NEOMETALS LTD — Capital/Financing Update 2013

Oct 14, 2013

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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

15 October 2013

Reed resumes 100% of iron ore rights at Mt Finnerty

HIGHLIGHTS

• Inferred Resources total 4.66Mt @ 53.5% Fe located close to existing rail infrastructure

• Multiple, outcropping hematite targets to be followed up with RC drilling

• Reviewing planned divestment structure to self-fund exploration and development whilst

maximising iron ore exposure for existing shareholders

Reed Resources Ltd (ASX: RDR) (Reed) is pleased to announce the resumption of 100% of the iron rights at its Mt Finnerty Project following the amicable termination of the “Mt Finnerty Iron Ore Joint Venture” with Cliffs Asia Pacific Iron Ore Pty Ltd (“Cliffs”).

The Mt Finnerty Project (Figure 1) is located 65 km east of the Cliffs Koolyanobbing Iron Ore Operations and adjoins Mineral Resources Ltd’s Carina Iron Ore Operation.

The combined Inferred Mineral Resources at the FIN9 and FIN10 prospects is 4.66 Mt at an average grade of 53.5% Fe, at a cut-off grade of 50% Fe (Appendix A).

A re-interpretation of the geophysical data undertaken by Cliffs in early 2010 generated several new prospects (Gray, Mt Watt East, Mt Watt South, Mt Finnerty). High-grade rock chip sampling of these prospects provides sufficient encouragement to progress exploration aimed at defining additional resources.

Figure 1. Project Location Plan

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Drilling Program

A short drill program of reverse circulation (RC) drill holes is planned, subject to board approval, at the Mt Watt East prospect, a program of works approval has been submitted. Massive iron mineralisation comprises mostly massive goethite, specular hematite and minor goethite-hematite in the shape of an isosceles triangle, the base measuring 90 meters and trending west-northwest, the sides approximately 70 meters. It. The drilling will target the southern extensions of the outcrop overlain by scree and colluvium which separates it from the largest pod of mineralisation at Mt Watt South (Figure 2). The drilling at Mt Watt will also follow up on rock chip samples (Table 1).

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Figure 2. Plan of Mt Watt East and South Rock Chip results

Table 1. Mt Watt East & South Rock Chip results (Appendix A)

Sample Number	Easting MGA	Northing MGA	Sample Type	Fe %	SiO2 %	Al2O3 %	P %	Mn %	LOI %
RK 2046	222500	6609077	Channel 4 m	58.69	3.43	1.36	0.03	0.19	10.76
RK 2047	222498	6609010	Chip	58.71	5.01	1.01	0.1	0.12	9.42
RK 2048	222501	6609124	Chip	58.27	5.28	1.29	0.06	0.12	9.63
RK 2049	222471	6609127	Chip	58.79	4.84	0.94	0.07	0.14	9.63
RK 2050	222446	6609118	Chip	58.9	3.83	1.47	0.07	0.1	9.98
RK 2051	222461	6609106	Chip	59.8	3.81	0.69	0.07	0.1	9.52
RK2052	222620	6608763	Channel, 12 meters	61.24	3.1	0.46	0.09	0.04	8.46
RK 2053	222624	6608750	Chip	59.99	2.85	1.05	0.05	0.13	9.85
RK 2054	222765	6608497	Chip	62.4	2.57	0.9	0.04	0.08	6.95
RK 2055	222760	6608484	Chip	60.98	3.14	0.5	0.07	0.1	8.77
RK 2056	222755	6608446	Chip	60.18	3.7	0.62	0.04	0.07	9.3

Project Strategy

All prospective mining leases and exploration licences are granted and endorsed for iron ore under section 111 of the Mining Act. The Project has the benefit of extensive infrastructure, the PerthKalgoorlie Railway transects the tenure which links it to two government-owned bulk export ports. A new JORC compliant Exploration Target is being prepared and due for completion by the end of October 2013.

Reed is reviewing the structure of its planned divestment of wholly owned subsidiary Mount Finnerty Pty Ltd (“MFPL”). Reed’s aim is to maximise value to its existing shareholders and for MFPL to be independently financed as it focusses on its Mt Marion and Barrambie projects. Strategic discussions have commenced with third parties in relation to structures which will enable rapid, lowcost development of existing and potential iron ore resources Discussions remain preliminary and there can be no assurance that a binding proposal will emerge.

ENDS

For further information please contact:

Chris Reed Managing Director Reed Resources Ltd T: +61 89322 1182

Competent Persons Statement

Geological aspects of this report that relate to Exploration Results have been compiled by Mr Gordon Kelly, an employee of the Reed Resources Ltd Group. Mr Kelly 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. Mr Kelly consents to the inclusion in the report of the matters in the form and context in which it appears.

Mineral Resource estimation was compiled in 2009 for the purposes of the Mt Finnerty Iron Ore Joint Venture in accordance with the guidelines outlined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2004) by Leonora Hackman and Duncan Hackman of Hackman and Associates Pty Ltd.

Leonora Hackman is a member of the Australasian Institute of Mining and Metallurgy and Duncan Hackman is a member of the Australian Institute of Geoscientists. Both have sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity undertaken to qualify as Competent Persons as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Leonora Hackman and Duncan Hackman consent to the inclusion of the Mineral Resource estimations in the form and context in which it appears.

Although Reed remains optimistic about the potential of the Mt Finnerty project, any reference to the terms “ore” and “high-grade” in this report is conceptual in nature. Use of the term “grade(s)” is not intended to represent the grade of a Reserve.

About Reed Resources

Reed Resources Ltd (ASX: RDR, OTC: RDRUY) is a Western Australian resource developer.

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

APPENDIX A: MINERAL RESOURCE ESTIMATE

Previously reported Inferred Resources at each of the prospects are listed in the following table at lower cut-off grades of 50% Fe and 58% Fe: (ASX Announcement 15 Dec 2009)

Prospect	Cut-off grade (% Fe)	Tonnes (‘000)	Fe %	SiO2 %	Al2O3 %	P %	S %	Mn %	LOI %
FIN9	50	2580	54.1	9.4	3.8	0.10	0.17	0.43	7.9
	58	30	58.2	4.8	3.1	0.11	0.16	0.15	7.7
FIN10	50	2080	52.9	9.9	5.3	0.06	0.12	0.07	8.3
	58	110	58.4	5.0	3.7	0.06	0.15	0.03	7.2

NOTES TO ACCOMPANY ROCK CHIP RESULTS:

1. Sample coordinates are for the MGA 94 (Zone 51) grid .

2. All samples analysed by Cliffs Asia Pacific Iron Ore Pty Ltd, Koolyanobbing, WA. Samples were sorted, dried, split and pulverised then prepared as fused discs for analysis by X-Ray fluorescence spectrometry (XRF) for Fe, Al, Si, P, S, Ca, K, Mg, Mn, Ti, V. LOI by gravimetric method.

ENDS