NEOMETALS LTD — Capital/Financing Update 2011

Jul 19, 2011

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

ASX Release

20 July 2011

Barrambie EPC Budget Estimate Received

HIGHLIGHTS

• Based on the EPC budget estimate received, Barrambie capex potentially reduced by 18% or A$100 million compared to 2009 DFS on a like-for-like basis.

• Processing plant opex estimated to be 6% lower than DFS, despite strong Australian dollar.

• Indicative preliminary financing proposals received from parties wishing to participate in a dedicated special purpose vehicle.

Further to the announcement of 23 June 2011, Australian diversified resources company Reed Resources Ltd (ASX: RDR) (the “Company” or “Reed Resources”) is pleased to announce that it has received an EPC budget estimate for the Barrambie Vanadium Project (“Barrambie” or the “Project”) from the consortium of China Nonferrous Metal Industry’s Foreign Engineering and Construction Co. Ltd (“NFC”) and Arccon (WA) Pty Ltd (“Arccon”).

The NFC / Arccon budget estimate, which is to an accuracy of +/- 7.5% and subject to future cost escalation and foreign exchange movements, is approximately 18% lower than the original Definitive Feasibility Study (“DFS”) capital cost estimate on a like-forlike basis, representing a potential capital cost saving of approximately A$100 million. The Direct Construction Costs and EPCM Fee estimate has been reduced from A$539 million to $439 million.

The total DFS estimate of A$629 million included A$50 million for Indirect (Preproduction) Costs and A$40 million for a Ferro-vanadium circuit, with the production focus now high-purity vanadium pentoxide the ferrovanadium circuit is not required. The total construction cost based on the NFC/Arccon budget estimate and holding constant the indirect, pre-production costs, would now amount to A$489 million.

The expected capital cost savings are in addition to processing plant operating cost savings of approximately 6% over the DFS estimates recently identified by Sinclair Knight Merz, which are primarily due to reductions in power and soda ash consumption arising from plant re-design work carried out by NFC / Arccon to-date.

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Reed Resources expects to receive a final, fixed price EPC quote for Barrambie in early August, at which point a full reconciliation to the DFS capital cost estimate will be released to the market.

A key term of the Company’s MOU with NFC / Arccon is an obligation on NFC to procure a debt term sheet from Chinese financial institutions for at least 70% of the Project’s total funding requirement. Notwithstanding this debt gearing, the equity capital component for the Project would still remain significant. Together with its advisers, Azure Capital, the Company continues to progress discussions with potential equity financiers, including parties with an interest in off-take.

Several indicative proposals have been received to-date, which suggest that an independently financed, stand alone special purpose vehicle for the Project is an achievable outcome. Consistent with Reed Resources’ stated strategic approach of spinning out quality projects which have been de-risked to development phase, the Company is reviewing the most appropriate methodology for achieving such an outcome, with an Initial Public Offering of the Company’s vanadium subsidiary being the Board’s currently preferred approach, which would also relieve the need for further equity raising in Reed Resources itself to support the development of the Barrambie project.

Reed Resources will ensure that the market remains fully informed regarding further developments as they arise.

- Ends -

For further information contact:

Reed Resources Media Chris Reed Tony Dawe Managing Director Professional Public Relations Tel: 08 9322 1182 Tel: 9388 0944 /+61 405 989 743 E: chris@reedresources.com E: tony.dawe@ppr.com.au

About Reed Resources

Reed Resources Ltd (ASX: RDR, OTC: RDRUY) is a diversified mining and exploration Company based in Western Australia. 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.

Reed Resources has five main projects (all in Western Australia):

• Mount Marion – High-grade Lithium project located about 40km south of Kalgoorlie in JV with Mineral Resources Limited. World’s second biggest lithium concentrate operation under construction. Commissioning to occur in December 2011.

• Meekatharra – Recently acquired 2.7M oz Gold project with 3Mtpa processing plant and associated infrastructure, conducting feasibility study to recommence gold production in second half of 2012.

• Barrambie – Definitive Feasibility Study completed on the production 6300t of vanadium per annum. Currently in approvals process. MOU with China Nonferrous Metals for EPC & financing assistance.

• Comet Vale – Evaluating recommencement of high-grade underground gold production, currently on care & maintenance.

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

Website: www.reedresources.com

About NFC

NFC is a state controlled company mandated by the Chinese central government to develop overseas mineral resources to meet China’s growing demand for metals. Listed on the Shenzen Stock Exchange, NFC is the largest Chinese contractor for foreign industrial projects in the nonferrous metals sector, and had built and financed mining plants and smelters across Asia and Africa. NFC’s overseas projects include:

• Kazakhstan Aluminum Smelter Project

• Chambishi Copper Mine of Zambia

• Vietnam Sin Quyen Copper Mine

• Iran Yazd Zinc Smelter

• Faryab Ferroalloy Plant of Iran

• Arak Aluminum Smelter of Iran

• Upgrading Project of Iran Jajarm Alumina Plant

• Iran Khatoon Abad Copper Plant

Website: www.nfc.com.cn