EVOLUTION MINING LIMITED — Capital/Financing Update 2008

Oct 2, 2008

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3 October 2008

ASX Code: CAH

Dear Option Holder

CATALPA RESOURCES LIMITED - FULLY UNDERWRITTEN RENOUNCEABLE RIGHTS ISSUE

Total number of shares on issue: 345,377,313

Share Price Current:

As per our announcement earlier today in relation to a renounceable rights issue (“Rights Issue”) to raise approximately $3.5 million before costs, the Rights Issue offers one new share and one free attaching option for every four shares held at an application price of 4 cents per share. The free attaching options have an exercise price of 10 cents each and expire on 31 October 2011.

I am writing to advise you that as an option holder, you are not entitled to participate in new issues of securities as they are only available to shareholders not option holders. You are entitled to participate in the new issues of securities offered to shareholders from this ‘Rights Issue’ if your options are exercised and the shares issued before the ‘record date’. The indicative Record Date for the entitlement is 16 October 2008.

If you wish to exercise your vested options, please follow the instructions in the Notice of Option Holders enclosed. This notice will be mailed out to all Option Holders today.

Yours sincerely CATALPA RESOURCES LTD

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GRAHAM ANDERSON Company Secretary

(3 October 2008) $0.065

12 month range:

$0.075 (high) - $0.038 (low)

Board of Directors

Mr John Rowe: Non Exec Chairman Mr Bruce McFadzean: Managing Director Mr Murray Pollock: Non Exec Director Mr Barry Sullivan: Non Exec Director Mr Chris Melloy: Non Exec Director Mr Nigel Johnson: Non Exec Director Mr Graham Anderson: Company Secretary Mr Leonard Math: Company Secretary

Major Shareholders

Major Shareholders
Lion Selection Group Limited	44.04%
Goldrich Holdings	4.05%
Zero Nominees	2.57%
HSBC Custody Nominees Aus.	2.03%
Charlemagne Investments	1.35%
Drummond Shay Margaret	1.16%
Geddes Angus William	0.88%
ANZ Nominees Limited	0.78%
Pretorius Leon Eugene	0.58%

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ABOUT CATALPA RESOURCES

Perth-based Catalpa Resources Limited (ASX: CAH) aims to become Australia’s next mid tier producer by developing its open pit assets, located on its extensive and wholly-owned mining tenements in Western Australia.

Catalpa is on the cusp of a new phase of development towards production at its Edna May (gold) Project, conveniently positioned a few kilometres from the infrastructure of Westonia, an established town with a long mining history. The project is just 3 hours or 300km by road from Perth; half way between Perth and Kalgoorlie and ideally situated to be serviced by both centres.

Notably, there have been three previous successful mining programs which have occurred both above and below the planned open pit at Edna May, which significantly reduces the risk of Catalpa’s current project.

Catalpa has an experienced and innovative Board and management team that is committed to realising a timely production and cash flow profile from the development of the Edna May open pit resources.

This is the company’s immediate strategy; and an update to the Company’s 2006 Edna May Gold Project Feasibility Study is on schedule to be finalised in the December quarter 2008. In preparation for planned production at Edna May, the Company relocated its 2.8mtpa Big Bell mill to site in 2007. The mill is being maintained ‘ready for construction’ adjacent to the proposed plant construction site.

Catalpa is pursuing parallel growth with a renewed exploration programme underway of its 880km² of under-explored Westonia Greenstone Belt, and is reviewing other regional opportunities for acquisition and/or joint venture. In particular, Catalpa seeks to identify and develop new projects and/or acquisitions on its extensive land holding or within the region, which is prospective for gold, nickel and base metals.

Catalpa has a sound Resource base at Edna May with significant upside to grow resources and reserves and move towards production. With a buoyant outlook on the gold price, the Company’s Board believes that Catalpa Resources presents a sound investment opportunity with significant upside potential.

Catalpa Resources has adopted best practice standards across all its operating activities, including its social, health and safety, environmental management and corporate governance functions.

