NEOMETALS LTD — AGM Information 2014

Oct 28, 2014

NOTICE OF

ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2014 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 Friday, 28 November 2014 at 4:00pm 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 2014

To receive the Annual Report of the Company for the period ended 30 June 2014 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 2014;

• 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.

2. Re-election of David Reed as Director

To consider and, if thought fit, to pass, to pass 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 offers himself for re-election, be re-elected as a Director of the Company."

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3. Adoption of Remuneration Report

To consider and, if thought fit, to pass the following as a non-binding resolution:

Resolution 2

“THAT, for the purposes of section 250R(2) of the Corporations Act 2001 (Cth), the Remuneration Report for the year ended 30 June 2014 be adopted."

The Remuneration Report is set out in the 2014 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 2:

• (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 the KMP; or

(c) as a proxy by a member of the KMP or their Closely Related Parties,

unless the vote is cast as proxy for a person entitled to vote in accordance with a direction on the proxy form or by the Chairman pursuant to an express authorisation to exercise the proxy.

4.

Approval of Performance Rights Plan

To consider and, if thought fit, to pass the following as an ordinary resolution:

Resolution 3

“THAT, for the purposes of ASX Listing Rule 7.2 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 3:

• (a) by a Director and any of their associates; and

(b) as proxy by a member of the KMP or their Closely Related Parties, unless the vote is cast as proxy for a person entitled to vote in accordance with a direction on the proxy form or by the Chairman pursuant to an express authorisation to exercise the proxy.

5. Approval of issue of Long Term Incentive Performance Rights to Christopher Reed

To consider and, if thought fit, to pass the following as an ordinary resolution:

Resolution 4

“THAT, for the purposes of Listing Rule 10.14 and for all other purposes, approval be given for the Company to grant performance rights to Mr Christopher Reed in respect of the financial years 30 June 2015, 30 June 2016 and 30 June 2017 on the terms set out in his employment agreement with the Company and the Company’s Performance Rights Plan as more fully described in the Explanatory Statement accompanying this Notice of Meeting.”

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Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 4:

• (a) by a Director and any of their associates; and

(b) as proxy by a member of the KMP or their Closely Related Parties,

unless the vote is cast as proxy for a person entitled to vote in accordance with a direction on the proxy form or by the Chairman pursuant to an express authorisation to exercise the proxy.

6. Approval of variation to Convertible Notes held by David Reed

To consider and, if thought fit, to pass the following as an ordinary resolution:

Resolution 5

“THAT, for the purposes of ASX Listing Rule 10.11 and for all other purposes, the variation to the terms of the 2,000,000 Convertible Notes issued by the Company to David Reed on 22 November 2013 as described in the Explanatory Statement be approved.”

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 5 by David 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 the Chairman of the Annual General 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. Change of company name

To consider and, if thought fit, to pass the following as a special resolution:

Resolution 6

“THAT with effect from the day on which the Australian Securities and Investments Commission alters the details of the Company’s registration, the name of the Company be changed to Neometals Ltd and the Constitution of the Company be amended to reflect the change of name.”

8. Other Business

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

Jason Carone Company Secretary Date: 29 October 2014

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EXPLANATORY STATEMENT

THIS EXPLANATORY STATEMENT accompanies and forms part of the Notice convening the 2014 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 Friday, 28 November 2014 at 4:00pm Western Standard Time.

This Explanatory Statement is to provide shareholders with explanatory notes and information relevant to the Annual General Meeting and its business. It comprises of a Part A and a Part B. 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, and includes close family members and any controlled companies of a member of the KMP.

Company means Reed Resources Ltd ABN 89 099 116 631.

Constitution means the constitution of the Company.

Convertible Notes has the meaning given to the term in section 7 of this Explanatory Statement.

Corporations Act means Corporations Act 2001 (Cth).

Director means a director of the Company.

Explanatory Statement means this explanatory statement incorporated in this Notice.

Facility Agreement has the meaning given to the term in section 10 of this Explanatory Statement.

Key Management Personnel or KMP means the Company’s 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.

Performance Right has the meaning given to the term in section 8 of this Explanatory Statement.

PRP has the meaning given to the term in section 8 of this Explanatory Statement.

Security has the meaning given in section 10 of this Explanatory Statement.

Share means a fully paid ordinary share in the capital of the Company.

