NEOMETALS LTD — M&A Activity 2013

Mar 19, 2013

ASX/MEDIA RELEASE 20 March 2013

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Crest Minerals Ltd signs binding MOU to acquire high-grade gold mine in WA from Reed Resources Ltd

Highlights

• Crest enters into binding, conditional Memorandum of Understanding (MOU) to acquire Sand Queen Gold Mines Pty Ltd, holder of the Comet Vale Gold Project (CVGP) in WA’s prolific Eastern Goldfields, from Reed Resources Ltd for $6 million cash.

• CVGP includes the high-grade Sand Queen Gold Mine, currently on care and maintenance, with total resources of 534,000 tonnes at 10.8 grams per tonne (g/t) gold containing 186,000 ounces (oz) of gold. Refer to Table 1 of Appendix A for more detail.

• Sand Queen Gold Mine is located 100km north of Kalgoorlie, and includes infrastructure to resume mining operations and a 280,000 tonne toll milling agreement over a four year period.

• CVGP includes several shallow prospects, with total resources of 320,000 tonnes at 2.4 g/t gold containing 24,600 oz of gold, adjacent to existing infrastructure. Refer to Table 2 of Appendix A for more detail.

• MOU also includes the right, subject to a pre-emptive right not being exercised, to acquire a 1% net smelter royalty payment from production on the Nimbus Silver - Zinc Mine.

Australian gold exploration company, Crest Minerals Limited (ASX: CTT) ( Crest ), today announced it had executed a binding Memorandum of Understanding ( MOU ) to acquire the Comet Vale Gold Project ( CVGP ) in Western Australia’s prolific Eastern Goldfields from ASXlisted Reed Resources Ltd ( Reed )) for $6 million in cash. The MOU also includes the right, subject to a pre-emptive right not being exercised, to acquire a 1% net smelter royalty payment from the Nimbus Silver-Zinc Mine, (together, the Acquisition ).

The Acquisition is subject to due diligence, capital raising, and receipt of necessary approvals.

Crest has paid a non-refundable deposit of $100,000 to secure the contract, which includes a two month due diligence period.

“Our proposed acquisition of the Comet Vale Gold Project is in line with our business objective of delivering shareholder value via definition drilling and project generation”, Crest’s Managing Director, Mr Angus Middleton, said today.

“Our plan is to expand the current resource base at Sand Queen to underpin a bigger mine plan that will see the resumption of operations at the site as soon as is practical,” he said.

“This will coincide with the planned recommissioning of the nearby Nimbus processing plant by its owners.”

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“We are of the firm view that the recent history of high-grade production (80,000 tonnes at 10 g/t gold) and the existing underground and surface infrastructure, should ensure the restart is lowrisk with a low-capital cost.”

“Crest believes the current high-grade resource inventory at Sand Queen (186,000 oz at 10.8 g/t gold, see Appendix A) in the current global gold price environment, together with a milling solution, is a valuable company making asset.”

Following completion of the Acquisition ( Completion ), Crest intends to continue exploration on its current assets, continue to seek and evaluate new opportunities and to conduct additional exploration at Sand Queen, with a view to possibly recommencing operations at Sand Queen. It is not expected that operations will recommence until July 2014 at the earliest.

Mr Middleton said the CVGP tenements are held within Sand Queen Gold Mines Pty Ltd ( SQGM ), a wholly-owned subsidiary of Reed, other than a mining lease application, which is required to be transferred to SQGM upon grant.

Under the binding MOU, upon completion, Crest will acquire all of the issued capital in SQGM. Tenure covers an area of approximately 63km[2] and comprises 14 granted Mining Leases, 4 granted Exploration Licences, one granted Miscellaneous Licence and one pending Mining Lease application.

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Figure 1 a) Location of the Comet Vale Gold Project. b) Plan of tenements surrounding the Sand Queen Mine.

The Comet Vale region has had a long history of gold production, with the earliest recorded in 1904.

The initial period of Mining ceased in the area in 1938 with cumulative production of 245,000 tonnes at 23g/t gold for 181,000 oz.

Through continuous mining between June 2006 and June 2010 Reed produced 80,000 tonnes at 10 g/t gold for 26,000 oz, using handheld machine mining methods with ore being hoisted to surface via a vertical shaft.

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Figure 2 Head Frame Sand Queen 1910’s

Figure 3 Head Frame Sand George 2013

The mine was placed on care and maintenance in May 2010 due to Reed’s inability to negotiate a long term milling contract.

The MOU includes a four year toll milling contract for 70,000 tonnes per annum at “cost plus 15%” at the Nimbus processing plant, which is situated about 8 km east of Kalgoorlie along Bulong Road, 120km from the CVGP.

Mr Middleton said extensive infrastructure remains in place at CVGP. This includes a shaft and head-frame, underground equipment, offices and change rooms, as well as an existing power supply and fresh water tank facilities.

The underground mine will require dewatering prior to recommencement of development and mining.

All licences, permits and approvals are current to enable a recommencement of the underground operations as soon as Crest deems it appropriate.

