NEOMETALS LTD — Capital/Financing Update 2011

Nov 14, 2011

Level 1, 672 Murray St West Perth WA 6005

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ABN 89 099 116 631
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Locked Bag 8 West Perth WA 6872 Tel: +61 8 9322 1182 Fax: +61 8 9321 0556

ASX RELEASE

15 November 2011

Reed Resources achieves 3 Million Ounce Resource and 500,000 Ounce Reserve at Meekatharra.

HIGHLIGHTS

• Total Resources increase by 498,000 oz to 3.27 Moz

• Open pit Reserves increase by 18 % from 251,000 oz to 308,800 oz

• Total Reserves (including underground) now stand at 533,700oz

• New open pit Reserves strengthen a robust mining plan.

Emerging gold producer Reed Resources Ltd ( ASX: RDR ) (the “Company” or “Reed Resources”), is pleased to announce a significant increase in its Reserve and Resource inventory from its flagship Meekatharra Gold Project.

As a result of the Company’s ongoing geological evaluation of its Meekatharra gold assets, Reed has increased the total resources from 2.8 Moz to 3.27 Moz (Table 1) and the total reserves from 476,000 ounces to 533,700 ounces (Table 2).

Table 1. Summary of total Mineral Resources at various cut‐off’s

Resource Classification	Tonnes	Gold Grade (g/t)	Total Ounces
Indicated	36,938,700	1.7	2,050,600
Inferred	21,956,000	1.7	1,222,600
TOTAL	58,894,700	1.7	3,273,200

Table 2. Summary of total Mineral Reserves at A$1,300/oz

Type	Reserve Classification	Tonnes	Gold Grade (g/t)	Total Ounces
Open Pit	Probable	4,578,400	2.1	308,800
Underground	Probable	1,961,800	3.6	224,900
TOTAL	Probable	6,540,200	2.5	533,700

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The optimisation of results from its winter drilling campaign identified 11,335 probable reserve ounces at 1.43 g/t Au in the Whangamata open pit. Gold mineralisation has also been identified in the floor of the Great Northern Highway pit (GNH), which has been re‐optimised classifying an additional 33,589 probable reserve ounces at 1.26 g/t Au ( Table 4 ). The GNH Pit is just 300m from the Bluebird Mill.

Managing Director, Mr Christopher Reed said; “The increase in open pit reserves adds real value to an already substantial gold project. The resource increase alone would probably be a company‐making achievement for most junior gold companies, and it now makes Reed one of the few +3Moz gold resource companies in Western Australia. The increase in reserves is a direct result of optimizing these resources, taking the total reserve base well over half a million ounces, which is a major milestone.

Our gold team is well advanced in all facets of advancing our Meekatharra gold assets towards operational status, and a decision to mine is anticipated in the near future.” Mr. Reed added.

All resources except GNH were estimated by Snowden Mining Consultants Pty Ltd (SMC) using Ordinary Kriging and the reserves were undertaken by Minecomp Pty Ltd using a A$1,300/oz gold price and competitive mining prices.

PROJECT UPDATE

The Project is progressing according to schedule (Figure 1). The focus items for the team are currently:

• Village refurbishment and construction contract is ready to be awarded;

• Mill refurbishment and upgrade study nearing completion;

• Mickey Doolan metallurgical test work is being finalized. This pit has the potential to extend the open pit mine life by 3 years should the metallurgy be favorable;

• Paddys Flat “Super Pit” resource is being finalized for optimization. This will evaluate the magnitude of the pit at various gold prices;

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Figure 1. Project timeline and progress.

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ENDS

For further information please contact:

Chris Reed Tony Dawe Reed Resources Ltd Professional Public Relations T: +61 89322 1182 T: +61 89388 0944/ +61 405 989 743 E: chris@reedresources.com E: tony.dawe@ppr.com.au

COMPETENT PERSONS STATEMENT

Geological aspects of this report have been compiled by Mr Craig Fawcett (MAIMM), a full time employee of Reed Resources Ltd. Mr Fawcett has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being reported on to qualify as a Competent Person as defined in the Code for Reporting of Mineral Resources and Ore Reserves (2004). Mr Fawcett consents to the inclusion in this report of the matters in the form and context in which it appears.

Notes to accompany Mineral Reserve Estimate:

Minecomp Pty Ltd was engaged by Reed Resources Ltd (Reed) to undertake an estimation of open pit gold reserves at the GNH, Whangamata and South Emu resources, in accordance with The 2004 Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code).