For further enquiries contact:

Bruce McFadzean Warrick Hazeldine / Annette Ellis Managing Director Media and Investor Relations Catalpa Resources Limited Purple Communications Tel (08) 9321 3088 Tel: (08) 9485 1254

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ABN 74 084 669 036 First Floor, 9 Havelock Street, West Perth WA 6005 Telephone: 08 9321 3088 Facsimile: 08 9321 8804

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«Holder_Name» «ADDRESS_1» «ADDRESS_2» «ADDRESS_3» «ADDRESS_4» «ADDRESS_5»

3 October 2008

Holder Number: «HOLDER» No of Opts Held @ 02/10/08: «NO_OF_SECS»

Dear Option holder

PARTICIPATION IN PRO-RATA RENOUNCEABLE ENTITLEMENTS ISSUE

The directors of Catalpa Resources Limited (“CAH” or “Company”) advise that the Company will be making a Pro-Rata Renounceable Entitlements Issue to all shareholders on the basis of 1 New Shares and 1 free attaching New Options for every 4 shares held on Thursday 16 October 2008 (“Record Date”) at an issue price of 4 cents per New Share.

The terms and conditions of the options you currently hold do not entitle you to participate in the above Pro-Rata Renounceable Entitlements Issue.

To participate in the Pro-Rata Renounceable Entitlements Issue, you must exercise your options in time for the new shares to be allotted prior to the Record Date. To ensure that your new shares are allotted prior to the Record Date, your Notice of Exercise of Options together with a cheque for the requisite amount must be received by our share registry, Security Transfer Registrars Pty Ltd, no later than Thursday 16 October 2008 .

In order to assist option holders, we have enclosed a copy of the Notice of Exercise of Options with this letter.

Your option holding details recorded at our share registry as of today are as above.

This notice is important and requires immediate attention. If you are in doubt as to the action you should take in relation to this notice, you should consult with your professional adviser for advice immediately.

Should you have any questions in relation to the above matters, please contact our registry on telephone (08) 9315 2333, facsimile (08) 9315 2233 or e-mail registrar@securitytransfer.com.au.

Yours faithfully

Bruce McFadzean MANAGING DIRECTOR

ABN: 74 084 669 036

TERMS AND CONDITIONS OF OPTIONS EXPIRING 30 JUNE 2010 @ $0.10 (CAHO)

CATALPA RESOURCES LIMITED

• i) the New Options will be exercisable at any time prior to 5.00pm WST on the 30 June 2010. Options not exercised on or before the Option Expiry Date will automatically lapse;

• ii) each New Option entitles the holder to subscribe for one Share upon payment of 10 cents per Option;

• iii) the New Options may be exercisable wholly or in part by completing an application form for Shares delivered to the Company's Share Registry, accompanied by payment of 10 cents per New Option, and received by it any time prior to the Option Expiry Date;

• iv) the Company will in accordance with Listing Rule 2.8, make application to have the Options listed for Official Quotation.

• v) shares issued on the exercise of the New Options will rank pari-passu with the then existing issued ordinary shares;

• vi) the Company will in accordance with Listing Rule 2.8, make application to have Shares allotted pursuant to an exercise of New Options listed for Official Quotation.

• vii) there will be no participating entitlements inherent in the New Options to participate in new issues of capital which may be offered to Shareholders during the currency of the New Options. Prior to any new pro rata issue of securities to Shareholders, holders of Options will be notified by the Company and will be afforded 7 Business Days before the record date (to determine entitlements to the issue), to exercise Options;

• viii) in the event the Company proceeds with a pro rata issue (except a bonus issue) of Shares to the holders of Shares after the date of issue of the New Options, the exercise price of the Options will be adjusted in accordance with the formula set out in ASX Listing Rule 6.22.2;

• ix) in the event of any re-organisation (including reconstructions, consolidations, subdivision, reduction of capital) of the issued capital of the Company, the New Options will be re-organised as required by the Listing Rules, but in all other respects the terms of exercise will remain unchanged; and

