NEOMETALS LTD — AGM Information 2011

Oct 13, 2011

NOTICE OF

ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2011 Annual General Meeting of shareholders of Reed Resources Ltd ABN 89 099 116 631 ( Company ) will be held at the Celtic Club, 48 Ord Street, West Perth , on Tuesday, 15 November 2011 at 3:00pm Western Standard Time for the purpose of transacting the following business.

An Explanatory Statement and Proxy Form accompany, and form 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 2011

To receive the Annual Report of the Company for the period ended 30 June 2011 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 2011;

• 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 accordance with the terms of section 250T of the Corporations Act.

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2. Re-election of Vanessa Guthrie, David Reed and Peter Collins as Directors

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

Resolution 1

"THAT Vanessa Ann Guthrie, who was appointed as a Director on 17 June 2011 and in accordance with Article 11.12 of the Company’s Constitution holds office until this Annual General Meeting, and who is eligible and offers herself for reelection, be re-elected as a Director of the Company."

Resolution 2

"THAT David John 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 of the Company."

Resolution 3

"THAT Peter Lionel Fleury Collins, 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 of the Company."

3. Ratification of issue of shares

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

Resolution 4

“That for the purposes of ASX Listing Rule 7.4, and for all other purposes, the issue of 2,505,300 fully paid ordinary shares in the capital of the Company on 1 July 2011 to Mercator Gold Australia Pty Ltd (Subject to Deed of Company Arrangement) on the basis set out in the Explanatory Statement is ratified and approved.”

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 Resolution 4 by Mercator Gold Australia Pty Ltd (Subject to Deed of Company Arrangement) or its 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.

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4. Directors’ Remuneration

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

Resolution 5

"THAT for the purposes of Article 11.15 of the Company’s Constitution, ASX Listing Rule 10.17 and for all other purposes, the maximum aggregate sum that may be paid to Directors by way of remuneration for their services as directors of the Company be increased by $150,000 to $400,000 per annum, to be paid in accordance with the terms and conditions set out in the Explanatory Statement."

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 5:

• (a) by a Director of the Company or an associate of a Director; and

(b) as a proxy by a member of the key management personnel of the Company ( KMP ) or a Closely Related Party (such as close family members and any controlled companies) of a member of the KMP,

unless 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.

5. Approval of Performance Rights Plan

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

Resolution 6

"THAT, for the purposes of ASX Listing Rule 7.9 exception 9(b) and for all other purposes, the grant of performance rights and issue of shares on vesting of performance rights under the Company’s Performance Rights Plan be approved.”

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 6:

• (a) by a Director of the Company or an associate of a Director; and

• (b) as a proxy by a member of the key management personnel of the Company ( KMP ) or a Closely Related Party (such as close family members and any controlled companies) of a member of the KMP,

unless 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.

Resolution 7

"THAT, for the purposes of sections 200B and 200E of the Corporations Act and for all other purposes, the giving of benefits under the Company’s Performance Rights Plan to a person by the Company in connection with that person ceasing to hold a managerial or executive office in the Company or a related body corporate

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on the terms set out in the Explanatory Memorandum accompanying this Notice of Meeting be approved.”

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 7:

• (a) in any capacity by any shareholders who are employees of the Company (on the basis that any employee may become a managerial or executive officer of the Company in the future), the Directors and any associates of those persons; and

• (b) as a proxy by a member of the KMP or a Closely Related Party of a member of the KMP,

unless the vote is cast as proxy for a person entitled to vote in accordance with a direction on the proxy form.

6. Adoption of Remuneration Report

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

Resolution 8

"THAT for the purposes of section 250R(2) of the Corporations Act 2001 (Cth) the Remuneration Report for the year ended 30 June 2011 be adopted."

The Remuneration Report is set out in the 2011 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.

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 8:

• (a) by or on behalf of a member of the KMP as disclosed in the Remuneration Report;

• (b) by or on behalf of a Closely Related Party (such as close family members and any controlled companies) of a member of KMP; or

• (c) as a proxy by a member of the KMP or a KMP’s Closely Related Party, unless the vote is cast as proxy for a person entitled to vote in accordance with a direction on the proxy form.

