to certain employees and consultants

On 14 September 2007 the Company issued and allotted an aggregate of 1,000,000 options to acquire fully paid ordinary shares in the Company to two employees and two consultants of the Company, exercisable on or before 31 December 2012 at an exercise price of $0.85 each. The options were issued within the discretionary capacity of the board under ASX Listing Rule 7.1.

The issue was made in recognition of the employees' and consultants' continued contribution to the Company’s progress to date and to further incentivise their ongoing performance and commitment to the Company.

Approvals Required for Resolutions 2, 3, 4 and 5

ASX Listing Rule 7.1 provides that, without approval of the Shareholders, the Company must not issue or agree to issue more equity securities if such issue, if aggregated with the securities issued by the Company without approval and which were not subject to an exemption, during the previous 12 months, would be such amount that would exceed 15% of the issued shares at the commencement of

that 12 month period (subject to certain rules and exemptions not relevant to the Company's present circumstances).

ASX Listing Rule 7.4 however provides that an issue of securities made without approval under Listing Rule 7.1 is treated as having been made with approval for the purposes of Listing Rule 7.1 if that issue did not breach Listing Rule 7.1 and the shareholders subsequently approve it. The issues referred to in Resolutions 2, 3, 4 and 5 did not breach Listing Rule 7.1 when made.

Under Resolution 2, the Company seeks the ratification by the Shareholders of the issue and allotment of the 4,761,905 ordinary shares of the Company issued and allotted to the RAB Special Situations (Master) Fund Limited.

Under Resolution 3, the Company seeks the ratification by the Shareholders of the issue and allotment of the 4,639,362 ordinary shares of the Company issued and allotted to Transocean Securities Pty Ltd (ACN: 009 230 120).

Under Resolution 4, the Company seeks the ratification by the Shareholders of the issue and allotment of the 2,000,000 options to acquire fully paid ordinary shares of the Company issued and allotted to Transocean Securities Pty Ltd (ACN: 009 230 120).

Under Resolution 5, the Company seeks the ratification by the Shareholders of the issue and allotment of the 1,000,000 options to acquire fully paid ordinary shares issued and allotted to two employees and two consultants of the Company.

The effect of the ratification by the Shareholders pursuant to Resolutions 2, 3, 4 and 5 is to restore the Company's capacity for the purposes of Listing Rule 7.1 to issue or agree to issue further equity securities up to the 15% limit.

Details of the previous issues of securities in respect of Resolutions 2, 3, 4 and 5

Resolution 2: March 2007 Placement to RAB Special situations (Master) Fund Limited

In respect of Resolution 2, for the purposes of Listing Rule 7.5.1, 7.5.2 and 7.5.4, the following information is given to Shareholders:

Issue Date	Allottee Basis	Issue Price	Number of fully paid ordinary shares
26 March 2007	RAB Special Situations (Master) Fund Limited pursuant to the terms of the private placement between the Company and the allottee	$0.42	4,761,905

Listing Rule 7.5 also requires the following further information to be provided to Shareholders:

• (a) ( Terms of the securities ) – the issued shares are fully paid ordinary shares and are on the same terms as existing fully paid ordinary shares of the Company.

• (b) ( Use or Intended use of the funds raised ) – the additional capital made available to the Company in consequence of the issue has been and is intended to be used for the purpose of funding the Company's ongoing exploration activities and to provide working capital to assist with the Company's evolution as a gold producer, and otherwise for the Company's operational and administration expenses.

Resolutions 3 and 4: May 2007 issues to Transocean Securities Pty Ltd in connection with Share Purchase Plan

In respect of Resolutions 3 and 4, for the purposes of Listing Rule 7.5.1, 7.5.2 and 7.5.4, the following information is given to Shareholders:

Issue Date	Allottee Basis	Issue Price	Number of fully paid ordinary shares
28 May 2007	Transocean Securities Pty Ltd (ACN: 009 230 120) as underwriter of shortfall shares pursuant to the terms of an underwriting agreement between the Company and the allottee.	$0.42	4,639,362

Issue Date	Allottee Basis	Exercise Price	Number of options to acquire fully paid ordinary shares
28 May 2007	Transocean Securities Pty Ltd (ACN: 009 230 120) as part of the remuneration of the underwriter pursuant to the terms of an underwriting agreement between the Company and the allottee.	$0.60	2,000,000

Listing Rule 7.5 also requires the following further information to be provided to Shareholders:

• (a) ( Terms of the securities ) – the issued shares are fully paid ordinary shares and are on the same terms as existing fully paid ordinary shares of the Company.

• (b) ( Use or Intended use of the funds raised ) – the additional capital made available to the Company in consequence of the issue has been and is intended to be used for the purpose of funding the Company's ongoing exploration activities and to provide working capital to assist with the Company's evolution as a gold producer, and otherwise for the Company's operational and administration expenses. There were no funds raised in connection with the issue of the options to Transocean under Resolution 4 as the options were issued without payment of cash consideration. The proceeds from a future exercise of the options, however, are intended to be applied towards meeting working capital requirements of the Company relevant at, or about the time of, the exercise of the options at the discretion of the Board.

Resolution 5: September 2007 issues to certain employees and consultants

In respect of Resolution 5, for the purposes of Listing Rule 7.5.1, 7.5.2 and 7.5.4, the following information is given to Shareholders:

Issue Date	Allottee Basis	Exercise Price	Number of options to acquire fully paid ordinary shares
14 September 2007	Two employees of the Company, as determined by the Board having regard to those employees' contribution to the Company.	$0.85	700,000
14 September 2007	Two consultants of the Company, as determined by the Board having regard to those consultants' contribution to the Company.	$0.85	300,000

Listing Rule 7.5 also requires the following further information to be provided to Shareholders:

• (a) ( Terms of the securities ) – Appendix 1 to this Explanatory Statement sets out the terms of the Reed Resources Employee Shares Option Plan, pursuant to which the offers of options were made to the employees of the Company. Appendix 2 to this Explanatory Statement sets out the terms in respect of the offers of options to the consultants of the Company.

The shares which will be issued upon exercise of the options will be fully paid ordinary shares and will be on the same terms as the currently issued fully paid ordinary shares in the Company.

• (b) ( Use or Intended use of the funds raised ) – there were no funds raised in connection with the issue of the options to the employees and consultants under Resolution 5 as the options were issued without payment of cash consideration. The proceeds from a future exercise of the options, however, are intended to be applied towards meeting working capital requirements of the Company relevant at, or about the time of, the exercise of the options at the discretion of the Board.

Recommendation of Board in respect of Resolutions 2, 3, 4 and 5

The Directors unanimously recommend that Shareholders vote in favour of each of Resolutions 2, 3, 4 and 5 to ratify those previous issues of securities of the Company.

3. Approval of issue of securities to a Director

Resolution 6: Issue of Options to Christopher John Reed

Background

The effect and purpose of Resolution 6 is to authorise the grant to Christopher John Reed, a director of the Company, a total of 1,000,000 options to acquire fully paid ordinary shares of the Company on or prior to 31 December 2012 at an exercise price of $0.85.

On 31 July 2007, the Board resolved to issue 1,000,000 options to Christopher John Reed as recognition of Christopher John Reed's continued contribution to the Company’s progress to date and to further incentivise his ongoing performance and commitment to the Company.

