NEOMETALS LTD — Proxy Solicitation & Information Statement 2011

Mar 3, 2011

97 Outram St West Perth WA 6005 Tel: + 61 8 9322 1182 Fax: + 61 8 9321 0556

4 March 2011

Company Announcements Office ASX Limited Via Electronic Lodgement

Dear Sirs

Notice of Extraordinary General Meeting and Share Purchase Plan Offer Document

On 24 February 2011, Reed Resources Ltd announced a \$40 million capital raising by way of a \$30 million two-tranche placement (Placement) and a \$10 million underwritten share purchase plan (SPP).

The first tranche of the Placement has been completed. The second tranche of the Placement and the underwriting of the SPP are subject to shareholder approval at an Extraordinary General Meeting of shareholders to be held at 3.00pm (WST) on 6 April 2011.

The Company is posting a Notice of Extraordinary General Meeting and the SPP Offer Booklet to shareholders today.

Please find attached a copy of the following documents:

• (a) Notice of Extraordinary General Meeting;
• (b) template Proxy Form;
• (c) SPP Offer Booklet; and
• (d) template SPP Application Form for eligible shareholders.

Yours faithfully

Jason Carone COMPANY SECRETARY

97 Outram St West Perth WA 6005 Tel: + 61 8 9322 1182 Fax: + 61 8 9321 0556

Dear Shareholder,

EXTRAORDINARY GENERAL MEETING

Notice is hereby given that an Extraordinary General Meeting (EGM) of Shareholders is to be held as follows:

Venue: Celtic Club 48 Ord Street West Perth, WA 6005

Time: 3pm (WST)

Date: Wednesday, 6 April 2011

Please find enclosed the following documents in relation to the EGM:

• 1. Notice of EGM together with Explanatory Statement; and
• 1. Proxy Form for EGM together with instructions.

If you are not able to attend the EGM in person, you are urged to complete and lodge the enclosed Proxy.

Yours sincerely

Jason Carone Company Secretary Reed Resources Ltd 3 March 2011

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS GIVEN that an Extraordinary General Meeting of the Company will be held on Wednesday, 6 April 2011, at 3pm (WST), at the Celtic Club, 48 Ord Street, West Perth WA 6005, to consider, and if thought fit, pass the resolutions below.

The Explanatory Statement and the Proxy Form accompanying this Notice are incorporated in and comprise part of this Notice.

AGENDA

Ordinary Business

1. Resolution 1 – Ratification of prior issue of Shares pursuant to Share Placement

To consider and if thought fit to pass, with or without amendment, the following as an ordinary resolution:

"That for the purposes of ASX Listing Rules 7.4, and all other purposes, Shareholders ratify and approve the issue by the Company of 27,500,000 Shares at an issue price of \$0.58 per Share, on the terms and conditions set out in the Explanatory Statement."

VOTING EXCLUSION STATEMENT

For the purposes of Listing Rule 7.5.6, and all other purposes, the Company will disregard any votes cast on the Resolution by any person who participated in the issue and any associate of those persons. However, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• (b) it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

2. Resolution 2 – Approval of issue of Shares pursuant to Share Placement

To consider and if thought fit to pass, with or without amendment, the following as an ordinary resolution:

"That, for the purposes of ASX Listing Rule 7.1, and for all other purposes, approval is given for the Directors to issue up to 24,224,138 Shares at an issue price of \$0.58 per Share, on the terms and conditions set out in the Explanatory Statement."

VOTING EXCLUSION STATEMENT

For the purposes of Listing Rule 7.3.8, and all other purposes, the Company will disregard any votes cast on the Resolution by any person who may participate in the proposed issue and any associate of those persons. However, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• (b) it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

3. Resolution 3 – Approval of issue of Shares pursuant to Underwriting Agreement

To consider and if thought fit to pass, with or without amendment, the following as an ordinary resolution:

"That, for the purposes of ASX Listing Rule 7.1, and for all other purposes, the Company approves the issue of up to 17,241,380 Shares at an issue price of \$0.58 per Share pursuant to the Underwriting Agreement in respect of the Company's Share Purchase Plan on the terms and conditions set out in the Explanatory Statement."

VOTING EXCLUSION STATEMENT

For the purposes of Listing Rule 7.3.8, and all other purposes, the Company will disregard any votes cast on the Resolution by any person who may participate in the proposed issue and any associate of those persons. However, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• (b) it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

4. Resolution 4 – Approval of amendments to Constitution

To consider and if thought fit to pass, with or without amendment, the following as a special resolution:

"That, for the purposes of section 136(2) of the Corporations Act, the Constitution be amended as follows

• (a) in clause 17.1, by deleting the words "final dividend out of profits" and replacing them with the word "dividend";
• (b) by deleting clause 17.2 in its entirety;
• (c) in clause 17.3, by deleting the words ", whether final or interim";
• (d) by inserting a new Part 17A Distributions, as follows:

"If, pursuant to a resolution provided for in this Constitution or in the Corporations Act, the Company distributes to Members (either generally or to specific Members) securities in the Company or in another body corporate or trust (whether as a dividend or otherwise and whether or not for value), each of those Members appoints the Company as his or her agent to do anything needed to give effect to that distribution, including agreeing to become a member of that other body corporate."; and

(e) in clause 19.2, by deleting the words "three (3) days" and replacing them with the words "one (1) day".

5. Determining Shareholder voting entitlements

Regulation 7.11.37 of the Corporations Regulations 2001 permits the Company to specify a time not more than 48 hours before the meeting, at which a "snap-shot" of Shareholders will be taken for the purposes of determining Shareholder entitlements to vote at the meeting. The Company has determined that, for the purposes of determining voting entitlements at this Extraordinary General Meeting, all Shares of the Company that are quoted on ASX at 7pm (Sydney time), Monday, 4 April 2011 be taken to be held by the persons registered as holding the Shares at that time.

