EVOLUTION MINING LIMITED — Interim / Quarterly Report 2010

Jul 26, 2010

QUARTERLY ACTIVITIES STATEMENT 30 June 2010

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Quarterly Report 30 June 2010

Highlights

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• Edna May process plant commissioned on 15 May 2010

• 18,274 ounces produced from Cracow and Edna May for June 2010 quarter

• 9,808 ounces produced from Edna May

• 8,466 ounces produced from Cracow (CAH attributable)

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• Cracow’s gold production of 102,759 ounces exceeded FY 2010 budget

• Edna May ramp-up to 2.8Mtpa on schedule by end of July 2010

• Edna May production was delivered into hedge book at approximately A$1,553/ounce

• Final Edna May capital, on budget at A$92 million

• Edna May Ore Reserve increased to more than 1 million ounces

• A$3.2 million Edna May underground target drilling commences in July 2010

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Catalpa Resources Limited

Quarterly Report 30 June 2010

Executive Summary

The Edna May Gold Project process plant was commissioned on 15 May 2010 and Catalpa continues to progress production ramp-up at Edna May, with 9,808 ounces of gold produced up to 30 June 2010. Notably, Edna May was cash positive from operations during the commissioning and ramp up phase, which is on schedule to be finalised by the end of July.

Cracow exceeded budgeted production in FY 2010 with 102,759 (100%) ounces of gold produced at a cash cost[(1)] of A$537 per ounce and a below budget total cost[(a)] of A$774 per ounce.

Catalpa’s cash and bullion position at 30 June 2010 was A$41 million. The Macquarie debt facility is fully drawn to A$65 million.

Resource development drilling at Edna May during the previous quarter resulted in an increased Mineral Resource and Ore Reserve. The Edna May Gold Project’s Ore Reserve now stands at over 1.0 million ounces of gold.

Exploration and resource definition drilling continues at both projects with planned expenditure of approximately A$7 million at Cracow (100%) and A$6 million at Edna May in FY 2011. Drilling at Edna May will focus on developing the underground potential, and the Greenfinch and Golden Point deposits in conjunction with further regional exploration drilling. Exploration expenditure at Cracow will focus on continued Resource to Reserve conversion at Kilkenny, Phoenix and Roses Pride in conjunction with other greenfields regional exploration.

Corporately, Catalpa finalised a A$20 million capital raising to restructure debt in the June quarter. Catalpa also conducted a strategic planning workshop with the Board and Management to define the operating and growth path for the company out to June 2015. In line with its growth strategy, Catalpa restructured its management team to provide capacity for a dual focus on both operations management and business development.

Production Highlights

Production highlights	Jun 2010 Qtr	Mar 2010 Qtr	Dec 2009 Qtr
Total Production (ounces)	18,274	6,437	7,231
Edna May Production (100%)	9,808	-	-
Cracow Production (30%)	8,466	6,437	7,231
Cash Cost A$/ounce(1)	577	610	545
Achieved Gold Price A$/ounce	1,427	1,225	1,197

(1) Cracow only. Edna May cash costs have been excluded as the project is in the commissioning and ramp up phase

(a) Cash cost plus depreciation and amortisation

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Catalpa Resources Limited

Quarterly Report 30 June 2010

Guidance FY 2011

Edna May remains on schedule to achieve full production rates by 31 July 2010 with planned annual production of 90,000 - 97,000 ounces of gold. Cracow is scheduled to produce 25,000 – 30,000 attributable ounces of gold for the year, with planned production for the Catalpa Group of 115,000 – 127,000 ounces of gold for FY 2011.

The Company will deliver 69,891 ounces of gold into the existing hedge facility at A$1,557.50 per ounce in 2010/11.

Resource definition drilling at Edna May will target a maiden underground Mineral Resource below the current final pit design by the end of the second quarter of FY 2011. Resource definition and exploration drilling will continue at Cracow with the aim of converting existing Mineral Resources into Ore Reserves and further testing known regional targets and conceptual structures.

Operations

Edna May (100%)

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Construction and Commissioning

The construction of the Edna May process plant was completed during the quarter, two months ahead of schedule and within budget. The final construction costs were A$92 million which was in line with budget.