Approvals Required

Chapter 2E of the Corporations Act regulates the provision of financial benefits to related parties by a public company. In particular, section 208 of the Corporations Act prohibits a public company giving a financial benefit to a related party of the company without shareholder approval, unless sanctioned by an exception to that section (which exceptions either do not apply or are not sought to be relied upon by the Company in the present circumstances). A director of a company is a related party for the purposes of the Corporations Act.

As Christopher John Reed is a director of the Company, the grant of the options may be prohibited by Section 208 of the Corporations Act as providing a financial benefit to a related party.

Pursuant to section 208 of the Corporations Act, a public company is permitted to give a financial benefit to a related party of that company if:

it obtains the approval of its members in the way set out in sections 217 to 227 of the Corporations Act; and

it gives the benefit within 15 months after the approval.

Further, ASX Listing Rule 10.11 requires that a listed company obtain shareholder approval by ordinary resolution prior to the issue of securities (including an option) to a related party. If approval is given under ASX Listing Rule 10.11, approval is not required under ASX Listing Rule 7.1 (refer to ASX Listing Rule 7.2 Exception 14). ASX Listing Rule 10.13 sets out the relevant information requirements that are to be provided to Shareholders in this Explanatory Statement with respect to an approval being sought under ASX listing Rule 10.11.

Accordingly, approval for the issue of the options to Christopher John Reed is required pursuant to Listing Rule 10.11 and s 208 of the Corporations Act.

Further information

Corporations Act

Section 219 of the Corporations Act specifies matters which must be addressed in an explanatory statement for the purposes of a notice convening a meeting to obtain the approval of the Shareholders for the issuing of the options to Christopher John Reed. For the purposes of section 219 of the Corporations Act, the following information is therefore set out:

Related parties to whom the proposed resolution would permit financial benefits to be given:

• Christopher John Reed

Nature of the financial benefits:

The financial benefits provided to Christopher John Reed under Resolution 6 are options issued by the Company which will entitle Christopher John Reed to acquire fully paid ordinary shares in the Company exercisable on or before 31 December 2012 for an exercise price of $0.85 per ordinary share, irrespective of the then current market value or share price of the Company's ordinary shares. Christopher John Reed, at his absolute discretion, may or may not exercise the options to so acquire further ordinary Shares.

Christopher John Reed will not be required to make any payment for the issuing and allotment of the options pursuant to the proposed Resolution. However, it is a

requirement of ASIC that shareholders be informed of the current dollar value of the options to be issued.

In determining the fair value of the options, the Black-Scholes option pricing model was used taking into account, as at the grant date, the variables and assumptions set out below. The inputs used below against each assumption are those which applied on 31 July 2007:

• (i) (exercise price) the options to be exerciseable at $0.85 ;

• (ii) (expected life of the instrument ) the options will expire, should they not previously be exercised, on or prior to 31 December 2012;

• (iii) (current price of the underlying share ) the share price at the grant date is $0.61, based on the last sale of shares on ASX as at 31 July 2007;

• (iv) (expected volatility ) price volatility of the shares of the Company is approximately 63%;

• (v) (expected dividends ) there are no dividends presently expected to be paid in respect of the underlying shares; and

• (vi) (the risk-free interest rate for the expected life of the instrument ) the average current risk free interest rate is 6.27%.

On this basis, an exercise price of $0.85 each results in an implied value of $0.22 per option. The aggregate implied value of the 1,000,000 options to be issued in favour of Christopher John Reed is therefore $220,000.00.

By way of information, the highest and lowest market price of listed ordinary shares of the Company during the 12 months immediately preceding 31 July 2007 is set out below:

	12 month high	12 month low	last market sale price as at 31 July 2007
Ordinary Share Price	$0.65	$0.40	$0.61

Director's recommendations to members and reasons

The recommendation to members of each Director and the reasons for that recommendation in relation to Resolution 6 in respect of each Director are as follows:

• (i) Recommendation of each Director

Each Director, other than Christopher John Reed, recommends that Shareholders vote in favour of Resolution 6. Christopher John Reed has a conflict of interest as the intended recipient of the options and, accordingly, makes no recommendation to Shareholders in relation to Resolution 6.

• (ii) Reasons for Director's Recommendations:

Each of the Directors making the recommendation to vote in favour of Resolution 6 considers that Resolution 6 is in the best interests of the

Company as recognition of Christopher John Reed's continued contribution to the Company’s progress to date and to further incentivise his ongoing performance and commitment to the Company.

Shareholders should be aware, however, that:

• the passing of Resolution 6 will result in Christopher John Reed becoming entitled to 1,000,000 new Shares in the Company; and

• the passing of Resolution 6 will result in, on any exercise of the options in due course, a dilution in the percentage shareholding of the Company's Shareholders, but the benefit of an enhancement of the Company’s capital base by reason of the receipt by the Company of the consideration or exercise price payable.

The number of Shares on issue as at 14 September 2007 was approximately 97,016,667. Subject to the issue of shares pursuant to the exercise of all the existing options and proposed new options under this Resolution 6 and assuming no other securities have been issued in the meantime, the aggregate number of Shares in the Company would be approximately 108,016,667. The proposed new options, on exercise in full, represent 1,000,000 Shares or 0.934% of that fully diluted capital base. The proposed new options, when aggregated with all prior options granted to Christopher Reed, on exercise in full, together with his other shareholdings, represent 5,823,800 Shares or 5.39% of that fully diluted capital base.

Ultimately, approval of Resolution 6 by Shareholders is entirely a decision for each Shareholder to be made by exercising his or her own judgment. Shareholders are encouraged to seek such expert advice on the matter as they consider appropriate.

Director’s interest in the outcome of Resolution 6:

If Resolution 6 for the issue of options to Christopher John Reed is passed, he will become entitled to the relevant options the subject of that resolution together with the option rights and entitlements associated with being a proprietor of such options.

Other remuneration currently given to Christopher John Reed

The only other remuneration currently given to Christopher John Reed by the Company, is by way of annual salary, as an executive director of the Company, of $180,000.00 (refer Directors Remuneration Report). He has previously been issued an aggregate 3,000,000 options (1,000,000 exerciseable at $0.35 per option on or before 31 December 2008, which issue was approved by the Shareholders at the extraordinary general meeting of the Company held on 16 June 2004, and 1,000,000 exercisable at $0.50 per option on or before 1 July 2010, which issue was approved by the Shareholders at the extraordinary general meeting of the Company held on 6 July 2005, and 1,000,000 exercisable at $0.75 per option on or before 30 June 2011, which issue was approved by Shareholders at the annual general meeting held on 23 November 2006).

Other information known to the Company:

Other than as provided for in this Explanatory Statement, there is no other information known to the Company or any of its Directors that is reasonably required by Shareholders in order to decide whether or not it is in the Company’s best interests to pass Resolution 6.

ASX Listing Rules

ASX Listing Rule 10.13 sets out a number of matters which must be included in a notice of meeting proposing an approval under ASX Listing Rule 10.11.

For the purposes of ASX Listing Rule 10.13, the following further information is provided in relation to Resolution 6:

• (a) ( name of person and maximum number of securities to be issued ) The maximum number of securities to be issued to Christopher John Reed for which approval is sought is 1,000,000.

