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Reed Resources’ Substantial Shareholder Delivers Vote Of Confidence With Increase In Shareholding

Reed Resources' (ASX: RDR) substantial shareholder U.S. based Vanguard Precious Metals and Mining Fund has increased its shareholding to 14.48%.

The fund acquired an additional 18 million shares at the end of May for a total consideration of A$3.6 million, or $0.20 per share.

Reed has been strongly backed by investors recently as it heads towards production from the Meekatharra Gold Project in the December quarter of 2012, with funding arrangements underway and development progressing.

The company recently completed a $40 million underwritten Rights Issue, and has signed a mandate for a debt financing facility of up to $23 million with Barclays Bank, under which Barclays will act as arranger.

Funds from the financing facility will fund initial working capital requirements for the start-up of mining operations at Meekatharra, and a hedging facility to manage the risk of adverse movements in the gold price.

The Meekatharra Gold Project hosts 3.59 million ounces, and not to be forgotten gold Reserves of 750,000 ounces, a milestone not matched by many gold companies in Western Australia.

Further upside stems from the pending Reserve upgrade, due in the June quarter.

Reed expects initial production of 95,000 ounces for the first 12 months of operation at Meekatharra.

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