6. Proxies

• (a) Votes at this Extraordinary General Meeting may be given personally or by proxy.
• (b) A proxy need not be a Shareholder of the Company.
• (c) The original proxy form sent with this Notice should be used for this Extraordinary General Meeting.
• (d) Each Shareholder who is entitled to cast 2 or more votes at this Extraordinary General Meeting, may appoint 2 persons to act as proxies and may specify the proportion of number of votes that each proxy is entitled to exercise. If a Shareholder does not specify the proportion or number of that Shareholder's votes each proxy may exercise, then each proxy will be entitled to exercise half of the votes. An additional proxy form will be supplied by the Company on request. No Shareholder may appoint more than 2 proxies.
• (e) In the case of a Shareholder who is an individual, a proxy must be under the hand of the individual or his or her attorney duly authorised in writing and, in the case of a Shareholder that is a corporation, a proxy must be executed by the corporation

under common seal, pursuant to Section 127 of the Corporations Act or under the hand of its duly authorised officer or attorney.

• (f) Any Shareholder may by power of attorney appoint an attorney to act on his or her behalf and such power of attorney or certified copy thereof must be received by the Company as specified in paragraph (i).
• (g) Any corporation which is a Shareholder of the Company may appoint a representative to attend and vote for that corporation at the Extraordinary General Meeting. Appointments of representatives by corporations must be received by the Company as specified in paragraph (i) at any time before the time for holding this Extraordinary General Meeting or adjourned Extraordinary General Meeting.
• (h) Proxies granted by Shareholders must be received by the Company by 3pm (WST) on Monday, 4 April 2011 as follows:
• (i) by post to GPO Box 242, Melbourne, Victoria 3001;
• (ii) by delivery to Level 2, 45 St Georges Terrace, Perth, Western Australia 6000; or
• (iii) by facsimile to 1800 783 447 (from within Australia), or to +61 3 9473 2555 (from outside Australia).
• (i) Corporate representative appointments under Section 250D of the Corporations Act may be delivered at any time to the Company at its registered office – 97 Outram Street, West Perth, WA 6005 or handed in at the Extraordinary General Meeting itself.

By order of the Board of Directors

Jason Carone Company Secretary Reed Resources Ltd

3 March 2011

EXPLANATORY STATEMENT – EXTRAORDINARY GENERAL MEETING –

1. General

This Explanatory Statement has been prepared to provide material information reasonably required to enable you to make an informed decision on how to vote upon the business to be conducted at the EGM.

The purpose of the EGM is to consider and if thought fit, pass the Resolutions.

The Directors recommend that Shareholders read this Explanatory Statement before determining whether to support the Resolutions or otherwise.

2. Resolution 1 – Ratification of prior issue of Shares pursuant to Share Placement

2.1 Background

On 12 January 2011, the Company announced the acquisition of the Meekatharra Gold Project from the Administrators of Mercator Gold Australia Pty Ltd (Meekatharra Acquisition).

On 24 February 2011, the Company announced a capital raising comprising of a twotranche placement of Shares (Share Placement) to raise \$30 million, and an underwritten Share purchase plan (Share Purchase Plan) to raise \$10 million, both at an issue price of \$0.58 per Share. Total funds raised under these capital raisings (approximately \$37.6 million after costs) will be used to complete the Meekatharra Acquisition, for general working capital and the advancement of the Company's other assets.

The Share Placement is to be conducted in two tranches. The first tranche of 27,500,000 Shares was placed on or about 3 March 2011 under the Company's available 15% placement capacity. The balance of the Share Placement, being 24,224,138 Shares, is subject to Shareholder approval as set out in Resolution 2.

2.2 Approvals required

ASX Listing Rule 7.1 provides that without approval of the Shareholders, the Company must not issue or agree to issue more equity securities if such issue, if aggregated with the securities issued by the company during the previous 12 months, would be such amount that would exceed 15% of the issued shares at the commencement of that 12 month period (subject to certain exemptions not relevant to the Company's present circumstances).

Under Resolution 1, the Company seeks the ratification by the Shareholders of the issue of 27,500,000 Shares to professional and sophisticated investors.

Although the issue of these Shares were all within the 15% prescribed limit when issued, the issue of those Shares had not previously been approved by Shareholders.

ASX Listing Rule 7.4 however treats an issue made without the approval under Listing Rule 7.1, as having been made with approval for the purposes of Listing Rule 7.1 if that issue

did not breach Listing Rule 7.1, and the Shareholders subsequently approve it. The issue referred to in Resolution 1 did not breach Listing Rule 7.1 when made.

The effect of the ratification by the Shareholders pursuant to Resolution 1 is to restore the Company's capacity for the purposes of Listing Rule 7.1 to issue or agree to issue further equity securities up to the 15% limit.

2.3 Technical information required by ASX Listing Rule 7.5

Listing Rule 7.5 also requires the following information to be provided to Shareholders:

• (a) (Number of securities allotted) 27,500,000.
• (b) (Price securities were issued) \$0.58.
• (c) (Terms of the securities) The issued shares are fully paid ordinary shares and are on the same terms as existing fully paid ordinary shares in the Company.
• (d) (Allottees) Professional Investors who have subscribed for shares pursuant to the Share Placement. These Professional Investors are domestic and international institutional investors and other professional or sophisticated investor clients of the Company's appointed capital raising manager, Bedford Capital Partners Pty Limited (Bedford) or other Australian financial services licensees arranged by Bedford on behalf of the Company, including Bligh Capital Partners Pty Ltd (Bligh Capital). None of the allottees are related parties of the Company.
• (e) (Use or intended use of the funds raised) The additional capital made available to the Company in consequence of the Share Placement, together with the Share Purchase Plan, will be used to complete the Meekatharra Acquisition, for general working capital and the advancement of the Company's other assets.

