🕐16.09.10 - 08:54 Uhr

Reeds Gold Strategy and Project Update



Reed Resources Limited ASX Announcement 15 September 2010 REEDS GOLD STRATEGY AND PROJECT UPDATE The Companys strategy is to expand the existing resource base at Comet Vale through a staged RC and diamond drilling program and delineate sufficient reserves to resume production at the Sand Queen Gold Mine as a mechanised decline operation.

New resource estimates and reserve calculations are expected by Christmas 2010.

These results will also determine the processing rate and scale of the Nimbus Mill refurbishment and recommissioning, for both internal and third‐party requirements. RESOURCE EXTENSION DRILLING A staged drilling program targeting both the existing Sand Queen/Sand George Lodes and the new parallel Sand Prince/Princess Grace lode system has commenced and is expected to be completed in early November.

Results will be released in due course.

Phase 1 of the drilling will specifically target the Princess Grace structure that lies directly beneath the designed Sand Prince West Open Pit, which is also planned to host the portal for a potential decline (Figure 2). Phase 2 of 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 that this drilling will total 10,000m. REGIONAL EXPLORATION In addition to the resource extension drilling, a campaign of exploration drilling has been planned and will be drilled on completion of the Resource Expansion campaign.

This is expected to total an initial 5,000m and is designed to test the main Comet Vale Shear both North and South of the Sand Queen mine. SAND PRINCE RESERVE The Sand Prince West Pit was optimised and redesigned by Minecomp Pty Ltd. Extensional drilling is designed to delineate the Princess Grace lode system and thus provide impetus for a decline access into both the Princess Grace and Sand Queen/Sand George Lodes.

Tabe 1 shows a reserve summary for the Sand Prince West pit above an undiluted grade of 1.5g/t @ $1,250/oz gold price. NIMBUS PROCESSING PLANT The Company is in receipt of operating and capital cost estimates for the conversion and refurbishment of the Nimbus processing plant for a number of throughput rates.

A Works Approval is being prepared for refurbishment to an initial 300ktpa rate, which is considered the internal milling requirement for any mechanised development at Comet Vale.

Discussions have been held with parties interested in development of Nimbus as a toll milling facility, to treat supplementary sources of feed should production resume from the existing shaft at Comet Vale.

Connection to the high‐voltage Western Power grid is expected to be completed in the March Quarter 2011.

GR Engineering has commenced detailed design work on parts of the processing plant for refurbishment.

Removal of the ball mill for inspection was completed last week (picture below). For the full announcement please click here. http://esp.gewru.com/download/files/12414/1242889/150910%20-%20Reed_s%20Gold%20Strategy%20and%20Project%20Update.pdf For more information please contact: Reed Resources Chris Reed Managing Director T: 08 9322 1182 Media David Tasker/ Karen Oswald Professional Public Relations T: 9388 0944/ 0423 602 353 E: About Reed Resources Reed Resources Ltd is a diversified mining and exploration Company based in Western Australia.

It has modest gold production and is expanding and diversifying its production base.

Reed Resources has five main projects (all in Western Australia) including; * Mount Marion -- High‐grade Lithium project located about 40km south of Kalgoorlie in JV with Mineral Resources Ltd. * Comet Vale -- High‐grade underground gold mine. * Barrambie -- Definitive Feasibility Study completed on a Ferrovanadium operation to produce 6300t of contained vanadium per annum.

Currently in approvals process. * Mount Finnerty -- Iron ore JV with Cliffs Natural Resources & Nickel Farm‐in with Barranco Resources NL. * Bell Rock Range -- Nickel‐Copper‐PGM Farm‐out to Anglo American Exploration. Website: www.reedresources.com
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