Level 1, 672 Murray StWest Perth WA 6005

Locked Bag 8 West Perth WA 6872 Tel: +61 8 9322 1182Fax: +61 8 9321 0556

ABN 89 099 116 631

ASX Release 25 October 2012 REED RESOURCES QUARTERLY ACTIVITIES REPORT For the quarter ended 30 September 2012 Highlights:

Meekatharra Gold Project

Mill Refurbishment 90% complete

Final project capital expenditure estimated to be below $23.8 million budget

Primary crusher installation commenced

Accommodation Village upgrade and refurbishment completed

Mining Contractor mobilising to site

Mining commenced subsequent to the end of the quarter

Mt Marion Lithium Project

Materially completed an evaluation of higher-margin lithium battery feed stocks and subsequent release of PFS results endorsing Reed’s integrated down-streaming strategy to maximise the Project’s value

Evaluating timing/production profile

Barrambie Fe-Ti-V Project

Completed proprietary hydrometallurgical test work to recover high purity titanium product with quality parameters pending further test work

Corporate

As of 30 September 2012, Reed had $26.9 million in cash and term deposits, including $14.8 million in restricted use term deposits supporting performance bonds and other contractual obligations

Appointment of Credit Suisse to act as arranger for a debt facility of $19 million for the working capital requirements for the Meekatharra Gold Project

Subsequent to the quarter, the completion of an $8 million placement and $2m underwritten share purchase plan to augment working capital as company enters the mining and commissioning phase of the Meekatharra Gold Project

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MEEKATHARRA GOLD PROJECT (Reed 100%)

The Meekatharra Gold Project, centred on the Bluebird processing plant, is located 640km northeast of Perth and 10 km south of Meekatharra, in the Murchison Region of Western Australia.

Figure 1: Location of tenement holdings overlain on bedrock geology of the Meekatharra – Mt Magnet region of the Murchison Province showing gold production from key Reed Resources mining districts and the location of other mining camps in the area

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Meekatharra Gold Project Strategy

Within the Meekatharra Gold Project tenements Reed Resources Ltd (ASX: RDR) (the Company or Reed) has a Resource inventory of 3.6Moz and a Reserve inventory of 752koz ounces (refer to Annexure A). Reed has a 3 staged strategy to exploit the Reserve, Resource and inventory base of the extensive Meekatharra Gold assets which includes producing 134,000 ounces from its low risk stage 1 open pit ore sources that are within 6.5km of Reed’s Bluebird processing facility. Stage 2 will exploit the remaining 618,000 ounces of Reserves predominantly from Paddys Flat, Yaloginda and Reedy project areas with production sourced from open pits and underground. Stage 3 of Reed’s strategy at Meekatharra will be executed concurrently with stage 1 and 2 and utilise the latest targeting and exploration techniques converting as many of the 2.8M Resource ounces to Reserves as possible whilst defining further Resources and Reserves with the ultimate aim of delivering a sustainable 10 year mine life from the Meekatharra Project area generating between 100,000 to 150,000 ounces per annum at a total cost below $1000/ounce.

Equity

On 22 October Reed announced a $10 million capital raising through a Placement and Share Purchase Plan (SPP). An issue price of $0.18 per Share was fixed for both raisings.

The funds raised will be used to maintain appropriate levels of working capital as Reed moves into the commissioning phase of the Meekatharra Gold Project.

Debt

As announced on 27 September 2012, Reed is in the process of finalising a $19 million debt facility with Credit Suisse. The funds raised from the equity raising will augment the Company’s cash reserves as this facility is finalised and made available.

Project Delivery

People

On 1 October Reed announced the appointment of Mr Chris Mardon as General Manager of the Meekatharra Gold Project who has subsequently commenced his role.