• (b) ( issue and allotment date ) It is proposed that the options will be issued and allotted (if approved) as soon as practicable after this AGM (and in any case within 1 month of this AGM). The options are exercisable at the absolute discretion of Christopher John Reed at any time on or prior to 31 December 2012.

• (c) ( terms of the securities ) Appendix 3 of this Explanatory Statement sets out the key terms in respect of the options. The Shares which will be issued upon exercise of the options will be fully paid ordinary shares and will be on the same terms as the currently issued fully paid ordinary shares in the Company.

• (d) ( the issue price of the options ) Christopher John Reed will not be required to make any payment for the issuing and allotment of the new options pursuant to the proposed Resolution, although he will be required to pay the $0.85 exercise price per option if exercised in due course. An implied dollar value of the financial benefit of the options to Christopher John Reed, as valued under the Black-Scholes option pricing model, is set out above.

• (e) ( use or intended use of the funds raised ) There will be no funds raised in connection with the issue of the options to Christopher John Reed under Resolution 6 as the options are to be issued without payment of cash consideration. The proceeds from a future exercise of the options, however, are intended to be applied towards meeting working capital requirements of the Company relevant at, or about the time of, the exercise of the options at the discretion of the Board.

Comparative information

By way of further information for the benefit of the Shareholders, the following comparative information is presented. Set out below is a table of the existing shares and options of the Company held by Christopher John Reed and, for comparison, the new options to be issued and allotted pursuant to the proposed Resolution 6.

Director	Shares	Shares	Options currently hld	Proposed options under	Total % holding in fully diluted basis*
	Direct	Related Entity
			e	Resolution 6
Christopher John Reed	1,341,287	482,513	3,000,000	1,000,000	5.39%*

* Assumes the options granted in Resolutions 4 and 5 and proposed to be granted in Resolution 6 are granted, and all options (including previously issued options) are exercised and no further securities are issued by the Company (in particular, any future issue of securities pursuant to Resolutions 7 and 8 has not been assumed).

The pro forma capital structure of the Company is summarised in the table below. The table assumes the issue of the 1,000,000 options is passed under Resolution 6 (but unexercised).

Number of Shares Contributed Equity

Listed Ordinary Fully Paid Shares 87,615,400 (prior to issues of shares ratified by Resolutions 2 and 3) Listed Ordinary Fully Paid Shares 9,401,267 (issues ratified by Resolutions 2 and 3) Total actual contributed equity 97,016,667 (as at the date of this AGM) Number of Existing Options Exercisable on or before 2,300,000 31 December 2008 $0.35 Exercisable on or before 1,000,000 1 July 2010 $0.50 Exercisable on or before 2,700,000 30 June 2011 $0.75 Number of New Options Exercisable on or 2,000,000 before 31 May 2009 $0.60 (if approved under Resolution 4) Exercisable on or before 31 December 2012 $0.85 2,000,000 (if approved under Resolutions 5 and 6)

4. Approval of future capital raising

Resolutions 7A and 7B: Approval of proposed placement to sophisticated or professional investors and associated success fee

Background

On 18 July 2007 the Company entered into a Corporate Finance Agreement (the Corporate Finance Agreement) with Transocean Securities Pty Ltd (ACN: 009 230 120) ( Transocean ) whereby the Company appointed Transocean as its exclusive investment banker. Under the terms of the Corporate Finance Agreement, the Company agreed that Transocean would have first right of refusal for all capital raising and investment banking activities.

In accordance with the appointment of Transocean as its investment banker, the Company intends to enter into an agreement with Transocean whereby Transocean will endeavour to arrange a share placement of up to 25,000,000 new ordinary fully paid shares in the capital of the Company at a price of $0.65 to sophisticated or professional investors (within the meaning of s708 of the Corporations Act) (each an Offeree ), to be issued by 28 November 2007 on the following terms and conditions:

• an Offeree may not assign, transfer, lay-off or otherwise deal with the Shares offered to them, or their obligations as contained in their offer letter, without the prior written consent of Transocean;

• no fee is payable to an Offeree by Transocean or the Company, except that certain Offerees that are an intermediary institution may be entitled to receive a fee (payable by Transocean) of up to 3% of the securities subscribed by that Offeree by prior arrangement with Transocean;

• each Offeree must acknowledge that they are a sophisticated or professional investor and have informed themselves as to the terms of sections 708 and 708A of the Corporations Act. In particular, each Offeree must acknowledge the restrictions on resale of Shares within 12 months of issue, as contained in those sections; and

• each Offeree must acknowledge that the Shares will not be freely tradeable unless and until the Company has issued a complying s.708A statement or a complying disclosure document in accordance with section 613(D) of the Corporations Act.

Pursuant to the terms of the Corporate Finance Agreement, by way of a 'success fee' the Company is obliged to grant Transocean such number of options to acquire new fully paid Shares in the Company equal to 10% of the total number of Shares placed by Transocean under the proposed placement (the Success Options ). Accordingly, up to 2,500,000 Success Options may be granted to Transocean in connection with the propose placement. The Success Options are exercisable at any time on or before 31 December 2009, at an exercise price of $0.78. The exercise price was calculated by adding a 20% premium to the issue price of the Shares to be placed by Transocean.

Approvals required

ASX Listing Rule 7.1 provides that, without approval of the Shareholders, the Company must not issue or agree to issue more equity securities if such issue, if aggregated with the securities issued by the Company without approval and which were not subject to an exemption, during the previous 12 months, would be such amount that would exceed 15% of the issued shares at the commencement of that 12 month period (subject to certain rules and exemptions not relevant to the Company's present circumstances).

Under Resolution 7A the Company seeks Shareholder approval for the proposed issue of Shares to Offerees pursuant to the placement agreed to be arranged by Transocean described above, such that the issue of those Shares will be regarded as having been approved for the purposes of ASX Listing Rule 7.1.

Under Resolution 7B the Company seeks Shareholder approval for the proposed issue of Success Options to Transocean as part of Transocean's remuneration for arranging the placement the subject of Resolution 7A, such that the issue of those Success Options will be regarded as having been approved for the purposes of ASX Listing Rule 7.1.

For the purposes of the requirements of ASX Listing Rule 7.3.1 to 7.3.7, the following information is provided in relation to the approval sought under Resolutions 7A and 7B for the issue of Shares and Success Options respectively by the Company pursuant to the proposed arrangements described above:

• (a) ( Maximum number of securities to be issued ) – Up to 25,000,000 fully paid Shares will be arranged to be placed and up to 2,500,000 Success Options will be granted.

• (b) ( Date of issue ) – If Resolution 7A is approved, the Company will issue and allot the relevant Shares to Offerees from whom valid applications to subscribe for Shares have been received, as soon as practicable after this AGM, and in any case, within 3 months after the date of this AGM. If Resolution 7B is approved, the Company will issue and allot the relevant number of Success Options to Transocean, as soon as practicable after this AGM, and in any case, within 3 months after the date of this AGM.

• (c) ( Issue price ) – The issue price of the Shares to be placed is fixed at $0.65 per Share. The exercise price of the Success Options to be granted to Transocean is fixed at $0.78 per

option. The Success Options are granted however for no additional cash or other consideration.

