EVOLUTION MINING LIMITED — Capital/Financing Update 2010

Nov 22, 2010

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23 November 2010

ASX Code: CAH

Market Update:

 Maiden High Grade Underground Resource at Edna May

• Inferred Resource of 660,000 tonnes at 9.1 g/t Au for 195,000 contained ounces

Shares on issue: 162,776,842 Share Price Current: $1.96 (22 November 2010)

 Total Catalpa Resources now exceed 2 million ounces

• Further high grade drill results

12 month range:

$2.27 (high) - $1.18 (low)

• 3.87m @ 17.20g/t Au from EMD021

• 1.70m @ 23.79g/t Au from EMD018

• 2.20m @ 26.71g/t Au from EMD016a

• 1.12m @ 45.00g/t Au from EMD021

• 1.10m @ 38.02g/t Au from EMD022

• Guidance Update FY10/11

• Total of 105,000 to 120,000 recovered ounces

• Cash Costs (C1) of A$677 ‐ A$745 per ounce

Maiden High Grade Underground Resource at Edna May

Catalpa Resources (ASX:CAH) , the Perth‐based gold producer today announced a maiden high grade underground Inferred Mineral Resource at its Edna May Gold Project delivering a further boost to gold ounces.

Total Catalpa Mineral Resources are now estimated at 2.175 million ounces of gold.

The result is significant and supports Catalpa’s vision to enhance the Edna May Gold Project with concurrent mining of high grade underground ore to considerably increase annual gold production.

Board of Directors

Mr Peter Maloney: Non Exec Chairman Mr Bruce McFadzean: Managing Director Mr John Rowe: Non Exec Director Mr Barry Sullivan: Non Exec Director Mr Graham Freestone: Non Exec Director Mr Murray Pollock: Non Exec Director Mr Graham Anderson: Company Secretary Mr Leonard Math: Company Secretary

Senior Management

Erik Palmbachs CFO Stuart Pether COO Nick Winnall Manager Exploration Adrian Pelliccia Manager Bus Dev John Winterbottom Manager Geology John Fraser General Manager – Edna May

The Mineral Resource estimate, reported at a 3g/t Au cut‐off, is the culmination of a new structural interpretation, based on historic level mapping, re‐constructing historic ore lodes and utilising existing drilling pre the current drill program to model the mineralisation and ‘structural trends’ at depth.

Edna May’s Mineral Resource now extends to 550 metres below surface (previously at 300 metres). Importantly the mineralisation remains open at depth.

In light of the positive underground result, Catalpa is looking to accelerate and expand on its underground drilling program.

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Figure 1 Defining the maiden underground Mineral Resource; All three deposits remain open at depth

Ongoing infill diamond drilling by Catalpa continues to confirm the strong down‐plunge continuity of high‐grade gold mineralisation associated with the reefs. Drilling is currently targeting a 20 x 30 metre nominal spacing and it is anticipated that a significant proportion of the area targeted by the current drill program will improve resource confidence to an Indicated category in the short term. Further results from the ongoing drill program will be made available over the coming months.

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Figure 2 Section 9685N of the Edna May Underground

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Figure 3 Section 9655N of the Edna May Underground

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Figure 4 Section 9635N of the Edna May Underground

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A summary of recent significant results is tabulated below.

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Figure 5 Tabulation of Significant Additional Intercepts Subsequent to Previous Announcement

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CONSOLIDATED MINERAL RESOURCE STATEMENT

	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement	Catalpa Total Mineral Resource Statement
	Measured			Indicated			Total Measured & Indicated			Inferred			Total Measured, Indicated & Inferred
	Million Tonnes	Gold g/t	'000 Ounces	Million Tonnes	Gold g/t	'000 Ounces	Million Tonnes	Gold g/t	'000 Ounces	Million Tonnes	Gold g/t	'000 Ounces	Million Tonnes	Gold g/t	'000 Ounces
Greenfinch	0.9	1.12	30	2.5	1.00	80	3.4	1.03	110	0.6	1.20	20	4.0	1.06	130
Edna May & Golden Point	21.9	1.05	737	15.9	0.99	504	37.8	1.02	1,241	10.1	0.86	280	47.9	0.99	1,521
Edna May Underground	‐	‐	‐	‐	‐	‐	‐	‐	‐	0.7	9.10	195	0.7	9.10	195
Cracow JV*	0.2	8.6	44	0.2	7.8	54	0.4	8.2	98	1.1	6.0	208	1.4	6.6	305
Stockpiles				1.2	0.62	24	1.2	0.62	24	‐	‐	‐	1.2	0.62	24
TOTAL	23.0	1.12	811	19.8	1.03	662	42.8	1.08	1,473	12.5	1.79	703	55.2	1.23	2,175

Effective Holdings

• Catalpa owns 100% of the Edna May Gold Project

• Catalpa owns 30% of the Cracow Gold Project

Edna May and Greenfinch Footnotes

• Edna May April 2010 and Greenfinch December 2009, Mineral Resources, were estimated using Hellman & Schofield MIK block modelling techniques, based on a (0.4g/t) Au cut‐off grade within a geologically and grade defined mineralisation envelopes and in accordance with the Australian JORC Code.

