NEOMETALS LTD — Capital/Financing Update 2012

Apr 1, 2012

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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

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

ASX RELEASE

2 April 2012

Reed to raise A$40 million through fully underwritten Entitlement Offer

HIGHLIGHTS

• A$40 million equity raising offer to shareholders.

• Funds committed to the development of the Meekatharra Gold Project.

• Offer fully underwritten.

• Offer due to open on 17 April 2012.

Emerging Australian gold producer Reed Resources Ltd ( ASX: RDR ) (the “Company” or “Reed”) has today launched a non-renounceable entitlement offer to raise approximately A$40 million to fund the development of Reed’s 100%-owned Meekatharra Gold Project in Western Australia.

This equity raising follows the Company’s announcement on 27 February 2012 regarding the completion of the Bankable Feasibility Study ( BFS ) and the decision to mine at the Meekatharra Gold Project, with a view to achieving gold production in the December quarter 2012.

Overview of Entitlement Offer

The Company is seeking to raise approximately A$40 million from eligible shareholders through a fully underwritten pro rata non-renounceable entitlement offer of new ordinary shares in Reed Resources, at an offer price of $0.20 per new share ( Entitlement Offer or the Offer ).

Eligible shareholders will be invited to subscribe for 3 new shares for every 4 ordinary Reed shares held at 5:00pm (Perth time) on the record date of Friday, 13 April 2012. The offer price of $0.20 represents a 29.8% discount to Reed’s closing price of $0.285 on 30 March 2012 and a 30.8% discount to the volume-weighted average price (VWAP) of Reed shares during the 20 trading trading days up to and including 30 March 2012 (being the day before the Entitlement Offer was announced).

Shares issued through the Entitlement Offer will rank equally with existing Reed shares. Share entitlements are non-renounceable and will not be tradeable on the ASX or otherwise transferable.

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Use of Proceeds of the Offer

Reed intends to use the proceeds of the Entitlement Offer primarily to fund the development of Reed’s 100% owned Meekatharra Gold Project, including accommodation facilities upgrade, plant refurbishment, infrastructure, pre-commissioning costs and capital raising costs, and for general working capital purposes.

Managing Director, Mr Christopher Reed, said: “The successful completion of this Entitlement Offer will be another important step in achieving our objective of pouring gold at Meekatharra by the end of this year.”

Full details of the Entitlement Offer, including the indicative timetable and details for how to accept the offer, are set out in a prospectus which the Company has today been lodged with ASIC and released to ASX contemporaneously with this announcement, and which will be dispatched to eligible shareholders by 17 April 2012. The indicative timetable is shown below.

The Entitlement Offer is fully underwritten by Bligh Capital Partners Pty Ltd.

Prosectus loded with ASX and ASIC	Prosectus loded with ASX and ASIC
	Prosectus loded with ASX and ASIC	2 Aril 2012
	p g	p
	‘Ex’ date	5 April 2012
				3 April 2012
	Record Date	5:00pm (Perth time), 1
	Opening Date17 April 2012
	Prospectus and Entitlement and Acceptance Formsdispatched to Eligible ShareholdersBy 17 April 2012
	Closing Date for acceptance and payment5:00pm (Perth time), 2 May 2012
	Deferred settlement trading commences3 May 2012
	Issue and allotment of New Shares10 May 2012
	Commencement of trading of New Shares11 May 2012

All dates (other than the date of lodgement of the Prospectus with ASX and ASIC) are indicative only. Reed reserves the right, subject to the Corporations Act, ASX Listing Rules and other applicable laws, to vary the dates of the Entitlement Offer.

For further information please contact :

Chris Reed	John Gardner
Reed Resources Ltd	MAGNUS Investor Relations
T: +61 89322 1182	T: +61 413 355 997
E: chris@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 second half 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 slag and pig iron as co-products.

• Comet Vale: Currently on care & maintenance. 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.

IMPORTANT NOTICE

This announcement has been prepared for publication in Australia and may not be released or distributed in the United States. This announcement does not constitute an offer of securities for sale in the United States or any other jurisdiction. Any securities described in this announcement may not be offered or sold in the United States absent registration under the US Securities Act of 1933 or an exemption from registration.