EVOLUTION MINING LIMITED — Interim / Quarterly Report 2009

Jan 20, 2009

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QUARTERLY ACTIVITIES STATEMENT

31 December 2008

ASX RELEASE

QUARTERLY ACTIVITIES REPORT

FOR THE PERIOD ENDED 31 December 2008

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CONTENTS

HIGHLIGHTS .......................................................................................................................................... 3 EDNA MAY OPEN PIT GOLD PROJECT FEASABILITY STUDY ................................................. 4 RESERVES AND RESOURCES ......................................................................................................... 8 EXPLORATION UPDATE ..................................................................................................................... 9 GREENFINCH RESOURCE DRILLING ........................................................................................... 13 FUTURE DRILLING ............................................................................................................................. 13 COMPLETION OF A SUCCESSFUL RIGHTS ISSUE FOR $3.5M ............................................. 14 OUTLOOK FOR AUSTRALIAN GOLD PRICE ................................................................................ 15 EXECUTIVE APPOINTMENTS ......................................................................................................... 16 COMPETENT PERSON STATEMENT ............................................................................................ 17 COMPANY PROFILE .......................................................................................................................... 17

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ASX RELEASE

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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HIGHLIGHTS

EDNA MAY OPEN PIT GOLD PROJECT FEASABILITY STUDY

• 738,000 ounce Ore Reserve

• 676,000 ounces recovered

• 64% Proved Ore Reserve

• Processing 2.8 Mtpa ramping to 3.2 Mtpa from year 3

• 6.3 year mine life

• Average annual production in excess of 100,000 ounces

• Cash Operating Costs pre 4.5% Royalty of $636 per ounce

• Cash Operating Margin (post Royalty) of $343M at A$1,200/oz gold price

• � Low waste:ore strip ratio of 1.9:1.0 (post pre-strip)

• Metallurgically simple and consistent at ≈92% recovery

EDNA MAY UNDERGROUND PROJECT

• Encouraging results from all 6 holes in the surface diamond drilling programme;

• Final three (3) holes of six (6) hole program completed in the quarter;

GREENFINCH RESOURCE DRILLING

• Positive assay results from three (3) Greenfinch diamond drill holes

CORPORATE

• Successful completion of Rights Issue to raise $3.5M before costs;

• Commencement of Erik Palmbachs as Chief Financial Officer (CFO).

• Appointment of Stuart Pether as General Manager Operations;

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ASX RELEASE

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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EDNA MAY OPEN PIT GOLD PROJECT FEASABILITY STUDY

Key Assumptions and Findings

During the December quarter the Feasibility Study (FS) for Catalpa’s Edna May Gold Project was finalised and the Catalpa Financial Model populated with study physicals, costs and revenues.

The FS Financial Model has been distributed to banks and discussions regarding funding have commenced with several providers.

The FS excludes the Greenfinch Resources which will be included in an updated mine plan following further drilling scheduled for the current quarter.

Key project assumptions are as follows;

• Resource optimised at A$1025/oz gold price;

• Pit designed and reconciled to A$1025/oz optimised shell;

• Process plant throughput;

• Year 1 – 2.7Mtpa (ramp up);

• Year 2 – 2.8Mtpa;

• Year 3 onward 3.2Mtpa;

• Project capital including 7 month pre-strip, working capital, etc - A$92M including contingencies;

• Project construction schedule 12 months.

Project Physicals	Project Physicals	Project Physicals	Project Physicals
Total Resource(0.5g/t COG)	*29.9Mt	Mill Throughput	**2.8Mt
Total Reserve(0.5g/t COG)	19.1Mt	Metallurgical recovery	≈92%
% Proved Reserve	64%	Recovered ounces	676,000
Stripratio totalproject(W:O)	2.1:1.0	Mine Life(postpre-strip)	5.8years
Stripratiopostpre-strip (W:O)	1.9:1.0	ProcessingLife	6.3years

• excludes Inferred Ore Resource 8.4Mt

• ** process plant throughput ramps up to 3.2Mt in year 3

FS project capital and operating costs were compiled from written submissions from engineering and equipment suppliers, and other service providers at the peak of the mining boom in July 2008. These costs are now considered to be at the ‘high’ end of likely capital and operating cost estimates. Catalpa has not reduced these costs estimates in the FS.