FORWARD STRATEGY FOR CVGP

Crest plans to expand the existing resource base at the Comet Vale Gold Project through a staged reverse circulation ( RC ) and diamond drilling program. As stated above, such a program, along with other exploration, will provide Crest with the information necessary to determine the viability of recommencing operations on the Comet Vale Gold Project and the possibility of mining in shallow pits. This will create more flexibility in future operations and opportunity for earlier cashflow through additional ounces of gold derived.

Exploration targeting has already identified a number of highly prospective areas close to the known Comet Vale shear zone.

A cross-sectional illustration can be seen in Figure 6. This shows the planned and current mine openings, the resource and planned drilling. Results from this drilling will allow a sustainable mining plan to be generated.

The drilling will specifically target any areas requiring further definition, including diamond tails of drill holes into the Sand Queen / Sand George Lodes. It is anticipated this resource definition and strike extension drilling will total 25,000 metres.

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TRANSACTION TERMS

The principal terms of the transaction under the binding MOU are as follows:

• Acquisition of:

• 100% of the issued capital of SQGM; and

• Reed’s Nimbus zinc royalty ( Royalty ), subject to non-exercise of pre-emptive right,

• for $6 million in cash, including a non-refundable deposit of $100,000, paid by Crest to Reed. If the Royalty is not acquired, the payment will be reduced by $600,000.

• Acquisition subject to Crest completing due diligence on SGQM and CVGP to its satisfaction within two months and, on or before 30 June 2013:

• Crest raising $13 million through the issue of fully paid ordinary shares in the capital of Crest;

• Crest obtaining any shareholder approvals required to complete the transaction;

• Reed obtaining any necessary consents, waivers and releases to complete the transaction; and

• Reed obtaining any necessary consents, authorisations and approvals from government or administrative authorities to complete the transaction.

• If requested by Crest, the parties will enter into a formal share sale agreement to reflect the terms of the binding MOU.

TRANSACTION TIMETABLE

Execution of MOU	19 March 2013
Deposit Paid	On or before 21 March 2013
Planned notice of meeting dispatch	Around 31 May 2013
Due Diligence Completed	2 Months after MOU executed
Shareholder meeting	On or before 30 June 2013
Latest Day for Settlement	31 July 2013 (or any other date agreed by Reed & Crest)

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Figure 4 Surface view of planned drilling in relation to existing resources and infrastructure.

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Figure 5 Cross Section illustrating a planned drill hole in relation to existing operations and planned open pit. A Level 1, 67, Greenhill Road, Wayville SA 5034 | T (08) 8338 4880| F (08) 8338 4881| E admin@crestminerals.com.au

www.crestminerals.com.au

For further information, please contact:

Angus Middleton Rohin Muller Sean Whittington Managing Director Adelaide Equity Partners Field Public Relations Crest Minerals Ltd 08 8232 8800 08 8234 9555 08 8338 4880 0435 867 819 0412 591 520 admin@crestminerals.com.au RMuller@adelaideequity.com.au sean@fieldpr.com.au

The information in this report that relates to Mineral Resources and Ore Reserves is based on information compiled by Stephen Jones FAusimm (CP), being the Chief Executive Officer of Crest Minerals Ltd, and who is a Fellow of the Australasian Institute of Mining and Metallurgy and is bound by and follows the Institute’s codes and recommended practices. Stephen Jones has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activities which he is undertaking, to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves’. Stephen Jones consents to the inclusion in the above report of the matters based on his information in the form and context in which it appears.

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APPENDIX A

TABLE 1

Resource Category	Tonnes	Grade g/t Au	Contained Au ounces
Inferred	296,000	10.9	103,500
Indicated	238,000	10.8	82,500
**Total **	534,000	10.8	186,000

Table 1 Mineral Resource Estimates for the Sand Queen Mine, Comet Vale project (at a cut-off grade of 5 g/t gold) 28 February 2010. Depletion until closure of 3,782 tonnes at 9.15 g/t gold.

TABLE 2

Resource Category	Tonnes	Grade g/t Au	Contained Au ounces
Princess Grace (1g/t goldlowercut,no uppercutrequired)
Inferred	13,000	1.6	700
Indicated	92,000	2.9	8,500
**Total **	105,000	2.7	9,200
Coonega (1g/t goldlowercut,12g/t gold uppercut)
Inferred	106,000	2.2	7,500
**Total **	106,000	2.2	7,500
Sand Prince West (1g/t goldlowercut,no uppercutrequired)
Inferred	19,000	1.5	900
Indicated	90,000	2.4	7,000
**Total **	109,000	2.3	7,900
Combined Resources (1	g/t goldlowercut)
Inferred	138,000	2.0	9,100
Indicated	182,000	2.6	15,500
**Total **	320,000	2.4	24,600

Table 2 Mineral Resource estimates at Sand Prince West, Princess Grace and Coonega prospects 28 February 2010.

TABLE 3

Deposit	Classification	Tonnes	Grade g/t Au	Contained Au ounces
Sand Prince West	Probable	109,000	2.6	9,200

Table 3 Reserve estimates for the Sand Prince West, released by Reed to ASX 15 September 2009.

All tonnage, grade and ounce values have been rounded down to three significant figures; slight errors may occur due to rounding of values.

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Figure 6 Long Section – Hangingwall Lode.

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Figure 7 Long Section – Footwall Lode.

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