During the construction phase a number of operational improvements were made to the Project, all of which were achieved within the construction budget, including:

• Increased expenditure on critical spares; and

• An increase in the tailing storage facility capacity from 19.2Mt to over 28Mt.

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Catalpa Resources Limited

Quarterly Report 30 June 2010

The dry and wet commissioning of the process plant commenced during the quarter as scheduled. Commissioning was complete upon successful performance testing on 15 May 2010 following demonstration of the process plant design capacity.

Health, Safety and Environment

The Edna May Gold Project was Lost Time Injury free for the quarter and project to date, continuing the Project’s excellent safety record.

No significant environmental incidents were reported in the quarter.

Mining

Mining to date has focussed on stripping waste from both the north and south side of the mine to expose ore supply for the next two years. Catalpa has elected to moderately accelerate waste stripping to provide several near and long term opportunities, including:

• Accelerated construction of 10m high noise bund walls on the south side of the pit. The noise bund walls protect the town from noise generated by 24 hour mining operations and are part of Catalpa’s environmental license. The bund walls will be completed within the first quarter of FY 2011;

• Removal of the mine waste:ore strip ratio peak identified in years three and four of the Bankable Feasabiity Study (BFS) mine schedule, removing the need for a second mining fleet to provide for scheduled ore supply;

• Geotechnical requirements to flatten the wall slope angles in the upper 30m of the oxidised zone on the northern side of the pit following a circular failure in the weathered zone;

• Opportunity to increase the process-feed grade via a cut over or a higher cut off grade (COG) strategy resulting from positive analysis of grade control data; and

• Accelerated construction of a larger tails facility to provide for 28Mt or ten years of process tails capacity.

The acceleration of the waste stripping has been achieved by a small change to the long term mining fleet from a single 120 tonne excavator and 5 trucks to a single new 190 tonne excavator and 6 trucks resulting in lower unit operating costs.

Ore supply to the process plant in the quarter has predominately been sourced from previously mined stockpiles. The reconciled processed grade of the stockpiles was 0.88g/t Au which is approximately 10% higher than the grade control estimate. In-pit ore plant feed will commence in August 2010.

Processing

The ramp up phase of the Project has processed a blend of oxide, transitional and fresh material which has enabled process rates to exceed design capacity, and allowing plant testing and the opportunity to expose and resolve any bottlenecks up to future processing rates of 3.2Mtpa.

The ramp up phase was impacted by some water supply and mechanical issues that have since been resolved, nonetheless resulting in 16 days lost production for the quarter. The major mechanical issues related to intermittent earth leakage issues on the main transformer, a ball mill trunion bearing failure, ball

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Catalpa Resources Limited

Quarterly Report 30 June 2010

mill clutch failure and liner design issues in the SAG mill. Water supply issues have hampered productiuon at times and have been alleviated by the successfully drilling of additional water bores.

A number of positive results have also been identified and achieved during the ramp up phase. These included:

• Early indications of achieving BFS gold recovery of 91.6%;

• Up to 40% gravity gold recovery;

• Better than expected gold leach performance; and

• Early return of process water from the tailings storage facility resulting in reduced reagent consumption and improved operational stability within the process plant.

The ramp up to full production capacity of 2.8Mtpa is on schedule to be achieved by 31 July 2010.

Community

During the commissioning and ramp up phase community engagement has continued, including a noise monitoring survey as required by the operating license. No major community concerns have been raised.

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Catalpa Resources Limited

Quarterly Report 30 June 2010

Cracow (30%)

The Cracow Gold Mine is located in central Queensland, Australia, approximately 4 kilometres from the township of Cracow and approximately 500 kilometres northwest of the city of Brisbane.

The Mine commenced operations in November 2004 and has consistently produced around 100,000 ounces per annum for the last three years. Ore throughput capacity exceeds 400,000 tonnes per annum with ore currently being sourced from the Royal, Sovereign, Klondyke and Crown mineralised zones. The gold mineralization occurs in steeply dipping low sulphidation epithermal fissure quartz veins developed at the intersection of major structures.

The Cracow Gold Mine is operated by Newcrest (70%) on behalf of the Cracow Mine Joint Venture. Catalpa’s 30% share of gold produced at the Cracow Gold Mine for the three months to 30 June 2010 was 8,466 ounces at cash operating cost of A$577/ounce. The 30% share of Cracow is unhedged and unleveraged and continues to be fully exposed to the currently high A$ gold price providing a strong cashflow stream.