The ore reserve is that part of the Mineral Resource which can be economically mined by open pit mining methods. Dilution of the Mineral Resource and an allowance for ore loss was included in the Ore Reserve estimate. Only the Indicated Resource was classified as Probable Reserves after consideration of all mining, metallurgical, social, environmental and financial aspects of the Bluebird Project.

Slope angles used in the Ore Reserve estimation were based on historical pit slope angles for that rock type and weathering profiles that have remained largely in‐tact for the last 15 years and were a base recommendation by Coffey Mining. Ore related parameters used in the optimisation are tabulated in Table 3 (prices quoted are in AUS$).

Table 3. Summary of Mineral Reserve Estimate parameters

Table 3.	Summary of Mi	Summary of Mi	neral Reserv	e Estimateparameters
Orebody	Processing Costs		Met Recovery	3rd Party Royalty	Total Mining & Milling Cost A$/oz
	Oxide	Fresh
GNH	$21.01	$23.80	94%	1.0%	$974
Whangamata	$21.01	$23.80	94%	1.0%	$1007
South Emu	$21.01	$23.80	94%	1.0%	$839

As a standard, a state royalty of 2.5% was applied to the reserves, and mining costs were derived from contractor estimates and/or peer equivalents. A gold price of A$1,300 is used to calculate the reserves. A cost of $0.12tkm was applied to haulage where required.

Metallurgical recovery was based on recoveries encountered from previous processing of the ore, or from metallurgical work undertaken on the ore bodies.

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Appendix A – Technical Information

‐ Yaloginda Bluebird Project

Great Northern Highway

The Great Northern Highway (GNH) pit lies directly opposite the Blue Bird Mill on the Eastern side of the Great Northern Highway. An area of un‐mined, high grade mineralisation has been identified during Reed Resources’ geological appraisal of the asset; this is located in the South East floor of the existing pit see figure 2 below:

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Figure 2. GNH cross section at 18,720mN highlighting the unmined mineralisation in the floor of the pit .

An historic Indicated Resource of 2.12Mt @ 1.2 g/t Au for 81,700oz, reported by St Barbara Mines in 2001, was validated and optimised. As a consequence the pit has been re‐optimised realising a Probable Reserve of 33,589 ounces of gold ( Table 4 ).

Table 4. GNH Reserve estimate at $1,300/oz gold price

Type	Reserve Classification	Tonnes	Gold Grade (g/t)	Total Ounces
Open Pit	Probable	880,300	1.3	33,600

The pit is located in the centre of the northern strain shadow of the Norrie Pluton. The un‐mined mineralisation identified in the South East floor is associated with a highly strained fold limb, which has been exploited by intense gold bearing veins.

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Whangamata

An internal optimisation completed in July 2011 calculated a 4,300oz inventory for the Whangamata area extending up to 300m along strike north of the pit. Following a successful drilling program and re‐ evaluation a reserve has been calculated of 337,000 tonnes @ 1.5g/t Au for 15,100oz (Table 5) with the total resource standing at 748,000 tonnes @ 1.5g/t Au for 36,900oz (Table 6). As the bulk of the ore is located north of the original pit further infill drilling has been planned to bridge the gap between the two main mineralised zones. The mineralisation remains open to the north and at depth.

The Whangamata pit is located 6km north of the Bluebird mill. Mineralisation is hosted within quartz veins in pervasive carbonate altered high magnesium basalts. Some 2,800oz were extracted from the original pit in 1995 at a grade of 1.36 g/t Au.

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Figure 3. Long Section of the Whangamata proposed open pit cut back and extension.

Table 5. Whangamata Mineral Reserve Estimate

Type	Reserve Classification	Tonnes	Gold Grade (g/t)	Total Ounces
Open Pit	Probable	259,000	1.43	11,335

Table 6. Whangamata Mineral Resource Estimate

Resource Classification	Tonnes	Gold Grade (g/t)*	Total Ounces
Indicated	553,000	1.5	26,600
Inferred	195,000	1.7	10,300
Sub‐Total	748,000	1.5	36,900

*Reported at > 0.5g/t Au cut off

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Paddy’s Flat Project:

In October 2011 Reed commenced a program of amalgamating and re‐estimating historical mineral resource estimates in the Paddys Flat area into a single model for evaluation. The aim was to test the potential for a super pit at Paddy’s Flat. Data for the northern Paddy’s Flat area and the Fenian‐ Marmont deposit was re‐modelled and assessed in addition to the recently updated Vivian‐Consols and Prohibition resources, completed by Reed in early 2011. The existing 2005 Mickey Doolan resource would also form part of a conceptual super pit.