The high ‘Proved Ore Reserve’ category of 64% of total Edna May Ore Reserve is further testament to the quantity and quality of the drilling undertaken on this project over the past 25 years. There are few projects in the Australian gold industry with this level of Ore Reserve confidence.

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ASX RELEASE

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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Further extensions to project life and improvements to the already robust economics are planned following the release of additional Ore Reserves from the Greenfinch Resource which is scheduled for further infill drilling in the current quarter. Additionally, project economics will be further improved from continued drilling of the Edna May deposit below the present FS pit and further drilling of the deeper underground targets scheduled for the first six (6) months of the 2009 calendar year.

The project has sound economics at current Australian gold prices. The average annual operating cashflows are significant and consistent allowing Catalpa to grow and develop towards being a mid tier gold producer within 12 months of finalising funding.

Estimated Revenues and Operating Costs (AUD)	Estimated Revenues and Operating Costs (AUD)
Gold Price Per Ounce	$1,200
OperatingCost	$430M
Cash OperatingMargin(post Royalty)	$343M
Average Cash Annual OperatingMargin	$54M
Average Cash Cost Per Ounce(pre royalty)	$636

Pit Design and Mining

The mine has a low life of mine strip ratio below 1.9:1.0 after completion of the 7 month pre-strip. The prestrip is scheduled during the second half of the process plant construction. The pit wall angles are derived from extensive geotechnical review where seven separate slope design domains apply to the pit design.

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QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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The pit will be mined in four stages which have been designed based on three optimised gold price economic boundaries at A$600/oz, A$800/0z and A$1,025/oz.

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Stage 1 Stage 2
Stage 3 Stage 4
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The low strip ratio nature of the Edna May Reserve allows the mine to employ a single mining fleet for the mine life, except for a 12 month period from year 3.5 when a second mining fleet will be transported to site. The FS utilises the fact that the mine site is ideally positioned, within three hours drive from Perth and Kalgoorlie and mining equipment and service personnel are freely available and locally accessible. This approach is in line with Catalpa’s operating objectives; as far as possible to utilise local labour, goods and services. This is just one of the benefits associated the Edna May Gold Project location which is within one kilometre of the Westonia town.

The Westonia town site is within five minutes drive from the process plant and provides for extensive conveniences and recreational facilities for Catalpa’s employees and service providers.

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ASX RELEASE

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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Process Plant

The process plant design and flow sheet provide for a conventional SABC FF (SAg mill Ball mill pebble Crusher Feed Forward) circuit. The Ore has been extensively tested and found to be metallurgically simple, consistent with a typical metallurgical recovery of approximately 92%.

The process plant was purchased and transported from the Big Bell mine site to the Edna May Gold Project in 2007. Key plant components have been stored under cover in Perth since then. The process plant consists of a 2.0kW SAG mill and a 3.7kW Ball Mill along with all other components necessary to reconstruct the plant.

As part of the plant upgrade to 2.8Mtpa the following changes to the flow sheet have been designed;

• New primary crusher, coarse ore storage and reconfigured reclaim;

• Reconfigured pebble management;

• 60% increase in leach and absorption capacity; and

• Upgrade to gravity circuit.

Catalpa’s mine and processing schedule will allow an average annual gold production of more than 100,000 ounces recovered.

The process plant has a twelve month construction period scheduled to commence at the completion of project funding.

Sustainability: Additional Mine Life

Further extensions to project life and improvements to the already robust economics are planned following the release of additional Ore Reserves from the Greenfinch Resource which is scheduled for further infill drilling in the current quarter.

Additionally, project economics will be further improved from continued drilling of the Edna May deposit below the present FS pit and further drilling of the deeper underground targets scheduled for the first six months of the 2009 calendar year.

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ASX RELEASE

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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RESERVES AND RESOURCES

Resources

The Edna May Resource remains unchanged from the previous FS in 2006.

