NEOMETALS LTD — Interim / Quarterly Report 2006

Apr 27, 2006

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.

REED RESOURCES LTD

ABN

89 099 116 631

Quarter ended ("current quarter")

31 March 2006

Year to date

Current quarter

Consolidated statement of cash flows

Cash flows related to operating activities

Cash flows related to operating activities				SΑ	$(12$ months) SA.
1.1	Receipts from product sales and related debtors
1.2	Payments for (a) evaluation	exploration	and	(521, 923)	(1, 261, 585)
		(b) development (c) production		(143, 756)	(332, 205)
1.3	Dividends received	(d) administration		(364, 280)	(1, 159, 902)
1.4	Interest and other items of a similar nature received			17,750	53,417
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other-
	Net Operating Cash Flows			(1,012,209)	(2,700,275)
1.8 1.9 1.10 1.11 1.12	Cash flows related to investing activities Payment for purchases of: investments assets Proceeds from sale of: investments assets Loans to other entities Loans repaid by other entities Other	(a)prospects (b)equity other $\left( \mathrm{c}\right)$ (a)prospects (b)equity (c)other	fixed fixed	0	(10, 527)
				$\bf{0}$	(10, 527)
	Net investing cash flows
1.13	Total operating and investing cash flows (carried forward)			(1,012,209)	(2,710,802)

$+$ See chapter 19 for defined terms.

1.13	Total operating and investing cash flows (brought forward)	(1,012,209)	(2,710,802)
1.14 1.15 1.16 1.17 1.18 1.19	Cash flows related to financing activities Proceeds from issues of shares, options, etc. Proceeds from sale of forfeited shares Proceeds from borrowings Repayment of borrowings Dividends paid Other - Capital raising costs	1,250,000	2,250,000
	Net financing cash flows	1,250,000	2,250,000
	Net increase (decrease) in cash held	237,791	(460, 802)
1.20 1.21	Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20	1,655,013	2,353,606
1.22	Cash at end of quarter	1,892,804	1,892,804

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	140,778
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 \$28,367 Salary and superannuation payable to directors \$112,411

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 SΑ
3.I	Loan facilities	-44	$\overline{\phantom{a}}$
3.2	Credit standby arrangements	-44	$\overline{\phantom{a}}$

Estimated cash outflows for next quarter

4.1	Exploration and evaluation	SΑ 250,000
4.2	Development	250,000
	Total

Reconciliation of cash

	Reconciliation of eash 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 \$A	Previous quarter SА
5.1	Cash on hand and at bank	1,419,141	150,349
5.2	Deposits at call	408,957	1,439,958
5.3	Bank overdraft
5.4	Other (bonds)	64,706	64,706
	Total: cash at end of quarter (item 1.22)	1,892,804	1,655,013

Changes in interests in mining tenements

		Tenement	Nature of interest	Interest at	Interest at end
		reference	(note (2))	beginning	of quarter
				of quarter
-6.1	Interests in mining	E29/423	Surrendered	100%	$0\%$
	tenements relinquished,	E29/466	Surrendered	100%	$0\%$
	reduced or lapsed	E29/502	Surrendered	100%	$0\%$

$+$ See chapter 19 for defined terms.

Appendix 5B Mining exploration entity quarterly report

6.2	Interests in mining	M15/1371	Acquisition	$0\%$	100%
	tenements acquired or	M15/1782	Application	$0\%$	100%
	increased	M15/1783	Application	$0\%$	100%
		M15/1784	Application	$0\%$	100%
		M15/1785	Application	$0\%$	100%
		M15/1786	Application	0%	100%
		M15/1787	Application	$0\%$	100%
		M16/521	Application	$0\%$	100%
		M16/522	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 security (see note $3)$ (cents)	Amount paid up per security (see note 3) (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 securities	80,000,000	80,000,000
7.4	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	5,000,000	5,000,000	25 cents	25 cents
7.5	+ Convertible debt securities
7.6	(description) 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 1,000,000	Nil Nil	Exercise price 35 cents 50 cents	Expiry date 31/12/2008 1/7/2010
7.8	Issued during quarter
7.9	Exercised during quarter
7.10	Expired during quarter
7.11	Debentures (totals only)
7.12	Unsecured notes (totals only)

Compliance statement

• $\begin{array}{c} \hline \end{array}$ 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

Director/Company secretary

Sign here:

Date: 28 April 2006

Print name: CHRISTOPHER JOHN REED

Notes

• $\mathbf{I}$ 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 $6.2$ .

⁺ See chapter 19 for defined terms.

• Issued and quoted securities The issue price and amount paid up is not required in $\overline{3}$ 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.
• $\mathfrak s$ 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.

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⁺ See chapter 19 for defined terms.