• (d) ( Names of allottees ) – The allottees of Shares to be issued pursuant to the proposed placement are clients of Transocean who are sophisticated or professional investors (within the meaning of s708 of the Corporations Act) from whom the Company (or Transocean) receives valid applications for the subscription of Shares pursuant to the proposed placement. Transocean is the sole allottee with respect to the Success Options.

• (e) ( Terms of the securities to be issued or granted ) – The Shares to be issued and allotted pursuant to the proposed placement (and upon exercise by Transocean of the Success Options) will have the same terms and will rank pari passu with the existing issued fully paid Shares. Each Success Option has an exercise price of $0.78 and an expiry date of 31 December 2009. The Company intends that, if Resolution 7B is approved, the terms of the Success Options will include provisions which are substantively similar to clauses 1.5 to 1.13 (inclusive) of Annexure 2, except that the relevant expiry date of the Success Options will be 31 December 2009.

• (f) ( Use of funds ) - It is anticipated that the proposed share placement will raise gross funds of approximately $16,250,000 which is intended to be used to:

• complete the Bankable Feasibility Study currently underway and due for completion in the second quarter of calendar year 2008;

• purchase gas in anticipation of future operations;

• progress existing nickel and iron ore joint ventures;

• further develop the Comet Vale gold mine;

• supplement existing working capital; and

• pay costs associated with the share placement.

There will be no funds raised in connection with the grant of the Success Options to Transocean, as the Success Options are granted without further cash or other consideration. The proceeds from a future exercise of the Success Options, however, are intended to be applied towards meeting working capital requirements of the Company relevant at, or about the time of, the exercise of the options at the discretion of the Board.

• (g) ( Date of allotment ) – Allotment of the Shares to subscribers under the proposed placement and the Success Options to Transocean will occur progressively.

Recommendation of Board

The Directors recommend that Shareholders vote in favour of Resolution 7A to approve the proposed issue of Shares of the Company.

The Directors recommend that Shareholders vote in favour of Resolution 7B to approve the proposed grant of the Success Options.

5. Approval of issues under Employee Share Option Plan

Resolution 8: Approval of future issues of securities under the Company's Employee Share Option Plan

Background

On 31 July 2007 the Board resolved to adopt the Reed Resources Ltd Employee Share Option Plan and terminate the previous employee share option plan on the basis that the previous plan had expired. The objective of the Company in adopting the Reed Resources Ltd Employee Share Option Plan is to create value for Shareholders by rewarding employees and consultants of the Company for outstanding performance, and to motivate employees and consultants to pursue the long-term growth and success of the Company.

The effect of Resolution 8 will be to authorise the Directors to issue options over fully paid ordinary shares of the Company to employees and consultants in accordance with the Employee Share Option Plan without further Shareholder approval. A total of 4,050,000 options were granted to employees and consultants of the Company under the previous employee share option plan, inclusive of the 700,000 options granted pursuant to Resolution 5.

Terms of the Employee Share Option Plan

The terms of the new Reed Resources Ltd Employee Share Option Plan are similar to, and based on, the terms of the Company's previous employee share option plan. In particular, pursuant to the new Reed Resources Ltd Employee Share Option Plan the Board may, in its absolute discretion, offer the opportunity to subscribe for options over fully paid ordinary shares of the Company to employees and consultants. Appendix 1 of this Explanatory Statement sets out the full terms of the new Reed Resources Ltd Employee Share Option Plan for the Shareholders' reference, however by way of summary the key terms are as follows:

• employees (whether full-time or part-time) and consultants to the Company or an associated company shall be eligible for an offer of options under the plan;

• the options shall have no issue price;

• the exercise price of the options shall be an amount as determined by the Board (but shall not be less than the minimum exercise price permitted by the ASX Listing Rules);

• • the expiry date of the options shall be a date as determined by the Board (but in any event shall not be a date more than 10 years from the date of the offer of options);

• the Board may impose additional terms and conditions upon the offer or exercise of the options;

• no options shall be exercisable within 12 months of the grant of the options;

• in respect of each recipient, a maximum of 50% of the options granted shall be exercisable after 12 months and prior to 18 months of the grant of options;

• in respect of each recipient, there shall be no restrictions on the exercise of options after 18 months of the grant of options;

• offers shall not be made under the Reed Resources Ltd Employee Share Option Plan if the number of Shares which would be issued pursuant to the exercise of all options the subject of the proposed offer, when aggregated with the number of Shares which would have been issued if each outstanding option to acquire an unissued Share under an employee share option scheme established by the Company during the previous 5 years were to be accepted or exercised, exceeds 5% of the total number of issued Shares as at the date the proposed offer or invitation is considered; and

• the Board may, subject to the ASX Listing Rules, alter, delete or add to the Reed Resources Ltd Employee Share Option Plan rules at any time.

Approvals required

ASX Listing Rule 7.1 provides that, without approval of the Shareholders, the Company must not issue or agree to issue more equity securities if such issue, if aggregated with the securities issued by the Company without approval and which were not subject to an exemption, during the previous 12 months, would be such amount that would exceed 15% of the issued shares at the commencement of that 12 month period (subject to certain rules and exemptions not relevant to the Company's present circumstances).

ASX Listing Rule 7.2 Exception 9 however provides that ASX Listing Rule 7.1 will not apply to an issue under an employee incentive scheme provided that Shareholders approve the issue of securities under the scheme as an exception to ASX Listing Rule 7.1.

Under Resolution 8 the Company seeks Shareholder approval of the Reed Resources Ltd Employee Share Option Plan and the issue by the Company of options pursuant to the Reed Resources Ltd Employee Share Option Plan.

Recommendation of Board

The Directors recommend that Shareholders vote in favour of the resolution to approve the Reed Resources Ltd Employee Share Option Plan and the issue by the Company of options pursuant to the Reed Resources Ltd Employee Share Option Plan.

6. Adoption of Remuneration Report

Resolution 9: Adoption of Remuneration Report

The Remuneration Report for the financial year ended 30 June 2007 is set out on pages 20 and 21 of the 2007 Annual Report.

The Remuneration Report sets out the Company's remuneration arrangements for all Directors and certain other executives.

Section 250R(2) of the Corporations Act requires a resolution that, at the Annual General Meeting, the Remuneration Report be adopted be put to the vote at this Annual General Meeting. Pursuant to section 250R(3) of the Corporations Act , the vote on the resolution is advisory only and does not bind the Directors or the Company.

Section 250SA of the Corporations Act requires that a reasonable opportunity be allowed to Shareholders at the meeting to ask questions about, or make comments on, the Remuneration Report.

Recommendation of Board

The Directors recommend that Shareholders vote in favour of the resolution to adopt the Remuneration Report. It is noted that each of the Directors has a conflict of interest in recommending that Shareholders vote in favour of Resolution 9, as each Director has received, and continues to receive, remuneration as described in the Remuneration Report.