7. Other Business

In compliance with section 250S(1) of the Corporations Act 2001 (Cth) the shareholders 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

Darren Wates Company Secretary Date: 7 October 2011

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EXPLANATORY STATEMENT

THIS EXPLANATORY STATEMENT accompanies and forms part of the notice of meeting convening the 2011 Annual General Meeting of shareholders of Reed Resources Ltd ABN 89 099 116 631 ( Company ) to be held at the Celtic Club, 48 Ord Street, West Perth, Western Australia, on Tuesday, 15 November 2011 at 3:00pm Western Standard Time.

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 an Appendix. This Explanatory Statement should be read in conjunction with the accompanying Notice.

PART A: VOTING

1. Definitions

In this Notice and Explanatory Statement:

AASB means the Australian Accounting Standards Board.

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

ASX means ASX Limited, or the Australian Securities Exchange, as the context requires.

Board means the board of Directors of the Company.

Closely Related Party has the meaning given in section 9 of the Corporations Act.

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

Constitution means the constitution of the Company.

Corporations Act means Corporations Act 2001 (Cth).

Director means a director of the Company.

Explanatory Statement means this explanatory statement incorporated in this Notice.

Key Management Personnel or KMP means key management personnel as defined in AASB Standard 124.

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.

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

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• (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 held.

3. Entitlement to Vote

The Company has determined that, for the purposes of the Corporations Act, the persons eligible to attend and vote at the Annual General Meeting are those persons who are registered shareholders of the Company at 3:00pm Western Standard Time on Sunday, 13 November 2011.

4. Proxies

• (a) Votes at the Annual General Meeting may be given personally or by proxy, attorney or representative.

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

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

• (d) Each shareholder who is entitled to cast 2 or more votes at this Annual General Meeting, may appoint up to 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. No shareholder may appoint more than 2 proxies.

• (e) In the case of a shareholder 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.

• (f) Any shareholder 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 (k).

• (g) Any corporation which is a shareholder 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 (k) or handed in at the Annual General Meeting when registering as a company representative.

• (h) Any directed proxies that are not voted on a poll at the Annual General Meeting by a shareholder’s appointed proxy will automatically default to the Chairman of the Annual General Meeting, who is required to vote proxies as directed on a poll.

• (i) Members of the KMP of the Company (which includes each of the Directors) will not be able to vote as proxy on Resolutions 5 to 8 unless the shareholder tells them how to vote. If a shareholder intends to appoint a member of the KMP (such

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as one of the Directors) as their proxy, the shareholder should ensure that they direct the member of the KMP how to vote on Resolutions 5 to 8.

• (j) If a shareholder intends to appoint the Chairman of the Annual General Meeting as their proxy, shareholders can direct the Chairman how to vote by either marking the boxes for each of Resolutions 5 to 8 (for example, if the shareholder wishes to vote ‘for’, ‘against’ or to ‘abstain’ from voting), or by marking the Chairman’s box on the proxy form (in which case the Chairman will vote in favour of these Resolutions).

• (k) 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 3:00pm Western Standard Time, Sunday, 13 November 2011:

At the Company’s registered office:

• (i) by delivery to the registered office – Level 1, 672 Murray Street, West Perth, Western Australia;

• (ii) by post to the registered office – Locked Bag 8, West Perth WA 6872; or

• (iii) by facsimile to the registered office – facsimile number +61 8 9321 0556; or

At the Company’s share registry:

• (iv) by post to the share registry – Computershare Investor Services Pty Limited, GPO Box 242, Melbourne, Victoria 3001; or

• (v) by facsimile to the share registry – 1800 783 447 (within Australia) or +61 3 9473 2555 (outside Australia).

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PART B: EXPLANATORY NOTES

5. Re-election of Directors

Resolution 1 – Re-election of Vanessa Guthrie

Under Article 11.11 of the Company’s Constitution the Directors may at any time appoint a person as an additional Director. Under Article 11.12, that person holds office until the next annual general meeting and is then eligible for re-election. Vanessa Guthrie was appointed as a Director on 17 June 2011, and now offers herself for re-election.