3. Resolution 2 – Approval of issue of Shares pursuant to Share Placement

3.1 Background

Resolution 2 seeks Shareholder approval for the issue of Shares pursuant to the second tranche of the Share Placement. Further details regarding the Share Placement are set out in Section 2 of this Explanatory Statement.

3.2 Approvals required

Resolution 2 seeks Shareholder approval for the issue of up to 24,224,138 Shares at an issue price of \$0.58 per Share, in accordance with ASX Listing Rule 7.1.

A summary of ASX Listing Rule 7.1 is set out in Section 2 of this Explanatory Statement.

The effect of the approval pursuant to Resolution 2 will be to allow the Company to issue the Shares during the period of 3 months after the EGM, without using the Company's 15% annual placement capacity.

3.3 Technical information required by ASX Listing Rule 7.3

Listing Rule 7.3 also requires the following information to be provided to Shareholders:

(a) (Maximum number of securities to be issued) – 24,224,138.

• (b) (Date by which the securities will be issued) no later than 3 months after the date of the Meeting, and it is intended that allotment will occur on the same date.
• (c) (Issue price of securities) \$0.58.
• (d) (Allottees) Professional Investors who have subscribed for Shares pursuant to the Share Placement. These Professional Investors are domestic and international institutional investors and other professional or sophisticated investor clients of the Company's appointed manager, Bedford or other Australian financial services licensees arranged by Bedford on behalf of the Company, including Bligh Capital. None of the allottees are related parties of the Company.
• (e) (Terms of the securities) The issued shares are fully paid ordinary shares and are on the same terms as existing fully paid ordinary shares in the Company.
• (f) (Intended use of the funds raised) The additional capital made available to the Company in consequence of the Share Placement, together with the Share Purchase Plan, will be used to complete the Meekatharra Acquisition, for general working capital and the advancement of the Company's other assets.

4. Resolution 3 - Approval of issue of Shares pursuant to the Underwriting Agreement

4.1 Background

On 24 February 2011, the Company announced a Plan providing an opportunity to its eligible existing Shareholders to participate in the equity raising at the same issue price that applied in the Share Placement (\$0.58 per Share) to raise up to a further \$10 million (before costs). The Plan will only be open to "eligible Shareholders", being Shareholders who were registered holders of Reed Shares as at 5:00pm (WST) on Wednesday, 23 February 2011 with a registered address in Australia or New Zealand who are not acting for the account or benefit of U.S. persons or persons in any other jurisdiction in which the offer would be unlawful. Eligible existing Shareholders will each have the opportunity to subscribe for up to \$15,000 of Shares. A maximum of 17,241,380 Shares (approximately \$10 million) is being made available in total to eligible Shareholders under the Plan. In the event that applications for more than that number of Shares are received, the number of Shares actually applied for, will be proportionately scaled back by the Company, so that a whole number of Shares not exceeding the maximum limit will be issued to applicants on the issue date.

It was also announced on 24 February 2011 that the Company proposed, pursuant to the Underwriting Agreement, that Bligh Capital will underwrite the Plan.

4.2 Approvals required

As noted above, ASX Listing Rule 7.1 provides that without approval of the Shareholders, the Company must not issue or agree to issue more equity securities if such issue, if aggregated with the securities issued by the company during the previous 12 months, would be such amount that would exceed 15% of the issued shares at the commencement of that 12 month period (subject to certain exemptions not relevant to the Company's

present circumstances). Issues to an underwriter of a share purchase plan are not exempt from these requirements.

As a result, the Company now seeks Shareholder approval of the proposed issue of up to a maximum of 17,241,380 Shares at an issue price of \$0.58 per Share to the underwriter or sub-underwriters pursuant to the Underwriting Agreement, raising a maximum total of approximately \$10 million.

4.3 Technical information required by ASX Listing Rule 7.3

Listing Rule 7.3 also requires the following information to be provided to Shareholders:

• (a) (Maximum number of securities to be issued) 17,241,380.
• (b) (Date by which securities will be issued) no later than 3 months after the date of the Meeting, and it is intended that allotment will occur on the same date.
• (c) (Issue Price of securities) \$0.58, being the same price as for the Plan.
• (d) (Allottees) The allottees will be Bligh Capital or persons nominated by Bligh Capital in accordance with the Underwriting Agreement.
• (e) (Terms of the securities) The issued shares are fully paid ordinary shares and are on the same terms as existing fully paid ordinary shares in the Company.
• (f) (Use or intended use of the funds raised) The additional capital made available to the Company in consequence of the underwritten Plan, together with the Share Placement, will be used to complete the Meekatharra Acquisition, for general working capital and the advancement of the Company's other assets.

5. Resolution 4 - Approval of amendments to Constitution

5.1 Background

A company may modify its constitution by a special resolution of its shareholders. The constitution, being the rules by which the Company operates, should continue to evolve in line with the regulatory environment in which the Company operates.

5.2 Summary of proposed amendments

Dividends

There have been recent changes to the dividend payment provisions of the Corporations Act which came into effect on 28 June 2010. A new section 254T has been included in the Corporations Act which introduces a new three-tiered test that a company will need to satisfy before paying a dividend. This replaces the previous test that the company may only pay dividends from profits.

The new section 254T provides that a company must not pay a dividend unless:

• (a) the company's assets exceed its liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend;
• (b) the payment of the dividend is fair and reasonable to the company's shareholders as a whole; and

(c) the payment of the dividend does not materially prejudice the company's ability to pay its creditors.

