NEOMETALS LTD — Capital/Financing Update 2011

Jul 5, 2011

==> picture [285 x 63] intentionally omitted <==

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

ASX RELEASE

6 July 2011

OPTION SECURED TO ACQUIRE NANNINE MINING CENTRE

HIGHLIGHTS

• Option secured to acquire outright ownership of the Nannine Mining Centre;

• Opportunity to extend Reed Resources’ Meekatharra land holding to a 110km long continuous land package from Reedy to Meekatharra North;

• Land holding of 147km[2] to potentially add to existing 800km[2] endowment;

• Historical mining at Nannine has produced over 200,000oz from pits and high grade underground;

• Existing resources of 580,000t @ 3.2g/t for 59,000oz.

Australian diversified resources company Reed Resources Ltd ( ASX: RDR ) (the “Company” or “Reed Resources”), is pleased to announce that it has secured the opportunity to extend its Meekatharra landholdings by entering into an option to take ownership of the Nannine Mining Centre.

The Nannine land holding is located midway between Reedy and Paddy’s Flat (see Figure 1). The Company has secured a two year option by paying an option fee of $150,000 and assuming responsibility for maintaining the tenements in good standing during the option period. The Company can acquire outright ownership of the Nannine tenements for $1,500,000 (payable in cash or Reed Resources shares), with a further payment of $500,000 due upon a decision to mine.

Reed Resources will commence detailed validation of all exploration and mining data before proceeding with exploration, remodelling and re-optimisation of the existing resources, to determine whether to exercise the option.

Managing Director Christopher Reed said, “This option provides the Company with the opportunity to secure another sensational land package within the Meekatharra area. Nannine has a history of high grade resources and has not had an economic assessment since 2004 when gold was about A$500/oz. Whilst the official resources are only 59,000oz (Table 1), there are many unofficial historic estimates associated with the prospects that indicate significant potential exists in the Nannine area. These will be reassessed by the Company’s internal technical team.

“The Nannine Mining Centre has a long history of high grade underground mining since 1890. The Nannine mine produced 23,700oz at 31.7g/t and Champion produced 27,700oz at 19.6g/t. In addition, several pits were mined historically and may provide immediate expansion potential to complement the existing open pit reserves.

==> picture [60 x 58] intentionally omitted <==

“Some of the more recent drilling intersections at both these prospects and others indicate continuing resources of a similar tenor. In time, it is hoped that ore from these areas may contribute significant metal to the Meekatharra Operation.”

Further information regarding the Nannine Mining Centre is set out in Appendix A.

==> picture [450 x 617] intentionally omitted <==

Figure 1. Location plan of Nannine and surrounding Meekatharra tenement holding.

2

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.

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 resource re-optimisation and 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

3

Appendix A – Technical Information

Nannine Geology & Location

Nannine is located 30km SSE from the town of Meekatharra, and 760km NE of Perth. It is located within the Meekatharra-Wydgee Greenstone Belt mid-way between Reedy (1Moz gold produced) and Paddy’s Flat (>2.0Moz gold produced) mining centres in a sequence of mafic volcanic rocks and intercalated sediments and banded iron-formation (BIF). To the west and east of Nannine, the greenstone sequence is intruded by large syn-tectonic granitic domes of the Nannine Tonalite and Norie Pluton respectively. Mineralisation at Nannine is located in quartz veining along stratigraphic contacts and brittle fault zones that cut the volcano-sedimentary sequence. The volcano-sedimentary sequence, including BIF, hosting mineralisation at Nannine belongs to the Norie Group of the Murchison Province. The Norie Group also hosts the mineralisation at Reedy, Yaloginda and Paddy’s Flat, making it the most prospective greenstone sequence in the Meekatharra area for hosting gold mineralisation. The landholding is only 15-20 km by sealed road from the Bluebird Processing facility, and represents an attractive potential source of ore with only a short trucking distance. Within the Nannine Mining Centre, there are a number of prospects that host either historical operations or prospective targets (Figure 2).

==> picture [382 x 461] intentionally omitted <==

Figure 2. Geological map of the Nannine area showing historic mines and prospects

4

Nannine Reef

This quartz reef system is hosted within the meta-basalt sequence along a NNE trending fault parallel to Caledonian. The quartz lodes at Nannine Reef (Figure 3), and adjacent Mount Hall Reef, plunge to the NNE at 25 degrees, and individual lodes are evident as tight packages of en echelon veins. Both the Nannine Reef and Mount Hall Reef were accessed from the same shaft, and the reefs are only 25m apart. The Mount Hall Reef was mined underground to a maximum depth of 75m, and the Nannine Reef was mined to a maximum of 150m. Drilling around, beneath, and to the south of the underground workings has resulted in intersections such as 5m @ 5.1 g/t (RCN3 at 50m vertical depth (vd)), 2m @ 42.8 g/t (NA75 at 19m vd), and 3m @ 12.4 g/t (NA41 at 48m vd). Drilling along the southern extension of the reef is sparse, with one hole per section at 40m spacing.