Resolutions 2 and 3 – Re-election of David Reed and Peter Collins

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 and Peter Collins will retire at the Annual General Meeting in accordance with this requirement. Both David Reed and Peter Collins offer themselves for re-election.

Information in respect of Vanessa Guthrie is set out below:

Dr Vanessa Guthrie

Term of Office: Appointed 17 June 2011

Company Board Committee Membership: Audit and Risk Management Committee Current External Directorships: None

Skills, Experience and Expertise: Dr. Guthrie holds a Bachelor of Science with Honours II (I) (Geology), Doctor of Philosophy (Geology) and a graduate diploma in Business Management. Dr Guthrie has more than 20 years of experience in the Australian resources sector and has previously covered a number of diverse roles in mining, refining, smelting and gas production operations including roles ranging from Company Secretary to Mine Manager of Australia’s largest bauxite operation and with the calibre of Woodside Energy Ltd, Alcoa World Alumina Australia, WMC Resources, RGC Limited, Goldfields Limited and Pasminco Ltd.

Information in respect of David Reed is set out below:

David Reed OAM

Term of Office: Appointed 20 December 2001

Current External Directorships: None

Skills, Experience and Expertise: Mr David Reed is a former Fellow member of CPA Australia, and graduated in accountancy in 1965. He has 40 years experience in stock broking 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. Mr Reed was also Chairman of CIBC Australia from 1997 to 2003. 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 of the Diggers and Dealers Forum in Kalgoorlie, and a past Secretary of the Amalgamated Prospectors and Leaseholders Association.

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Information in respect of Peter Collins is set out below:

Peter Collins

Term of Office: Appointed 20 December 2001

Company Board Committee Membership: Nomination and Remuneration Committee and Audit and Risk Management Committee

Current External Directorships: None

Skills, Experience and Expertise: Dr Peter Collins is a geologist with over 35 years experience in the minerals industry, government and academia. He has a BSc (Hons) and a PhD in geology from the University of Tasmania and currently holds a senior lecturing position in economic geology at Curtin University, Perth. Dr Collins is widely experienced in investigation and exploration of gold, base metals, ferrous metals, tintungsten and pegmatite mineralisation and was responsible for discovery of the Sand George gold deposit at Comet Vale, WA.

Recommendation of Directors

The Directors, after considering the recommendations of the Nomination and Remuneration Committee, recommend that shareholders vote in favour of Resolutions 1, 2 and 3. Neither Vanessa Guthrie, David Reed nor Peter Collins make any recommendation in relation to their own re-election.

The Chairman intends to vote all available proxies in favour of Resolutions 1 – 3.

6. Ratification of issue of shares

Resolution 4 – Ratification of issue of shares

On 1 July 2011, the Company issued 2,505,300 ordinary shares to Mercator Gold Australia Pty Ltd (Subject to Deed of Company Arrangement) ( Mercator ) as part of the consideration payable to Mercator by the Company on completion of the acquisition of the Meekatharra Gold Project. Details of the acquisition of the Meekatharra Gold Project were announced to ASX on 12 January 2011 and 1 July 2011.

ASX Listing Rule 7.1 provides that, without the approval of the shareholders, the Company must not issue or agree to issue equity securities if those securities, when aggregated with the securities issued by the Company without approval and which were not subject to an exemption during the previous 12 months, exceed 15% of the number of securities on issue at the commencement of that 12 month period (subject to certain rules and exemptions).

The issue and allotment of shares outlined in Resolution 4 does not exceed the 15% limit. However, ASX Listing Rules 7.1 and 7.4 provide that, where a company in general meeting ratifies an issue of equity securities, the issue will be treated as having been made with approval for the purpose of ASX Listing Rule 7.1, thereby enabling the company to issue further equity securities in the following 12 months without exceeding the 15% limitation.

Shareholder approval is sought so as to refresh the Company’s 15% equity security placement limit pursuant to ASX Listing Rule 7.1.

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In order to satisfy ASX Listing Rule 7.4, Resolution 4 proposes the ratification of share issue described above, in order to comply with ASX Listing Rule 7.4.