The proposed amendments to the Constitution remove the profits test from the Constitution and enable the Company to pay dividends in accordance with the new position under the Corporations Act. The Directors consider it appropriate for the Constitution to reflect the recently amended Corporations Act to allow flexibility in the payment of dividends.

Distributions

This new clause is intended to confer greater flexibility on the Directors to distribute securities, whether as a dividend or otherwise, in another company.

Notices

This proposed amendment reduces the service time for a notice sent by post by the Company to Shareholders from three days to one day. Notice will be deemed to have been served one day after posting. This has been introduced by the Directors to bring the notice provision of the Constitution in line with market practice.

6. Definitions

For the purposes of this Explanatory Statement and the Notice of Extraordinary General Meeting the following definitions apply unless the context requires otherwise.

ASX means ASX Limited (ABN 98 008 624 691), or the Australian Securities Exchange as the context requires.

Bedford means Bedford Capital Partners Pty Limited (ABN 62 131 241 444).

Bligh Capital means Bligh Capital Partners Pty Ltd (ABN 24 129 655 849).

Company means Reed Resources Ltd (ABN 89 099 116 631).

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

EGM or Extraordinary General Meeting means the extraordinary general meeting notified to the Company Shareholders by the Notice.

Meekatharra Acquisition means the acquisition of the Meekatharra Gold Project from the Administrators of Mercator Gold Australia Pty Ltd, as announced to ASX on 12 January 2011.

Notice means the notice of extraordinary general meeting incorporating this Explanatory Statement.

Plan or Share Purchase Plan means the Company's Share Purchase Plan as announced on 24 February 2011.

Professional Investors means a person who participated in the Share Placement who is not a 'retail client' within the meaning of section 761G of the Corporations Act and is also one of the following:

• (a) a sophisticated investor within the meaning of section 708(8) of the Corporations Act; or
• (b) a professional investor within the meaning of section 708(11) of the Corporations Act.

Resolutions means the resolutions proposed in the Notice, or any of them, as the context requires.

Share means a fully paid ordinary share in the capital of the Company.

Share Placement means the placement of 51,724,138 Shares to Professional Investors announced on 24 February 2011.

Shareholder means a holder of Shares of the Company and Shareholders has a corresponding meaning.

Underwriting Agreement means the underwriting agreement entered into between the Company and Bligh Capital on or about 24 February 2011.

Lodge your vote:

By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Proxy Form

For your vote to be effective it must be received by 3.00pm (WST) Monday 4 April 2011

How to Vote on Items of Business

000001 ⁰⁰⁰ RDR MR SAM SAMPLE FLAT 123

123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate "Certificate of Appointment of Corporate Representative" prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

Turn over to complete the form

www.investorcentre.com View your securityholder information, 24 hours a day, 7 days a week:

Review your securityholding Update your securityholding Your secure access information is:

SRN/HIN: I9999999999

PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030 Proxy Form			Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with 'X') should advise your broker of any changes.	I9999999999 I 9999999999		I ND
			Please mark			to indicate your directions
		Appoint a Proxy to Vote on Your Behalf				XX
		I/We being a member/s of Reed Resources Ltd hereby appoint			PLEASE NOTE: Leave this box blank if
	the Chairman OR of the meeting				you have selected the Chairman of the	Meeting. Do not insert your own name(s).
	Items of Business	Wednesday, 6 April 2011 at 3.00pm (WST) and at any adjournment of that meeting.	or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the General Meeting of Reed Resources Ltd to be held at the Celtic Club, 48 Ord Street, West Perth, WA 6005 on PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your
			behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.
Resolution 1		Ratification of prior issue of Shares pursuant to Share Placement
Resolution 2		Approval of issue of Shares pursuant to Share Placement
Resolution 3		Approval of issue of Shares pursuant to Underwriting Agreement
Resolution 4		Approval of amendments to Constitution
			The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.
		Signature of Securityholder(s)	This section must be completed.

Individual or Securityholder 1	Securityholder 2		Securityholder 3
Sole Director and Sole Company Secretary	Director		Director/Company Secretary
Contact		Contact Daytime
Name		Telephone	/ Date	/

97 Outram St West Perth WA 6005 Tel: + 61 8 9322 1182 Fax: + 61 8 9321 0556

4 March 2011

Dear Shareholder

Reed Resources Ltd ABN 89 099 116 631 Share Purchase Plan 2011

1 Introduction

I am pleased to advise you that the directors of Reed Resources Ltd ("'Reed" or "Company") have established a share purchase plan ("'Plan") to give its existing shareholders the opportunity to acquire up to 25,862 additional ordinary shares in Reed ("Shares").

Under the Plan, Reed is offering each Eligible Shareholder the opportunity to acquire up to a maximum of \$15,000 worth of Shares at the issue price of \$0.58 per Share ("Issue Price"). Shares acquired under the Plan will not attract brokerage, stamp duty or any other transaction costs.

A maximum of 17,241,380 Shares (approximately \$10 million) is being made available in total to Eligible Shareholders under the Plan. In the event that applications for more than that number of Shares are received, the number of Shares actually applied for will be proportionately scaled back by Reed, so that a whole number of Shares not exceeding the maximum limit will be issued to applicants on the issue date. Excess subscription monies, calculated by multiplying the Issue Price by the difference between the number of Shares allocated and the number of Shares applied for, will be refunded to each applicant by cheque as soon as practicable.

Reed recently announced a placement of Shares to institutional investors, to raise \$30 million ("Placement"). The Plan provides Reed's loyal Eligible Shareholders with the opportunity to increase their shareholding in Reed at the same price paid by the institutional investors under the Placement, without incurring any charges.