==> picture [492 x 218] intentionally omitted <==

Figure 3. Long Section view of the Nannine Reef

Caledonian

The Caledonian Pit was mined initially in 1988 by Endeavour Resources, then again in the mid 1990s and 2002 by St Barbara Mines. The local geology is comprised of mafic volcanics and sediments and the mineralisation is controlled by a NNE trending fault along the contact between the Nannine Tonalite and the greenstone. Drilling beneath this pit represents the best immediate target in the region for underground potential (Figure 4). Previous intersections include: 8.0m @ 8.9g/t (CDN11 at 210m vd), 9.0m @ 6.6g/t (CPH85 at 150m vd), 3.0m @ 15.6g/t (CD14 at 163m vd) and 4.0m @ 29.7g/t (CPH206 at 102m vd).

There are no published resources or reserves for mineralisation beneath this pit. Validation of the existing data base and modelling of the deposit will be conducted as a matter of priority.

Luggs Reward

This prospect is characterised by a northeast to northwest dipping sequence of intercalated mafic, ultramafic and sedimentary rocks. The main line of historical workings follow ferruginous chert units that dip to the east. The first round of drilling in 1989 intercepted a number of significant intersections including 10m @ 5.4g/t (LR27 at 22m vd). Follow-up drilling in 2002 did not test the area of anomalous intersections but instead extensional drilling was undertaken that returned many holes of low tenor mineralisation. Aeromagnetic data would suggest the mineralisation is associated with a suite of faults that were not tested in the 2002 round of drilling. As such, Luggs Reward presents an immediate target.

5

==> picture [463 x 308] intentionally omitted <==

Figure 4. Cross-section view of the Caledonian pit showing high-grade mineralisation extending beneath the pit

Aladdin

The mineralisation is associated with the series of regional NNE-NNW trending faults as seen throughout the region. These interact with sediments and BIF units. The interaction causes local widening of mineralisation within the BIF units which so far has hosted the bulk of the economic material.

The existing pit has potential for expansion, as previous drilling and underground sampling indicate extensional potential (Figure 5). Modelling of the deposit will be reassessed following intensive validation of the data base.

Three Sisters

This comprises almost 400m of variably exposed quartz reef up to 6m wide in places (Figure 6). This is hosted within meta-basalt. High grade drilling intersections at this prospect include 3m @ 24.9g/t (TS15 at 30m vd) and 2m @ 49.1g/t (TS23 at 45m VD). The high grade nature of this deposit is attractive for both open pit and underground potential.

6

==> picture [463 x 308] intentionally omitted <==

Figure 5 . Cross-section view of the Aladdin pit showing mineralisation extending beneath the pit

==> picture [476 x 318] intentionally omitted <==

Figure 6. Cross-section view of the Three Sisters prospect showing mineralisation encountered in historic drilling

7

Heritage Sites and Designated Environmentally Sensitive Areas

The Nannine tenement package contains a number of areas that require approval from the Department of Indigenous Affairs and/or Department of Environment and Conservation (DEC). At present, six sites of indigenous significance are registered in the tenement area, covering 8km[2] of the tenement package, including part of the Three Sisters prospect. Access to these areas for exploration requires permission from the Department of Indigenous Affairs and local Native Title claimant groups.

Tenements located to the south of the Nannine Reef Mine, in the vicinity of Lake Annean, are within a region deemed as an Environmentally Sensitive Area (ESA) by the DEC. Application must be made to the DEC before any ground disturbing exploration can be done in the area. Exploration in the Baileys Island area is unlikely to be hindered due to the extent of previous mining activity; however access to other islands within the lake, and areas marginal to the lake will require clearing permits, and may require vegetation surveys to be undertaken.

Table 1. Nannine Resource Summary – St Barbara Mines Estimates from 2003 & 2005.

~~Area~~ Caledonian (SBM 2003)	~~Classification~~ Indicated	~~Tonnes~~	~~(g/t)~~	~~Total Ounces~~
	Inferred	173,000	4.8	27,000
	Sub-Total	173,000	4.8	27,000
Nannine Reef (SBM 2005)	Indicated
	Inferred	267,000	2.1	18,000
	Sub-Total	267,000	2.1	18,000
TOTAL Aladdin (SBM 2003)	Indicated
	Inferred	140,000	3.0	14,000
	Sub-Total ~~Indicated~~	140,000 ~~-~~	3.0 ~~-~~	14,000 ~~-~~

8