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2. Chairman

David Reed will serve as Chairman of the Annual General Meeting. However, given Mr Reed’s interest in the outcome of Resolutions 1 and 5, Mr Reed has advised the Board that he will pass the chair to Steven Cole, the Company’s Deputy Chairman, for the consideration of and voting on Resolutions 1 and 5.

3. 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 held.

4. 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 4:00pm Western Standard Time on Wednesday, 26 November 2014.

5. 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 shareholder 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 that each proxy may exercise, then each proxy will be entitled to exercise half of that shareholder’s 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 form must be executed 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 form 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).

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• (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 (which includes each of the Directors) will not be able to vote as proxy on Resolutions 2, 3 or 4 unless the shareholder tells them how to vote or, in the case of the Chairman of the Annual General Meeting, unless the shareholder expressly authorises him to do so. If a shareholder intends to appoint a member of the KMP (other than the Chairman) as their proxy, the shareholder should ensure that they direct the member of the KMP how to vote on Resolutions 2, 3 or 4.

• (j) If a shareholder intends to appoint the Chairman of the Annual General Meeting as their proxy for Resolutions 2, 3 or 4, shareholders can direct the Chairman how to vote by marking one of the boxes for Resolutions 2, 3 or 4 (for example, if the shareholder wishes to vote ‘for’, ‘against’ or to ‘abstain’ from voting). If a shareholder does not direct the Chairman how to vote, then by submitting the proxy form, the shareholder will be expressly authorising the Chairman to exercise the proxy in respect of Resolutions 2, 3 and 4 even though it is connected to the remuneration of members of the KMP.

• (k) Proxy forms (including any instruments under which they have been executed) and powers of attorney granted by shareholders must be received by the Company by 4:00pm Western Standard Time on Wednesday, 26 November 2014:

At the Company’s registered office:

• (i) by hand 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

• (iv) by email – cosec@reedresources.com.

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PART B: EXPLANATORY NOTES

6. Re-election of Directors

Resolution 1 – Re-election of David Reed

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 (excluding the managing director and any director appointed under Article 11.1), or if their number is not 3 nor a multiple of 3, then the number nearest one third, retire from office. Under Article 11.5, the Directors to retire are those who have been longest in office since their last election. Accordingly, David Reed will retire at the Annual General Meeting in accordance with this requirement. David Reed offers himself for re-election.

Information in respect of David Reed is set out below:

David Reed

David was born and raised in Kalgoorlie. He commenced stockbroking in 1963, qualified as an accountant in 1967 and became a member of the Perth Stock Exchange in 1971. His firm RW & DJ Reed merged with TE Eyres in 1981 and became Eyres Reed Ltd which was subsequently purchased by CIBC Wood Gundy in 1997.

David was a director and Chairman of CIBC Australia Limited. David has been a prospector, former secretary of the Amalgamated Prospectors and Leaseholders Association and private mine owner.

In 1984 David founded Mt. Martin Gold Mines NL, which with partner Newmont Australia developed the million ounce New Celebration Gold Mine. Mt. Martin merged with nickel producer Titan Resources NL (ASX Code:TIR) where David was Chairman from 1991 to 1997. In 1998 David was admitted as a Fellow of the Certified Practicing Accountants. In recognition of his service to the community he was awarded the Order of Australia Medal in 2002

Recommendation of Directors

The Directors, after considering the recommendations of the Nomination and Remuneration Committee, recommend that shareholders vote in favour of Resolution 1. David Reed does not make any recommendation in relation to his own re-election.

Mr Steven Cole, the Deputy Chairman, will hold the chair for the consideration of and voting on this Resolution 1. Mr Steven Cole intends to vote all available proxies in favour of Resolution 1.

7. Adoption of Remuneration Report

Resolution 2 – Adoption of Remuneration Report

The Remuneration Report for the financial year ended 30 June 2014 is set out in the 2014 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. However, the Directors take the discussion at the meeting and the outcome of the vote into account when considering the Company’s remuneration practices.

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

If at least 25% of the votes cast on Resolution 2 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) would go up for re-election.

The Directors encourage all shareholders to vote on Resolution 2.

The Chairman intends to vote all available proxies in favour of Resolution 2.

8. Approval of Performance Rights Plan

Resolution 3 – Approval of Performance Rights Plan

Background

In 2011, the Company established a Performance Rights Plan for its staff ( 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. The PRP was previously approved by shareholders at the Company’s 2011 Annual General Meeting.