The Cracow Gold Mine is a developed underground operation with a high quality management team and has outstanding potential to add substantially to the mine life through exploration success.

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The Cracow Gold Mine is located in the Theodore region of southern Queensland and is very well located with good infrastructure and access. The majority of staff and contractors operate on a fly-in-flyout roster from the Sunshine Coast or Brisbane.

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Catalpa Resources Limited

Quarterly Report 30 June 2010

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Health, Safety and Environment

No Lost Time Injuries (LTI) or Serious Potential Incidents occurred during the June quarter with site extending its LTI free days at the end of June 2010 to 401.

No significant environmental incidents were reported in the quarter.

Production

Gold production increased during the quarter in line with forecast, with annual production exceeding budget by 2,069oz to 30 June 2010.

QuarterlyProduction Summary (30% Attributable basis)	QuarterlyProduction Summary (30% Attributable basis)	QuarterlyProduction Summary (30% Attributable basis)	QuarterlyProduction Summary (30% Attributable basis)	QuarterlyProduction Summary (30% Attributable basis)
		Jun-09	Sep-09	Dec-09	Mar-10	Jun-10
Total Ore Mined	tonnes	36,142	34,312	35,369	37,476	37,678
Ore Processed	tonnes	33,707	34,283	35,397	35,555	38,732
Ore Grade	g/t Au	8.32	8.49	6.97	6.15	7.37
Met Recovery	%	92.7	92.9	91.2	91.6	92.2
Gold Produced	Oz	8,676	8,694	7,231	6,437	8,466

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Catalpa Resources Limited

Quarterly Report 30 June 2010

Cost Summary

		QuarterlyCost Summary (30% Attributable basis)	QuarterlyCost Summary (30% Attributable basis)	QuarterlyCost Summary (30% Attributable basis)	QuarterlyCost Summary (30% Attributable basis)
			Jun-09	Sep-09	Dec-09	Mar-10	Jun-10
	Gold Produced	(oz)	8,676	8,694	7,231	6,437	8,466
	Cash Cost	(A$/oz)	460	436	545	610	577
	Capital Costs	(A$M)	1.0	1.3	1.5	1.3	1.4
	Exploration	(A$M)	0.4	0.4	0.4	0.6	0.6

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Catalpa Resources Limited

Quarterly Report 30 June 2010

Exploration

Edna May (100%)

Resource definition drilling completed in March this year has resulted in an Ore Reserve increase of 24K ounces within the Golden Point deposit, due mainly to a resource classification upgrade from Inferred to Measured and Indicated.

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Figure 1 Golden Point resource upgrade drilling and new pit design including Golden Point

The reporting period saw no additional resource definition drilling undertaken at the Edna May Gold Project as planning for the next round of deep diamond exploration holes was completed. The program is due to start in July and consists of approximately 10,000m of surface diamond drilling targeting the Edna May Reef extensions below the final pit design.

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Catalpa Resources Limited

Quarterly Report 30 June 2010

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Figure 2 Planned surface diamond drilling targeting underground high grade gold reefs

It is anticipated that the program will deliver a maiden underground Mineral Resource in the December quarter followed by an underground feasibility study early next year.

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Figure 3 Edna May Gold Project - Opportunities for Growth (inset of planned drilling)

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Catalpa Resources Limited

Quarterly Report 30 June 2010

Regional

Government permitting for the planned RAB and Aircore drilling program has been recieved. The drilling will test historical gold workings, auger gold anomalies, ‘magnetic low targets’ (Edna May lookalike) and two gold geochemical anomalies. One of the geochemical anomalies is a well defined 48ppb ‘bulls-eye’ gold target and the other is a series of gold anomalous values to 49ppb coincident with a aeromagnetic lineament which extends from a nearby, recently defined gold resource.

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Figure 4 Regional exploration drill targets

Edna May Mineral Resource and Ore Reserve Statement

Total Mineral Resources to 30 June 2010 after mining depletion are estimated at 1.68 million ounces of gold, including 24K ounces of gold in stockpiled material. The applied cut-off grade is 0.4 g/t Au to reflect the economic cut-off grade at A$1,250 per ounce.