For the purposes of ASX Listing Rule 7.5, the following further information is provided in relation to Resolution 4:

Number of securities issued: 2,505,300 fully paid ordinary shares

Price at which the securities were issued: The shares were issued for nil cash consideration, as part consideration for the acquisition of the Meekatharra Gold Project.

Terms of the securities: The issued shares are fully paid ordinary shares on the same terms as existing fully paid ordinary shares on issue and ranking equally in all respects with the existing fully paid ordinary shares on issue.

Name of allottee: Mercator Gold Australia Pty Ltd (Subject to Deed of Company Arrangement).

Intended use of the funds raised: No funds were raised from the issue. The shares were issued for nil cash consideration, as part consideration for the acquisition of the Meekatharra Gold Project.

Recommendation of Board

The Directors recommend that shareholders vote in favour of Resolution 4 to ratify the share issue described above.

The Chairman intends to vote all available proxies in favour of Resolution 4.

7. Directors’ remuneration

Resolution 5 – Directors’ remuneration

Article 11.15 of the Company’s Constitution requires that the maximum aggregate sum per annum to be paid to the Directors (excluding salaries of executive Directors) from time to time will not exceed the sum determined by the shareholders in general meeting and the maximum aggregate fixed sum will be divided between the Directors as the Directors shall determine (or, in default of agreement between them, then in equal shares). ASX Listing Rule 10.17 requires shareholder approval for any increase in the total amount of directors’ fees payable (excluding salaries paid to executive directors).

Resolution 5 seeks shareholder approval to increase the maximum aggregate sum per annum to be paid to the Directors by $150,000 to $400,000. The current cap of $250,000 was set by the Company on 26 November 2008.

The maximum aggregate sum per annum has been determined after reviewing similar companies listed on ASX. The Directors believe that this level of remuneration is in line with corporate remuneration of similar companies and will allow the Company to accommodate the recent increase in the number of Directors on the Board. Shareholders should note that the Directors do not intend to distribute all of the $400,000 (if approved) in the current year, rather it will assist in providing the flexibility to allow payment of appropriate level of fees to attract suitably qualified Directors and accommodating any further increase in the number of Directors over time.

The Chairman intends to vote all available proxies in favour of Resolution 5.

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8. Approval of Performance Rights Plan

Resolution 6 – Approval of performance rights plan

8.1 Background

As advised to the market on 1 August 2011, the Company has adopted a Performance Rights Plan ( PRP ) for its staff.

The Company believes that the PRP will assist it to remunerate and provide ongoing incentives to its employees. The Company will use the PRP to reward contributions to the Company’s performance and strengthen the link between the creation of value for shareholders and rewards for its employees.

In summary, the rules of the PRP enable the Company to issue performance rights to eligible personnel subject to performance hurdles and vesting conditions determined by the Company. Each performance right entitles the holder, for nil cash consideration, to one fully paid ordinary share in the Company if the applicable performance hurdles and vesting conditions set for that holder are satisfied.

A summary of the key rules of the PRP is set out in Appendix 1. A copy of the full rules of the PRP is available on the Company’s website (www.reedresources.com).

As also advised to the market on 1 August 2011, the Company has already granted a total of 285,000 performance rights to certain of its staff (none of whom are related parties of the Company). Those performance rights may result in the issue of 285,000 fully paid ordinary shares in the Company if the applicable performance hurdles and vesting conditions are satisfied over the next 12 to 24 months.

8.2 Why is approval being sought?

Broadly, ASX Listing Rule 7.1 prohibits the Company issuing equity securities which, in aggregate, exceed 15% of the fully paid ordinary share capital of the Company in any 12month period, unless the Company obtains shareholder approval for the issue or an exception applies.

Exception 9(b) in ASX Listing Rule 7.2 provides that Listing Rule 7.1 does not apply to the issue of equity securities by the Company under an employee incentive scheme if the scheme has been approved by shareholders within 3 years before the date of issue.

The 285,000 performance rights already granted will not fall within this exception because they were granted before shareholder approval of the PRP.

However, the Company is seeking approval of the PRP for the purposes of Listing Rule 7.2 exception 9(b) so that further grants of performance rights under the PRP, and shares issued on vesting of those performance rights, will not reduce the Company’s 15% capacity under Listing Rule 7.1.

