NEOMETALS LTD — Interim / Quarterly Report 2010

Jul 29, 2010

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity

Reed Resources Ltd

ABN 89 099 116 631 Consolidated statement of cash flows	Quarter ended (“current quarter”)
	30 June 2010

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows	Current quarter $A’000	Year to date (12months) $A’000
	6,939,855 (612,304) (562,203) (4,773,524) (1,052,461) ‐ 16,260 ‐ ‐ ‐	8,072,685 (4,972,644) (562,203) (5,204,591) (3,806,794) ‐ 358,023 (133,211) 412,348 ‐
	(44,377)	(5,836,387)
Cash flows related to investing activities 1.8 Payment for purchases of:(a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (Option Fee for Tenements) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	(1,141,590) ‐ ‐ ‐ ‐ ‐ ‐	(3,934,262) ‐ (1) ‐ ‐ ‐ (200,000)
	(1,141,590)	(4,134,263)
	(1,185,967)	(9,970,650)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report
1.13 Total operating and investing cash flows (brought forward)	(1,185,967)	(9,970,650)
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 (provide details if material) Net financing cash flows	500,000	11,426,512 (690,745)
	500,000	10,735,767
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	(685,967) 10,738,739	765,117 9,287,655
	10,052,772	10,052,772

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

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		219,474
		‐
1.25	Explanation necessaryfor an understandingof the transactions
	Wages, superannuation and directors’ fees: $167,034 Rent and services fees: $52,440

Non‐cash financing and investing activities

2.1 2.2	Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
	n/a
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest
	n/a

• See chapter 19 for defined terms.

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Financing facilities available

Add notes as necessary for an understanding of the position.

Amount available Amount used $A’000 $A’000 3.1 Loan facilities 3.2 Credit standby arrangements Estimated cash outflows for next quarter $A’000 4.1 Exploration and evaluation 700,000 4.2 Development 300,000 4.3 Production ‐ 4.4 Administration 800,000 1,800,00 Total

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as Current quarter Previous quarter shown in the consolidated statement of cash flows) $A’000 $A’000 to the related items in the accounts is as follows. 5.1 Cash on hand and at bank 1,027,378 1,708,976 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (term deposits) 9,025,394 9,029,763 10,052,772 10,738,739

Total: cash at end of quarter (item 1.22)

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	E16/377 E16/379 P16/2209 P16/2210 P16/2211 P16/2212	Lodged 13/02/2009 Withdrawn 05/05/2010 Lodged 13/02/2009 Withdrawn 05/05/2010 Expired 25/05/2010 Expired 25/05/2010 Expired 25/05/2010 Expired 25/05/2010	0% 0% 0% 0% 0% 0%	0% 0% 0% 0% 0% 0%

• See chapter 19 for defined terms.

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6.2 Interests in mining tenements acquired or increased

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 note3) (cents)	Amount paid up per security (see note3) (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 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy‐ backs	177,271,768	177,271,768
	4,011,431 1,000,000	4,011,431 1,000,000
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.

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7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	2,700,000 500,000 1,300,000 1,850,000 1,600,000 4,500,000 850,000	Nil Nil Nil Nil Nil Nil Nil	Exercise price $0.75 $0.85 $0.85 $1.20 $0.80 $0.80 $0.80	Expiry date 30/06/2011 26/11/2012 31/12/2012 30/06/2013 31/12/2013 30/06/2012 31/12/2013
	1,000,000	Ni	$0.50	01/07/2010
	1,333,333	Ni	$1.08	30/06/2010
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

Compliance statement

• 1 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).

• 2 This statement does /does not* (delete one) give a true and fair view of the matters disclosed.

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Sign here: ............................................................ Date: 30 July 2010 (Director/Company secretary)

Print name: Jason Carone

Notes

• 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.

• 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

• See chapter 19 for defined terms.

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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.

• 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.

== == == == ==

• See chapter 19 for defined terms.

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