NEOMETALS LTD — Capital/Financing Update 2008

May 28, 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

GOLD PRODUCTION UPDATE 29 MAY 2008

HIGHLIGHTS

• Fifth toll treatment campaign produces 1,466 oz Au (RDR share 700 oz).

• Estimated C1 Cash Costs of A$398/oz generating margin of A$566/oz.

Reed Resources Ltd (ASX:RDR) announces the results of the fifth toll-treatment campaign of ore from the Sand Queen Gold Mine, situated at Comet Vale, 100 kilometres north of Kalgoorlie.

Under the joint venture with Kingsrose Mining Limited, Reed is required to truck and toll-treat the ore for 50% of the contained gold.

A parcel of 5,196 tonnes, comprising 3,821t of stoping ore grading 10.85 g/t Au and 1,375t of development ore grading 3.3g/t Au, from the Sand George deposit has been processed at Higginsville Mining’s Greenfields plant at Coolgardie.

A total of 1,466 ounces of gold and 143 ounces of silver have been extracted of which 700 ounces of gold has been credited to Reed.

The gravity circuit recovered about 54% of the gold with a total gold recovery of 97.5% calculated from the metallurgical balance. The leach and adsorption kinetics of the ore parcel improved from 88% to 95% and the tail grade fell from 0.44 to 0.21 g/t Au.

Reed Resources cash costs of production (C1) are estimated at A$398/oz generating a margin of A$566/oz on the 700 ounces sold at spot rate of A$964/oz. All gold production is unhedged and therefore fully leveraged to further upward movements in the price of gold.

The May 2008 ore parcel is the second parcel of ore from Sand Queen and Sand George that mostly originated from new stoping above the 3 Level. Kingsrose will extend mine operations in 2008 to the 4 Level at Sand Queen and expects to be hoisting ore from this level during the second half.

Kingsrose Mining is progressing the mobilization of overseas workers, with the first group of Philipino underground miners now in Kalgoorlie.

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Chris Reed Managing Director

Competent Persons

The information in this report that relates to Exploration Results is based on information complied by Mr. David Potter who is a member of the Australian Institute of Geoscientists.

Mr. David Potter (BSc, Dip FAI, MAIG), is a full time employee of Reed Resources Ltd. Mr. Potter has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results Mineral Resources and Ore Reserves’. Mr. Potter consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Reed Resources is a gold miner based in the Eastern Goldfields of Western Australia, with modest production and sound margins we are expanding and diversifying our production base into steel minerals.

Reed Resources has three main projects all in Western Australia.

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Comet Vale - High-grade underground gold mine in JV with Kingsrose Mining Ltd, targeting 20,000 oz pa in 2008. Nickel Laterite JV with Heron Resources NL. Mt.Finnerty – Iron Ore JV with Portman Ltd Nickel JV with Western Areas NL Barrambie – Completing Definitive Feasibility Study on 5,000t per annum Ferrovanadium operation.