The Mineral Resource has been estimated to a maximum depth of 300 metres below surface. The Mineral Resource excludes mineralisation defined from previous deep (+300 metre) diamond drilling programs. A focus for Catalpa’s exploration campaign in 2010 is to target the deeper mineralisation, in an effort to move it towards a JORC compliant Mineral Resource in addition to advancing Golden Point; and drill testing regional targets.

Total Ore Reserves to 30 June 2010 after mining depletion are estimated at 1.05 million ounces of gold, including stockpiles. Significantly, 62% of the Ore Reserve is in the highest confidence (JORC) Proved category. The gold price of A$1,250 used in the Ore Reserve estimate reflects a moderate approach to the current Australian dollar spot price and excludes the further price benefit Catalpa receives from the forward sold position of 352,316 ounces at A$1,557 per ounce.

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Catalpa Resources Limited

Quarterly Report 30 June 2010

Mineral Resource Statement

The accompanying statement of Edna May and Greenfinch Mineral Resources at 30 June 2010 was 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 envelope and in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) 2004 edition.

	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off	Catalpa Total Mineral Resource Statement Report to 0.4g/t Au cut-off
	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
Stockpiles				1.2	0.62	24	1.2	0.62	24	-	-	-	1.2	0.62	24
TOTAL	22.8	1.05	767	19.6	0.97	608	42.4	1.01	1,375	10.7	0.88	300	53.1	0.98	1,675

Effective holdings

• Catalpa Resources Limited owns 100% of the Edna May Operations Pty Ltd which in turn owns 100% of the Edna May Gold Project.

Footnotes to Mineral Resource

• The Resources are estimates of recoverable tonnes and grades using Multiple Indicator Kriging with block support correction and assuming a smallest mining unit for ore selection.

• 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.

• All Mineral Resource figures are stated at 30 June, 2010 on a 100% basis, with depletion by production where relevant.

• 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.

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Catalpa Resources Limited

Quarterly Report 30 June 2010

Ore Reserve Statement

The accompanying statement of Edna May and Greenfinch Ore Reserves as shown below was compiled by Coffey Mining and is in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) 2004 edition.

Catalpa Total Mineral Reserve Statement Reported to 0.4g/t Au cut-off	Catalpa Total Mineral Reserve Statement Reported to 0.4g/t Au cut-off	Catalpa Total Mineral Reserve Statement Reported to 0.4g/t Au cut-off	Catalpa Total Mineral Reserve Statement Reported to 0.4g/t Au cut-off	Catalpa Total Mineral Reserve Statement Reported to 0.4g/t Au cut-off	Catalpa Total Mineral Reserve Statement Reported to 0.4g/t Au cut-off	Catalpa Total Mineral Reserve Statement Reported to 0.4g/t Au cut-off	Catalpa Total Mineral Reserve Statement Reported to 0.4g/t Au cut-off	Catalpa Total Mineral Reserve Statement Reported to 0.4g/t Au cut-off	Catalpa Total Mineral Reserve Statement Reported to 0.4g/t Au cut-off
	Proved			Probable			Total Proved and Probable
	Million Tonnes	Gold g/t	'000 Ounces	Million Tonnes	Gold g/t	'000 Ounces	Million Tonnes	Gold g/t	'000 Ounces
Greenfinch	0.8	1.14	28	1.7	1.04	58	2.5	1.07	86
Edna May & Golden Point	16.6	1.09	582	8.8	1.09	308	25.4	1.09	890
Stockpiles				1.2	0.62	24	1.2	0.62	24
Total	17.6	1.17	655	11.8	1.07	400	29.4	1.13	1055

Catalpa Resources Limited notes the following;

Effective holdings

• Catalpa Resources Limited owns 100% of the Edna May Operations Pty Ltd which in turn owns 100% of the Edna May Gold Project.

Footnotes to Ore Reserve

• Ore Reserves are the economically mineable part of Measured and/or Indicated Resources and include diluting materials and allowances for losses which may occur. Ore Reserves are quoted as a subset of Mineral Resources.

• Metal price assumptions for Ore Reserves are A$1,250 per ounce of gold at a processing rate of 2.8- 3.2Mtpa.

• The economic cut-off grade of Ore Reserves is 0.4g/t gold.