The Plan is fully underwritten by Bligh Capital Partners Pty Ltd ("Bligh Capital"). The underwriting of the Plan is subject to shareholder approval for the purposes of the ASX Listing Rules.

Funds raised from the Plan and the Placement will be used to complete the recently announced acquisition of the Meekatharra Gold Project, for working capital and the advancement of the Company's other assets.

Further details about Reed's projects, including the Meekatharra Gold Project can be accessed by visiting Reed's website www.reedresources.com and from the announcements lodged by Reed with the ASX.

The terms and conditions of the Plan are enclosed with this letter and all Eligible Shareholders should read these before deciding whether to participate in the Plan.

2 Conditional approval – Underwriting

The Company is seeking shareholder approval for the underwriting of the Plan by Bligh Capital at a General Meeting of the Company to be held on Wednesday, 6 April 2011, at 3pm (WST), at the Celtic Club, 48 Ord Street, West Perth WA 6005 ("EGM"). If the underwriting by Bligh Capital is not approved, the Company will proceed with the Plan to the extent that applications are received from Eligible Shareholders.

3 Eligible Shareholders

An offer is being made under the Plan to all shareholders who at 5.00pm (WST) on Wednesday, 23 February 2011 ("Record Date") were registered holders of Shares with an address in Australia or New Zealand and who are not acting for the account or benefit of a "US Person" as defined in Regulation S under the US Securities Act of 1993 (USA) or a person in any other jurisdiction in which the offer would be unlawful ("Eligible Shareholders").

Due to the risk and expense of offshore regulatory compliance issues and given the small number of holders involved, offers are not being made to shareholders whose registered address is not in Australia or New Zealand. To the extent that you hold Shares on behalf of another person resident outside Australia or New Zealand, it is your responsibility to ensure that any acceptance complies with all applicable foreign laws.

The offer is non-renounceable, which means that Eligible Shareholders cannot transfer their rights to subscribe for Shares under the Plan to anyone else. Details of the offer and the terms and conditions of the offer are set out in the attached Application Form.

Subject to providing a Custodian Certificate (as defined in the Terms and Conditions attached), certain custodians, trustees or nominees may be able to participate on behalf of each eligible persons' interest for whom they hold Reed Shares at 5.00pm (WST) on the Record Date without a requirement for the person's interest to be expressly noted on the Reed register.

As noted in section 4 of the Terms and Conditions of the Plan, Eligible Shareholders may only acquire a maximum of A\$15,000 worth of Reed Shares in any 12 month period.

4 Application and issue price

Eligible Shareholders may apply for Shares to a value of any one of the following amounts of Shares in the Company:

Option A	Total subscription amount of \$2,500 (being 4,310 Shares @ \$0.58 (Minimum Amount))
Option B	Total subscription amount of \$5,000 (being 8,621 Shares @ \$0.58)
Option C	Total subscription amount of \$10,000 (being 17,241 Shares @ \$0.58)
Option D	Total subscription amount of \$15,000 (being 25,862 Shares @ \$0.58 (Maximum Amount))

The Shares will be issued at \$0.58 per Share, which is the same issue price that applied under the Placement. This represents approximately a 13.7% discount to the volume weighted average sale price of Shares traded on the Australian Securities Exchange ("ASX") during the trading days between 15 February 2011 and 23 February 2011 (inclusive).

Like all Shares traded on the ASX, there is an inherent risk that the price of Shares traded on the ASX may change between the date of the offer and the date when the Shares under this Plan are issued to an applicant under the Plan. This means that the price you pay per Share pursuant to this Offer may be either higher or lower than the Reed Share price at the time of the Offer or at the time the Shares are issued to you under the Plan. Regardless of any fluctuations in the price of Shares traded on the ASX, the price of Shares applied for under the Plan is fixed at \$0.58 per Share.

Consequently, irrespective of the actual price of Shares at the date of issue, the applicant will receive such number of Shares issued under the Plan corresponding to their relevant application, at the price of \$0.58 per Share.

For compliance with certain Australian Securities and Investments Commission ("ASIC") and ASX Listing Rule requirements, in any consecutive 12 month period, the maximum aggregate application price of Shares for which each shareholder may subscribe for under the Plan and any other similar arrangement for the purchase of Shares is \$15,000. This limit applies to each Eligible Shareholder even if that person holds Shares in Reed in more than one capacity – for example, as a single holder and as a first (or subsequent) named holder of two or more joint holders. However, a Custodian, trustee or nominee (as defined in the Terms and Conditions attached) ("Custodian") may be able to participate on behalf of each eligible person's interest for whom they hold Reed Shares at the Record Date without a requirement for the person's interest to be expressly noted on the Reed register, subject to providing to Reed the Custodian Certificate.

5 Closing date of offer

The offer closes at 5pm (WST) on 24 March 2011 ("Closing Date"). If you are an Eligible Shareholder who is not a Custodian and would like to participate in the offer, you will need to either:

• 1 return your completed Application Form together with your cheque in Australian dollars for the full amount to which your acceptance relates, so that we receive it by no later than 5pm (WST) on the Closing Date; or
• 2 make payment using BPay in accordance with the instructions on the Application Form by no later than 3pm (WST) on the Closing Date.

If you are a Custodian and you have been instructed to apply for Shares on behalf of Participating Beneficiaries (as defined in the Terms and Conditions attached) under the Plan, follow the instructions on completing a Custodian Certificate in conjunction with an Application Form.

Applications received after the Closing Date will not be accepted.

6 Quotation on stock exchange

It is expected that Shares issued under the Plan will be quoted on ASX in late March 2011 and you should receive your holding statement shortly after this time.