Chris has had over 20 years of mining and resources experience having graduated from the Western Australian School of Mines with a Bachelor of Engineering in 1990. Chris holds a First Class Mine Managers Certificate and has held senior management roles in resources companies including Modun Resources, Delta Gold, Croesus Mining and Tanami Gold/Jabiru Metals. He has also operated as an independent mining consultant. Chris has held key roles in mine feasibilities, project development and management of mining operations both domestically and internationally. Chris has relevant exposure to gold, base metals, iron ore and coal operations and has surface and underground mining experience.

In line with the Meekatharra Gold Project execution strategy, key operational staff continue to be appointed in preparation for full operations.

Contract Awards

As announced on 1 October Infinite Corp Pty Ltd t/a Minepower have been awarded the Stage 1 Mining Contract at Reed’s Meekatharra Gold Operations.

Minepower is a Western Australian owned business specialising in open pit mining and earthmoving. Minepower commenced mobilisation to site on 1 October and commenced mining on 10 October.

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Morris Corporation (Morris) was awarded Meekatharra Gold Operations Catering and Facilities management contract during the quarter.

Morris is Australia’s largest privately owned facilities management specialists. Morris commenced activities on site from 1 October.

Project Work Packages

Processing Plant

The refurbishment works progressed significantly during the quarter and were 90% complete by the end of September with the remaining works to be completed by mid-November.

Figure 2: Bluebird Gold Processing Facility ball mills, fully refurbished, relined and ready for operation

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Primary Crusher

The new Metso C125 primary crusher unit arrived on site during the previous quarter. GR Engineering has removed the existing Kemco crusher and placed the C125 crusher into position. The new primary crushing installation will be complete by mid-November.

Figure 3: New C125 Primary Crusher being lifted into position with the existing Kemco crusher removed and ready for transport by low loader

Village

APB completed the installation and handed over the upgrade of the Meekatharra Gold Operations accommodation village. The upgrade included the addition of 80 new rooms, new dining and kitchen facility, and the construction of a new facilities management centre. The completed upgrade cost was as estimated.

Refurbishment of the existing village facilities was also completed during the quarter with a significant cost saving being realised by completing the works internally.

The accommodation village now has capacity for 190 personnel which is sufficient to accommodate project and operational personnel.

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Figure 4: Meekatharra Gold Operation’s new dinning and kitchen facility being utilised by onsite personnel

Power Station

All site preparation works have been completed to receive the new diesel power stations which includes 8 generators each consisting of a Cummins KTA50 G3 diesel engine close coupled to a 3.3kV alternator complete with fuel and exhaust systems, tanks, meters, power and control cabling to the main switchboard, air-conditioned control room housing the control panel and main switchboard.

Pacific Energy (KPS) Pty Ltd has the contract for the provision of power “over-the-fence” under a Build-Own-Operate (BOO) agreement.

The new power generating facility is scheduled to be installed and operational by the end of November.

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Figure 5: Meekatharra Gold Operation’s power station facility fully prepared to receive generator sets and associated equipment

Mining Contract

As noted earlier, the mining contract was awarded during the quarter to Minepower.

Minepower commenced mobilisation to site on 1 October and commenced mining the Bluebird open pit on 10 October. Continuous shift mining operations commenced on 15 October concurrently with drill and blast activities. All equipment required to meet Reed’s production requirements from Bluebird will be mobilised by the end of October.

Grade control drilling has commenced at Bluebird as has infill resource definition drilling at Whangamata.

Figure 6: Meekatharra Gold Operation’s mining fleet mobilised to site and parked in the Bluebird “go bay”

Figure 7: Mining activity within the Bluebird open pit

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Figure 8: Blast-hole drilling of the South East Bluebird open pit limit crest

Figure 9: Assay laboratory receiving samples and has commenced producing assaying results

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Facilities Management

As noted earlier, Morris Corporation (Morris) was awarded the catering and facilities management contract during the quarter.

Morris commenced services provision on 1 October and is contracted for the duration of Meekatharra’s Stage 1 mining activities.