• All Ore Reserve figures are stated at 30 June, 2010, with depletion by production where relevant.

• The Ore Reserve figures are shown on a 100% basis.

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

• Due to rounding of figures small discrepancies may exist.

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Catalpa Resources Limited

Quarterly Rep o rt 30 June 2010

Cracow (30%)

Exploration

Newcrest manages the operation and ex p loration activities of the Cracow Joint Venture.

Cracow had significant exploration succe s s during the quarter. Resource definition drilling c o ntinued on the Phoenix structure where a maiden Min e ral Resource and Ore Reserve is expected to be r eported in the September quarter 2010.

Significant intercepts in the quarter inclu d ed:

• PHU007: 6.2m (6.1m) @ 24.1g/t A u from 89.8m

• PHU010: 6.1m (5.3m) @ 10.6g/t A u from 102.3m

• PHU011: 10.7m (8.1m) @ 14.9g/t A u from 130.7m

• PHU014: 5.0m (3.6m) @ 18.0g/t A u from 136.5m

• PHU017: 4.4m (3.2m) @ 14.3g/t A u from 138.6m

• PHU018: 3.6m (2.3m) @ 14.5g/t A u from 143.3m

Regional exploration in the quarter inclu d ed RC drilling, field mapping, rock chip sampling a t Walhalla and soil sampling at Cracow South to define drilling targets at Cracow South, where a repeat of the Cracow Goldfield is targeted.

Cracow Mineral Resource and O re Reserve Statement

• Mineral Resources are contained within an underground mining shape based on a margin cut-off gr a de

• Mineral Resource quoted on 100% basis (3 0 % attributable to Catalpa)

• ** Further details on CMJV Mineral Resour c es and Ore Reserves are available on the Newcrest web s ite www.newcrest.com.au

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Catalpa Resources Limited

Quarterly Report 30 June 2010

Cracow Ore Reserve Estimate Depleted by production as at December 31, 2009 Royal,Crown,Klondyke North,Sovereign	Cracow Ore Reserve Estimate Depleted by production as at December 31, 2009 Royal,Crown,Klondyke North,Sovereign	Cracow Ore Reserve Estimate Depleted by production as at December 31, 2009 Royal,Crown,Klondyke North,Sovereign	Cracow Ore Reserve Estimate Depleted by production as at December 31, 2009 Royal,Crown,Klondyke North,Sovereign	Cracow Ore Reserve Estimate Depleted by production as at December 31, 2009 Royal,Crown,Klondyke North,Sovereign	Cracow Ore Reserve Estimate Depleted by production as at December 31, 2009 Royal,Crown,Klondyke North,Sovereign	Cracow Ore Reserve Estimate Depleted by production as at December 31, 2009 Royal,Crown,Klondyke North,Sovereign	Cracow Ore Reserve Estimate Depleted by production as at December 31, 2009 Royal,Crown,Klondyke North,Sovereign	Cracow Ore Reserve Estimate Depleted by production as at December 31, 2009 Royal,Crown,Klondyke North,Sovereign
Proved			Probable			Total Proved & Probable
Million Tonnes	Gold g/t	'000 Ounces	Million Tonnes	Gold g/t	'000 Ounces	Million Tonnes	Gold g/t	'000 Ounces
0.6	7.6	152	0.2	5.6	36	0.8	7.1	188

• Ore Reserve based on a gold price of US$750 per ounce of gold

• Ore Reserve quoted on 100% basis (30% attributable to Catalpa)

• ** Further details on CMJV Mineral Resources and Ore Reserves are available on the Newcrest website www.newcrest.com.au

Corporate

Catalpa has been active at a corporate level implementing initiatives to improve its capital structure with a view to positioning the Company to take advantage of further growth opportunities.

Restructuring of Catalpa Debt Finalised

Catalpa finalised the restructure of its Mezzanine Loan Facility (MLF) of A$10 million with Macquarie Bank Limited (MBL). The MLF was part of a A$65 million debt facility Catalpa has in place with MBL, and was converted into senior debt during the quarter. While there was no change to Catalpa’s total debt position, ongoing interest costs on the A$10 million were lowered by 2.5% per annum.

As part of the MLF restructure MBL has forgone entitlement to 6.06 million Catalpa options with an exercise price of A$0.825 which existed under the previous MLF. In consideration for these changes Catalpa issued MBL 500,000 fully paid ordinary shares.

