NEOMETALS LTD — Capital/Financing Update 2010

Mar 7, 2010

Reed Resources Ltd

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----- Start of picture text ----- ABN 89 099 116 631----- End of picture text -----

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

ASX Announcement

8 March 2010

Mt Finnerty Nickel HoA with Western Areas NL terminates

KEY POINTS:

• Earn in requirement at Mt Finnerty Nickel project by Western Areas not satisfied, therefore Heads of Agreement has lapsed,

• Reed resumes 100% nickel rights to project, and

• Reed to progress nickel exploration in own right.

Australian diversified resources company Reed Resources Ltd ( ASX: RDR ) notes that under a Heads of Agreement with Western Areas NL ( ASX: WSA ) made 26 February 2007 WSA has been exploring for nickel at Mt Finnerty and was entitled to earn a 51% interest by expending $1.5m before 26 February 2010: see ASX announcement dated 28 February 2007

RDR announces WSA had expended approximately $1.32m by that date. Accordingly WSA’s right to earn an interest has now expired and the Heads agreement lapsed.

Since commencement of the agreement WSA has completed, at a cost in excess of A$1.3M, geological mapping, ground geophysical surveys, soil geochemical surveys, RAB and RC drilling. Exploration by WSA has successfully confirmed the presence of extensive high‐ magnesium cumulate‐textured komatiitic sequences along the western flank of the Watt Hills greenstone belt (refer Figure 1).

Recent exploration by WSA focussed on the Richies Reward‐Johnnies Dam prospects, targeting an embayment in the Western Ultramafic sequence (Figure 1), including a deep (220m) RC drill hole (WMFRC010) drilled in September. The drill hole intersected unmineralised basalt and thin low‐Mg ultramafic units but was stopped at 124m, due to an inflow of salty water, and did not intersect its target.

FORWARD WORK

Reed will continue nickel exploration at Mt Finnerty and the first task will be to mobilise a diamond drill rig to drill a tail on the end of MFRC010 to complete testing of the geological/geophysical target.

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C J Reed

MANAGING DIRECTOR

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Competent Persons Statement

Geological aspects of this report that relate to Exploration Results have been compiled by Dr Peter Collins (MAIG), a Director of Reed Resources Ltd. Dr Collins has sufficient experience relevant to the styles of mineralisation and typse of deposit under consideration and to the activity being reported on to qualify as a Competent Person as defined in the Code for Reporting of Mineral Resources and Ore Reserves. Dr Collins consents to the inclusion in the report of the matters in the form and context in which it appears.

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Figure 1 Location of significant nickel targets in the basal(?) ultramafic sequences along the western flank of the Watt Hills greenstone belt, including a ‘gossan’ (5.1% Ni, WMC 1968) and RC drill holes with anomalous Ni intersections (e.g. MF103) in the north of the project. Several nickel sulphide targets identified by Western Areas along strike in the southern part of the same ultramafic sequence include the Johnnies Dam (MFRC010) and Richies Reward prospects. Bedrock geology interpretation by Southern Geoscience Consultants.

About Reed Resources

Reed Resources Ltd is a diversified mining and exploration Company based in Western Australia. It has modest gold production and is expanding and diversifying its production base. Reed Resources has five main projects (all in Western Australia) including;

• Mount Marion – High‐grade Lithium project located about 40km south of Kalgoorlie in JV with Mineral Resources Ltd. Resource Estimate by April 2010.

• Comet Vale – High‐grade underground gold mine in Production JV with Kingsrose Mining Limited (resuming 100% equity on 1 June 2010).

• Barrambie – Definitive Feasibility Study completed on a Ferrovanadium operation to produce 6300t of vanadium per annum. Currently in approvals process.

• Mount Finnerty – Iron ore JV with Cliffs Natural Resources & Nickel Farm‐in with Barranco Resources NL.

• Bell Rock Range – Nickel‐Copper‐PGM Farm‐out to Anglo American Exploration.

Website: www.reedresources.com