NEOMETALS LTD — Capital/Financing Update 2013

Sep 12, 2013

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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

13 September 2013

Grant of ASX Waiver

Reed Resources Ltd (ASX: RDR) ( Reed or the Company ) announces that ASX has granted the Company a waiver of ASX Listing Rule 10.1 in relation to the $3 million standby loan facility to be provided by David Reed to the Company as previously announced to the market ( Loan Facility ).

The Company applied for a waiver of ASX Listing Rule 10.1 to allow it to grant security ( Security ) over its shares in Australian Vanadium Corporation (Holdings) Pty Ltd, the holding entity of the Barrambie Project, in favour of David Reed without obtaining shareholder approval.

ASX granted the waiver on the following terms:

• Based solely on the information provided, ASX Limited (“ASX”) grants Reed Resources Limited (the “Company”) a waiver from listing rule 10.1, to the extent necessary to permit the Company to grant first-ranking security over the Company’s shareholding in Australian Vanadium Corporation (Holdings) Pty Ltd, a wholly owned subsidiary of the Company in favour of David Reed to secure the obligations of the Company pursuant to the loan facility entered between the Company and David Reed announced to the market by the Company on 26 August 2013 (“the Loan Facility”) without obtaining shareholder approval on the following conditions.

• (a) The Loan Facility includes a term that if an event of default occurs and David Reed or his associates exercises this rights under the Loan Facility, neither David Reed or his associates can acquire any legal or beneficial interest in an asset of Australian Vanadium Corporation (Holdings) Pty Ltd in full or part satisfaction of the Company's obligations under any of the Loan Facility or otherwise deal with the assets of the Australian Vanadium Corporation (Holdings) Pty Ltd, without the Company first having complied with any applicable listing rules, including listing rule 10.1, other than as required by law or through a receiver, or receiver and manager (or any other person acting on behalf of David Reed) appointed by David Reed exercising a power of sale under the Loan Facility and selling the assets to an unrelated third party on arm's length commercial terms and conditions and distributing the cash proceeds to David Reed in accordance with their legal entitlements.

• (b) A summary of the material terms of the Loan Facility is made in each annual report of the Company during the term of the Loan Facility.

• (c) Any variations to the terms of any of the Loan Facility which is:

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• (1) not a minor change; or

• (2) inconsistent with the terms of the waiver,

must be subject to shareholder approval.

• (d) The Company must seek to discharge the Loan Facility when the funds advanced under all the Loan Facility have been repaid, or if they are not discharged, seek shareholder approval for the continuation of the Loan Facility for any further loan facility amount.

• (e) The Company immediately releases to the market an announcement which sets out the terms of the waiver, and the Company’s plans with respect to the repayment of the funds advanced under all of the Loan Facility and the discharge of the Loan Facility, including the timeframe within which it expects the repayment and discharge to occur.

The Loan Facility is repayable by 31 August 2014, but must be paid down so that a maximum of $2 million is owing by 19 December 2013.

Subject to shareholder approval (which the Company will seek at its 2013 annual general meeting), the Company may repay up to $2 million by the issue of convertible notes. The convertible notes will carry the same interest rate as the Loan Facility and be secured by the Security. They will be convertible at a 25% premium to the 30-trading day VWAP before the Company issues the notice of general meeting to seek shareholder approval. If not converted by David Reed, the notes will be redeemable by the Company 12 months after issue.

The Company expects to fund repayments of amounts advanced under the Loan Facility from a combination of its existing cash reserves and the divestment of its non-core assets. Subject to the outcome of the divestments, the Company may also seek to raise additional equity capital to fund its operational objectives and ongoing repayments. Further information regarding the Company’s expected cash flows over the next 6 months is set out in the Investor Update released to ASX by the Company on 26 August 2013.

Formal documentation for the Loan Facility is currently being finalised.

-ENDS-

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

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