	Edna May Resource Estimate to 300m Depth	Edna May Resource Estimate to 300m Depth	Edna May Resource Estimate to 300m Depth	Edna May Resource Estimate to 300m Depth	Edna May Resource Estimate to 300m Depth	Edna May Resource Estimate to 300m Depth	Edna May Resource Estimate to 300m Depth	Edna May Resource Estimate to 300m Depth	Edna May Resource Estimate to 300m Depth	Edna May Resource Estimate to 300m Depth	Edna May Resource Estimate to 300m Depth	Edna May Resource Estimate to 300m Depth
Cut Off Grade	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
0.50	16.6	1.15	612	13.3	1.13	484	29.9	1.14	1,096	8.4	1.0	269	38.2	1.11	1,365
0.60	14.2	1.26	574	11.1	1.25	446	25.3	1.26	1,021	6.4	1.1	227	31.7	1.22	1,248
0.70	12.1	1.36	529	9.2	1.37	403	21.2	1.36	932	5.0	1.3	209	26.3	1.35	1,141
0.80	10.2	1.48	484	7.6	1.50	365	17.7	1.49	848	4.0	1.4	178	21.7	1.47	1,027
0.90	8.5	1.60	439	6.3	1.64	330	14.8	1.62	769	3.2	1.5	152	18.0	1.60	922
1.00	7.1	1.72	394	5.2	1.78	299	12.3	1.75	693	2.6	1.7	139	14.9	1.74	832
1.10	6.0	1.85	356	4.4	1.92	270	10.4	1.88	626	2.1	1.8	120	12.4	1.87	746

Reserves

The FS undertaken by Coffey Mining as part of their key role in providing the bulk of the work in the FS for Catalpa has led to a further upgrade of Catalpa’s Reserve from 629,000 to 738,000 contained ounces.

This was the second Reserve upgrade in three months and increased the 2006 Reserve by 36% from 544,000 ounces to 738,000 ounces as part of the current FS.

The Reserves have been based on a gold price in Australian Dollars of A$1,025 per ounce at a processing rate of 2.8Mtpa and 3.2Mtpa from year 3. A$1,025 per ounce is significantly below the current (Australian Dollar) gold price which at the time of writing continued to trade above A$1,220 per ounce.

Cut Off Grade		Proved			Probable		Total Proven & Probable	Total Proven & Probable	Total Proven & Probable
	Million Tonnes	Gold g/t	'000 Ounces	Million Tonnes	Gold g/t	'000 Ounces	Million Tonnes	Gold g/t	'000 Ounces
0.50	12.3	1.19	471	6.8	1.23	267	19.1	1.20	738

The Ore Reserve at current gold prices presents a significant boost to the project revenue. In the context of recent market uncertainty, gold prices have remained buoyant in Australian Dollar terms, and have remained above or around A$1,200 per ounce over the past few weeks.

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ASX RELEASE

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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EXPLORATION UPDATE

Edna May Reef Underground Target Drilling 2008

Catalpa completed underground target drilling in October 2008 and reported final drill hole assay results in December 2008. The following table outlines the holes and metres drilled in the 2008 drill programme,

Surface Drill Program 2008	Surface Drill Program 2008
Drill Hole ID	Depth(m)
WDD144A	609.97
WDD145	596.24
WDD146	598.07
WDD147	511.90
WDD148	567.90
WDD149	538.09
Total	3,422.17

The figure below illustrates an oblique section of the Edna May Gneiss with the Edna May Reef drill target zone highlighted.

