NEOMETALS LTD — Capital/Financing Update 2007

May 27, 2007

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

28 May 2007

The Manager ASX Company Announcement Platform PO Box H224 Australian Square SYDNEY NSW 2000

FOR RELEASE

Dear Sir

ISSUE OF SHARES

NOTIFICATION PURSUANT TO SECTION 708A(5)(e) OF THE CORPORATIONS ACT 2001

Reed Resources Ltd (Company) advises that, on 28 May 2007, it issued 4,639,362 fully paid ordinary shares (Securities) pursuant to the underwriting agreement between the Company and Transocean Securities Pty Ltd in respect of unsubscribed offers for ordinary shares under a share purchase plan (in the terms of ASIC CO 02/831) made available to existing shareholders of the company.

The Company notifies ASX that:

• The Company issued the Securities without disclosure to investors under Part 6D.2 of the 1 Corporations Act 2001 (the Act);
• $\overline{2}$ This notice is given pursuant to paragraph (5)(e) of Section 708A of the Act:
• 3 As at the date of this notice the Company has complied with:
• $(a)$ the provisions of the Chapter 2M of the Act as they apply to the Company; and
• $(b)$ section 674 of the Act; and
• 4 As at the date of this notice there is no excluded information (as defined in section 708A(7) and (8) of the Act) which is required to be disclosed by the Company.

For and on behalf of the Board REED RESOURCES LTD

Qe d

Chris Reed COMPANY SECRETARY

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 177/96. Origin: Appendix 5. Amended 177/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003.

Name of entity

Reed Resources Ltd

ABN

89 099 116 631

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

$\mathbf{1}$ $\pm$ Class of $\pm$ securities issued or to be issued

Fully paid ordinary

• Number of ⁺securities issued or to $\overline{2}$ be issued (if known) or maximum number which may be issued
• 3 Principal terms of the *securities (eg, if options, exercise price and date; if partly paid expiry *securities, the amount outstanding and due dates for payment; if *convertible securities, the conversion price and dates for conversion)

4,639,362 fully paid ordinary shares (a)

• $(b)$ 2,000,000 unlisted options
• Fully paid ordinary shares $(a)$
• $(b)$ Unlisted options each to acquire one fully paid ordinary share at an exercise price of \$0.60 on or prior to 31 May 2009.

⁺ See chapter 19 for defined terms.

4	Do the securities rank equally in all respects from the date of allotment with an existing "class of quoted securities?	Yes, in respect of the fully paid ordinary shares
	If the additional securities do not rank equally, please state: the date from which they do the extent which to they participate for the next dividend, οf the case ă (in trust. distribution) or interest payment the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
5	Issue price or consideration	in respect of the fully paid ordinary (a) shares, \$0.42
		(b) additional consideration	in respect of the unlisted options, no
6	Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	In respect of fully paid ordinary share, as to shares to which Valid Applications under the Reed Resources Share Plan were not received, pursuant to the Underwriting Agreement between the Company and the Underwriter. In respect of unlisted options, as to part of the remuneration of the underwriter pursuant to the Underwriting Agreement between the Company and the Underwriter.
7	Dates of entering *securities into uncertificated holdings or despatch of certificates	Immediately on allotment
8	Number and class οf all securities quoted on ASX. (including the securities in clause 2 if applicable)	Number 97,016,667	+ Class Ordinary Shares

⁺ See chapter 19 for defined terms.

$\overline{9}$ Number and "class of all *securities not quoted on ASX (including the securities in clause 2 if applicable)

Number	+ Class
2,300,000	Unlisted options exercisable at \$0.35 each
1,000,000	Unlisted options exercisable at \$0.50 each
2,700,000	Unlisted options exercisable at \$0.75 each
2,000,000	Unlisted options exercisable at \$0.60 each

10 trust, distribution policy) on the increased capital (interests)

Dividend policy (in the case of a $\sqrt{\phantom{a}}$ No change to existing policy

Part 2 - Bonus issue or pro rata issue

11	holder approval Īš security required?	N/A
12	Is the issue renounceable or non- renounceable?	N/A
13	Ratio in which the *securities will be offered	N/A
14	Class of securities to which the offer relates	N/A
15	*Record date determine to. entitlements	N/A
16	Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?	N/A
17	Policy for deciding entitlements in relation to fractions	N/A
18	Names of countries in which the entity has *security holders who will not be sent new issue documents	N/A
	Note: Security holders must be told how their entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing of I date for receipt acceptances or renunciations	N/A

⁺ See chapter 19 for defined terms.

