NEOMETALS LTD — Capital/Financing Update 2003

Mar 31, 2003

Media Release

1 April 2003

REED RESOURCES ACQUIRES TITANIUM-RICH BARRAMBIE DEPOSIT

Reed Resources Limited today committed to a major new titanium project at Barrambie, south east of Meekatharra.

With a reserve calculated at 38.67 million tons, Barrambie has potential to be a major titanium resource.

Reed Resources Executive Chairman, David Reed, said Barrambie had been overlooked for the past 20 years for its titanium potential while previous owners focussed on vanadium.

Reed Resources today finalised the 100% acquisition of Mining Lease M57/173 (about 684 hectares) from Precious Metals Australia Ltd and Magnum Properties Pty Ltd for a consideration of \$110,000 cash and 750,000 Ordinary Shares in Reed Resources.

Mr Reed said over \$3.5 million has previously been spent on exploration, metallurgical testing and mining feasibility studies on the Barrambie deposit by a number of companies since it was discovered in 1960.

Most of this work was undertaken by Ferrovanadium Corporation NL, Great Australian Resources and Trans-Global Resources and more recently by Precious Metals Australia.

"We first looked at Barrambie for its gold deposits but, once we looked deeper into the drilling results, we realised it has far greater potential for its titanium," Mr Reed said

"Our intention is to do some work on the results and then seek a Joint Venture partner to work with us to develop the project.

"What we like about Barrambie, which hindered its early stage development as a vanadium project, is the close access to energy now available from the Windimurra gas pipeline, and the enormous access to intellectual property in Western Australia within the existing mineral sands companies. There are no technical firsts with this project."

Mr Reed said most recent interest in the deposit had been for its potential resources of vanadium with mining feasibility studies based on a resource of some 130,000-190,000 tonnes $V_2O_5$ (vanadium pentoxide) with titanium and iron considered accessory products.

This bias toward vanadium influenced the previous exploration and evaluation programs but the Barrambie deposit also has significant potential to be a major titanium producer, with vanadium and iron as accessory products. There are potentially substantial accumulations of titanium mineralisation (as ilmenite and leucoxene) in addition to that already identified in the vanadium resource.

Reed Resources' focus will be on a thorough evaluation of the development potential of the Barrambie layered complex as a major titanium resource with the emphasis on high grade zones of titanomagnetite (in excess of 20 $%$ TiO₂) within the area of known mineralisation and along strike extensions of the known resources, as identified by aeromagnetic and other geophysical surveys.

In addition to the Ti-V-Fe mineralisation, the Barrambie Complex also has potential for gold in shear zones that intersect the layered complex and for platinum group metals (PGMs) within the titanomagnetite segregations or as separate layers.

ENDS

For more information, please contact

David Reed Executive Chairman Reed Resources (08) 9322 1182

or

Paul Downie Porter Novelli (08) 9386 1233 0414 947 129

BARRAMBIE TI-V-FE DEPOSIT

Reed Resources Ltd announces that it has acquired 100% ownership of Mining Lease M57/173 (about 684 hectares) which covers the Barrambie titanium-vanadium-iron deposit located about 100 km southeast of Meekatharra, Western Australia.

Over \$3.5 million has been expended on exploration, metallurgical testing and mining feasibility studies on the Barrambie deposit by a number of companies since it was discovered in 1960. Most of this work was undertaken by Ferrovanadium Corporation NL, Great Australian Resources and Trans-Global Resources and more recently by Precious Metals Australia.

In the past most interest in the deposit has been in its potential resources of vanadium with mining feasibility studies based on a resource of some 130,000-190,000 tonnes $V_2O_5$ (vanadium pentoxide) with titanium and iron considered accessory products.

This bias toward vanadium influenced the previous exploration and evaluation programs but the Barrambie deposit also has significant potential to be a major titanium producer, with vanadium and iron as accessory products. There are potentially substantial accumulations of titanium mineralisation (as ilmenite and leucoxene) in addition to that already identified in the vanadium resource.

Reed Resources' focus will be on a thorough evaluation of the development potential of the Barrambie layered complex as a major titanium resource with the emphasis on high grade zones of titanomagnetite (in excess of 20 $%$ TiO₂) within the area of known mineralisation and along strike extensions of the known resources, as identified by aeromagnetic and other geophysical surveys.

In addition to the Ti-V-Fe mineralisation, the Barrambie Complex also has potential for gold in shear zones that intersect the layered complex and for platinum group metals (PGMs) within the titanomagnetite segregations or as separate layers.

Mining Lease M57/173 was acquired from Precious Metals Australia Ltd and Magnum Properties Pty Ltd for a consideration of \$110,000 cash and 750,000 Ordinary Shares in Reed Resources. The Mining Lease was granted on 31 July 1990 for a period of 21 years and includes the published resources and potential strike extensions of the Barrambie deposit.

GEOLOGY

The Barrambie Ti-V-Fe deposit occurs within a 400 metre thick lavered. anorthosite-gabbro intrusive complex that was emplaced into an Archaean NNW-SSE trending greenstone belt. The layered complex is poorly exposed beneath an extensive regolith cover but has a strike length of at least 22 km. of which about 11 km is within M57/173. Layering within the complex is near vertical to steep east dipping.

