NEOMETALS LTD — Capital/Financing Update 2012

May 24, 2012

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ABN 89 099 116 631
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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

25 May 2012

Construction & Financing Update – Meekatharra Gold Project

HIGHLIGHTS

• ~$40m underwritten Rights Issue closed

• Mandate for $23m debt and hedging facility signed with Barclays

• 70,000 oz of gold put options (A$1,560 strike) purchased

• Plant refurbishment on schedule and within budget

Emerging Australian gold producer Reed Resources Ltd ( ASX: RDR ) (the “ Company” or “Reed Resources” ) is pleased to provide an update on the development of the Meekatharra Gold Project. Gold production from Meekatharra is scheduled to commence in the last quarter of 2012, targeting production of ~95,000 oz for the first 12 months of operations.

Corporate

Funding

As previously announced to the market, Reed Resources’ ~$40m Rights Issue closed during May. The funds will be used to progress the infrastructure upgrade and refurbishment program at the Meekatharra Gold Project.

Reed Resources also recently signed a mandate with Barclays Bank PLC (“ Barclays ”) for Barclays to act as arranger of a debt financing facility of up to $23m of debt to fund the initial working capital requirements for the Meekatharra Gold Project during the start-up phase of the mining operations, and a hedging facility which will allow the company to manage the risk of adverse movements in the gold price. The due diligence process and drafting of documentation is well under way.

Hedging

Reed Resources has recently purchased put options for the delivery 70,000 oz of gold with a strike price of A$1,560/oz and an expiry date of 19 September 2012. The purchased put options provide the Company with protection from falls in the gold price prior to the mandatory hedge (required under the proposed debt financing facility) being established. The mandatory hedge is likely to comprise of a combination of forward delivery contracts and bought put options.

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Meekatharra Gold Project - Project Update

The upgrade and refurbishment of the infrastructure at the Meekatharra Gold Project continues to gather momentum and is within the projected delivery dates for key items on the project. (Figure 1)

Figure 1. Project Timeline

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Project Execution and Progress

Key operational staff have been appointed and manning levels will continue to increase over the coming months in line with the increased level of activity. Following the completion of the Rights Issue and in line with the project execution strategy the Company has commenced awarding key contracts in order to achieve the project milestones dates.

Processing Plant refurbishment and Crusher upgrade

In-house refurbishment of the processing plant is advancing as scheduled (Figure 2) and the upgrade of the crushing circuit is under way with the new heavy duty primary crusher due to arrive in Fremantle at the end of May. It is anticipated that the crusher will be delivered to site in mid-June with installation scheduled to commence in August.

Figure 2. Refurbishment of the processing plant proceeding as scheduled.

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Power Station

Work to upgrade the power station has commenced with the existing facility being readied for the installation of new power generation plant and associated infrastructure (Figure 3).

Figure 3. Preparation for the upgrade of the power supply has commenced

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Staff Accommodation and Messing

The contract for the supply and installation of the extension to the accommodation village and the new messing facilities was awarded to Australian Portable Buildings Pty Ltd during May, with installation of this infrastructure anticipated to commence in July. Refurbishment of the existing accommodation units is being undertaken internally by Reed Resources and is nearing completion.

Mining Contract

The open pit mining tender was distributed to ten (10) interested parties. Responses were received in January from 9 parties, which validates the open pit mining cost estimates for the BFS. The tenders have been evaluated and the technical team are in the final stages of the contract bid

evaluation with the shortlisted parties. The contract award is anticipated in late June with mining anticipated to commence in early August.

Forward Work Program

The ongoing evaluation of the various ore bodies throughout the tenement holding continues to deliver additional sources for future expansion. The technical team continue to interpret the mineral inventory for both open pit and underground potential, continuing with geotechnical and metallurgical evaluation. Considerable effort is being placed on the underground component of the future mining area, immediately accessible detailed open pit studies and long term sustainable exploration strategy. This work is critical to the delivery of Meekatharra’s Stage 2 development.

“Stage 2” of the Meekatharra Gold Project is presently projected to commence in early 2014 and to include production from eight existing and identified reserves at Yaloginda and Paddy’s Flat (6 Mt @ 1.7 g/t Au for 328,000 oz). Geotechnical, hydrological, metallurgical, and environmental studies are in progress and a BFS-level evaluation is scheduled for completion by the end of the first quarter of CY2013.

“Stage 3” is currently under continuing evaluation and is anticipated to supplement the Stage 2 open pits with ore from the Paddy’s Flat Underground reserve (2 Mt @ 3.6 g/t Au for 225,000 oz). A BFSlevel evaluation is scheduled for completion by the end of the second quarter of CY 2013.

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 the December quarter of 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 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). Currently under construction.

• Barrambie: Definitive Feasibility Study completed on the production of 6300t of vanadium per annum. Currently in approvals process and evaluating recovery of titanium and iron units.

• Comet Vale: Currently on care & maintenance. High grade JORC resource of 186,000 oz at 10.8 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

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.