The Company believes that the PRP assists it to remunerate and provide ongoing incentives to its employees.

In summary, the rules of the PRP enable the Company to issue performance rights ( 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 more detailed summary of the 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).

Since the PRP was last approved by shareholders in 2011, the Company has granted a total of 22,805,470 Performance Rights. Those Performance Rights have resulted in the issue of 3,864,831 Shares and may result in the issue of a further 14,098,478 fully paid ordinary shares in the Company if the applicable performance hurdles and vesting conditions are satisfied over the next 12 to 24 months.

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 12-month 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 approval of the PRP in 2011 meant that Performance Rights granted, and shares issued on vesting of those Performance Rights, in the previous 3 years fell within this exception.

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 further issues of shares on vesting of those Performance Rights, will not reduce the Company’s 15% capacity under Listing Rule 7.1.

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The grant of any Performance Rights to a Director will require specific approval under Listing Rule 10.14.

Recommendation of Directors

The Directors (with Mr Christopher Reed, who is eligible to participate in the PRP, abstaining) recommend that shareholders vote in favour of Resolution 3.

The Chairman intends to vote all available proxies in favour of Resolution 3.

9. Grant of Long Term Incentive Performance Rights to Christopher Reed

Resolution 4 – Grant of Long Term Incentive Performance Rights to Christopher Reed

Background

In June 2014, a review was conducted in relation to Mr Reed’s remuneration arrangements and employment agreement as Managing Director of the Company. Subsequently, his appointment as Managing Director was extended for a further two years and his employment agreement was revised as announced to the market on 29 August 2014.

Under his revised employment agreement, Mr Reed is entitled to receive a base salary of $390,000 per annum plus superannuation; a variable remuneration component in the form of a short-term incentive annual discretionary bonus of up to $100,000; and a long term incentive component in the form of the grant of Performance Rights up to a value of $150,000 under the PRP (subject to any requisite shareholder approvals first being obtained).

As part of his long-term incentive remuneration structure, the Company has agreed to invite Mr Reed to apply for tranches of Performance Rights over the next 3 financial years in accordance with agreed principles and subject to agreed performance conditions set out below.

Terms of Long Term Incentive Performance Rights

On or about 30 June of each financial year until 30 June 2017, in accordance with the terms of his employment contract, Mr Reed will be invited to apply for a number of Performance Rights under the PRP. The number of rights that Mr Reed will be entitled to apply for will be determine by reference to the following formula (Mr Reed’s Issue Formula ):

S P = VWAP

Where:

• P is the whole number of Performance Rights;

• S is the portion of Mr Reed’s Annual Salary Package referrable to the long term incentive for the applicable period, set in accordance with his employment contract; and

• VWAP is the 60-day volume weighted average price of Shares on ASX calculated as at 30 June for the relevant financial year.

The Performance Rights will be granted subject to the rules of the PRP.

Under the rules of the PRP, the Performance Rights will vest only if the Director remains an employee of the Company up to and including the relevant vesting date.

Rule 4 of the PRP allows for earlier vesting where a Director ceases to be an employee of the Company by reason of death, disability, bona fide redundancy or other reason with the approval of the Board.

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When rule 4 applies, the Board may determine the extent (if any) to which Performance Rights granted will vest, having regard to level of satisfaction of the performance conditions over the period from the date of grant to the date of cessation of employment.

No consideration is payable by the Directors at the time that the Performance Rights are granted or upon the allocation of Shares to which they may become entitled on the vesting dates.

Performance condition

The Performance Rights will not vest unless the performance condition set out below has been satisfied.

The performance condition will be measured by comparing the Company’s total shareholder return ( TSR ) against the TSRs of a comparator group of companies determined by the Nomination and Remuneration Committee. The period over which the TSR of the Company is compared with the comparator group will be the period from 1 July in the financial year to which the grant of Performance Rights relates until 30 June in the financial year that is two years after the initial grant of the Performance Rights ( Vesting Date ).

The vesting of the Performance Rights on the relevant Vesting Date will depend on the Company’s percentile ranking within the comparator group as follows:

• If the Company ranks at or below the 45th percentile, none of the Performance Rights will vest.

• If the Company ranks at the 46th percentile, 10% of the Performance Rights will vest. For each percentile above the 46th percentile up to the 50th percentile, a further 10% of the Performance Rights will vest.