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Target Zone
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ASX RELEASE

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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The program targeted to infill an interpreted Edna May Reef structure at a nominal intercept spacing of 25 – 30m up and down dip and along strike. The drilling started from the known positions identified in previously drilled key holes WDD054, WDD054W1 and WDD055, WDD055W1. These holes intersected significant quartz reef material and are listed along with other significant previously drilled intercepts in the table below:

Previous Drilled Holes Interpreted to Intersect the Edna May Reef

**Previous Drilled Holes Interpreted to Intersect the Edna May Reef **	**Previous Drilled Holes Interpreted to Intersect the Edna May Reef **
Hole ID	Downhole Interval and Grade
WDD041	3.0m@15.0g/t – Above LongSection Shown
WDD043	4.0m @ 8.25 g/t
WDD043A	2.0m @ 5.63 g/t
WDD052	3.0m @ 14.7 g/t
WDD052A	3.0m @ 4.58
WDD054	18.1m@7.63g/t
WDD054A	9.1m@7.32g/t
WDD055	17m @ 5.2g/t and 16.6m @ 6.8g/t
WDD055A	32.9m @ 7.8 g/t Possible 2 Intercepts as in WDD055
WDD079	3.3m @ 0.35 g/t
WDD079B	3.0m @ 1.72 g/t
WDD083	4.3m @ 8.3 g/t

In December 2008 a review of the drill core from the recent programme of six diamond drill holes was completed to determine the various key mineralised veins and reef intercepts.

From the review it was possible to identify coherent reef intercepts in drill holes WDD145 and WDD147 that correspond well with the geological model generated prior to drilling and consistent with the existing drilling.

Additionally, we interpret that the narrower quartz reefs intercepted in drill holes WDD144A and WDD149 are located and have orientations consistent with the initial interpretation. The identified Edna May Reef intercepts from the recent drill programme are given in the table below.

	Current Drillprogram Edna May Reef intercepts	Current Drillprogram Edna May Reef intercepts	Current Drillprogram Edna May Reef intercepts	Current Drillprogram Edna May Reef intercepts
HoleID	Depth From	Depth To	Interval and Grade(Aug/t)	Comments
WDD144A	536.88	538.44	1.56m @ 49.4 g/t	Significant High grade reef and minor associated veins. ProbableEdna May ReefIntersection
WDD145	506.64	525.59	18.95m @ 4.91 g/t	CompleteEdna May Reefintercept including 5.03m zone of veined EMG. Hangingwall reef section + veined EMG 6.82m @10.81g/t
WDD146			NoidentifiedEdnaMayreef	Missed target
WDD147	420.95	423.20	2.25m @ 1.43 g/t	Edna May Reef– same style of Quartz lode cut by pegmatite intrusive therefore not complete intercept
WDD148			No identified Edna Mayreef	Missed target
WDD149	479.95	481.2	1.25m@ 31.29g/t	Significant High grade reef and minor associated veins. PossibleEdna May Reefor associated Intersection

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QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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The Long Projection below depicts the 2008 drill programme intercepts in relation to previous drill intercepts of the Edna May Reef:

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For drill holes WDD146 and WDD148, there are a number of mineralised zones that do not correlate with the interpreted Edna May reef location.

Overall there are a number of additional narrow high grade intercepts within the six drill holes and these are listed in table below. This data will be utilised to assist further 3D modelling of the reefs and vein sets during the March quarter, with the objective of allocating these intercepts to identified reef positions.

The most significant of these is in drill hole WDD148, 1.6m @ 48.5 g/t, which occurs within the hanging wall of the interpreted Edna May Reef.

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QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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	Other high grade intercepts from 2008 surface drilling	Other high grade intercepts from 2008 surface drilling	Other high grade intercepts from 2008 surface drilling	Other high grade intercepts from 2008 surface drilling
Hole ID	Depth From	Depth To	Interval and Au g/t	Comments
WDD144A	513.0m	513.27m	0.27m @ 127.0	g Narrow quartz vein
WDD144A	542.38m	543.0m	0.62m @ 99.09	g Narrow quartz vein in interval
WDD144A	547.85	548.2m	0.35m @ 85.69	g Quartz rich zone. No coherent vein margin
WDD144A	568.29m	569.16m	0.87m @ 140	g Quartz rich zone within pegmatite
WDD145	458.86m	459.89m	1.03 @ 15.0	g Small 10cm vein in interval
WDD145	549.15	549.89	0.74 @ 13.64	g Veined and sulphide rich EMG – small 10cm vein
WDD146	412.07	412.45	0.38m @ 70.09	g Silicified quartz rich zone with sulphides and visible gold
WDD146	495.79	496.6	0.81m @ 9.36	g Interval contains 10cm quartz vein
WDD146	539.2	540.29	1.09m at 10.19	g 0.75m vein within the interval
WDD147	464.29	464.79	0.5m @ 49.5	g 40cm quartz vein with visible gold – flatter dipping vein set -35 degrees to 030
WDD147	475.14	476.33	1.19m @ 24.39	g Irregular veining on the margin of a pegmatite intrusive
WDD148	401.6	403.2	1.6m @ 48.5	g 0.87 m quartz vein plus additional peripheral veining
WDD148	489.35	489.86	0.51m @ 12.1	g 0.34m quartz vein in interval

