NEOMETALS LTD — Capital/Financing Update 2008

Aug 18, 2008

Reed Resources Ltd

ABN 89 099 116 631

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

19 August 2008

Company Announcements Office ASX Limited via Electronic Lodgement

Dear Sirs

Proposed Issue of Options

1. Options to be offered to key employees and consultants

The Company wishes to advise that today, its Board resolved to approve to offer to five of the Company's key employees and consultants, in aggregate 1,000,000 options to acquire fully paid ordinary shares of the Company under and in accordance with the terms of the Company's Employee Share Option Plan. The options to be offered will have an exercise price of $1.20 and an expiry date for exercise of 30 June 2013. The options are offered to the relevant employees and consultants for no additional consideration, in recognition of their contribution to the Company and in accordance with their remuneration entitlements.

2. Options to be granted to directors

The Board also approved a further grant to four of its directors (including 3 non-executive directors) of, in aggregate, 1,250,000 options to acquire fully paid ordinary shares of the Company. Each grant to a director shall be subject to shareholder approval, anticipated to be sought at the Company's upcoming Annual General Meeting.

Although not granted under the Company's Employee Share Option Plan, it is anticipated that the terms of the options will be consistent with the terms applicable to options granted under the Employee Share Option Plan. The specific terms of the options proposed to be granted to each director will be set out in the explanatory memorandum to the notice of the Company's upcoming Annual General Meeting.

All the options proposed to be granted to the directors have an exercise price of $1.20 and an expiry date for exercise of 30 June 2013. The options are proposed to be granted to the directors in recognition of their contribution to the Company and in accordance with their remuneration entitlements.

Yours faithfully

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Chris Reed MANAGING DIRECTOR COMPANY SECRETARY

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