• For each percentile ranking at or above the 51st percentile, an additional 2% of the Performance Rights will vest, with 100% vesting where the Company ranks at or above the 75th percentile.

If none or only some of the Performance Rights vest at 30 June of that year, the performance condition will be re-tested six months later as at 31 December of that year.

The Nomination and Remuneration Committee will have the discretion to adjust the comparator group of companies to account for changes that might occur during the relevant period.

Example

By way of example, if Resolution 4 is approved by Shareholders:

On or about 30 June 2015, Mr Reed will be entitled to apply for Performance Rights in accordance with the Issue Formula.

On 30 June 2017, the performance of the Company will be assessed by reference to the TSRs of the comparator companies over the two financial years up to 30 June 2017. The Performance Rights will vest in whole or in part, or not at all, according to the criteria set out above.

To the extent that Performance Rights do not vest on this date in accordance with those criteria, Mr Reed will have the opportunity to re-test Performance Rights on 31 December 2017. Any Performance Rights that do not vest following re-testing will lapse.

Approval required

Shareholder approval for grant of Performance Rights to the Directors is sought for the purposes of the ASX Listing Rules.

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(a) ASX Listing Rule 10.14

ASX Listing Rule 10.14 provides that a listed company must not permit a director of the company to acquire securities under an employee incentive scheme (such as the PRP) without the prior approval of ordinary security holders.

Accordingly, Resolution 3 seeks approval under ASX Listing Rule 10.14 for the grant of the Performance Rights to Mr Reed on the terms set out above.

If shareholder approval is obtained under Listing Rule 10.14, the grant of the Performance Rights and the subsequent issue of shares will not count towards the Company’s 15% cap under Listing Rule 7.1 (without the need for separate shareholder approval under Listing Rule 7.1).

(b) ASX Listing Rule 10.15A

ASX Listing Rule 10.15A requires the following information regarding the PRP and the Long Term Incentive Performance Rights to be included in this Explanatory Statement:

• Mr Reed is an Executive Director of the Company.

• Subject to Shareholder approval being obtained, the maximum number of Performance Rights (and hence Shares) that the Company may issue to Mr Reed in respect of the financial years ending 30 June 2015, 30 June 2016 and 30 June 2017 will be determined in accordance with the terms of his employment agreement as described above.

• No consideration is payable by Mr Reed at the time of grant of the Performance Rights or upon the allocation of Shares to which they may become entitled on vesting of the Performance Rights.

• The only other person who has participated in the PRP since it was approved by Shareholders in November 2011 who would require Shareholder approval under ASX Listing Rule 10.14 is Mr Luke Tonkin, who has since left the Company. Since approval of the PRP in November 2011, Mr Tonkin was issued 4,247,390 Performance Rights, of which 1,667,000 vested (resulting in the issue of 1,667,000 ordinary shares) and 2,580,390 lapsed, and Mr Reed has been issued 12,045,470 Performance Rights, of which 1,000,000 vested (resulting in the issue of 1,000,000 ordinary shares), 1,154,184 lapsed and 9,891,286 remain outstanding and subject to performance hurdles. No consideration was paid by either Mr Tonkin and Mr Reed for these issues.

• The following persons who would require Shareholder approval under ASX Listing Rule 10.14 will be entitled to participate in the PRP: Mr Reed and any other executive Director who the Board may from time to time in its absolute discretion declare eligible.

• No loans will be made by the Company in connection with the acquisition of the Performance Rights by Mr Reed.

• Details of any Performance Rights and/or Shares issued under the PRP will be published in each Annual Report of the Company relating to the period in which performance rights or Shares have been issued.

• Any additional persons who become entitled to participate in the PRP after the resolutions are approved who are not named in the Notice will not participate until approval is obtained under Listing Rule 10.14 (if approval is required under that Listing Rule).

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• Performance Rights to be granted to the Directors in respect of the financial years will be issued on or around 30 June 2015, 30 June 2016 and 30 June 2017 and in any event not later than three years after the Meeting.

Recommendation of Directors

The Directors, other than Mr Christopher Reed, recommend that shareholders vote in favour of Resolution 4. Mr Christopher Reed has an interest in the outcome of Resolution 4 and therefore declines to make any recommendation in relation to Resolution 4.