In deciding whether to take up the enclosed offer of Shares, you should seek your own independent financial, legal and taxation advice in respect of the offer. It is also advised that Eligible Shareholders who apply for Shares under the Plan should not trade in the

Shares applied for until they have received confirmation of the issue and allotment of the Shares applied and noted in their shareholding statement which is to be distributed subsequent to the issue and allotment.

7 Key dates

For your reference, the table below summarises the key dates of the offer made under this Plan. The dates shown below are indicative only, and Reed may vary the dates and times of the offer at its discretion.

Record Date (5:00pm WST)	23 February 2011
Opening Date	4 March 2011
Closing Date (5:00pm WST)	24 March 2011
Issue Date	On or about 30 March 2011

By order of the Board of Directors

Jason Carone Company Secretary Reed Resources Ltd

REED RESOURCES LTD ABN 89 099 116 631 SHARE PURCHASE PLAN

Pursuant to the Reed Resources Ltd Share Purchase Plan 2011 ("Plan"), Reed Resources Ltd ACN 099 116 631 ("Reed" or "Company") offers Eligible Shareholders the ability to apply for a parcel of fully paid ordinary shares in Reed ("Shares") valued at \$2,500, \$5,000, \$10,000 or \$15,000 ("Offer").

IMPORTANT NOTICES

This is an important document offering Eligible Shareholders the opportunity to buy up to 25,862 Shares in Reed. You are encouraged to contact your professional adviser if you are unsure about what to do in relation to this document.

You should carefully read the terms and conditions relating to the Offer set out below as you will be bound by them. By lodging this form with your cheque or by making your payment via BPay, you confirm that you have read, understood and agreed to the Terms and Conditions of the Plan.

If you apply for Shares under the Plan, there is a risk that the market price of Shares may change between the date that you complete and return the Application Form and the Issue Date. This means that you may be able to buy Shares at a lower price than the Issue Price of \$0.58.

TERMS AND CONDITIONS

1 Eligibility to participate

You are an Eligible Shareholder and may participate in the Plan if, as at 5.00pm (WST) on 23 February 2011, (being the "Record Date" stated in the Application Form, as determined by the directors of Reed ("Board")), you are registered as a holder of Shares with an address in Australia or New Zealand and are not acting for the account or benefit of, a "US Person" as defined in Regulation S under the US Securities Act of 1993 (USA) or a person in any other jurisdiction in which the offer would be unlawful.

Due to the risk and expense of offshore regulatory compliance issues and given the small number of holders involved, Offers are not being made to shareholders whose registered address is not in Australia or New Zealand.

To the extent that you hold Shares on behalf of another person resident outside Australia or New Zealand, it is your responsibility to ensure that any acceptance complies with all applicable foreign laws.

For the purposes of determining who are Eligible Shareholders:

• (a) Single holders: If you are the only registered holder of a holding of Reed Shares, but you receive more than one offer under the Plan (for example, due to multiple registered holdings), you may only apply for one maximum parcel of Reed Shares.
• (b) Joint holders: If you are recorded with one or more other persons as the joint holder of a holding of Reed Shares, that joint holding is considered to be a

single registered holding for the purpose of the Plan, and the joint holders are entitled to participate in the Plan in respect of that single holding only. If the same joint holders receive more than one offer under the Plan due to multiple identical holdings, the joint holders may only apply for one maximum parcel of Reed Shares.

• (c) Custodians, trustees and nominees: If you are a custodian, trustee or nominee within the definition of "custodian" in ASIC Class Order [CO 09/425] or in any more specific ASIC relief granted to Reed in relation to the Plan ("Custodian") and hold Reed Shares on behalf of one or more persons (each a "Participating Beneficiary"), you may apply for up to a maximum of A\$15,000 worth of Reed Shares for each Participating Beneficiary, subject to providing a notice in writing to Reed (the "Custodian Certificate") certifying the following:
• (1) either or both of the following:
  • that you hold Shares on behalf of Participating Beneficiaries that are not Custodians;
  • that another Custodian ("Downstream Custodian") holds beneficial interests in Shares on behalf of Participating Beneficiaries, and the custodian holds the Shares to which those beneficial interests relate on behalf of the Downstream Custodian or another Custodian;

and that each Participating Beneficiary has instructed you or a Downstream Custodian to apply for Reed Shares on their behalf under the Plan;

• (2) the number of Participating Beneficiaries;
• (3) the name and address of each Participating Beneficiary;
• (4) in respect of each Participating Beneficiary:
• the number of Shares that you hold on their behalf; and
• the number of Shares to which the beneficial interests relate on behalf of the Downstream Custodian;
• (5) in respect of each Participating Beneficiary:
• the number or the dollar amount of Shares they instructed you to apply for on their behalf; and
• the number or the dollar amount of Shares they instructed the Downstream Custodian to apply for on their behalf;
• (6) that there are no Participating Beneficiaries in respect of which the total of the application price exceeds A\$15,000 worth of Shares, calculated by reference to Reed Shares applied for by you as Custodian or Downstream Custodian on their behalf under:
• the Plan; and
• any other Reed Shares issued to you as Custodian in the 12 months before your application under an arrangement similar to the Plan, in each case, as a result of an instruction given by them to you as Custodian or the Downstream Custodian to apply for Reed Shares on their behalf;
• (7) that a copy of the written offer document was given to each Participating Beneficiary; and
• (8) where there is a Downstream Custodian, the name and address of each Custodian who holds beneficial interests in the Shares held by the Custodian in relation to each Participating Beneficiary.