APPENDIX 1 – EMPLOYEE SHARE OPTION PLAN

Reed Resources Ltd Employee Share Option Plan 2007

Allens Arthur Robinson Level 37 QV.1 Building 250 St Georges Terrace Perth WA 6000 Tel 61 8 9488 3700 Fax 61 8 9488 3701 www.aar.com.au

© Copyright Allens Arthur Robinson 2007

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1. Definitions and Interpretation

• 1.1 In these Rules, unless the context otherwise requires, the following words and expressions shall have the following meanings:

Associated Company means at any time any body corporate that at that time is a related body corporate of the Company within the meaning of section 50 of the Corporations Act 2001;

ASX means ASX Limited (ABN 98 008 624 691);

Bid Period , in relation to a takeover bid in respect of shares in the Company, means the period referred to in the definition of that expression in section 9 of the Corporations Act 2001 provided that where a takeover bid is publicly announced prior to the service of a bidder's statement on the Company in relation to that takeover bid, the Bid Period shall be deemed to have commenced at the time of that announcement;

Board means the directors acting as a the board of directors of the Company or a committee appointed by such board of directors;

Business day means a day on which the stock market of ASX is open for trading in securities;

Certificate means the certificate issued by the Company to a Holder in respect of an Option;

Change of Control Event means a shareholder, or a group of associated shareholders, becoming entitled to sufficient shares in the Company to give it or them the ability, and that ability is successfully exercised, in general meeting, to replace all or a majority of the Board;

Company means Reed Resources Ltd ACN 099 116 631;

Director means a director of the Company from time to time but does not include a person who is only a director by virtue of being an alternate director;

Eligible Person means at any time a person who then is an employee (whether full-time or parttime) of or consultant to the Company or an Associated Company;

Eligible Nominee means:

• (a) a spouse or child of the Eligible Person;

• (b) a superannuation fund for the benefit of the Eligible Person;

• (c) a trust of which the Eligible Person (and/or the spouse of the Eligible Person or a company controlled by the Eligible Person or the spouse of the Eligible Person) is the trustee or appointor;

• (d) a company controlled by the Eligible Person and/or the spouse of the Eligible Person; or

• (e) any other person or corporation approved by the Directors (in their absolute discretion);

Exercise Price means, in respect of an Option, the subscription price per Share, determined in accordance with clause 15, payable by a Holder on exercise of the Option;

Expiry Date means, in relation to an Option, the date determined by the Board prior to the offer of the relevant Options, subject to any restriction in the Corporations Act 2001 from time to time but in any event no longer than 10 years from the date of grant of the Option;

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Holder means, in relation to an Option, the person (whether an Eligible Person or an Eligible Nominee) entered into the Company's register of options as the holder of that Option;

Issue Date means, in relation to an Option, the date on which the Company grants that Option;

Listing Rules means the Official Listing Rules of ASX as they apply to the Company;

Month means calendar month;

Official Quotation has the meaning ascribed to it in the Listing Rules;

Option means an Option issued under the Plan to subscribe (subject to clauses 14.2 and 14.4) for a Share;

Permanent Disablement means, in relation to an Eligible Person, that the Eligible Person has, in the opinion of the board, after considering such medical and other evidence as it sees fit, become incapacitated to such an extent as to render the Eligible Person unlikely ever to engage in any occupation for which he or she is reasonably qualified by education, training or experience.

Plan means the Reed Resources Ltd Employee Share Option Plan established in accordance with these Rules;

Redundancy means, in relation to an Eligible Person, a determination by the Board that the Company's need to employ a person for the particular kind of work carried out by that Eligible Person has ceased (but, for the avoidance of any doubt, does not include the dismissal of an Eligible Person for personal or disciplinary reasons or where the Eligible Person leaves the employ of the Company of his or her own accord);

Retirement means, in relation to an Eligible Person, bona fide occupational retirement by that Eligible Person from the Company at such age is considered appropriate by the Board in its discretion;

Rules means these rules, as amended from time to time;

Series means, in relation to Options, Options with a common Issue Date; and

Shares means fully paid ordinary shares in the capital of the Company.

• 1.2 In these Rules, unless a contrary intention appears:

• (a) where an expression is defined, another part of speech or grammatical form of that expression has a corresponding meaning;

• (b) the singular includes the plural and vice versa;

• (c) a reference to a gender includes all genders; and

• (d) an expression defined in, or given a meaning for the purposes of, the Corporations Act 2001 has the same meaning where used in these Rules.

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2. Establishment and Termination of the Plan

• 2.1 The Board will establish and administer the Plan in accordance with the terms and conditions set out in these Rules and otherwise as it determines from time to time in its absolute discretion.

• 2.2 The Board may terminate the Plan, or suspend its operation for any period it considers desirable, at any time that it consider appropriate.

• 2.3 The Board may not issue any further Options after the Plan has been terminated. However, these Rules will continue to apply to Options on issue at the date of such termination until the last of those Options lapses or is exercised.

3. Purpose of Plan

• 3.1 The purpose of this Plan is to:

• (a) recognise the ability and efforts of the employees of and consultants to the Company who have contributed to the success of the Company;

• (b) provide an incentive to the employees and consultants to achieve the long term objectives of the Company and improve the performance of the Company; and/or

• (c) attract persons of experience and ability to employment or consultancy with the Company and foster and promote loyalty between the Company and its employees and consultants.

4.

Eligibility

• 4.1 Subject to these Rules, the Board may from time to time determine that an Eligible Person is entitled to participate in the Plan and the extent of that participation. Prior to making that determination, the Board must consider:

• (a) the position the Eligible Person occupies within the Company;

• (b) the record of employment of the Eligible Person with the Company;

• (c) the potential contribution of the Eligible Person to the growth of the Company;

• (d) the extent (if any) of the existing participation of the Eligible Person (or any Eligible Nominee in relation to that Eligible Person) in the Plan; and

• (e) any other matters which the Board considers relevant.

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• 4.2 The Board may exercise its powers in relation to the participation of any Eligible Person on any number of occasions.

5. Offer of Options

• 5.1 Subject to these Rules and to the Listing Rules, the Company (acting through the Board) may offer Options to any Eligible Person at such times and on such terms as the Board considers appropriate. Each offer must state:

• (a) that the Eligible Person to whom it is addressed may accept the whole or any lesser number of Options offered. The offer may stipulate a minimum number of Options and any multiple of such minimum or any other number which may be accepted;

• (b) the period within which the offer may be accepted, and the period or periods during which the Options or any of them may be exercised and the Expiry Date;

• (c) the method of calculation of the Exercise Price; and

• (d) any other matters which the Board may determine.

6. Accepting Offers

• 6.1 Upon receipt of an offer of Options, an Eligible Person may, within the period specified in the offer:

• (a) accept the whole or any lesser number of Options offered by notice in writing to the Board; or

• (b) nominate a nominee, who must be an Eligible Nominee, in whose favour the Eligible Person wishes to renounce the offer by notice in writing to the Board.

• 6.2 Upon:

• (a) receipt of the acceptance referred to in paragraph 6.1(a); or

• (b) the Eligible Nominee accepting the whole or any lesser number of Options offered by notice in writing to the Board,

then the Eligible Person or the Eligible Nominee, as the case may be, will be taken to have agreed to be bound by these Rules and will be granted Options subject to these Rules.

• 6.3 If Options are issued to an Eligible Nominee of an Eligible Person, the Eligible Person must, without limiting any provision in these Rules, ensure that the Eligible Nominee complies with these Rules.