Paddy’s Flat North

All the historic data north of the Vivian’s deposit was modelled resulting in a total Resource of 6,559,000 tonnes @ 1.2 g/t Au for 249,700oz (Table 7). This encompasses eight historic pits with combined gold production of 202,800oz mined at a grade of 2.2g/t. Directly north of Consols on the main Paddy’s Flat shear, the mineralisation at Ingliston and Alberts is associated with quartz feldspar porphyry. Further north, mineralisation is fault offset to the Commodore and Halcyon pits, where mineralisation is hosted in sheared ultramafic and feldspar porphyry, respectively.

Table 7.

Summary of Paddy’s Flat North Resource Estimate

Resource Classification	Tonnes	Gold Grade (g/t)*	Total Ounces
Indicated	6,108,000	1.2	238,700
Inferred	278,000	1.2	11,000
Sub‐Total	6,386,000	1.2	249,700

*Reported at > 0.5g/t Au cut off

Fenian‐Marmont

Located at Paddy’s Flat, between the Consols and Mickey Doolan pits, the Fenian‐Marmont structure was mined historically underground along the central Paddy’s Flat shear down to 450m vertical depth and later as open pits with a total historic gold production of more than 700,000oz. The eastern lode was not mined from underground and there is only sparse drilling below 100m depth. Re‐modelling and re‐evaluation has resulted in a Resource of 2,220,000 tonnes @ 1.1g/t Au for 77,400oz. (Table 8).

Table 8. Summary of Fenian‐Marmont Resource Estimate

Resource Classification	Tonnes	Gold Grade (g/t)*	Total Ounces
Inferred	2,223,000	1.1	77,400
Sub‐Total	2,223,000	1.1	77,400

*Reported at > 0.5 g/t Au cut off

All known mineralisation at Paddys Flat has now been re‐evaluated. The resource models have been reported at a 0.5g/t cut off and to a maximum depth of 200m to reflect the likely depth of a potential super pit. This has resulted in a grand total of 29,888,100 tonnes @ 1.4 g/t Au for 1,310,900 oz (Figure 4), with all resources extending below the arbitrary cut off depth.

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Figure 4. Plan view of Paddy’s Flat resource areas and total Mineral Resource estimate above 200m depth

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Reedy Project:

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Figure 5. Plan view of deposit locations at the Reedy project.

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Turn of the Tide

The Turn Of The Tide (TOTT) line of mineralisation is located approximately 6km east of Reedy (Figure 5.). There are four existing open pits that were worked during the 1980’s and 1990’s, and three of these are within the current resource area; at Culculli North, Culculli, and TOTT Main. Remodelling of this mineralisation by Reed’s internal geological team has led to a maiden resource of 76,450 ounces.

Table 9. Turn of the Tide Mineral Resource Estimate .

Resource Classification	Tonnes	Gold Grade (g/t)*	Total Ounces
Indicated	854,000	1.8	47,900
Inferred	604,000	1.5	28,500
Sub‐Total	1,458,000	1.6	76,400

*Reported at > 0.5 g/t Au cut off

Mineralisation is associated with moderate to strongly weathered sericite‐quartz schist. The host structure is predominantly steeply dipping to the east, except the West Zone which dips steeply towards the west.

Drilling leaves the mineralisation open at depth, with only two holes extending below 80m.

South Emu

South Emu is the southernmost pit on the Reedy line (Figure 5). The bulk of mineralisation occurs on the margins of a felsic porphyry dyke on the contact between mafic volcanics and ultramafic rock.

The deposit has been remodelled and re‐optimised resulting in a resource increase from 78,000oz to 94,300oz (Table 10) with a grade increase from 3.4 g/t Au to 5 g/t Au; still being open at depth. An open pit Reserve has 91,000 tonnes at 4.7 g/t Au for 13,900oz (Table 11). An underground reserve, mine design and mining schedule is in progress. Figure 6 illustrates the planned opened pit cut back.

Directly to the north along strike is the historic Triton shaft which produced 230,000oz Au from 1935 to 1948 at a grade of 9.7 g/t Au and is currently undergoing re‐evaluation.

Table 10. South Emu Mineral Resource Estimate .

Resource Classification	Tonnes	Gold Grade (g/t)*	Total Ounces
Indicated	441,000	5.1	72,800
Inferred	144,000	4.64	21,500
Sub‐Total	585,000	5.0	94,300

*Reported at > 2 g/t Au cut off

Table 11. South Emu Mineral Reserve Estimate at A$1,300/oz.

Type	Reserve Classification	Tonnes	Gold Grade (g/t)	Total Ounces
Open Pit	Probable	91,000	4.7g/t	13,900

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Figure 6. Long section schematic of South Emu proposed open pit cut back.

