NEOMETALS LTD — Capital/Financing Update 2012

Oct 21, 2012

==> picture [280 x 60] intentionally omitted <==

Level 1, 672 Murray St West Perth WA 6005 Locked Bag 8 West Perth WA 6872 Tel: + 61 8 9322 1182 Fax: + 61 8 9321 0556

ASX RELEASE

22 October 2012

Placement and underwritten Share Purchase Plan to raise $10 million

HIGHLIGHTS

• $8 million Placement to institutional and sophisticated investors.

• $2 million underwritten Share Purchase Plan to existing shareholders.

• Funds raised to maintain group working capital as Reed transitions into mid-tier gold producer.

Emerging Australian gold producer Reed Resources Ltd ( ASX: RDR ) (the Company or Reed ) is pleased to announce a $10 million capital raising through a Placement and Share Purchase Plan ( SPP ). An issue price of $0.18 per Share has been fixed for both raisings.

The funds raised will be used to maintain appropriate levels of working capital as Reed moves into the commissioning phase of the Meekatharra Gold Project. As announced on 27 September 2012, Reed is in the process of finalising a $19 million debt facility with Credit Suisse. The funds raised will augment the Company’s cash reserves as this facility is finalised and made available.

Managing Director, Mr Luke Tonkin, said: “Reed is pleased with the very strong support for the capital raising. The additional working capital allows the group to maintain appropriate working capital levels during the commissioning of the Meekatharra Gold Project, which is scheduled for December.

“The Meekatharra Gold Operations mining contractor commenced mobilising to site from 1 October and has commenced 24 hour mining operations. The approval of the Batavia Mining Proposal is expected this week which is another key milestone as the Company works towards first gold production.”

==> picture [60 x 57] intentionally omitted <==

Placement

The $8 million Placement has been lead managed by Azure Capital Limited ( Azure ) and subscription commitments have been received from institutional and sophisticated investors for settlement on Thursday, 25 October. The Company is pleased that a number of large existing shareholders have participated in the Placement.

Share Purchase Plan

Reed is also conducting a $2 million SPP to give its existing shareholders the opportunity to acquire new Shares, at the same price paid by institutional and sophisticated investors under the Placement.

Under the SPP, Reed is offering each eligible shareholder (being those with a registered address in Australia or New Zealand who held Shares as at 4.00pm Western Standard Time on 19 October 2012) the opportunity to acquire up to a maximum of $15,000 worth of Shares. Shares acquired under the SPP will not attract brokerage or any other transaction costs.

The offer price of $0.18 represents a 5% discount to Reed’s closing price on the 16 October 2012, the last full trading day before the announcement of the capital raising, and a 17% discount to the volume-weighted average price (VWAP) of Reed shares during the 20 trading days up to and including 16 October 2012.

The SPP is capped at $2 million and is underwritten by Azure. The underwriting is conditional upon completion of the Placement. SPP documents will be dispatched to shareholders on or about 25 October 2012.

ENDS

For further information please contact :

Luke Tonkin John Gardner Reed Resources Ltd MAGNUS Investor Relations T: +61 89322 1182 T: +61 413 355 997 E: enquiries@reedresources.com E: jgardner@magnus.net.au

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 December 2012.

Reed Resources’ wholly owned Meekatharra Gold Project is located in the prolific Murchison region of Western Australia and currently has 3.59Moz of gold in JORC resources (see table below) 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).

• Barrambie: Currently in approvals process and evaluating recovery of titanium, vanadium and iron units via a proprietary hydrometallurgical processing route.

• Comet Vale: Currently on care & maintenance. High grade resource of 209,500 oz at 7.6 g/t Au.

• Mount Finnerty: Iron ore JV with Cliffs Natural Resources and nickel option 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

==> picture [452 x 324] intentionally omitted <==

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 they appear.