7. No consideration

No consideration is payable for a grant of an Option, unless the Board decides otherwise.

8. Certificates

Certificates for Options will be dispatched within 10 Business Days after their Issue Date.

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9. Quotation

• 9.1 The Company will not apply for Official Quotation of any Options.

• 9.2 If shares of the same class as those allotted under the Plan are listed on the ASX, the Company must apply for Official Quotation of those Shares allotted pursuant to the exercise of Options within the time required by the Listing Rules after the date of allotment.

10. Transfer of Options

• In addition to the transfer of Options pursuant to clause 13.4(a), Options are transferable to an Eligible Nominee, but not otherwise.

11. Exercise of Options

• 11.1 Subject to these Rules, the following restrictions apply to the exercise of the Options:

• (a) no Options are exercisable within 12 months of the Issue Date;

• (b) a maximum of 50% of the Options issued to an Eligible Person or Eligible Nominee of that Eligible Person are exercisable after 12 months and prior to 18 months from the Issue Date; and

• (c) after 18 months from the Issue Date there are no restrictions on the Exercise of Options in the terms of this Clause 11.1.

• 11.2 Notwithstanding paragraph 11.1, all Options may be exercised:

• (a) during a Bid Period; or

• (b) at any time after a Change of Control Event has occurred; or

• (c) on an application under section 411 of the Corporations Act 2001, if a court orders a meeting to be held concerning a proposed compromise or arrangement for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company.

• 11.3 Options not exercised on or before the Expiry Date will automatically lapse.

• 11.4 Options may only be exercised by notice in writing to the Board delivered to the registered office of the Company. The notice must specify the number of Options being exercised and must be accompanied by:

• (a) the Exercise Price for the number of Options specified in the notice; and

• (b) the Certificate for those Options, for cancellation by the Company.

The notice is only effective (and only becomes effective) when the Company has received value for the full amount of the Exercise Price (for example, if the Exercise Price is paid by cheque, by clearance of that cheque).

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• 11.5 Subject to paragraph 11.3, within 10 Business Days after the notice referred to in clause 11.4 becoming effective, the Board must:

• (a) allot and issue the number of Shares specified in the notice to the Holder;

• (b) cancel the Certificate for the Options being exercised; and

• (c) if applicable, issue a new Certificate for any remaining Options covered by the Certificate accompanying the notice.

12. Shares allotted on exercise of options

• 12.1 All Shares allotted upon exercise of Options rank pari passu in all respects with Shares previously issued and, in particular, entitle the holder of the Shares to participate fully in:

• (a) dividends declared by the Company after the date of allotment; and

• (b) all issues of securities made or offered pro rata to holders of Shares.

13. Ceasing to be an Eligible Person

• 13.1 Unless otherwise determined by the Board, if at any time an Eligible Person ceases to be an Eligible Person for any reason other than Retirement, Permanent Disability, Redundancy or death, all Options held by such Eligible Person, or if appropriate, his or her Eligible Nominee, will automatically lapse.

• 13.2 For the avoidance of doubt, if at any time an Eligible Person ceases to be an Eligible Person by reason of Retirement, Permanent Disability, Redundancy or death, all Options held by such Eligible Person, or if appropriate, his or her Eligible Nominee, will automatically lapse upon the earlier of:

• (a) the expiration of 3 months of the date of Retirement, Redundancy or death or of the date of the Board's determination of Permanent Disability;

• (b) the Expiry Date of the Options; or

• (c) such longer period as the Board may determine.

• 13.3 A certificate signed by the company secretary of the Company stating that a person ceased for any reason to be an Eligible Person shall (in the absence of manifest error) be conclusive for the purposes of the Plan, both as to such occurrence and the date of such occurrence.

• 13.4 If at any time prior to the Expiry Date of any Options a Holder dies, the deceased Holder's legal personal representative may:

• (a) elect to be registered as the new Holder of the deceased Holder's Options;

• (b) whether or not he becomes so registered, exercise those Options (subject nevertheless to Clause 13.2) as if he were the Holder of them in accordance with these Rules; and

• (c) if the deceased Holder had already given the Company a notice of exercise of his or her Options, pay the Exercise Price in respect of those Options.

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14. Entitlement to participate in future issues

14.1 New Issues

Holders may only participate in new issues of securities to holders of Shares if an Option has been exercised and Shares allotted in respect of the Option before the record date for determining entitlements to the issue. The Company must give notice as required under the Listing Rules to Holders of any new issue before the record date for determining entitlements to the issue in accordance with the Listing Rules.

14.2 Bonus Issues

If there is a bonus share issue ( Bonus Issue ) to the holders of Shares, the number of Shares over which an Option is exercisable will be increased by the number of Shares which the Holder would have received if the Option had been exercised before the record date for the Bonus Issue ( Bonus Shares ). The Bonus Shares must be paid up by the Company out of the profits or reserves (as the case may be) in the same manner as was applied in the Bonus Issue and upon issue rank pari passu in all respects with the other shares of that class on issue at the date of issue of the Bonus Shares.

14.3 Pro Rata Issues

If there is a pro rata issue (other than a Bonus Issue) to the holders of Shares during the currency of, and prior to the exercise of any Options, the Exercise Price of an Option will be adjusted in the manner provided for in the Listing Rules.

14.4 Reorganisation of Capital

If, prior to the expiry of any Options, there is a reorganisation of the issued capital of the Company, Options will be reorganised in accordance with the Listing Rules.

14.5 Advice

In accordance with the Listing Rules, the Company must give notice to each Holder of any adjustment to the number of Shares for which the Holder is entitled to subscribe or to the Exercise Price pursuant to the provisions of clauses 14.2, 14.3 or 14.4.

15. Exercise price of options

The method of calculation of the Exercise Price of each Option will be determined by the Board (but not less than the minimum exercise price permitted by the ASX Listing Rules).

16. Number of options to be issued

Offers shall not be made under the Plan if the number of Shares which would be issued pursuant to the exercise of all Options the subject of the proposed offer, when aggregated with the number of Shares which would have been issued if each outstanding option to acquire an unissued Share under an employee share option scheme established by the Company during the previous 5 years were to be accepted or exercised, exceeds 5% of the total number of issued Shares as at the date the proposed offer or invitation is considered.

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17. Amendments to the rules

The Board may subject to the Listing Rules alter, delete or add to these Rules at any time (save for the provisions of clause 16).

18. Powers of the Board

The Plan shall be administered by the Board who shall have the power to:

• (a) determine procedures from time to time for administration of the Plan consistent with these Rules;

• (b) resolve conclusively all questions of fact or interpretation arising in connection with the Plan; and

• (c) delegate to any one or more persons for such period and on such conditions as the Board may determine to exercise any of the Board's powers or discretions arising under the Plan.

19. Notices

Notices may be given by the Company to any Holder either personally or by sending by post to his or her address as noted in the Company's records or to the address (if any) within the Commonwealth of Australia supplied by him to the Company for the giving of notices. Notices for any overseas Holders shall be forwarded and posted by air. Where a notice is sent by post the notice shall be deemed to be served on the day after posting. The signature of any notice may be given by any Director or secretary of the Company. A Notice of Exercise shall not be deemed to be served on the Company until actually received.