Resource Potential

The drilling to date confirms the existence of a coherent mineralised quartz reef at depth in the overall Edna May mineralised system. Additionally, there is evidence of other reefs that may well have sufficient continuity to present as underground targets.

It is not yet possible to outline a JORC compliant Mineral Resource from the drilling completed to date, however Catalpa is able to define “Resource Potential” and estimate the exploration target size to plan further drilling.

The drilling completed to date covers a small portion of the mineralised system and was not targeted to test the continuity of the other reef structures previously mined in the historic workings.

As a result of the 2008 drill programme, Catalpa will continue to assess and optimise the interpretation of the Edna May Reef together with interpretation of the narrower high grade veins of the Western Reef structures.

Further drilling is being designed for the zone below the old ACM decline workings to the top of the target zone drilled in the 2008 drill campaign.

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ASX RELEASE

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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GREENFINCH RESOURCE DRILLING

Three diamond holes were drilled in the Greenfinch Resource in November 2008. These largely successful holes were specifically targeted to provide check assays of earlier RC drilling samples and geological structural information for test work in the various rock types that host the Greenfinch mineralisation. The table below outlines the drill hole intercepts and assay results from these holes.

			Greenfinch Diamond DrillingResults	Greenfinch Diamond DrillingResults	Greenfinch Diamond DrillingResults
Hole ID	Intersection Length(m)	Grade Aug/t	from (m)	to (m)	Description
GFD001	7	2.8	31	38	Quartz-pyrite-pyrrhotite-chalcopyrite in Edna May Gneiss/amphibolite
inc	2	6.6	34	36	Quartz-pyrite-chalcopyrite in highlyshearedgneiss
	3	1.4	42	45	Quartz-pyrrhotie-pyrite in laminated Edna MayGneiss
	3	1.4	55	58	Quartz-pyrrhotite-chalcopyrite in laminated Edna May Gneiss
GFD002	5	1.1	40	45	Quartz-pyrrhotie-pyrite-chalcopyrite in Edna MayGneiss
inc.	1	2.6	42	43	Quartz-pyrrhotie in Edna MayGneiss
GFD003	2	3.0	11	13	Quartz-iron oxide in Edna MayGneiss
	1	2.2	28	29	Highlysheared Edna MayGneiss

FUTURE DRILLING

A further 5,000 metres of RC drilling is planned to test the Greenfinch Resource before the end of January 2009. The drill program is designed to convert the existing Indicated and Inferred Resource category mineralisation into Measured and Indicated.

It is anticipated that the programme will be completed in March 2009 with assays and the updated Resource model to be finalised in April 2009. The new Resource will then be optimised to estimate the Ore Reserve.

Further drilling in the Edna May Gneiss to extend the present Feasibility Study (FS) pit is presently being designed and planned for the current half of 2009. This drill programme is targeting the material below and to the north of the FS pit where there is potential for improvements in modelled tonnes and grade below the FS pit design and optimised shells.

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QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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The figure below shows an oblique section of the Edna May Gneiss in relation to the FS final pit, density of drilling, and grade intercepts above 0.5 g/t which contribute to the high ratio of Proved Reserve at the Edna May Gold Project.