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

10. Approval of variation to Convertible Notes held by David Reed

Resolution 5 – Approval of variation to Convertible Notes held by David Reed

Background

On 27 September 2013, the Company entered into a facility agreement with its chairman, Mr David Reed, for the provision of a loan facility by Mr Reed to the Company of up to A$3,000,000 for working capital purposes ( Facility Agreement ).

A key term of the Facility Agreement was that the Company could, subject to obtaining shareholder approval at its 2013 annual general meeting, elect to repay all or part of the outstanding amount under the Facility Agreement by the issue of convertible notes to Mr Reed ( Convertible Notes ).

Shareholder approval for the issue of the Convertible Notes to Mr Reed was granted on 20 November 2013 at the 2013 annual general meeting. The Company subsequently repaid the outstanding amount under the Facility Agreement by issuing the Convertible Notes to Mr Reed on 22 November 2013.

Mr Reed has not converted any of the Convertible Notes.

The key terms of the Convertible Notes as issued are summarised below:

Number:	Up to 2,000,000 Convertible Notes, subject to a maximum of the number that would, on conversion, result in Mr Reed holding voting power of 19.9% in the Company. This cap will be applied based Mr Reed’s voting power on the date of issue of the Convertible Notes.
Face Value:	A$1 per Convertible Note.
Interest:	A floating rate that is 3.00% above the rate paid by Mr Reed under his external financing arrangements. Interest is payable monthly in arrears.
Security:	Secured by a first-ranking security over the Company’s shares in Australian Vanadium Corporation (Holdings) Pty Ltd, the holding entity for the Company’s Barrambie Project.
Conversion Period:	Convertible at any time within 12 months of issue (ie by 22 November 2014) at Mr Reed’s election in multiples of 500,000. Convertible into Shares, ranking equally in all respects with the ordinary shares then on issue.
Conversion Price:	A$0.03 per Share, being a 25% premium to the volume-weighted average price of the Shares on ASX in the 30 trading days up to the date the notice of the 2013 annual general meeting was approved by the Board.

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Redemption:	Unconverted Convertible Notes must be redeemed by the Company at the end of the Conversion Period at face value (plus accrued but unpaid interest).
Rights:	Convertible Notes do not confer any voting rights or rights to participate in dividends or other issues unless and until they are converted into Shares.
Reorganisations:	The number and conversion price of the Convertible Notes will be adjusted on any reorganisation of the Company’s capital in accordance with the ASX Listing Rules.
Transferability:	The Convertible Notes are non-transferable. Upon conversion of any Convertible Notes, Mr Reed can elect for the Shares to be issued to certain persons associated with him.

Proposed variations to Convertible Notes

The Company has agreed with Mr Reed to vary the terms of the Convertible Notes, subject to shareholders approving Resolution 5.

The proposed variations being put to shareholders for approval are as follows:

• (a) Extension of Conversion Period: The Conversion Period would be extended by 12 months, so that it would end on 22 November 2015. This variation would mean the date by which the Company must redeem any unconverted notes would be 22 November 2015, and Mr Reed would have until that date to elect to convert his Convertible Notes.

• (b) Resetting of Conversion Price: The Conversion Price would be varied to A$0.04 per Share, representing a 29% premium to the volume-weighted average price of the Shares on ASX in the 10 trading days up to the date this Notice was approved by the Board. This variation is intended to ensure that the price for the extended Conversion Period would be broadly consistent with the commercial principles on which the current Conversion Price was set.

• (c) Interest rate: The interest rate would be a fixed rate of 11.0% per annum. The proposed rate is close to the rate currently payable of 10.75% per annum, and provides the Company with certainty during the extended Conversion Period on the required monthly interest payments.

Approval sought

Under Listing Rule 10.11, shareholder approval is required before the Company can issue securities to a related party (including a Director) of the Company. The Company has consulted with ASX about the proposed variations to the terms of the Convertible Notes and confirmed that ASX requires the proposed variations also be approved by shareholders under Listing Rule 10.11.

Accordingly, the Company seeks the approval of shareholders for the variation of the terms of the Convertible Notes as set out above.

Pursuant to Exception 4 in Listing Rule 7.2 and Exception 7 in Listing Rule 10.12, the Company will be not required to obtain further shareholder approval for the conversion of any Convertible Notes into Shares.

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Consequences of not obtaining approval

Mr Reed has agreed with the Company that he will not convert any Convertible Notes before the Annual General Meeting. In addition, as the Convertible Notes (on their current terms) would be due for redemption on 22 November 2014, before the Annual General Meeting on 28 November 2014, Mr Reed has agreed to waive his right to redemption until after the conclusion of the meeting, when the outcome of the vote on Resolution 5 will be known.