The potentially economic mineralisation occurs as cumulative segregations of vanadiferous and titaniferous magnetite horizons, in the form of massive and disseminated layers, within a zone up to 160m thick. The massive layers contain in excess of 80% magnetite-ilmenite in bands 1-20 metres thick which are separated by layers of anorthosite-gabbro with disseminated magnetiteilmenite.

Drilling in an area known as the Bay-Cove zone has shown the titanomagnetite bands to be continuous for at least 2 km. Aeromagnetic and gravity surveys indicate that the titanomagnetite layers extend north and south of the Bay-Cove zone, beneath transported and residual regolith but there has been only exploration drilling outside of the Bay-Cove zone.

Magnetite and ilmenite are the primary ore minerals. Magnetite has been extensively altered to 'martite', even at depths of 60 m. Ilmenite is extensively altered to leucoxene and some recrystallisation has yielded coarse rutile. No discrete vanadium minerals have been identified. Vanadium occurs in solid solution in magnetite (2.2-3.6 % $V_2O_5$ ), 'martite' after magnetite (1.9-2.2 % $V_2O_5$ ), and ilmenite (0.2-1.6 % $V_2O_5$ ).

Ti-V-Fe RESOURCES⁽¹⁾

Detailed exploration has been completed only over a 2 km section, along strike, of the Barrambie Complex between the Bay deposit in the north and the Cove deposit in the south (referred to as the Bay-Cove ore zone). Some 263 RC, diamond and RAB drill holes for a total of 11,583 metres have been drilled to test the deposit.

An estimate of the vanadiferous titanomagnetite resource in the 2 km long section in the Bay-Cove ore zone has been calculated by a number companies, but all have focussed on the vanadium mineralisation. An initial estimate by Ferrovanadium Corporation delineated an "indicated resource" of 37 million tons at a grade of 0.46 % $V₂O₅$ and an "inferred resource" of 415 million tons at 0.46 % $V₂O₅$ to a depth of 61 m.

A more recent estimate by Control Data Australia, in 1984, calculated a "proven and probable reserve" of 38.67 million tons grading 0.48% $V_2O_5$ . 9.67% Ti0₂ and 20.99% Fe (0.3% $V₂O₅$ cut-off), including a "proven reserve" of 33.31 million tons grading 0.48% $V_2O_5$ , 11.04% Ti0₂ and 18.32% Fe.

Barrambie's potential as a major titanium resource has not been fully assessed. There is potential for high grade zones (in excess of 20 $%$ Ti0₂) in addition to the known vanadium resources. Most potential is along the eastern flank of the deposit where there are reported drill hole intersections with assays in the range 18-31.5 % TiO2 over inferred true widths of 6-39.6 metres.

Exploration along strike from the known resources is limited to wide spaced drilling, much of it as vertical RAB holes. Aeromagnetic and other geophysical surveys indicate there is potential for the main titanomagnetite layers to continue along strike from the Bay-Cove zone.

OTHER METALS

In addition to its Ti-V-Fe mineralisation, the Barrambie layered complex also has potential for gold and platinum group metals (PGMs), and nickel-copper sulphides and silver.

Limited analysis of drill samples by previous explorers indicates that later gold mineralisation may occur within the Barrambie complex or along splays off a major shear zone that is adjacent the gabbroic complex. Reported intersections include 3 metres at 5.4 g/t Au and 1.5 metres at 2 g/t Au (percussion drill hole PDH-23 at inclined depths of 12.19-15.24 metres and 15.24-16.76 metres, respectively) and 0.25 metres at 5 g/t Au and 0.30 metres at 33.9 g/t Au (diamond drill hole DDH-4 at inclined depths of 184.71 metres and 186.53 metres, respectively).

Trace amounts of platinum and palladium were recorded in random assays of samples from diamond drill hole DDH-4 with values up to 0.44 g/t platinum and 0.07 g/t palladium. PGMs are likely to be genetically related to initial crystallisation of the Barrambie complex, possibly occurring as disseminations within the titanomagnetite segregations or as separate layers with nickelcopper sulphides.

A systematic sampling program is needed to more fully evaluate the gold and PGM potential.

FUTURE DEVELOPMENT

Reed Resources' principal objective will be to establish a sufficiently large, high grade, hard rock titanium resource within the Barrambie tenement and complete a mining feasibility study.

Most emphasis will be on further exploration, mine planning and processing and will include:

• Review and revaluation of all previous exploration and mining $\bullet$ information.
• Additional drilling to confirm previous drill results and infill drilling to upgrade and extend known resources.

• Further evaluation and exploratory drilling of the layered complex to test the potential of strike extensions for high grade titanium mineralisation.

• Metallurgical testing of high grade titanium mineralisation to support a $\bullet$ feasibility study.

• Assessment of the gold and PGM potential of the Barrambie complex.

David John Reed EXECUTIVE CHAIRMAN

Note:

1. The criteria used in the 1970s and 1980s for reporting of mineral resources and ore reserves are different to those currently adopted by the JORC Code and resource estimates may not equate directly to those specified in the Code. Resource tonnages were reported in tons and these have not been converted to metric tonnes.