The grant of any performance rights to a director of the Company will require specific approval under Listing Rule 10.14.

8.3 Chairman’s intentions

The Chairman intends to vote all available proxies in favour of Resolution 6.

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9. Approval of potential termination benefits under PRP

Resolution 7 – Approval of potential termination benefits under Performance Rights Plan

9.1 Background

The Corporations Act restricts the benefits that can be given to persons who hold a ‘managerial or executive office’ (as defined in the Act) on leaving their employment with the Company or any of its related bodies corporate (the Group ).

Under section 200B of the Corporations Act, a company may only give a person a benefit in connection with them ceasing to hold a managerial or executive office in the Group if the benefit is approved by shareholders or an exemption applies.

Amendments to the Corporations Act in 2009 significantly expanded the scope of these provisions and lowered the threshold for termination benefits that do not require shareholder approval. The term “benefit” has a wide meaning and may include benefits resulting from the Board exercising certain discretions under the rules of the PRP.

Specifically, where a participant in the PRP has left employment before their performance rights have vested, the Board may exercise its discretion to determine that some or all of the performance rights will vest and to determine the basis on which vesting will occur, having regard to the relevant performance hurdles at the time the participant leaves employment with the Group. The Board does not, however, have discretion to vest any unvested performance rights if the participant has been dismissed for fraudulent or dishonest behaviour. In those circumstances, the participant’s unvested performance rights will lapse.

The exercise of these discretions may constitute a “benefit” for the purposes of section 200B of the Corporations Act.

9.2 Shareholder approval sought

The Company is therefore seeking shareholder approval for the exercise of the Board’s discretion in respect of any current or future participant in the PRP who holds:

• (a) a managerial or executive office in the Group at the time of their leaving or at any time in the three years prior to their leaving; and

• (b) performance rights under the PRP at the time of their leaving.

Provided shareholder approval is given, the value of these benefits will not be counted towards the cap in the termination benefits that can be given to a participant without shareholder approval.

The Board’s current intention is to only exercise this discretion:

• (a) where the employee leaves employment without fault on their part; and

• (b) so as only to preserve that number of unvested performance rights as are prorated to the date of leaving, which then get vested in the same way as if the employee had remained and only vest to the extent that the performance conditions are met.

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9.3 Value of the benefits

The value of the termination benefits that the Board may give under the PRP cannot be determined in advance.

This is because various matters will or are likely to affect that value. In particular, the value of a particular benefit will depend on factors such as the Company’s share price at the time of vesting and the number of performance rights that the Board decides to vest.

The following additional factors may also affect the benefit’s value:

• (a) the participant’s length of service and the portion of any relevant performance periods that have expired at the time they leave employment;

• (b) the participant’s total fixed remuneration at the time grants are made under the PRP and at the time they leave employment; and

• (c) the number of unvested performance rights that the participant holds at the time they leave employment.

9.4 Chairman’s intentions

The Chairman intends to vote all available proxies in favour of Resolution 7.

10. Adoption of Remuneration Report

Resolution 8 – Adoption of Remuneration Report

The Remuneration Report for the financial year ended 30 June 2011 is set out in the 2011 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 the Annual General Meeting to include a vote on the adoption of the Remuneration Report. 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.

Under recent changes to the Corporations Act, if at least 25% of the votes cast on Resolution 8 are voted against adoption of the Remuneration Report at two consecutive annual general meetings, the Company will be required to put to Shareholders at the second annual general meeting a resolution proposing that another general meeting be held within 90 days, at which all of the Company’s Directors (other than the Managing Director) must go up for re-election.

The Directors encourage all shareholders to vote on Resolution 8.

The Chairman intends to vote all available proxies in favour of Resolution 8.