Shareholders should be aware that if shareholder approval is not obtained for the variation to the terms of the Convertible Notes at the Annual General Meeting, Mr Reed will be entitled to require the Company to redeem the Convertible Notes following the meeting at face value (plus accrued but unpaid interest). This means that the Company will have to repay to Mr Reed $2,000,000 (plus any accrued but unpaid interest). While the Company has sufficient cash reserves available to meet the repayment, it would then need to consider what funding sources were available to fund its ongoing working capital requirements.

Information required by Listing Rule 10.13

In accordance with Listing Rule 10.13, the following information is provided in relation to the proposed variation of the Convertible Notes:

• (a) The Convertible Notes have been issued to David Reed, a Director of the Company. Upon conversion of any Convertible Notes, Mr Reed can elect for the Shares to be issued to certain persons associated with him.

• (b) The Company has issued 2,000,000 Convertible Notes to Mr Reed at a face value of A$1 each. If the Convertible Notes are varied as proposed and subsequently converted by Mr Reed, the maximum number of Shares into which the Convertible Notes could be converted is 50 million (based on the conversion price set out in paragraph (d) below).

• (c) The Company has already issued the Convertible Notes to Mr Reed. If the Convertible Notes are varied as proposed, the Conversion Period will be extended by 12 months so that it will end on 22 November 2015. Subject to shareholder approval, the variations to the Conversion Period and Conversion Price will take effect from the date of the Annual General Meeting.

• (d) The face value of the Convertible Notes is A$1 per note. If the Convertible Notes are varied as proposed, they will be convertible into Shares at the Conversion Price of A$0.04 per Share.

• (e) The Company has used the funds advanced by Mr Reed for working capital purposes.

Recommendation of Directors

The Directors, other than Mr David Reed, recommend that shareholders vote in favour of Resolution 5. Mr David Reed does not make any recommendation in relation to Resolution 5.

Mr Steven Cole, the Deputy Chairman, will hold the chair for the consideration of and voting on this Resolution 5, in his capacity as acting chair. Mr Steven Cole intends to vote all available proxies in favour of Resolution 5.

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11. Change of company name

Resolution 6 – Change of Company name

It is proposed that the Company change its name from Reed Resources Limited to Neometals Ltd.

The Board believes that the name of the Company should be reflective of its strategic direction. Although the name of “Reed Resources Ltd” has served the Company well, and is respectful of the Company’s origins, it is also synonymous in market perception with the commodity “gold”.

Given the departure of the gold business from the Company’s portfolio and the Company’s strategic focus on the group’s advanced minerals assets, after due consideration, it is proposed that the Company change its name from Reed Resources Ltd to Neometals Ltd.

Neometals Ltd more accurately reflects the Company’s current and proposed strategic activities and aligns its brand positioning with the concept of ‘new’ or ‘21st century metals’, which include lithium and titanium.

It is proposed that the Company’s ASX listing code will also change from ‘RDR’ to ‘NMT’.

In presenting this resolution, Steven Cole as Deputy Chair, on behalf of all shareholders, expresses the Company’s thanks to its Chairman David Reed and CEO Chris Reed for their sharing of their family name for the benefit of the Company since its incorporation some 12 years ago.

Recommendation of Directors

The Directors recommend that shareholders vote in favour of Resolution 6.

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

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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 or 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.

• (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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PROXY FORM

ACN 099 116 631

ANNUAL GENERAL MEETING

I/We

of:

being a Shareholder entitled to attend and vote at the Meeting, hereby appoint:

Name:

OR: the Chair of the Meeting,

or failing the person so named or, if no person is named, the Chair of the meeting as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions, or, if no directions have been given, and subject to the relevant laws as the proxy sees fit, at the Meeting to be held at 4:00pm Western Standard Time, on Friday, 28 November 2014 at Celtic Club, 48 Ord Street, West Perth, Western Australia 6005, and at any adjournment or postponement thereof.

AUTHORITY FOR CHAIR TO VOTE UNDIRECTED PROXIES ON REMUNERATION RELATED RESOLUTIONS

Where I/we have appointed the Chair as my/our proxy (or where the Chair becomes my/our proxy by default), I/we expressly authorise the Chair to exercise my/our proxy on Resolution 2, 3 & 4 (except where I/we have indicated a different voting intention below) even though Resolution 2, 3 & 4 are connected directly or indirectly with the remuneration of a member of the Key Management Personnel, which includes the Chair.

