NEOMETALS LTD — Interim / Quarterly Report 2007

Apr 26, 2007

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")

Year to date

$(12$ months)

31 March 2007

Current quarter

SA

Consolidated statement of cash flows

Cash flows related to operating activities

					\$A
1.1	Receipts from product sales and related debtors			402,864	402,864
1.2	Payments for (a) evaluation	exploration	and	(1,228,419)	(1,554,930)
		(b) development (c) production (d) administration		(0) (205, 958) (461, 418)	(164, 440) (226, 580) (1, 210, 826)
1.3	Dividends received
1.4	Interest and other items of a similar nature received			7,202	35,680
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other $-$ R and D tax rebate				110,036
	Net Operating Cash Flows			(1,485,729)	(2,608,196)
1.8 1.9 1.10 1.11	Cash flows related to investing activities Payment for purchases of: (a)prospects (b)equity investments fixed other $\left( \mathrm{c}\right)$ assets Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets Loans to other entities Loans repaid by other entities			(72, 273)	(82, 905)
1.12	Other
	Net investing cash flows			(72, 273)	(82, 905)
1.13	Total operating and investing cash flows (carried forward)			(1,558,002)	(2,691,101)

$+$ See chapter 19 for defined terms.

1.13	Total operating and investing cash flows (brought forward)	(1,558,002)	(2,691,101)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	2,000,000	2,087,500
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings	849,290	849,290
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other - Capital raising costs	(120,000)	(120,000)
	Net financing cash flows	2,729,290	2,816,790
	Net increase (decrease) in cash held	1,171,288	125,689
1.20	Cash at beginning of quarter/year to date	567,362	1,612,961
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	1,738,650	1,738,650

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	101,814
1.24	Aggregate amount of loans to the parties included in item 1.10

1.25 Explanation necessary for an understanding of the transactions

Expanditure necessary for an analyzinamic of the nanoactions
Office rent and service fees paid to a company related to a director	\$33,727
Salary and superannuation payable to directors	\$68.087

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
3.1	Loan facilities	1,000,000	800,000
3.2	Credit standby arrangements		$\overline{\phantom{a}}$

Estimated cash outflows for next quarter

4.1	Exploration and evaluation	SΑ 1,500,000
4.2	Development	$\bullet$
	Total	1,500,000

Reconciliation of cash

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
Cash on hand and at bank 5.1	1,670,415	$-14,372$
Deposits at call 5.2	0	517,027
Bank overdraft 5.3
Other (bonds) 5.4	68,235	64,707
Total: cash at end of quarter (item 1.22)	1,738,650	567,362

Changes in interests in mining tenements

		Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed	PLA16/2350 PLA16/2350 MLA29/269	Surrendered Surrendered Refused	100% 100% 100%	$0\%$ $0\%$ $0\%$
6.2	Interests in mining tenements acquired or increased	ELA16/341	Reversion Application	$0\%$	100%

⁺ See chapter 19 for defined terms.

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)
7.1	Preference			$3)$ (cents)	(cents)
	*securities
	(description)
7.2	Changes during
	quarter
	(a) Increases through issues
	(b) Decreases
	through returns
	of capital, buy-
	backs,
7.3	redemptions + Ordinary	85,111,905	85,111,905
	securities
7.4	Changes during
	quarter (a) Increases	4,761,905	4,761,905
	through issues			42 cents	42 cents
	(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
7.7	Options			Exercise price	Expiry date
	(description and
	conversion factor )	2,300,000	Nil Nil	35 cents 50 cents	31/12/2008
		1,000,000 2,700,000	Nil	75 cents	1/7/2010 30/6/2011
$7.8\,$	Issued during
	quarter
7.9	Exercised during
7.10	quarter Expired during
	quarter
7.11	Debentures
	(totals only)

⁺ See chapter 19 for defined terms.

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 $\text{ASX}$ (see note 4).
• $\overline{2}$ This statement does /does not* (delete one) give a true and fair view of the matters disclosed.

ORred

Sign here:

Director/Company secretary

Date: 27 April 2007

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.
• 3 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.
• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
• $\overline{5}$ 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.

$\equiv$ and any and an

⁺ See chapter 19 for defined terms.