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APPENDIX 1 SUMMARY OF RULES OF PRP

(a)	The Board may determine which persons are eligible to receive grants of performance rights under the
	PRP and may invite eligible persons to participate in the PRP and be granted a number of performance
	rights on terms and conditions specified by the Board.
(b)	Performance rights will not be quoted and will not be transferable except with the Board’s consent or by
	force of law upon the participant’s death.
(c)	Performance rights confer on the participant no rights to vote, attend meetings, participate in a distribution
	of profit or a return of capital or any other participant rights or entitlements.
(d)	In general, performance rights vest when the applicable performance hurdles and vesting conditions are
	satisfied.
(e)	On vesting of a performance right, the Company will either issue or transfer to the participant a share in the
	Company.
(f)	The Company will apply for quotation on ASX of any shares issued under the PRP. Any shares issued
	under the PRP will rank equally with those traded on ASX at the time of issue, except as regards any rights
	attaching to shares by reference to a record date prior to the date of allotment.
(g)	Participants are not entitled to trade in shares issued on vesting of performance rights without the prior
	consent of the Board until the earlier to occur of:

• (i) the expiry of the period specified in the invitation to participate (not being longer than 7 years from the date of grant of the performance right); and

• (ii) the participant ceasing employment with the Company or one of its related bodies corporate.

• (h) Performance rights that do not vest and become exercisable in accordance with the applicable conditions will automatically lapse, unless otherwise determined by the Board.

• (i) Where, in the opinion of the Board, a participant acts fraudulently or dishonestly or is in breach of their obligations to the Company or a related body corporate, the Board may deem any unvested performance rights to have lapsed and any shares issued on vesting of performance rights to be forfeited, or where any shares have been sold by the participant, the Board may require the participant to pay all or part of the net proceeds of that sale to the Company.

• (j) Upon the cessation of a participant’s employment with the Company or a related body corporate:

• (i) by reason of death, disability, bona fide redundancy or other reason approved by the Board, and at that time the participant continues to satisfy any other relevant conditions of the grant, the Board may determine the extent to which performance rights held by the participant vest; or

• (ii) for any other reason, all performance rights held by the participant lapse.

• (k) In the event of a takeover bid for the Company, any performance rights granted to a participant will vest where, in the Board’s absolute discretion, pro rata performance is in line with the performance conditions applicable to those performance rights. In addition, in the event of a court-ordered arrangement or compromise, compulsory acquisition following a takeover bid or the winding up of the Company, the Board may, in its absolute discretion, determine that some or all of a participant’s performance rights vest if pro rata performance is in line with the performance conditions applicable to those performance rights.

• (l) If shares in the Company are issued under a bonus issue or there is a reorganisation (including a consolidation, subdivision, reduction or return) of the issued capital of the Company, the number or the amount (if any) payable on vesting or both of performance rights to which a participant is entitled will be adjusted by the Board to ensure that no advantage or disadvantage accrues to the participant.

• (m) The Board may amend or add to any of the rules of the PRP or the terms and conditions of any performance rights granted under the PRP, subject to certain restrictions.

• (n) The Board may establish a trust for the purpose of acquiring and holding shares issued on vesting of a performance right.

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ABN 89 099 116 631

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All your securities will be voted in accordance with your directions.

A p p ointm ent of P rox y

V oting 1 0 0 % of your h olding: Direct your proxy how to vote by mark ing one of the boxes opposite each Resolution. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on a Resolution your vote will be invalid on that Resolution.

V oting a p ortion of your h olding: Indicate a portion of your voting rig hts by inserting the percentag e or number of securities you wish to vote in the For, Ag ainst or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100% .

A p p ointing a second p rox y: Y ou are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentag e of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. W hen appointing a second proxy write both names and the percentag e of votes or number of securities for each in Step 1 overleaf.

A p rox y need not b e a securityh older of th e C om p any.

S igning Instructions

Individual: W here the holding is in one name, the securityholder must sig n.

J oint H olding: W here the holding is in more than one name, all of the securityholders should sig n.

P ow er of A ttorney: If you have not already lodg ed the Power of Attorney with the reg istry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

C om p anies: W here the company has a Sole Director who is also the Sole Company Secretary, this form must be sig ned by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sig n alone. Otherwise this form must be sig ned by a Director jointly with either another Director or a Company Secretary. Please sig n in the appropriate place to indicate the office held. Delete titles as applicable.

A ttending th e Meeting

Bring this form to assist reg istration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable forms".

Comments & Q uestions: If you have any comments or q uestions for the company, please write them on a separate sheet of paper and return with this form.