• The Resources are estimates of recoverable tonnes and grades using Multiple Indicator Kriging with block support correction into 25 metres (East) by 15 metre (North) by 5 metre (Elevation) model blocks and assuming smallest mining unit for ore selection in mine grade control of 5 metres (East) by 3 metres (North) by 2.5 metres (Elevation).

• Measured and Indicated resources lie in areas where drilling is available at a maximum of 25 x 25 metre spacing, Inferred resources exist in areas of broader spaced drilling, generally peripheral to the Measured and Indicated panels.

• Edna May and Greenfinch Mineral Resource figures are stated at the 30 June, 2010 on an attributable basis.

• There are no known environmental, permitting, legal, taxation, political or other relevant issues that would materially affect the estimates of the Mineral Resources.

• Mineral Resources are inclusive of Ore Reserves. The stated contained Mineral Resource metal ounces are considered in‐situ; beneficiation recovery factors have not been applied.

• Due to rounding of figures small discrepancies may exist.

Edna May Underground Footnotes

• Edna May Underground Mineral Resource was estimated using conditional simulation techniques by SRK Consulting, based on a 3g/t Au cut‐off grade within a geologically and grade defined mineralisation envelopes and in accordance with the Australian JORC Code.

• th

• One hundred realisations were generated as part of the estimation process, with the 50 percentile realisation used for reporting purposes.

• The Inferred Resource is based on 62 diamond drill holes on a nominal spacing of 30m x 50m

• Edna May Underground Mineral Resources figures are stated at the 18 November, 2010 on an attributable basis, with depletion by production where relevant.

Cracow Footnotes

• The Mineral Resources have been reported above a cut‐off grade of 2.8g/t Au, and is based on a US$800 per ounce gold price and 0.75 USD:AUD exchange rate (A$1066 per ounce).

• All Mineral Resource figures are stated at the 30 June 2010 on a 30% attributable basis, with depletion by production where relevant.

• Mineral Resources are inclusive of Ore Reserves. The stated contained Mineral Resource metal ounces are considered in situ; beneficiation recovery factors have not been applied.

• Due to rounding small discrepancies may exist

• The reported Cracow Mineral Resource is based on a Competent Persons Statement provided by Newcrest Mining Limited on behalf of the Cracow Mining Joint Venture. Cracow is an unincorporated joint venture between Catalpa (30%) and Newcrest (70%).

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Guidance Update

Catalpa wishes to update the market on Edna May production guidance and release cost per ounce guidance for Edna May, Cracow and the Catalpa Group for the year to 30 June 2011.

The upper level geotechnical issues encountered at Edna May in the June quarter have now been resolved. The geotechnical issues delayed access to the ore body by approximately three months dictating processing of previously stockpiled lower grade ores for longer than planned. The northern wall has now been mined down to fresh rock providing access to large tonnages of fresh ore. The oxidised levels of the north wall were reduced to circa 35 degrees in the process, improving wall stability. The additional waste stripping will be completed by the end of December 2010 when we plan to scale back to a single mining fleet.

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The SAG mill liner issues have continued to impact production with monthly unplanned liner replacement during the first four months of FY2010/11. The SAG mill issue is driven by accelerated wear of the liner and lifters necessitating replacement on a monthly basis. Mechanically, the SAG mill is performing reliably and in line with BFS assumptions. Monthly liner replacement losses have been reducing continually since commissioning and the newly designed liner package which was installed last week is expected to significantly extend the time between liner changes. The ball mill, which receives the SAG mill output, demonstrates liner wear rates supporting the 2008 BFS assumptions, with the first liner change scheduled in December 2010.

The impact on production from the accelerated SAG mill liner wear since July 2010 are estimated at circa 4,500 ounces whilst the ounces lost from the delayed access to the ore body is estimated at circa 2,000 ounces for the same period.

To date, the plant has performed at rates of up to 3.2 million tonnes per annum supporting process modelling from the BFS. Catalpa is presently considering various options which may result in acceleration of the planned secondary crushing capital from year two as planned in the BFS. Considerable process modelling was completed in the 2008 BFS and further modelling with live processing data is presently being undertaken.

The addition of the secondary crusher would allow the SAG mill to be converted to a closed circuit mill increasing plant capacity to 3.2 million tonnes per annum. In addition to the higher throughput, the secondary crusher offers a number of benefits to Catalpa including reduced feed variability to the SAG mill and a reduction of the risk of continued operating time losses.

Electrically, the plant is performing well with only one hour of unplanned down time in the September quarter. Several electrical issues ranging from intermittent power fluctuations and MCC transformer issues during the June quarter have been resolved. The process plant has demonstrated it is electrically reliable.

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Catalpa is pleased with the overall performance of the process plant and its reliability. It is the view of the Company that the SAG liner wear issues can, and will be resolved within the short term.

Guidance for Cracow remains unchanged.