Project Timeline and Progress

On 27 September Reed announced the appointment of Credit Suisse (CS) to act as arranger for a debt facility of $19 million for the working capital requirements for the Meekatharra Gold Project. The Company has received a credit approved term sheet which is subject to detailed documentation.

The key features of the facility are summarised as follows:

• $19 million Senior Secured Term Loan Facility • Tenor of twelve months from first utilisation, with an option to extend a further six months • A hedging facility which includes 70,000 ounces in forward delivery contracts and 40,000

ounces in bought puts • Mining approval for the Batavia open pit is a condition precedent to utilisation (mining

approval for the Bluebird and Surprise Stage 1 pits have been received)

The Batavia Mining Proposal has been approved by the Department of Mines and Petroleum (“DMP”) and Reed has lodged environmental bonds covering the Batavia mining area with the DMP which have been acknowledged. Reed is expecting correspondence from the DMP imminently which approves mining at Batavia.

On 22 October Reed announced a $10 million capital raising through a Placement and Share Purchase Plan (SPP). The funds raised will be used to maintain appropriate levels of working capital, given Reed’s projected cash spend, as Reed moves into the commissioning phase of the Meekatharra Gold Project. The funds raised will augment the Company’s cash reserves as the CS facility is finalised and made available.

All project activities within Reed’s direct control remain on schedule and forecast final project capital expenditure is estimated to be below the $23.8 million budget.

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Figure 10: Meekatharra Gold Project key milestones

MT MARION LITHIUM PROJECT (Reed 70%, Mineral Resources Limited 30%)

During the quarter Reed together with Mineral Resources Ltd (MRL) continued to advance the Mount Marion Lithium Project (Mount Marion). Subsequent to the quarter, the parties signed the shareholders agreement to formalise the 70:30 shareholding of the project’s special purpose vehicle, Reed Industrial Minerals Pty Ltd (RIM).

Mount Marion has a designed capacity of 200,000 tpa of 6% Li2O chemical grade spodumene concentrate, 60,000 tpa of muscovite mica and 30 tpa tantalite concentrate.

Lithium Down-streaming Strategy

During the quarter Reed continued its evaluation of the production of high-purity lithium hydroxide (LiOH) and lithium carbonate (Li2CO3) from Mt Marion lithium concentrates. The results of a Pre-feasibility Study (PFS) announced subsequent to the end of the quarter indicate robust financial returns and endorse the integrated down-streaming strategy to maximise the Project’s value. Pre-feasibility Study

The study investigates the economic viability of producing up to 20,000 tonnes per annum of battery-grade lithium hydroxide monohydrate (57.5% LiOH.H2O) in Malaysia.

The production of LiOH involves hydrochloric acid leaching of spodumene concentrate, purification of lithium chloride solution and electrolysis applying proprietary technology owned by Reed. Process test work was conducted by the CSIRO utilising product specifications from the Mt Marion Lithium Project.

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For the purpose of the PFS, a kiln feed rate of 147,000 tonnes per annum @ 6.0% Li2O was assumed and the following key process steps applied:

• Decrepitation in a rotary kiln • Hydrochloric acid leaching of beta spodumene • Solvent extraction and ion exchange • Electrolysis (identical to chlor-alkali process) • Lithium Hydroxide crystallisation and carbonisation to lithium carbonate • 20 year effective plant life

Operating Parameters Quantity Spodumene Concentrate Feed 147,100 tpa Spodumene Concentrate Grade 6.0 % Li2O Lithium Hydroxide/Lithium Carbonate Production 10,000/8,810 tpa

PFS Highlights Life of Mine (LOM) Production 200,000t LiOH

176,200t Li2CO3 LOM Revenue US$ 3.15 billion Pre-tax Cashflow US$ 1.19 billion Pre-tax NPV 12% US$ 321 million Pre-tax Internal Rate of Return 94% Average Cost per tonne of LiOH US$ 3,878 Average Cost per tonne of Li2CO3 US$ 4,538 Total initial capital costs US$ 83 million

All analysis is in US dollars and assumes a selling price of US$6,900/t for lithium hydroxide and lithium carbonate, a spodumene cost of US$350/t CIF, an AUD exchange rate of US$1.05 and a MYR exchange rate of US$0.32. Operating Revenues and Costs are both escalated at 2% pa.