RL9

RL9 is located between the Jack Ryan and Callisto Pits (Figure 5) on a splay off the main Reedy shear. A review and re‐optimisation by Reed Resources has resulted in a total Resource of 161,000 tonnes @ 1.6 g/t Au for 8,200oz (Table 12), hosted by a foliated mafic unit cut by strong quartz veins and minor felsic intrusions. The mineralised structure plunges to the north and is open at depth and to the north.

Table 12. RL9 Mineral Resource Estimate.

Area	Resource Classification	Tonnes	Gold Grade (g/t)*	Total Ounces
RL9	Indicated	80,000	1.7	4,500
	Inferred	82,000	1.4	3,700
	Sub‐Total	162,000	1.6	8,200

*Reported at > 0.5 g/t Au cut off

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SUMMARY OF RESOURCES AND RESERVES

Table 13. Summary of current Mineral Resources for the Meekatharra gold project.

Project	Resource Classification	Tonnes	Gold Grade (g/t)	Total Ounces
Meekatharra North	Indicated	706,000	1.3	29,000
	Inferred	174,000	1.2	6,000
	Sub‐Total	880,000	1.3	35,000
Paddy's Flat	Indicated	23,431,700	1.6	1,179,900
	Inferred	11,846,000	1.5	583,900
	Sub‐Total	35,277,700	1.6	1,763,800
Yaloginda	Indicated	10,061,000	1.7	565,300
	Inferred	6,248,000	1.7	343,400
	Sub‐Total	16,309,000	1.7	908,700
Reedys	Indicated	2,740,000	3.1	276,400
	Inferred	3,688,000	2.4	289,400
	Sub‐Total	6,428,000	2.7	565,800
TOTAL	Indicated	36,938,700	1.7	2,050,600
	Inferred	21,956,000	1.7	1,222,600
	TOTAL	58,894,700	1.7	3,273,200

Table 14. Summary of current Mineral Reserves for the Meekatharra gold project (Reserves are include in the Resources in Table 13).

Type	Project	Reserve Classification	Tonnes	Gold Grade (g/t)	Total Ounces
Open Pit	Bluebird	Probable	1,410,000	1.9	87,000
	Prohibition	Probable	1,110,000	2.7	96,000
	South Junction	Probable	97,000	1.5	4,500
	Surprise	Probable	136,000	3.0	13,000
	Batavia	Probable	200,000	2.4	14,000
	Whangamata	Probable	259,000	1.4	11,300
	GNH	Probable	880,300	1.3	33,600
	Jack Ryan	Probable	222,500	3.1	21,800
	Callisto	Probable	72,500	3.1	7,200
	Rand	Probable	100,000	2.4	7,600
	South Emu	Probable	91,100	4.7	12,800
	Sub‐Total	Probable	4,578,400	2.1	308,800
Underground	Prohibition	Probable	1,325,300	2.4	104,100
	Vivian/Consols	Probable	256,500	7.7	63,600
	Fatts/Mudlode	Probable	380,000	4.7	57,200
	Sub‐Total	Probable	1,961,800	3.6	224,900
TOTAL RESERVES			6,540,200	2.5	533,700

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About Reed Resources

Reed Resources Ltd (ASX: RDR, OTC: RDRUY) is an emerging Western Australian gold producer focused on bringing its flagship Meekatharra Gold Project into production in the second half of 2012.

Reed Resources’ wholly owned Meekatharra Gold Project is located in the prolific Murchison region of Western Australia and has a current JORC resource of 3.27 Moz and existing infrastructure including the 3 Mtpa Bluebird processing plant.

Reed Resources’ other projects include:

• Mount Marion – High‐grade lithium project located 40km south of Kalgoorlie in JV with Mineral Resources Limited (ASX: MIN) and set to be the World’s second biggest lithium concentrate operation. Currently under construction with commissioning planned for 2012.

• Barrambie – Definitive Feasibility Study completed on the production 6300t of vanadium per annum. Currently in approvals process and evaluating recovery of titanium slag and pig iron as co‐ products.

• Comet Vale – Evaluating recommencement of high‐grade underground gold production, currently on care & maintenance. JORC resource of 186,000 oz at 10.8 g/t Au.

• Mount Finnerty Iron Ore – Iron ore JV with Cliffs Natural Resources and nickel farm‐in with Barranco Resources NL.

Reed Resources’ American Depositary Receipts (ADR’s) trade under the code RDRUY (CUSIP Number: 758254106). Each Reed Resources ADR is equivalent to 10 ordinary shares of Reed Resources as traded on the ASX. The Bank of New York Mellon is the depository bank.

Website: www.reedresources.com

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