NEOMETALS LTD — Governance Information 2010

Dec 20, 2010

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97 Outram St West Perth WA 6005 Tel: + 61 8 9322 1182 Fax: + 61 8 9321 0556

21 December 2010

Company Announcements Office ASX Limited via Electronic Lodgement

Dear Sirs

SECURITIES TRADING POLICY

Please find attached the Reed Resources Ltd Securities Trading Policy. This is provided in compliance with Listing Rule 12.9 for when it comes into effect on 1 January 2011.

Yours faithfully

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Jason Carone

COMPANY SECRETARY

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Reed Resources Ltd

Policy on the Trading of Company’s Shares

1. General Principles

The principle behind the Company’s policy on trading (buying, selling or other dealing in) Company securities (being shares, options, or any other equity, debt or derivative instruments, including instruments to limit the economic risk of other securities held), whether or not issued or granted by the Company or a Group member, is as follows:

• Directors, officers and employees, and persons associated with them, including family members and business associates (together “Insiders”), must not trade in the Company’s securities nor place themselves in a position where it may reasonably be perceived they have been trading in the Company’s securities other than in compliance with this policy.

• The policy is designed to seek to ensure that:

  • Insiders do not breach “insider trading” laws under the Corporations Act (See Annexure 1);

  • Insiders do not trade Company securities while they may be in possession of market price sensitive information which has not been released to the ASX announcements platform by the Company (including due to exceptions that may apply to the need to release that information);

  • perceptions cannot arise that Insiders may be taking advantage of their position in the Group (or that of a person with whom they are associated), even if such perceptions are wrong or unsubstantiated.

• This Policy has been made to meet regulatory requirements and generally accepted principles and standards of conduct.

• Implementation Protocols

In implementing this policy, and without limiting the General Principles, there are a number of rules and provisions that must, on all occasions, be followed:

• (a) Directors, officers and employees of the Group and persons associated with them (ie: ALL Insiders) are prohibited from trading in the Company’s securities other than in conformity with this Policy.

• (b) A Director, and the Company Secretary, and persons associated with them, are required to obtain the approval of the Chairman in respect of a proposed trade in the Company’s securities prior to any trade by them. The Chairman’s approval, which is to be provided in

writing, shall be valid for a period of no longer than two weeks and is to be reported at the following Board meeting.

• (c) The Chairman is required to obtain the approval of the CEO/MD and one other Non-Executive Director prior to any trade by the Chairman or a person associated with the Chairman. The approval, which is to be provided in writing, shall be valid for a period of no longer than two weeks and is to be reported at the next following Board meeting.

• (d) Officers (being persons who have the capacity to make decisions that may significantly impact on the operations or finances of the Group’s businesses, other than the Chairman, Directors and the Company Secretary) and employees are required to discuss and obtain approval for a proposed trade in the Company’s securities with the CEO/MD prior to any trade by them or a person associated with them. The approval, which is to be provided in writing, shall be valid for a period of no longer than 2 weeks.

• (e) The periods referred to in (b), (c) and (d) above may be shortened at any time by the persons issuing the approval by notice in writing to the relevant Chairman, Director, Company Secretary, Officer or employee.

• (f) All trades referred to in (b), (c) and (d) above are to be advised to the Company Secretary and the CEO/MD within two days of the relevant trade.

• (g) Directors, officers and employees are required to use their best endeavours, wherever possible, to ensure that persons associated with them are aware of and conform to this policy. An associate is regarded as including:

  • close family of the Director, officer or employee;

  • a company or trust over which the Director, officer or employee has control or is a beneficiary;

  • a business or other associate of any of the foregoing.

• (h) The requisite approvals for paragraphs (b), (c) and (d) are deemed to have been given during declared Trading Windows (refer 3 below).

• (i) Insiders seeking approval to trade securities under paragraphs 2(b), (c) of (d) must apply in writing and must supply to the person to give the approval all information known to the applicant that may be material to the approval being granted.

• Trading Windows, Prohibited Periods and Closed Periods

• (a) The following definitions apply:

“Closed Period” means 1 January to 31 December inclusive each year but does not include a period declared to be a Trading Window.

“Prohibited Period” means any period in which the Company is in possession of information that would be disclosable to the market under ASXLR 3.1 but for the application of, and reliance upon, an exemption allowed under ASXLR 3.1A.

“Trading Window” means a period in which the Chairman has declared Insiders (either generally or specific to any particular Insider – refer paragraph 2(h) above) are at liberty to trade the Company’s securities, provided that the Chairman (or the CEO/MD) may at any time, by notification in writing to the Insiders personally, or on the Company’s website, “close” a declared Trading Window. Trading Windows must not be declared or allowed to continue during a Prohibited Period. Without limitation, typically Trading Windows might be declared for the period of 2 weeks commencing 2 business days after:

• the release of the Company’s annual or half yearly results;

• the release of a prospectus by the Company (other than a transaction specific prospectus);

• the Company’s AGM;

• other times at the Chairman’s discretion.