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COMPLETION OF A SUCCESSFUL RIGHTS ISSUE FOR $3.5M

The 2008 December quarter was a difficult one for the Australian mining industry. The majority of mining companies were significantly impacted by the global financial issues that dominated our news headlines for many months.

Catalpa was successful in raising approximately $3.5M (before costs) from a Fully Renounceable Rights Issue in November 2008. The positive shareholder support for the company during the raising was an encouraging endorsement for the Edna May Gold Project at a time when the equity markets suffered one of the most severe downturns in its history.

The issue was fully underwritten by our supportive major shareholder Lion Selection Limited who increased their holding in Catalpa to 51.3%. In summary, the Rights Issue success was a significant outcome for Catalpa and its shareholders, providing the Company the necessary funds to continue drilling in order to increase both Resources and Reserves and move the Edna May Gold Project towards production in 2009.

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QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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OUTLOOK FOR AUSTRALIAN GOLD PRICE

A positive effect resulting from the financial and economic turmoil in the world during the December quarter of 2008 was the rise in the Australian Dollar (AUD) price of gold.

The graph below illustrates the monthly movement of Australian Dollar gold price in comparison the AUD/US dollar exchange rate. The data clearly reflects that the continued upward trend in Australian gold price coincides with the uncertain economic outlook for the global economies and commodities which emerged during the December quarter.

Many financial analysts, economists, banks and other financial institutions are predicting buoyant times for the AUD gold price during 2009 as the full extent of the global financial turmoil pushes investors into the safe haven of gold.

These positive predictions and outlook for the AUD gold price further support the timing for Catalpa to move the Edna May Gold Project into construction and ultimately production in 2009/10.

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QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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EXECUTIVE APPOINTMENTS

Chief Financial Officer

On 12 September 2008 Catalpa announced the appointment of Erik Palmbachs as the Company’s Chief Financial Officer. Mr Palmbachs commenced in the role with effect from 20 October 2008.

Mr Palmbachs is an experienced CFO and holds an MSc in Mineral Economics and a Bachelor of Business (Accounting). He is a member of the Australian Society of Accountants (AASA, CPA) and has an impressive resume with 29 years hands-on experience, much of which was gained in the resources sector.

Mr Palmbachs was formerly the Chief Financial Officer at Territory Resources Limited and his experience and proven track record in overseeing the financial aspects of systems, project development and acquisition of resources is an important skill set to benefit Catalpa in the Company’s journey towards becoming a mid-tier producer.

Since commencing with Catalpa in October Mr Palmbachs is making a significant contribution to Catalpa’s financing and funding strategy.

General Manager Operations

On 6 January 2009 Catalpa announced the appointment of Stuart Pether as the Company’s General Manager Operations. Mr Pether took up the role with effect from 12 January 2009.

Mr Pether is an experienced Mining Engineer and holds a BEng (Mining) with an impressive resume with over 20 years hands-on and technical experience in the resources sector.

Mr Pether has worked in various operational, managerial, technical and corporate roles in Australia and Canada in his career covering several commodities predominately in gold, nickel and zinc. Stuart is equally skilled in both open pit and underground mining environments.

In particular, it is anticipated that Mr Pether will be making a significant contribution during Catalpa’s financing and funding arrangements, contract construction and negotiation, systems, and also in terms of Catalpa’s strategy to bring the Edna May Gold Project into production on time and within budget.

Catalpa’s Board is also delighted to have attracted someone with Stuart’s experience, skills and energy to Catalpa.

The commencement of both Stuart and Erik with Catalpa is a significant milestone in our efforts to bring the Edna May Gold Project on line in 2009. Both Stuart and Erik are experienced and well skilled in their particular fields and key to moving the project into production.

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QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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COMPETENT PERSON STATEMENT

The exploration data has been compiled according to the JORC Code for the reporting of Mineral Resources and Ore Reserves by Nick Winnall (Exploration Manager), a full-time employee of Catalpa Resources Limited. Mr. Winnall is a Member of the Australasian Institute of Mining and Metallurgy (AUSIMM) 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 December 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr. Winnall 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 mineral resources is based on work completed by Mr Nicolas Johnson, who is a Member of the Australian Institute of Geoscientists. Mr Johnson is a full time employee of Hellman and Schofield Pty Ltd 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’. Mr Johnson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The reported Ore Reserves have been compiled by Mr Harry Warries. Mr Warries is a Member of the Australian Institute of Mining and Metallurgy and an employee of Coffey Mining 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 Warries gives Catalpa Resources Limited consent to use this estimate in reports.