Catalpa’s cash and bullion position at 30 June 2010 was A$41million including full draw down of the A$65 million Macquaire debt facility.

Capital Raising

During the quarter, Catalpa successfully completed:

• A share placement of 7,590,910 fully paid ordinary shares at A$1.32 per share to raise a total of A$10 million before costs; and

• A share entitlement offer to raise A$10 million. This offer was heavily oversubscribed with applications received for A$30 million.

These funds are being applied to:

• Accelerate resource definition and exploration drilling at Catalpa’s Edna May Gold Project; and

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Catalpa Resources Limited

Quarterly Report 30 June 2010

• Provided a further working capital buffer during commissioning of Edna May.

Option Expiry

During the quarter 1,554,867 listed options (CAHO - expiry date 30 June 2010) with an average price of A$1.032 per option were exercised. In July 2010 the Company announced that 70,419 listed options (CAHO) exercisable at $1.032 had expired due to a 30 June 2010, expiry date.

Investment Activities

During the period Catalpa acquired a 4.61% stake in Renaissance Minerals Limited IPO. The land holding held by Renaissance is within our regional search target radius at approximately 70kms from the Edna May process plant.

Senior Management Restructure

Catalpa’s senior management team was restructured to enable Catalpa to focus on both operational excellence and future growth:

• Mr Stuart Pether was appointed to the role of Chief Operating Officer (COO), responsible for all operations within Catalpa;

• Mr Adrian Pelliccia, formally Catalpa’s Manager Geology was appointed to Manager Business Development, responsible for the identification and evaluation of external and internal growth opportunities;

• Mr John Winterbottom was appointed to fill the Manager Geology role vacated by Mr Pelliccia and is responsible for Edna May geology from production to resource development; and

• Mr John Fraser was appointed to the role of General Manager - Edna May Gold Project following his role in the successful commissioning of Edna May.

Gold Outlook

In April the Australian Dollar gold price traded between A$1,200 and A$1,250 per ounce, before rising sharply in May, and trading predominantly in the range of A$1,400 and A$1,450 per ounce in June. The outlook for the Australian dollar gold price remains positive in the current quarter.

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Catalpa Resources Limited

Quarterly Report 30 June 2010

Corporate Profile

Catalpa Resources Limited (ASX: CAH) has two exciting gold assets; a 30% interest in the 100,000 ounce per annum Cracow Gold Project - a producing gold mine in Queensland (70% Newcrest Mining Limited); and the 100,000 ounce per annum Edna May Gold Project in Western Australia (100%) – an operating mine currently ramping up to full production.

The A$92 million Edna May Gold Project is fully funded, and, as part of the finance facility, Catalpa has sold forward 352,316 ounces of gold at A$1,557.50 per ounce. At an average gold price of A$1,400 per ounce Catalpa will realize 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 1.9 million ounces and a combined Ore Reserve of more than 1.0 million ounces of gold (refer announcement dated 27[th] May 2010), Cracow and Edna May will provide a sustainable 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 programs at both operations. In parallel, the Company continues to proactively identify and assess other production growth opportunities.

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The Company has a committed 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 has adopted best practice standards across all its activities, including health and safety, environmental management, corporate governance and social responsibility.

Corporate Information

Board Members

Peter Maloney Non Executive Chairman Bruce McFadzean Managing Director John Rowe Non-Executive Director Barry Sullivan Non-Executive Director Murray Pollock Non-Executive Director Graham Freestone Non Executive Director

Registered and Principal Office

Level 1, 9 Havelock Street West Perth, Western Australia, 6005 Telephone: +61 (0)8 9321 3088 Fax: +61 (0)8 9321 8804 Email: manager@catalparesources.com.au Website: www.catalparesources.com.au

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Catalpa Resources Limited

Quarterly Report 30 June 2010

Competent Persons Statement

The exploration data has been compiled according to the JORC Code for the reporting of Mineral Resources and Ore Reserves by Adrian Pelliccia, a full-time employee of Catalpa Resources Limited. Mr Pelliccia 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 Pelliccia 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 Edna May 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 Edna May 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.