Project Development

Reed and MRL are determining the most effective production profile and optimal timing for the commencement of operations at Mt Marion. Reed’s and MRL’s preferred option is to develop a vertically integrated mine-downstream processing operation to supply essential lithium compounds to the fastest growing battery markets in the world.

Reed is working with MRL in preparing RIM to become an independently financed, advanced minerals company. An Initial Public Offering (IPO) of RIM is currently Reed and MRL’s preferred financing strategy, with the anticipated timing to be determined post-completion of a Definitive Feasibility Study to construct a lithium battery materials plant. Strategic discussions continue with third parties in relation to alternate transaction structures, the discussions remain preliminary and there can be no assurance that a binding proposal will emerge.

Project development is fully funded by MRL. For

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BARRAMBIE FE-TI-V PROJECT (Reed 100%)

During the quarter Reed continued a concept study level evaluation of the production of a titanium, vanadium and iron products from the Eastern Band of the Barrambie Fe-Ti-V deposit. Initially the study evaluated the production and export of a titanium rich concentrate. The study has subsequently advanced to evaluating the recovery of Fe-Ti-V via a proprietary hydrometallurgical route from both ROM ore and concentrate.

Barrambie’s Eastern Band is one of the highest grade hard rock titanium deposits globally (behind Rio Tinto’s Lac Tio mine in Canada - Mineral Resource 2005 of 48Mt @ 22% TiO2).

Formal laboratory scale test work has been conducted on Eastern Band magnetic concentrates at the laboratory of the technology owner, in Canada. Results to date are very encouraging with early extraction and selective precipitation or iron and vanadium whilst titanium is extracted in a secondary leach and precipitated as a pure product with excellent recoveries. Process simulation as part of an economic evaluation indicates that further evaluation at a continuous scale is warranted and planned as appropriate resources become available.

A mini-plant (150kg) test work program is planned pending the receipt of successful confirmation of titanium product quality. An updated resource estimate will be released pending determination of an appropriate cut-off grade for titanium which is supported by metallurgical test work results.

Figure 11: An indication of the size of the Eastern Band at Barrambie and its grade in comparison with two of the world’s highest grade titanium deposits

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COMET VALE GOLD PROJECT (Reed 100%)

The Sand Queen mine remains on care and maintenance and there was no production during the quarter.

A sale process for the Comet Vale project is continuing however a binding offer sufficiently attractive to Reed is yet to be achieved.

The project has combined underground and open-pitable resources of 792Kt @ 8.2g/t Au for 208,000 oz.

MT FINNERTY PROJECT

The Mt Finnerty Project located about 65 km east of Koolyanobbing is currently being explored for iron ore in joint venture with Cliffs Natural Resources (“Cliffs”) and nickel mineralisation in its own right.

Iron Ore (Cliffs 80%, Reed 20%)

No work was undertaken at the Mt Finnerty prospects during the quarter. A budget has been approved for the 2012 exploration season with the major activities comprising a focussed diamond drilling campaign to sample favourable material types for magnetite characterisation studies.

Nickel (Barranco 100%, Reed option to acquire 100%)

A review of previous exploration carried out by Western Mining Services confirms a large cumulate-textured high-magnesium ultramafic body is present within the project. Previous auger sampling had returned highly anomalous levels of PGE’s which are considered to form halos around nickel sulphides. RCP drill testing of the basal contact confirmed the presence of the high-magnesium ultramafic rocks yet was unsuccessful in intersecting nickel sulphide mineralization.

