NEOMETALS LTD — Interim / Quarterly Report 2011

Oct 30, 2011

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	Quarter ended (“current quarter”)
89 099 116 631	30 September 2011

Consolidated statement of cash flows

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 (3months) $A’000
	- (5,171) - - (1,953) - 127 (79) - -	- (5,171) - - (1,953) - 127 (79) - -
	(7,076)	(7,076)
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 (d) subsidiaries 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)	- - (5,306) - - 10 3,134 - - (148)	- - (5,306) - - 10 3,134 - - (148)
	(2,310)	(2,310)
	(9,386)	(9,386)

• See chapter 19 for defined terms.

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1.13 Total operating and investing cash flows (brought forward)	(9,386)	(9,386)
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	- - - - - -	- - - - - -
	-	-
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	(9,386) 25,672	(9,386) 25,672
	16,286	16,286

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

related entities
1.23 Aggregate amount of payments to the parties included in item 1.2 1.24 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
	443.7
	-

• 1.25 Explanation necessary for an understanding of the transactions

Directors’ fees and superannuation: $209,167 Rent & Service charge: $84,505 Advance to Managing Director, Mr Christopher Reed: $150,000

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

• The Group completed the purchase of the Meekatharra Gold Project on 1 July 2011 via its wholly owned subsidiary GMK Exploration Pty Ltd. Final payment on this date contained a non-cash component of $1.3m worth of fully paid ordinary shares in Reed Resources Ltd.

• On 29 July 2011 GMK Exploration Pty Ltd entered into a non-cash backed bond facility in the amount of $2.5m with Macquarie Bank as security for unconditional performance bonds (“UPB”) relating to the Meekatharra Gold Project. Consequently $2.5m in cash that was on deposit as security for the UPB (classified as ‘Other Deposits’ at 5.4 in the previous quarter) has now been released and is available for operations.

• On 8 September 2011 the Company completed the sale of wholly owned subsidiary Kalgoorlie Ore Treatment Company Pty Ltd to MacPhersons Reward Gold Ltd (ASX:MRP). Consideration received by Reed Resources Ltd included a non-cash component of $1.6m worth of MRP fully paid ordinary shares.

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

• 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

n/a

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1	Loan facilities
3.2	Credit standby arrangements

Amount available	Amount used
$A’000	$A’000
-	-
-	-

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	3,000
	-
	-
	1,000
Total	4,000

Reconciliation of cash

Total 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 $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (term deposits)	7,137	13,883
	-	-
	-	-
	9,149	11,789
Total: cash at end of quarter(item 1.22)	16,286	25,672

• See chapter 19 for defined terms.

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Changes in interests in mining tenements

Tenement reference Nature of interest (note (2)) Interest at beginning ofquarter Interest at end of quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed E69/2293 E09/1746 Surrendered Withdrawn 100% 100% 0% 0% 6.2 Interests in mining tenements acquired or increased L15/315 L15/316 L15/317 L15/321 E09/1937 Granted Granted Granted Granted Application 100% 100% 100% 100% 0% 100% 100% 100% 100% 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.	Tenement reference Nature of interest (note (2)) Interest at beginning ofquarter Interest at end of quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed E69/2293 E09/1746 Surrendered Withdrawn 100% 100% 0% 0% 6.2 Interests in mining tenements acquired or increased L15/315 L15/316 L15/317 L15/321 E09/1937 Granted Granted Granted Granted Application 100% 100% 100% 100% 0% 100% 100% 100% 100% 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.	Tenement reference Nature of interest (note (2)) Interest at beginning ofquarter Interest at end of quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed E69/2293 E09/1746 Surrendered Withdrawn 100% 100% 0% 0% 6.2 Interests in mining tenements acquired or increased L15/315 L15/316 L15/317 L15/321 E09/1937 Granted Granted Granted Granted Application 100% 100% 100% 100% 0% 100% 100% 100% 100% 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.	Tenement reference Nature of interest (note (2)) Interest at beginning ofquarter Interest at end of quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed E69/2293 E09/1746 Surrendered Withdrawn 100% 100% 0% 0% 6.2 Interests in mining tenements acquired or increased L15/315 L15/316 L15/317 L15/321 E09/1937 Granted Granted Granted Granted Application 100% 100% 100% 100% 0% 100% 100% 100% 100% 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.	Tenement reference Nature of interest (note (2)) Interest at beginning ofquarter Interest at end of quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed E69/2293 E09/1746 Surrendered Withdrawn 100% 100% 0% 0% 6.2 Interests in mining tenements acquired or increased L15/315 L15/316 L15/317 L15/321 E09/1937 Granted Granted Granted Granted Application 100% 100% 100% 100% 0% 100% 100% 100% 100% 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 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	264,742,501	264,742,501
	2,505,300	2,505,300
7.5 +Convertible debt securities (description)

• See chapter 19 for defined terms.

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7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	1,800,000 1,850,000 2,450,000 4,500,000 3,150,000 4,000,000 500,000	Nil Nil Nil Nil Nil Nil Nil	Exercise price $0.85 $1.20 $0.80 $0.80 $1.00 $1.00 $1.00	Expiry date 31/12/2012 30/06/2013 31/12/2013 30/06/2012 01/07/2013 01/07/2012 01/07/2014
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.

==> picture [95 x 47] intentionally omitted <==

Sign here: ............................................................ Date: 31 October 2011 Company secretary Print name: Jason Carone

• See chapter 19 for defined terms.

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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 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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