NEOMETALS LTD — Capital/Financing Update 2010

Aug 19, 2010

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

20 August 2010

Company Announcements Office ASX Limited via Electronic Lodgement

Dear Sirs

PROPOSED ISSUE OF OPTIONS TO KEY EMPLOYEES AND CONSULTANTS

1. Options to be offered to key employees and consultants

The Company advises that the Board has resolved to offer to eight of the Company's key employees and consultants, in aggregate, 2,400,000 options to acquire fully paid ordinary shares of the Company pursuant to the Company's Employee Share Option Plan.

The options to be offered will have an exercise price of $1.00 and an expiry date for exercise of 1 July 2013. The options are to be offered to the relevant employees and consultants in recognition of their contribution to the Company and in accordance with their remuneration entitlements.

2. Options to be granted to Directors

Subject to shareholder approval, anticipated to be sought at the Company's upcoming Annual General Meeting, the Board has also approved the offer of the following options to the following directors;

• Chris Reed (Managing Director & CEO) 2,000,000

• David Reed (Executive Chairman) 1,000,000  Steven Cole (Deputy Non Executive Chairman) 500,000  Peter Collins (Non Executive Director) 250,000  Ian Junk (Non Executive Director) 250,000

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Each option will be exercisable at an exercise price of the greater of $1.00 or 145% of the VWAP for the RDR shares traded on the last day of trading of such shares immediately prior to the shareholder approval, at any time from the relevant vesting date until 1 July 2013.

The options for Chris Reed and David Reed vest as to 50% on grant and 50% on 1 July 2011. The options for the non‐executive directors vest on grant.

The options form part of the long term incentivisation arrangements for the relevant directors and were taken into consideration at the time of the Company’s annual remuneration reviews through the Nomination and Remuneration Committee.

Yours faithfully

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Jason Carone COMPANY SECRETARY