The review has suggested the possibility of nickel sulphides being below the limit of existing drilling. Observed metamorphism of the host rocks appears to have caused the mobilization of the PGE’s but not nickel sulphides. An application for EIS funding for innovative drilling has been made for a deep diamond drill hole within E16/305 to test this hypothesis. The hole will also be used for a down-hole TEM survey to test for off-hole accumulations of sulphides.

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CORPORATE

At the end of the quarter the Company had $26.9 million in cash and term deposits, including $14.8 million in restricted-use cash deposits.

During the quarter Reed announced it had appointed Credit Suisse (CS) to act as arranger, following receipt of a credit approved term sheet for a $19 million debt facility for the working capital requirements of the Meekatharra Gold Project located in the Murchison region of Western Australia.

Subsequent to the end of the quarter, Reed announced a placement and underwritten share purchase plan to raise approximately $10 million, before costs. Reed intends to use the proceeds of the issue to augment its general working capital heading into the mining and commissioning phases of the Meekatharra Gold Project.

ENDS

COMPETENT PERSONS STATEMENT

Geological aspects of this report have been compiled by Mr Craig Fawcett (MAIMM), a full time employee of Reed Resources Ltd. Mr Fawcett has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being reported on to qualify as a Competent Person as defined in the Code for Reporting of Mineral Resources and Ore Reserves (2004). Mr Fawcett consents to the inclusion in this report of the matters in the form and context in which they appear.

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APPENDIX A: MEEKATHARRA GOLD PROJECT RESOURCES & RESERVES AS AT 30 JUNE 2012

MINERAL RESOURCE INVENTORY

Project Category Tonnes (Mt) Au (g/t) Au (koz)

Meekatharra North Indicated 1.2 1.8 66

Inferred 0.2 1.6 9

Nannine Indicated 0.6 1.6 31

Inferred 0.2 1.6 13

Paddy's Flat Indicated 25.2 1.6 1,281

Inferred 13.4 1.6 670

Yaloginda Indicated 10.1 1.7 564

Inferred 6.2 1.7 347

Reedys Indicated 2.7 3.1 276

Inferred 4.0 2.7 338

TOTAL

Indicated 39.8 1.7 2,217

Inferred 24.1 1.8 1,377

TOTAL 63.9 1.8 3,594

ORE RESERVE INVENTORY (31ST Mar, 2012)

Project Category Tonnes (Mt) Au (g/t) Au (koz)

Bluebird Probable 1.39 1.9 86.2

Prohibition Probable 1.11 2.7 96.0

Mickey Doolan Probable 3.31 1.1 121.7

Maid Marion Probable 0.2 1.4 8.6

South Junction Probable 0.1 1.5 4.5

Surprise Probable 0.1 3.0 13.0

Batavia Probable 0.2 2.4 14.0

Whangamata Probable 0.3 1.4 11.9

GNH Probable 0.9 1.3 35.6

Aladdin Probable 0.4 1.7 21.4

Jack Ryan Probable 0.2 3.1 21.8

Callisto Probable 0.1 3.1 7.2

Rand Probable 0.1 2.4 7.6

South Emu Probable 0.1 4.7 13.9

TOTT Probable 0.5 1.8 29.4

Total (Open Pit) Probable 9.0 21.7 492.9

Prohibition Probable 1.3 2.4 104.1

Vivian/Consols Probable 0.3 7.7 63.6

Fatts/Mudlode Probable 0.4 4.7 57.2

South Emu Probable 0.2 4.3 34.2

Sub-Total Probable 2.2 3.6 259.1

Total Probable 11.2 2.1 752 Notes: 1. Resources and Reserves comply with the Australian JORC Code (2004) reporting guidelines. 2. Resources are inclusive of Reserves.

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Highlights:Iron Ore (Cliffs 80%, Reed 20%)Nickel (Barranco 100%, Reed option to acquire 100%)