COMPANY PROFILE

Catalpa Resources Limited (ASX: CAH), Perth-based advanced gold developer, aims to become Australia’s next mid tier producer by developing its open pit assets, located on its extensive and whollyowned 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 three 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 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.

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.

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17
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ASX RELEASE

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 December 2008

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Catalpa is pursuing parallel growth with a renewed exploration programme underway on 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 for 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.

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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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Appendix 5B Mining exploration entity quarterly report

1ule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

CATALPA RESOURCES LIMITED

	ABN 74 084 669 036 Consolidated statement of cash flows		Quarter ended (“current quarter”) 31 December 2008	Quarter ended (“current quarter”) 31 December 2008
			31 December 2008
Cash flows related to operating activities 1.1 Receipts from tax returns and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (GST to be recouped) Net Operating Cash Flows		Current quarter $A’000		Year to date (6 months) $A’000
		- (1,410) - - (574) - 42 - - (30)		- (1,879) - - (896) - 91 - - (90)
		(1,972)		(2,774)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (Option deposit to purchase equipment) Net investing cash flows		- - (11) - - - - - -		- - (11) - - - - - -
		(11)		(11)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(1,983)	(2,785)
Cash flows related to financing activities 1.14 Proceeds from shares /shares to be issued 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Proceeds from release of tenement bond 1.19 Other (Cost of Capital Raising/Prospectus) Net financing cash flows	3,461 - - - - (249)	3,461 - - - - (259)
	3,212	3,202
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	1,229 1,997	417 2,809
	3,226	3,226

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		184
		NIL
1.25	Explanation necessaryfor an understandingof the transactions
	All transactions involving Directors and associates were on normal commercial terms.

Non-cash financing and investing activities

2.1 2.2	Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
	NIL
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest
	NIL

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	NIL	NIL
	NIL	NIL

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development	$A’000
	696
	-
Total	696

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	3,226	34
	-	1,963
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	3,226	1,997

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
	E77/1494 Sandford Rocks	Granted	-	100%
	Nil

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference+securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs,redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	518,168,935	518,168,935
	172,723,071 68,551	172,723,071 68,551	$0.02 $0.10	$0.02 $0.10
7.5 +Convertible debt securities(description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	38,306,699 200,000 100,000 172,723,071 3,750,000 3,750,000 3,750,000 3,750,000 625,000 625,000 625,000 625,000	38,306,699 172,723,071	Exercise price 10 cents 11 cents 8 cents 10 cents 8 cents 10 cents 12 cents 14 cents 6 cents 8 cents 10 cents 12 cents	Expiry date 30/6/2010 22/11/10 29/4/2011 31/10/2011 23/12/2013 23/12/2013 23/12/2013 23/12/2013 23/12/2013 23/12/2013 23/12/2013 23/12/2013
	172,723,071 3,750,000 3,750,000 3,750,000 3,750,000 625,000 625,000 625,000 625,000	172,723,071	10 cents 8 cents 10 cents 12 cents 14 cents 6 cents 8 cents 10 cents 12 cents	31/10/2011 23/12/2013 23/12/2013 23/12/2013 23/12/2013 23/12/2013 23/12/2013 23/12/2013 23/12/2013
	68,551	68,551	10 cents

• See chapter 19 for defined terms.

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7.11 Debentures
(totals only)
7.12 Unsecured notes
(totals only)
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Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does / ~~does not~~ * (delete one) give a true and fair view of the matters disclosed.

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Sign here: ............................................................ Date: 21 January 2009 ( ~~Director~~ /Company secretary)

Print name: GRAHAM DOUGLAS ANDERSON

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

== == == == ==

• See chapter 19 for defined terms.

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