• x) the New Options will not give any right to participate in dividends until Shares are allotted pursuant to the exercise of the relevant Options

NOTICE OF EXERCISE OF OPTIONS

The Directors Catalpa Resources Limited First Floor 9 Havelock Street West Perth WA 6005

Shareholder Number:________ Share Registry: C/- Security Transfer Registrars Pty Ltd PO Box 535 Applecross WA 6953 Phone: 61 8 9315 2333 Fax: 61 8 9315 2233 Email: registrar@securitytransfer.com.au

I/We ___________________

Of _______________

the registered holder(s) of the options, hereby exercise my/our options to apply for the below amount of ordinary shares,

Number in Words Number in Figures I/We enclose application monies payable of $0.10 per option $ ____

And authorise you to register me/us as the holder of the shares to be allotted to me/us and I/we agree to accept such shares subject to the Rules of the Constitution of the Company.

Individual or Securityholder 1 Securityholder 2 Securityholder 3 Director Director/Secretary Sole Director or Sole Secretary DATED: DAY MONTH YEAR

This application, with application money in Australian Currency, should be lodged at the Company’s Share Registry on or

before the Expiry Date.

NOTE: Cheque should be made payable to “Catalpa Resources Limited” and forwarded to Security Transfer Registrars.

CATALPA RESOURCES LIMITED

ABN: 74 084 669 036

NOTICE OF EXERCISE OF OPTIONS (Expiring 29/04/2011 @ $0.08)

Shareholder Number:________

The Directors Catalpa Resources Limited First Floor 9 Havelock Street West Perth WA 6005

Share Registry: C/- Security Transfer Registrars Pty Ltd PO Box 535 Applecross WA 6953 Phone: 61 8 9315 2333 Fax: 61 8 9315 2233 Email: registrar@securitytransfer.com.au

I/We _______________ Of ___________________

the registered holder(s) of the options, hereby exercise my/our options to apply for the below amount of ordinary shares,

Number in Words Number in Figures

I/We enclose application monies payable of $0.08 per option

$ ____

And authorise you to register me/us as the holder of the shares to be allotted to me/us and I/we agree to accept such shares subject to the Rules of the Constitution of the Company.

Individual or Securityholder 1 Securityholder 2 Securityholder 3 Director Director/Secretary Sole Director or Sole Secretary DATED: DAY MONTH YEAR

This application, with application money in Australian Currency, should be lodged at the Company’s Share Registry on or before the Expiry Date.

NOTE: Cheque should be made payable to “Catalpa Resources Limited” and forwarded to Security Transfer Registrars.

CATALPA RESOURCES LIMITED

ABN: 74 084 669 036

NOTICE OF EXERCISE OF OPTIONS (Expiring 22/11/2010 @ $0.11)

Shareholder Number:________

The Directors Catalpa Resources Limited First Floor 9 Havelock Street West Perth WA 6005

Share Registry: C/- Security Transfer Registrars Pty Ltd PO Box 535 Applecross WA 6953 Phone: 61 8 9315 2333 Fax: 61 8 9315 2233 Email: registrar@securitytransfer.com.au

I/We _______________ Of ___________________

the registered holder(s) of the options, hereby exercise my/our options to apply for the below amount of ordinary shares,

Number in Words Number in Figures

I/We enclose application monies payable of $0.11 per option

$ ____

And authorise you to register me/us as the holder of the shares to be allotted to me/us and I/we agree to accept such shares subject to the Rules of the Constitution of the Company.

Individual or Securityholder 1 Securityholder 2 Securityholder 3 Director Director/Secretary Sole Director or Sole Secretary DATED: DAY MONTH YEAR

This application, with application money in Australian Currency, should be lodged at the Company’s Share Registry on or before the Expiry Date.

NOTE: Cheque should be made payable to “Catalpa Resources Limited” and forwarded to Security Transfer Registrars.