For the purposes of ASIC Class Order [CO 09/425] you are a "Custodian" if you are a registered holder that:

• (1) holds an Australian financial services licence that:
• covers the provision of a "custodial or depository service" (as defined in section 766E of the Corporations Act); or
• includes a condition requiring the holder to comply with ASIC Class Order [CO 02/294]; or
• (2) is exempt under:
• paragraph 7.6.01(1)(k) of the Corporations Regulations 2001; or
• paragraph 7.6.01(1)(na) of the Corporations Regulations 2001; or
• ASIC Class Order [CO 05/1270] to the extent that it relates to ASIC Class Order [CO 03/184]; or
• ASIC Class Orders [CO 03/1099], [CO 03/1100], [CO 03/1101], [CO 03/1102], [CO 04/829] or [CO 04/1313]; or
• an individual instrument of relief granted by ASIC to the person in terms similar to one of the class orders referred to in the immediately above sub-paragraph; or
• paragraph 911A(2)(h) of the Corporations Act;

from the requirement to hold an Australian financial services licence for the provision of a custodial or depository service; or

• (3) is trustee of a:
• self-managed superannuation fund; or
• superannuation master trust; or
• (4) is responsible entity of an IDPS-like scheme; or
• (5) is registered holder of Shares or interests in the class and is noted on the register of members of the body or scheme (as the case may be) as holding the Shares or interests on account of another person.

If you hold Reed Shares as a trustee or nominee for another person, but are not a Custodian as defined above, you cannot participate for beneficiaries in the manner described above. In this case, the rules for multiple single holdings (above) apply.

Custodians should provide a Custodian Certificate in conjunction with an Application Form.

Participation in the Plan is optional and is subject to these Terms and Conditions.

For the purposes of these Terms and Conditions, an Eligible Shareholder who accepts the Offer and applies for Shares is referred to as an "Applicant".

2 Offers

The Offer under the Plan is non-renounceable and you may not transfer your rights under the Offer to another person. All Offers made under the Plan will be made to each Eligible Shareholder on the same terms and conditions irrespective of the number of Shares which they may hold on the Record Date.

The Offer is open to all Eligible Shareholders from Friday, 4 March 2011, being the "Opening Date" as stated on the Application Form until 5.00pm (WST) on Thursday, 24 March 2011, being the "Closing Date" as stated on the Application Form.

3 Underwriting – Conditional on shareholder approval

The Plan is fully underwritten by Bligh Capital Partners Pty Ltd ("Bligh Capital"). The Company is seeking shareholder approval to approve the underwriting of the Plan by Bligh Capital. If the underwriting by Bligh Capital is not approved, the Company will proceed with the Plan to the extent that applications are received from Eligible Shareholders.

4 Investment amount

Eligible Shareholders may apply for a parcel of fully paid ordinary Shares valued at \$2,500, \$5,000, \$10,000 or \$15,000. This limit applies to you even if you hold Shares in more than one capacity – for example, as a single holder and as a first (or subsequent) named holder of two or more joint holders. If you receive more than one Offer under the Plan, you may apply on different Application Forms for more than one parcel of Shares, but you may not apply under the Plan for Shares with an aggregate application price of more than \$15,000. However, a Custodian may apply for up to a maximum of \$15,000 worth of Shares for each Participating Beneficiary, subject to providing the Custodian Certificate to Reed.

5 Issue Price

The Issue Price is \$0.58 per Share, which represents approximately a 13.7% discount to the volume weighted average sale price of Reed's Shares traded on the ASX during the period between 15 February 2011 and 23 February 2011 (inclusive).

You agree to pay the Issue Price per Share for the number of Shares you have selected on the Application Form.

There is a risk that the price of Reed's Shares traded on the ASX may change between the Opening Date and the date when the Shares under this Plan are issued to an Applicant. This means that the price you pay per Share pursuant to this Offer may be either higher or lower than the Reed Share price at the time of the Offer or at the time the Shares are issued to you under the Plan. Irrespective of the actual price of Reed's Shares traded on the ASX as at the Issue Date (defined below), the Applicant shall be issued under the Plan, such number of Shares corresponding to their application and at the price of \$0.58 per Share.

6 Limit of Shares available for purchase

The maximum number of Shares that may be issued under the Plan is 17,241,380 (the "Offer Limit"). In the event that the aggregate number of Shares validly applied for by all Applicants exceeds the Offer Limit, then the number of Shares you will be issued with shall instead be such whole number of Shares (rounded down) as calculated in accordance with the following formula:

$$
P \quad x \; \frac{L}{S}
$$

Where:

P = the relevant parcel applied for by that Applicant as elected in its Application Form;

L = the Offer Limit (being 17,241,380); and

S = the actual aggregate number of Shares validly applied for by all Applicants.

In the event that the amount of Shares applied for are so required to be reduced pursuant to this section 6, the excess subscription monies, calculated by multiplying the Issue Price by the difference between the number of Shares you are allocated and the number of Shares you applied for, will be refunded to you by cheque as soon as practicable. No interest will be paid on any subscription monies returned to you.

If a scale back produces a fractional number of Shares when applied to your parcel, the number of Shares will be rounded down to the nearest whole number of Shares.

7 Calculation of the number of Shares to be issued to you

In the absence of a scale back, the number of Shares to be issued to you will be calculated by dividing the aggregate application money that you pay in applying for Shares by the Issue Price (\$0.58), then rounding down to the nearest whole number of Shares.

Any fractions of Shares will be rounded down to the nearest whole number of Shares.

8 Costs of Participation

No brokerage, commissions, stamp duty or other transaction costs will be payable by shareholders in respect of the application for, and issue of, Shares under the Plan.