As a result of the matters discussed above, Catalpa’s revised guidance for FY2010/11 is as follows,

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Edna May Gold Project
Guidance Revision
Ounces
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Note

• C1 – cash costs represents the cost for mining, processing and administration, including accounting movements for stockpiles and gold‐in‐circuit. It does not include capital costs for exploration, mine development or processing mill capital works. It includes net proceeds from by‐products credits. It does not include the cost of royalties.

• Edna May C1 A$ cost guidance reflects the period from October 2010 to June 2011

• Ounces are defined as ounces produced

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For further enquiries contact:

Bruce McFadzean Adrian Pelliccia Managing Director & CEO Manager Business Development Catalpa Resources Limited Catalpa Resources Limited Tel +61 8 9321 3088 Tel +61 8 9321 3088

Competent Person Statement

The reported Edna May Underground Mineral Resource has been compiled by Mr Daniel Guibal. Mr Guibal is a Member of the Australian Institute of Geoscientists and an employee of SRK Consulting Pty Ltd. He has sufficient experience, relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking, to qualify as a Competent Person as defined in the ‘Australasian Code for Reporting of Mineral Resources and Ore Reserves’ of December 2004 (“JORC Code”) as prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia. Mr Guibal consents to the inclusion in the report of the matters based upon his information in the form and context in which it appears.

The reported Edna May Mineral Resource has been compiled by Mr Nicolas Johnson. Mr Johnson is a Member of the Australian Institute of Geoscientists and an employee of Hellman & Schofield Pty Ltd. He has sufficient experience, relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking, to qualify as a Competent Person as defined in the ‘Australasian Code for Reporting of Mineral Resources and Ore Reserves’ of December 2004 (“JORC Code”) as prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia. Mr Johnson consents to the inclusion in the report of the matters based upon his information in the form and context in which it appears.

The reported exploration results have been compiled by Mr John Winterbottom (Manager Geology), who is a Member of the Australian Institute of Geoscientists (AIG) and a full-time employee of Catalpa Resources Limited. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Winterbottom consents to the inclusion in the report of the matters based upon his information in the form and context in which it appears.

The information in this report that relates to the Cracow Mineral Resource is based on work completed by Mr Craig Irvine, who is a Member of the Australian Institute of Mining and Metallurgy. Mr Irvine is a full time employee of Newcrest and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Newcrest gives Catalpa Resources Limited consent to use this estimate for reporting purposes.

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ABOUT CATALPA RESOURCES

Catalpa Resources Limited (ASX: CAH) has two exciting gold assets; a 100% interest in the 100, 000 ounces per annum Edna May Gold Project in Western Australia and a 30% interest in the 100, 000 ounces per annum Cracow Gold Project in Queensland (70% Newcrest Mining Limited).

Catalpa’s flagship Edna May Project boasts an impressive forward sold position of 325,000 ounces of gold at A$1,557.50 per ounce. At a hedge book/spot weighted average gold price of A$1,460 per ounce Catalpa expects to realise an average cash operating margin of A$72 million per annum from the Edna May Gold Project alone.

With a combined Mineral Resource of more than 2.2 million ounces and a combined Ore Reserve of more than one million ounces of gold, (refer announcement dated 27th May 2010), the Cracow and Edna May Operations will provide a sustainable long life cash flow to fund Catalpa’s growth strategy.

Catalpa is confident that both Cracow and Edna May offer further Reserve and Resource growth potential, with ongoing exploration programmes at both operations. In parallel, the Company continues to proactively identify and assess other production growth opportunities.

The Company has a motivated and technically accomplished management team and a highly‐experienced and supportive Board, committed to realising shareholder value from the Company’s growing asset portfolio.

Catalpa strives for best practice standards across all its activities, including health and safety, environmental management, corporate governance and social responsibility.

EDNA MAY OPERATIONS (100%)

Catalpa’s wholly‐owned Edna May Gold Project is conveniently positioned just two kilometres from the infrastructure of Westonia, on the eastern edge of WA’s Wheatbelt region. The mine is half way between Perth and Kalgoorlie and ideally situated to be serviced by either of these major mining centres.

With its robust economics, geologically and metallurgically well defined ore‐body, high Ore Reserve confidence and excellent recovery rate of more than 92%, Catalpa’s Edna May Gold Project offers an attractive, long‐term platform to grow a mid tier gold producer.

Catalpa’s mine and processing schedule demonstrate average gold production at Edna May in excess of 100,000 ounces per annum for a life of mine of more than nine years, with the first gold poured in April 2010.

CRACOW GOLD OPERATIONS (30%)

Catalpa owns 30% of the Cracow Gold project in Queensland with a pre‐emptive right over Newcrest’s 70% stake in the asset. The Cracow Gold Project is well managed and operated by Newcrest, allowing Catalpa to remain focused on the ramp up to full production of Edna May Gold Project.

The Cracow Gold Project has a history of steady gold production of over 100,000 ounces per annum for the past four years and it is considered to have considerable exploration upside.

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