Important Note: If the Chair of the Meeting is (or becomes) your proxy, you can direct the Chair to vote for or against or to abstain from voting on Resolutions 2, 3 and 4 by marking the appropriate box/es below.

CHAIR’S VOTING INTENTION IN RELATION TO UNDIRECTED PROXIES

The Chair intends to vote undirected proxies in favour of all Resolutions. In exceptional circumstances the Chair may change his/her voting intention on any Resolution. In the event this occurs an ASX announcement will be made immediately disclosing the reasons for the change.

Voting on business of the Meeting	Voting on business of the Meeting	FOR	AGAINST	ABSTAIN
Resolution 1	Re-election of Director – David Reed
Resolution 2	Adoption of Remuneration Report
Resolution 3	Approval of Performance Rights Plan
Resolution 4	Approval of issue of Performance Rights to Christopher Reed
Resolution 5	Approval of variation to Convertible Notes held by David Reed
Resolution 6	Approval for change of company name

Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is: % Signature of Shareholder(s): Individual or Shareholder 1 Shareholder 2 Shareholder 3 Sole Director/Company Secretary Director Director/Company Secretary Date: Contact name: Contact ph (daytime): Consent for contact by e-mail E-mail address: in relation to this Proxy Form: YES NO

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PROXY FORM RDR 2014.docx

Instructions for completing Proxy Form

1. ( Appointing a proxy ): A Shareholder entitled to attend and cast a vote at the Meeting is entitled to appoint a proxy to attend and vote on their behalf at the Meeting. If a Shareholder is entitled to cast 2 or more votes at the Meeting, the Shareholder may appoint a second proxy to attend and vote on their behalf at the Meeting. However, where both proxies attend the Meeting, voting may only be exercised on a poll. The appointment of a second proxy must be done on a separate copy of the Proxy Form. A Shareholder who appoints 2 proxies may specify the proportion or number of votes each proxy is appointed to exercise. If a Shareholder appoints 2 proxies and the appointments do not specify the proportion or number of the Shareholder’s votes each proxy is appointed to exercise, each proxy may exercise one-half of the votes. Any fractions of votes resulting from the application of these principles will be disregarded. A duly appointed proxy need not be a Shareholder.

2. ( Direction to vote ): A Shareholder may direct a proxy how to vote by marking one of the boxes opposite each item of business. The direction may specify the proportion or number of votes that the proxy may exercise by writing the percentage or number of Shares next to the box marked for the relevant item of business. Where a box is not marked the proxy may vote as they choose subject to the relevant laws. Where more than one box is marked on an item, without specifying the proportion or number of votes to be voted on each, the vote will be invalid on that item.

3. ( Signing instructions ):

• ( Individual ): Where the holding is in one name, the Shareholder must sign.

• ( Joint holding ): Where the holding is in more than one name, all of the Shareholders should sign.

• ( Power of attorney ): If you have not already provided the power of attorney with the registry, please attach a certified photocopy of the power of attorney to this Proxy Form when you return it.

• ( Companies ): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held. In addition, if a representative of a company is appointed pursuant to Section 250D of the Corporations Act to attend the Meeting, the documentation evidencing such appointment should be produced prior to admission to the Meeting. A form of a certificate evidencing the appointment may be obtained from the Company.

• ( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and return to:

• (a) By post to Corporate Specialists Pty Ltd, 31 Ord Street, West Perth, WA 6005; or

• (b) By facsimile: within Australia: 08 9322 6722; outside Australia: + 61 8 9322 6722;

• (c) By email: admin@corporatespecialists.com.au

OR to:

• (d) By hand delivery to the Company’s registered office – Level 1, 672 Murray Street, West Perth, Western Australia;

• (e) By post to the Company’s registered office – Locked Bag 8, West Perth WA 6872; or

• (f) By facsimile to the Company’s registered office – facsimile number +61 8 9321 0556; or

• (g) By email – cosec@reedresources.com

so that it is received not less than 48 hours prior to commencement of the Meeting, being 4.00 pm Western Standard Time on Wednesday 26[th] November 2014.

Proxy Forms received later than this time will be invalid

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PROXY FORM RDR 2014.docx