20. No compensation or damages

• 20.1 The rights and obligations of any Holder under the terms of his or her employment with the Company are not affected by his or her participation in the Plan.

• 20.2 These Rules do not form part of, and will not be incorporated into, any contract of engagement or employment between a Holder and the Company.

• 20.3 No Holder has any rights to compensation or damages as a result of the termination of his or her employment, so far as those rights arise or may arise from the Holder ceasing to have rights under the Plan as a result of the termination.

21. Governing law

This plan and any Options issued under it are governed by the laws of Western Australia and the Commonwealth of Australia.

APPENDIX 2 – TERMS OF OPTIONS (CONSULTANTS)

Terms and Conditions of Offer

• 1.1 The Company offers you up to a maximum [NUMBER] Options, each in respect of one unissued fully paid ordinary share in the Company. The Options will be issued for no consideration and there are no dividends payable or voting rights attached to the Options.

• 1.2 Acceptance of the Options being offered is expressed by signing this Acceptance Form and returning it to the Company Secretary, by post or by hand, no later than [DATE] at 97 Outram Street, West Perth, Western Australia 6005. You may accept the offer of Options in whole or in part, but if the offer of Options is accepted in part then you may do so only in multiples of 100,000 Options. If the Company receives your Acceptance Form within the time stated above, the Options applied for will be issued to you by [DATE]. The Company will give you one or more Option Certificate(s) in respect of the Options issued to you.

• 1.3 The offer of Options may only be accepted by you or a nominee nominated by you who is either:

your spouse or child;

a superannuation fund for the benefit of you;

a trust of which you (and/or your spouse or a company controlled by you and/or your spouse) is the trustee or appointor;

a company controlled by you and/or your spouse; or

any other person or corporation approved by the Directors of the Company in their absolute discretion.

• 1.4 There are no restrictions as to the time at which any or all the Options issued to you may be exercised, and exercise of the Options is at your sole discretion.

• 1.5 For the avoidance of doubt, all Options may be exercised:

• during any Bid Period (as defined in the Corporations Act); or

at any time after an event in which a change of control of the Company has occurred; or

on an application under section 411 of the Corporations Act 2001, if a court orders a meeting to be held concerning a proposed compromise or arrangement for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company.

• 1.6 Options not exercised on or before 31 December 2012 will automatically lapse.

• 1.7 Options may only be exercised by notice in writing to the Board delivered to the registered office of the Company. The notice must specify the number of Options being exercised and must be accompanied by:

• (a) the exercise price for the number of Options specified in the notice; and

• (b) the certificate for those Options, for cancellation by the Company.

The notice is only effective (and only becomes effective) when the Company has received value for the full amount of the exercise price (for example, if the exercise price is paid by cheque, by clearance of that cheque).

• 1.8 All shares of the Company allotted upon exercise of Options rank pari passu in all respects with the fully paid ordinary shares of the Company previously issued and, in particular, shall have rights to participate fully in:

• (a) dividends declared by the Company after the date of allotment; and

• (b) all issues of securities made or offered pro rata to holders of ordinary shares of the Company.

• 1.9 The shares issued pursuant to the Options only carry an entitlement to participate in new issues of securities to holders of ordinary shares if an Option has been exercised and those shares allotted in respect of the Option before the record date for determining entitlements to the issue.

• 1.10 If there is a bonus share issue ( Bonus Issue ) to the existing holders of ordinary shares, the number of ordinary shares over which an Option is exercisable will be increased by the number of ordinary shares which you would have received if the Option had been exercised before the record date for the Bonus Issue ( Bonus Shares ). The Bonus Shares will be paid up by the Company out of the profits or reserves (as the case may be) in the same manner as was applied in the Bonus Issue and upon issue rank pari passu in all respects with the other shares of that class on issue at the date of the Bonus Shares.

• 1.11 If there is a pro rata issue (other than a Bonus Issue) to the existing holders of ordinary shares during the currency of, and prior to the exercise of any Options, the exercise price of the Options will be adjusted in the manner provided for in the Listing Rules.

• 1.12 If, prior to the expiry of any Options, there is a reorganisation of the issued capital of the Company, Options will be reorganised in accordance with the Listing Rules.

APPENDIX 3 – TERMS OF OPTIONS (CHRISTOPHER JOHN REED)

Terms and Conditions of Offer

The following sets out the key terms of the options to be issued to Christopher John Reed, subject to the proposed grant being approved by the resolution of the shareholders of the Company at its extraordinary general meeting scheduled to be held on DATE:

• (a) There are no restrictions as to the time at which any or all the Options issued to Christopher John Reed may be exercised, and exercise of the Options is at the sole discretion of Christopher John Reed.

• (b) For the avoidance of doubt, all Options may be exercised:

• (i) during any Bid Period (as defined in the Corporations Act); or

• (ii) at any time after an event in which a change of control of the Company has occurred; or

• (iii) on an application under section 411 of the Corporations Act 2001, if a court orders a meeting to be held concerning a proposed compromise or arrangement for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company.

• (c) Options not exercised on or before 31 December 2012 will automatically lapse.

• (d) Options may only be exercised by notice in writing to the Board delivered to the registered office of the Company. The notice must specify the number of Options being exercised and must be accompanied by:

• (i) the exercise price for the number of Options specified in the notice; and

• (ii) the certificate for those Options, for cancellation by the Company.

The notice is only effective (and only becomes effective) when the Company has received value for the full amount of the exercise price (for example, if the exercise price is paid by cheque, by clearance of that cheque).

• (e) All shares of the Company allotted upon exercise of Options rank pari passu in all respects with the fully paid ordinary shares of the Company previously issued and, in particular, shall have rights to participate fully in:

• (i) dividends declared by the Company after the date of allotment; and

• (ii) all issues of securities made or offered pro rata to holders of ordinary shares of the Company.

• (f) The shares issued pursuant to the Options only carry an entitlement to participate in new issues of securities to holders of ordinary shares if an Option has been exercised and those shares allotted in respect of the Option before the record date for determining entitlements to the issue.

• (g) If there is a bonus share issue ( Bonus Issue ) to the existing holders of ordinary shares, the number of ordinary shares over which an Option is exercisable will be increased by the number of ordinary shares which Christopher John Reed would have received if the Option had been exercised before the record date for the Bonus Issue ( Bonus Shares ). The Bonus Shares will be paid up by the Company out of the profits or reserves (as the case may be) in the same manner as was applied in

the Bonus Issue and upon issue rank pari passu in all respects with the other shares of that class on issue at the date of the Bonus Shares.

• (h) If there is a pro rata issue (other than a Bonus Issue) to the existing holders of ordinary shares during the currency of, and prior to the exercise of any Options, the exercise price of the Options will be adjusted in the manner provided for in the Listing Rules.

• (i) If, prior to the expiry of any Options, there is a reorganisation of the issued capital of the Company, Options will be reorganised in accordance with the Listing Rules.

Reed Resources Ltd ABN 89 099 116 631

APPOINTMENT OF PROXY ANNUAL GENERAL MEETING

To assist you in exercising your right to vote your shares at the forthcoming Annual General Meeting of the Company to be held at 3:00 pm Monday 26 November 2007, you may wish to appoint a person who is attending as your proxy.