Appendix 3B New issue announcement

20	Names of any underwriters	N/A
21	Amount of any underwriting fee or commission	N/A
22	Names of any brokers to the issue	N/A
23	Fee or commission payable to the broker to the issue	N/A
24	any handling fee Amount οf brokers who lodge payable to acceptances or renunciations on behalf of *security holders	N/A
25.	If the issue is contingent on "security holders" approval, the date of the meeting	N/A
26	Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled	N/A
27	If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders	N/A
28	Date rights trading will begin (if applicable)	N/A
29	Date rights trading will end (if applicable)	N/A
30	How do *security holders sell their entitlements in full through a broker?	N/A
31	How do *security holders sell part of their entitlements through a broker and accept for the balance?	N/A

⁺ See chapter 19 for defined terms.

How do *security holders dispose $N/A$ 32 of their entitlements (except by sale through a broker)?

33 *Despatch date

w.
b.	$\vert$ ivo

$N/A$

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of securities (tick one)

$\left( a\right)$

$(b)$

35

• Securities described in Part 1 (other than the unlisted options referred therein)
• All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

				Tick to indicate you are providing the information or
documents

• If the "securities are "equity securities, the names of the 20 largest holders of the additional "securities, and the number and percentage of additional "securities held by those holders
• 36 If the *securities are *equity securities, a distribution schedule of the additional *securities setting out the number of holders in the categories $1 - 1,000$ $1,001 - 5,000$ 5,001 - 10,000 $10,001 - 100,000$ 100,001 and over

37

A copy of any trust deed for the additional *securities

⁺ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

38.	Number of securities for which *quotation is sought	N/A
39.	Class of securities for which quotation is sought	N/A
40	Do the "securities rank equally in all respects from the date of allotment with an existing "class of quoted *securities?	N/A
	If the additional securities do not rank equally, please state: the date from which they do ٠ extent to which the they participate for the next dividend, $(in$ the case of a trust, distribution) or interest payment the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
41	Reason for request for quotation now Example: In the case of restricted securities, end of restriction period	N/A
	(if issued upon conversion of another security, clearly identify that other security)
42	Number and + class of all + securities quoted on ASX (including the securities in clause 38)	Number N/A	+ Class

⁺ See chapter 19 for defined terms.

Quotation agreement

• $\mathbf{I}$ *Quotation of our additional *securities is in ASX's absolute discretion. ASX may quote the *securities on any conditions it decides.
• $\overline{2}$ We warrant the following to ASX.
• The issue of the *securities to be quoted complies with the law and is not for $\bullet$ an illegal purpose.
• There is no reason why those "securities should not be granted "quotation.
• An offer of the "securities for sale within 12 months after their issue will not require disclosure under section $707(3)$ or section $1012C(6)$ of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any *securities to be quoted and that no-one has any right to return any *securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the *securities be quoted.
• We warrant that if confirmation is required under section 1017F of the Corporations Act in relation to the *securities to be quoted, it has been provided at the time that we request that the *securities be quoted.
• If we are a trust, we warrant that no person has the right to return the *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the "securities be quoted.

⁺ See chapter 19 for defined terms.

• $\overline{3}$ We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• $\overline{4}$ We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before +quotation of the *securities begins. We acknowledge that $ASX$ is relying on the information and documents. We warrant that they are (will be) true and complete.

GReed

Sign here:

(Director/Company secretary)

Print name:

Christopher John Reed

= == == == == =

Date: 28 May 2007

⁺ See chapter 19 for defined terms.