9 Acceptance of Offers and application for Shares

If you are an Eligible Shareholder, you may accept the Offer to participate in the Plan by:

• 1 completing and returning the enclosed Application Form, in accordance with the instructions on the Application Form together with the appropriate payment for the amount corresponding to the relevant parcel of Shares applied for, by no later than 5pm (WST) on the Closing Date; or
• 2 making payment by BPay in accordance with the instructions on the Application Form by no later than 3pm (WST) on the Closing Date. If you make payment by BPay, you do not need to return the Application Form to Reed.

Payments may only be made by BPay, cheque or bank draft in Australian dollars and drawn on an Australian branch of a financial institution. No interest will be paid on any application monies, including any application monies returned to you.

If you are a Custodian you are required to provide a Custodian Certificate in conjunction with an Application Form.

Valid Application Forms will be accepted by Reed until 5pm (WST) on the Closing Date. Any Application Form received after that time will be rejected and deemed invalid, and

the cheques attached to those Application Forms in respect of subscription monies returned to the relevant Applicant. An Offer will be taken to have been accepted by an Eligible Shareholder only if the cheque which accompanies the Applicant's Application Form is paid in full on first presentation. Cheques will be deposited on or following their day of receipt. Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured. Receipts for payment will not be issued.

Subject to this section 9, Eligible Shareholders may only apply for a parcel of fully paid ordinary Shares valued at \$2,500, \$5,000, \$10,000 or \$15,000.These parcels may be subject to scaleback in accordance with section 6 above.

Reed shall not issue Shares to an Applicant to the extent that the aggregate issue price of Shares acquired and applied for by that Applicant under the Plan and any other issue exceeds (or will exceed) \$15,000.

For the avoidance of doubt, that Applicant shall be entitled to be issued under the Plan, such whole number of Shares which value, when aggregated with the value of all Shares purchased under the Plan and any other similar arrangement for the purchase of Shares within the 12 months preceding the Application Date is nearest to but not exceeding \$15,000. Reed shall then procure that any excess subscription monies in respect of Shares not issued to that Applicant be refunded (but no interest on those monies will be payable to shareholders) as soon as practicable after the Issue Date (defined below).

Reed may reject an acceptance of this Offer in its absolute discretion if this Application Form is not completed in accordance with these Terms and Conditions and the instructions on the Application Form, or the Application Form is incomplete, or a Custodian Certificate does not satisfy all requirements, or if the exact amount payable is not tendered with the Application Form.

10 Significance of submitting an Application Form or making payment by BPay

By completing and returning the Application Form to Reed or by making payment via BPay you:

• (a) certify that you have not applied for Shares with an aggregate application price in excess of \$15,000 under the Plan and any similar arrangement in the 12 months prior to your application, even though you may have received more than one Offer under the Plan or received Offers in more than one capacity under the Plan;
• (b) agree that your application is made on the terms and conditions set out in this document and the Application Form;
• (c) authorise Reed and its officers and agents to correct any error in, or omission from, your Application Form and to complete your Application Form by insertion of any missing details;
• (d) agree that you will not be able to withdraw or revoke your application;
• (e) accept the risk associated with any refund that may be sent to you by cheque to your address shown on Reed's register;
• (f) confirm that you are an Eligible Shareholder or Custodian with a valid Custodian Certificate;
• (g) acknowledge that Reed is not liable for any exercise of its discretion referred to in these Terms and Conditions;

• (h) you are responsible for any dishonour fees or other costs Reed may incur in presenting a cheque for payment that is dishonoured;

• (i) accept that Reed at their discretion can make reduction in allotments of Shares under a scale back;

• (j) acknowledge that no interest will be paid on any application monies held pending the allotment of the Shares or subsequently refunded to you for any reason; and
• (k) acknowledge that you have not been provided with investment advice or financial product advice by Reed.

11 Issue and quotation of Shares

Subject to section 6 above, Reed will issue and allot Shares under the Plan on or about 30 March 2011 (the "Issue Date").

Shares issued under the Plan will rank equally with existing Shares quoted on the ASX, with the same voting rights, dividend rights and other entitlements.

On or before the Issue Date, Reed will apply for Shares issued under the Plan to be quoted on the ASX.

Reed will, within the period required by the ASX Listing Rules, send participants a holding statement in respect of any Shares issued to them under the Plan.

12 Amendment, Suspension and Termination of the Plan

The Board may, in its discretion, amend, suspend or terminate the Plan at any time and adopt any administrative procedures it thinks appropriate in relation to the Plan. Reed may issue to any person fewer Shares than subscribed for under the Plan (or none at all) if Reed believes that the issue and allotment of those Shares would contravene any law or the rules of any stock exchange on which Reed Shares are quoted.

13 Dispute Resolution

Reed may settle, in any manner it thinks fit, any difficulties, anomalies or disputes which may arise under or in connection with the operation of the Plan, whether generally or in relation to any participant or class of participants, offer, application or Shares, and the decision of Reed shall be conclusive and binding on all participants and other persons to whom the determination relates.

Reed reserves the right to waive compliance with any provision of these Terms and Conditions.

14 Notices

Notices and statements to participating shareholders may be given in any manner determined by the board of Reed from time to time.

15 Governing law

These Terms and Conditions are governed by the laws of Western Australia and the Commonwealth of Australia.

RDR Paperdip cheque(s)	SPRB	PLEASE DETACH HERE Please see overleaf for Payment Options			SAMP_PAYMENT_000000/000001/000001/i
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I/We wish to purchase: 4.310 shares or or A\$2,500 * These share amounts may be subject to scale-back in accordance with the terms of the SPP. Payment Details - Please note that funds are unable to be directly debited from your bank account Drawer	8.621 shares or A\$5,000 Cheque number	or BSB number	17.241 shares or A\$10,000 Account number	or Cheque amount	25,862 shares or A\$15,000
				A\$
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