TO APPOINT A PROXY, FOLLOW THE STEPS BELOW

Name of Shareholder

Insert here the name and address of shareholder.

..............................................................................

Address

.............................................................................. ..............................................................................

APPOINTS

Name of Proxy .....................................................

Address ...............................................................

..............................................................................

or failing that person the Chairperson of the meeting;

OR

THE CHAIRPERSON OF THE MEETING

to vote in accordance with the directions on this form, at the Annual General Meeting of the Company and at any adjournment thereof. If the Chairperson holds the proxy and if no specific voting direction on the following page of this form is given:

Insert here the name and address of the person you wish to appoint as proxy. Shareholders cannot appoint themselves.

OR

Mark the box opposite if you wish to appoint only the Chairperson of the Meeting to act as your proxy.

If you plan to attend the Meeting your proxy’s right to speak and vote for you will be suspended while you are present.

• assuming that the Company Chairman chairs the meeting, his intention is to exercise the proxy in favour of each Resolution;

• • it is acknowledged that the Chairperson may exercise the proxy even if he or she has an interest in the outcome of the Resolution and votes cast by him or her other than as proxy holder will be disregarded because of that interest.

SIGNATURE OF SHAREHOLDER(S)

� .........................................................................

• (*) Individual shareholder

• (*) Director

• (*) Sole Director and Sole Secretary

� .........................................................................

• (*) Director/Secretary

IF A CORPORATION AFFIX COMMON SEAL (OPTIONAL) Dated this day of 2007

SHAREHOLDER MUST SIGN HERE AND DATE HERE

This proxy must be signed by the shareholder or by the shareholder’s attorney, or if a corporation, either under its common seal or by its authorised officers, or attorney who has not received any notice of revocation.

If this proxy is signed by a person who is not the registered shareholder, then the relevant authority must either have been exhibited previously with the Company or be enclosed with this proxy.

• (*) Delete if not applicable

FOR YOUR VOTE TO BE COUNTED, THIS FORM MUST BE RECEIVED NO LATER THAN THE YOUR VOTE TIME SHOWN ON IS THE REVERSE SIDE IMPORTANT

COMPLETE THE REVERSE SIDE IF YOU WISH TO SPECIFICALLY DIRECT YOUR PROXY HOW TO VOTE ON EACH RESOLUTION OR

IF YOU DO NOT WISH TO SO DIRECT YOUR PROXY HOW TO VOTE, MARK THIS BOX AND BY SO DOING DIRECT YOUR PROXY TO VOTE AS YOUR PROXY THINKS FIT. BY MARKING THIS BOX YOU ACKNOWLEDGE THAT THE CHAIRMAN MAY EXERCISE YOUR PROXY EVEN IF HE HAS AN INTEREST IN THE OUTCOME OF THE RESOLUTION AND VOTES CAST BY HIM OTHER THAN AS PROXY HOLDER WILL BE DISREGARDED BECAUSE OF THAT INTEREST.

Reed Resources Ltd ABN 89 099 116 631

Directing your Proxy how to vote

Resolutions	Resolutions	For	Against	Abstain	Abstain
1.	Re-election of David Reed as a Director	�	�	�
2.	Ratification of placement to RAB Special Situations (Master) Fund Limited	�	�	�
3.	Ratification of the issue of Shares (being
	the shortfall shares of the Company's Share Purchase Plan) to Transocean	�	�	�
	Securities Pty Ltd
4.	Ratification of the grant of options to
	Transocean Securities Pty Ltd (as part of its remuneration as underwriter of the	�	�	�
	Company's Share Purchase Plan)
5.	Ratification of the grant of options to
	certain employees and consultants of the Company.	�	�	�
6.	Approval of the proposed grant of options to Christopher John Reed	�	�	�
7A.	Approval of the proposed issue of Shares
	to sophisticated or professional investors arranged by Transocean Securities Pty	�	�	�
	Ltd.
7B.	Approval of the proposed grant of options
	to Transocean Securities Pty Ltd (by way of success fee).	�	�	�
8.	Approval of future issues of securities
	under the Reed Resources Employee Share Option Plan	�	�	�
9.	Adoption of Company's 2007 Remuneration Report	�	�	�

==> picture [163 x 423] intentionally omitted <==

A Shareholder who is entitled to cast 2 or more votes may appoint 2 persons (whether Shareholders or not) to attend the Meeting and vote. If you appoint a second proxy, state here the proportion or number of votes given to the proxy appointed on this form:

(OPTIONAL)

APPOINTMENT OF A SECOND PROXY

---

An additional proxy form will be supplied on request

Reed Resources Ltd ABN 89 099 116 631

Proxy Notes:

1. A member entitled to attend and cast 2 or more votes at the meeting is entitled to appoint 2 proxies. If a member does not specify the proportion or number of votes each proxy may exercise, each proxy may exercise half of the votes.

2. A proxy need not be a member of the Company.

3. Unless a member specifically directs the proxy how to vote on each Resolution, the proxy may vote as he or she thinks fit or abstain from voting. If the Chairperson is appointed and if no specific direction as to how to vote on each Resolution is given, and assuming that the Company Chairman chairs the meeting, his intention is to exercise the proxy in favour of each Resolution. It is acknowledged that the Chairperson may exercise the proxy even if he or she has an interest in the outcome of the Resolution and votes cast by him or her other than as proxy holder will be disregarded because of that interest.

1. In the case of an individual, a proxy must be under the hand of the individual or his or her attorney duly authorised in writing and, in the case of a corporation, a proxy must be under the common seal of that corporation, pursuant to section 127 of the Corporations Act or under the hand of its duly authorised officer/s or attorney.

2. To be valid, the form appointing the proxy and the power of attorney granted by members or other authority (if any) must be lodged at the registered office of the Company as set out below.

Your completed proxy must be received by 5:00 pm on Friday 23 November 2007: Deadline for receipt (a) The registered office of the Company – 97 Outram Street, West Perth, Western Australia; or of Proxy forms (b) By facsimile at the registered office of the Company – fax number (08) 9321 0556.

Reed Resources Ltd ABN 89 099 116 631

APPOINTMENT OF CORPORATE REPRESENTATIVE Pursuant to Section 250D of the Corporations Act

• _____ ( ACN/ARBN _____ )

(Insert name of Shareholder/Body Corporate & ACN/ARBN)

Hereby Authorises

---

(Insert name of appointee)

• ()1. To act as the Company’s representative at all meetings of: Reed Resources Ltd ABN 89 099 116 631*

• (*)2. To act as the Company’s Representative at the Annual General Meeting to be held at 3:00 pm on Monday 26 November 2007 and any adjournment thereof.

Dated this ____ day of _______ 2007

Executed by the Shareholder in accordance with its Constitution in the presence of:

(*) Director

(*) Sole Director & Sole Secretary

Director/Secretary Affix Common Seal here (optional)

(*) Delete if not applicable

This authority must be sent to the registered office of the Company, 97 Outram Street, West Perth, Western Australia or sent by facsimile to the Company, facsimile number (08) 9321 0556, by 5:00 pm Friday 23 November 2007 as set out in the Notice of Meeting which this appointment accompanies or handed in at the Meeting when registering as a company representative. In any case, the authority will be retained by the Company.