NEOMETALS LTD — Interim / Quarterly Report 2005

Oct 19, 2005

Appendix 5B

$Rule 5.3$

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

REED RESOURCES LTD

ABN

89 099 116 631

Quarter ended ("current quarter")

Current quarter

30 September 2005

Year to date

Consolidated statement of cash flows

Cash flows related to operating activities				SА	€ 12 months) \$A
1.1	Receipts from product sales and related debtors
1.2	Payments for (a) evaluation	exploration	and	(535, 356)	(535, 356)
		(b) development (c) production		(51, 928)	(51, 298)
		(d) administration		(382, 140)	(382, 140)
1.3	Dividends received
1.4	Interest and other items of a similar nature received			7,872	7,872
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other-
	Net Operating Cash Flows			(961, 552)	(961, 552)
1.8 1.9	Cash flows related to investing activities Payment for purchases of: (a)prospects investments assets Proceeds from sale of: investments assets	(b)equity other (c) (a)prospects (b)equity (c)other	fixed fixed	(3,927)	(3,927)
1.10	Loans to other entities
1.11	Loans repaid by other entities
1.12	Other
				(3,927)	(3,927)
	Net investing cash flows
1.13	Total operating and investing cash flows (carried forward)			(965, 479)	(965, 479)

$+$ See chapter 19 for defined terms.

1.13	Total operating and investing cash flows (brought forward)	(965, 479)	(965, 479)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other – Capital raising costs
	Net financing cash flows	0	0
	Net increase (decrease) in cash held	(965, 479)	(965, 479)
1.20	Cash at beginning of quarter/year to date	2,353,606	2,353,606
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	1,388,127	1,388,127

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current quarter A\$
1.23	Aggregate amount of payments to the parties included in item 1.2	105,538
1.24	Aggregate amount of loans to the parties included in item 1.10

1.25 Explanation necessary for an understanding of the transactions Office rent and service fees paid to a company related to a director \$21,300 Salary and superannuation payable to directors \$84.238

Non-cash financing and investing activities

$2.1$ Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

$2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

⁺ See chapter 19 for defined terms.

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available SΑ	Amount used
3.1	Loan facilities		w
3.2	Credit standby arrangements		MAR

Estimated cash outflows for next quarter

	Total
4.2	Development
4.1	Exploration and evaluation	SΑ

Reconciliation of cash

$\overline{a}$

	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter SΑ	Previous quarter SА
5.1	Cash on hand and at bank	96,695	267,174
5.2	Deposits at call	1,226,726	2,021,932
5.3	Bank overdraft
5.4	Other (bonds)	64,706	64,500
	Total: cash at end of quarter (item 1.22)	1,388,127	2,353,606

Changes in interests in mining tenements

	Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
Interests in mining tenements relinquished, reduced or lapsed	E15/746	Surrender	100%	$0\%$

$6.1$

⁺ See chapter 19 for defined terms.

6.2	Interests in mining	M15/1747	Application	$0\%$	100%
	tenements acquired or	M15/1748	Application	$0\%$	100%
	increased	M15/752	Application	$0\%$	100%
		M15/506	Application	$0\%$	100%
		M15/507	Application	$0\%$	100%
		M15/508	Application	$0\%$	100%
		M15/509	Application	$0\%$	100%
		M15/510	Application	$0\%$	100%
		M15/511	Application	$0\%$	100%
		E15/897	Application	$0\%$	100%
		E15/903	Application	$0\%$	100%
		P15/4752	Application	$0\%$	100%
		L20/49	Application	$0\%$	100%

Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total number	Number quoted	Issue price per	Amount paid up per
				security (see note	security (see note 3)
				$3)$ (cents)	(cents)
7.1	Preference
	*securities
	(description)
7.2	Changes during
	quarter (a) Increases
	through issues
	(b) Decreases
	through returns
	of capital, buy-
	backs,
	redemptions
7.3	+ Ordinary	70,000,000	70,000,000
	securities
7.4	Changes during
	quarter
	(a) Increases
	through issues (b) Decreases
	through returns
	of capital, buy-
	backs
7.5	+ Convertible
	debt securities
	(description)
7.6	Changes during quarter
	(a) Increases
	through issues
	(b) Decreases
	through
	securities matured,
	converted

⁺ See chapter 19 for defined terms.

7.7	Options (description and conversion factor )	2,650,000	Nil	Exercise price \$0.35	Expiry date 31/12/2008
7.8	Issued during quarter	1,000,000	Nil	\$0.50	1/7/2010
7.9	Exercised during quarter
7.10	Expired during quarter
7.11	Debentures (totals only)
7.12	Unsecured notes (totals only)

Compliance statement

• $\mathbf{I}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
• $\overline{2}$ This statement does /does not^*/delete one) give a true and fair view of the matters disclosed.

Gheed

Date: 20 October 2005

Sign here:

Print name:

(Director/Company secretary) CHRISTOPHER JOHN REED

Notes

• $\mathbf{1}$ The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
• $\overline{2}$ The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
• $\mathbf{\hat{z}}$ Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
• $\overline{4}$ The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
• $\leq$ Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

⁺ See chapter 19 for defined terms.