• (b) During Closed Periods trading in the Company’s securities by Insiders is prohibited other than with approval under paragraph 2(b), (c) or (d).

• (c) During Prohibited Periods, no trading in the Company’s securities by Insiders is permitted.

4. Approvals under Paragraph 2(b), (c) and (d)

• (a) Without intruding upon the discretion of the person conferring the approval, approval for trading in the Company’s securities may be given under paragraphs 2(b), (c) or (d) might commonly be expected where:

  • it is not a Prohibited Period;

  • there will be no breach of “insider trading” laws by reason of the proposed trade; and

  • adverse reputational imputations for the Company and its governance are unlikely to arise by reason of the proposed trade.

• (b) Without intruding upon the discretion of the person conferring the approval, approval for trading in the Company’s securities under paragraphs 2(b), (c) and (d) is unlikely to be given where:

  • it is a Prohibited Period; or

  • it is not a Prohibited Period but it is in a period after the close of the Company’s books for a relevant period and before the release of the Company’s annual or half yearly results for that relevant period, other than if the approval is to respond to circumstances of financial hardship or personal need for a particular Insider.

• Compliance with Corporations Act and ASX Listing Rules (“Regulations”)

• (a) This Policy will be interpreted and construed so as to be consistent with all applicable Regulations.

• (b) If anything in this Policy is contrary to the applicable Regulations, then that provision will be severed from this Policy.

• (c) The Company must comply with the Regulations in administering this Policy and in reporting any relevant trading in the Company’s securities by Insiders.

6. Exclusions

Subject to paragraph 5, the mere take up of entitlements, or exercise of vested options, to subscribe for Company securities under a pro rata rights issue to all shareholders, an employee share option plan (or similar) or the mere take up of Company securities under a dividend re-investment plan (or similar) does not constitute a “trade” in Company securities for the purpose of this policy.

7. Short Term Trading Prohibited

Each Director, officer or employee, or persons associated with them (ie. ALL insiders), must not engage in short term buying and selling of Company securities (ie. buying and selling of Company securities within a 6 month period).

8. Communication of Policy/Education and Training

This policy is to be communicated to all Directors, officers and employees of the Company, and periodically reinforced by follow up education and training as part of the Company’s corporate governance policies and procedures. In particular this policy is to be communicated to new personnel of the Company as part of their induction training.

A copy of this policy should be included on the Company’s web-site along with its Corporate Governance Charter and related policy statements.

Annexure 1 - Summary of the insider trading provisions

1.1 Prohibition

Insider trading is a criminal offence. It may also result in civil liability. In broad terms, a person will be guilty of insider trading if:

• (a) that person possesses information which is not generally available to the market and, if it were generally available to the market, would be likely to have a material effect on the price or value of the Company’s securities (ie, information that is ‘price sensitive’);

• (b) and that person:

• (i) buys or sells securities in the Company; or

• (ii) procures someone else to buy or sell securities in the Company; or

• (iii) passes on that information to a third party where that person knows, or ought reasonably to know, that the third party would be likely to buy or sell the securities or procure someone else to buy or sell the securities of the Company.

1.2 Examples

To illustrate the prohibition described above, the following are possible examples of price sensitive information which, if made available to the market, may be likely to affect materially the price of the Company’s securities:

• (a) the Company considering a major acquisition or disposal of assets;

• (b) the threat of major litigation against the Company;

• (c) the Company’s sales and profit results materially exceeding (or falling short of) the market’s expectations;

• (d) a material change in debt, liquidity or cash flow;

• (e) a significant new development proposal ie, new product or technology;

• (f) the granting (or loss) or a major contract;

• (g) management or business restructuring proposal; and

• (h) a share issue proposal.

1.3 Dealing through third parties

A person does not need to be a director, officer or employee of the Company to be guilty of insider trading in relation to securities in the Company. The prohibition extends to dealings by directors, officers and employees through nominees, agents or other associates, such as family members, family trusts and family companies.

1.4 Information however obtained

It does not matter how or where the person obtains the information – it does not have to be obtained from the Company to constitute inside information. (eg. even if the director, officer or employee overhears it or is told in a social setting).

1.5 Confidential information

Directors, officers and employees also have a duty of confidentiality to the Company. A director, officer or employee must not reveal any confidential information concerning the Company, use that information in any way which may cause loss to the Company, or use that information to gain an advantage for themselves or anyone else. Directors, officers and employees should ensure that if confidential information is required to be provided to external advisers that they are also aware they have a duty of confidentiality to the Company.