� Turn over to complete the form

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View the Annual Report:

U pdate your securityholding , 24 hours a day, 7 days a week :

w w w .investorcentre.com

w w w .reedresources.com

Y our s ecure a cces s informa tion is :

S R N /H IN : I9 9 9 9 9 9 9 9 9 9

� P LE A S E N O T E : For security reasons it is important that you k eep your SRN/HIN confidential.

916CR_0_Sample_Proxy/000001/000001

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

I ND

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C h ange of address. If incorrect, mark this box and mak e the correction in the space to the left. Securityholders sponsored by a brok er (reference number commences with ’ X ’) should advise your brok er of any chang es. I 9999999999

P rox y Form

P lease m ark to indicate your directions

A p p oint a P rox y to V ote on Y our Beh alf

XX

I/W e b eing a m em b er/s of R eed R esources Ltd h ereb y ap p oint

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th e C h airm an of th e Meeting

O R

� P LE A S E N O T E : Leave this box blank if you have selected the Chairman of the Meeting . Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting , as my/our proxy to act g enerally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been g iven, as the proxy sees fit) at the Annual General Meeting of Reed Resources Ltd to be held at The Celtic Club, 48 Ord Street, W est Perth on Tuesday, 15 November 2011 at 3:00pm (W ST) and at any adjournment of that meeting .

Im p ortant for R esolutions 5 , 6 , 7 and 8 - If th e C h airm an of th e Meeting is your p rox y or is ap p ointed as your p rox y b y default

By mark ing the box immediately below, you are directing the Chairman of the Meeting to vote in accordance with the Chairman's voting intentions on R esolutions 5 , 6 , 7 and 8 as set out below and in the Notice of Meeting . If you do not mark this box, and you have not directed your proxy how to vote on R esolutions 5 , 6 , 7 and 8 , the Chairman of the Meeting will not cast your votes on R esolutions 5 , 6 , 7 and 8 and your votes will not be counted in computing the req uired majority if a poll is called on these Resolutions. If you appoint the Chairman of the Meeting as your proxy you can direct the Chairman how to vote by either mark ing the boxes in Step 2 below (for example if you wish to vote ag ainst or abstain from voting ) or by mark ing the box immediately below (in which case the Chairman of the Meeting will vote in favour of R esolutions 5 , 6 , 7 and 8 ).

T h e C h airm an of th e Meeting intends to vote all availab le p rox ies in favour of R esolutions 5 , 6 , 7 and 8 .

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I/W e direct the Chairman of the Meeting to vote in accordance with the Chairman's voting intentions on R esolutions 5 , 6 , 7 and 8 (except where I/we have indicated a different voting intention below). I/W e ack nowledg e that the Chairman of the Meeting may exercise my proxy even thoug h R esolutions 5 , 6 , 7 and 8 are connected directly or indirectly with the remuneration of a member of k ey manag ement personnel and even if th e C h airm an of th e m eeting h as an interest in th e outcom e of th ese R esolutions and th at th e votes cast b y th e C h airm an, oth er th an as a p rox y h older w ould b e disregarded b ecause of th at interest.

� Item s of Business

P LE A S E N O T E : If you mark the A b stain box for a Resolution, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the req uired majority.

Resolution 1 Re-election of Vanessa Guthrie as a Director	Approval of Rig hts and Issue of Shares under the Company's Performance Rig hts Plan Resolution 6
Re-election of David Reed as a Director Resolution 2
	Resolution 7 Approval of Benefits under the Companys Performance Rig hts Plan
Resolution 3 Re-election of Peter Collins as a Director
Ratification of Issue of Shares Resolution 4	Adoption of the Remuneration Report Resolution 8
Resolution 5 Increase in Directors Remuneration

T h e C h airm an of th e Meeting intends to vote all availab le p rox ies in favour of all R esolutions.

S ignature of S ecurityh older(s) This section must be completed.

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Individual or S ecurityh older 1 S ecurityh older 2 S ecurityh older 3
S ole D irector and S ole C om p any S ecretary D irector D irector/C om p any S ecretary
C ontact
C ontact D aytim e / /
N am e T elep h one D ate
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