The reported Cracow Mineral Resource and Ore Reserve is based on a Competent Persons Statement provided by Newcrest Mining Limited on behalf of the Cracow Gold Joint Venture. Cracow is an unincorporated joint venture between Catalpa (30%) and Newcrest (70%). Further details on CGJV Ore Reserve are available on the Newcrest website www.newcrest.com.au

Further Information

Bruce McFadzean Annette Ellis / Warrick Hazeldine Managing Director Media and Investor Relations Catalpa Resources Limited Purple Communications Tel (08) 9321 3088 Tel: (08) 6314 6300

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Catalpa Resources Limited

Appendix 5B Mining exploration entity quarterly report

Rule 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, 01/06/10.

Name of entity

	Name of entity
	CATALPA RESOURCES LIMITED
	ABN 74 084 669 036 Consolidated statement of cash flows		Quarter ended (“current quarter”)
			30 June 2010
Cash flows related to operating activities 1.1 Receipts from gold sales and related debtors 1.2 Payments for (a) exploration & 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 (provide details if material) Net Operating Cash Flows		Current quarter $A’000		Year to date (12 months) $A’000
		10,816		22,274
		(561) (13,650) (4,100) (2,513) - 360 (617) (271) -		(1,009) (91,910) (9,448) (7,481) - 760 (704) (543) -
		(10,536)		(88,061)
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 (term deposits) 1.12(a) Other (cash acquired in business combination) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- (560) (355) - - - - - - -		- (560) (653) - - - - - 3,533 2,896
		(915)		5,216
		(11,451)		(82,845)

• See chapter 19 for defined terms.

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1.13 Total operating and investing cash flows (brought forward)	(11,451)	(82,845)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (facility fee) Net financing cash flows	10,569 - 16,000 (22) - -	20,830 - 65,000 (82) - (1,100)
	26,547	84,648
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	15,096 19,004 -	1,803 32,297 -
	34,100	34,100

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

Current quarter $A'000 1.23 Aggregate amount of payments to the parties included in item 1.2 277 1.24 Aggregate amount of loans to the parties included in item 1.10 NIL 1.25 Explanation necessary for an understanding of the transactions All transactions involving Directors and associates were on normal commercial terms.

Non-cash financing and investing activities

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows NIL

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has 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	Amount used
$A’000	$A’000
65,000	65,000
NIL	NIL

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	690
	5,261
	20,096
	2,008
Total	28,055

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)	25,062	9,866
	9,038	9,138
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	34,100	19,004

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	-	-	-	-

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

6.2 Interests in mining tenements acquired or increased	-	-	-	-

• 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	162,749,311	162,749,311		Fully Paid
	1,554,590 10,277 2,191 8,013,738 500,000 -	1,554,590 10,277 2,191 8,013,738 500,000 -	$1.032 $1.045 $1.10 $1.25 - -	Fully Paid Fully Paid Fully Paid Fully Paid Fully Paid
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	-	-	-	-
	- -	- -	- -

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity q uarterly report

	Tota l number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.7 Options (description and conversion factor)	5,402,605 18,182 375,004 375,004 397,731 340,912 56,819 113,637 113,637 113,637 113,637 6,060,606	5,402,605	Exercise price $1.10 $1.137 $0.867 $1.087 $1.307 $1.527 $0.647 $0.647 $0.867 $1.087 $1.307 $0.83	Expiry date 31/10/2011 22/11/10 23/12/2013 23/12/2013 23/12/2013 23/12/2013 23/12/2013 11/03/2014 11/03/2014 11/03/2014 11/03/2014 31/03/2014
7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	N_e Offe* _w exercise price took effect on 23 April 2010 after the completi r (refer announcement dated 24 March 2010) on of the Entitlement
	-	-	-	-
	1,544,590 10,277 2,191	1,544,590 10,277 2,191	$1.032 $1.045 $1.10	30/6/2010 30/6/2010 31/10/2011
	70,419	70,419	$1.032	30/6/2010
7.11 Debentures (totals only)	-	-
7.12 Unsecured notes(totals only)	-	-

Compliance stateme n t

1 This statement has b een prepared under accounting policies which com p ly with accounting standar d s as defined in the Corporations Act or other standa r ds acceptable to ASX (see note 4 ) .

• 2 This statement doe s give a true and fair view of the matters disclosed.

¶

==> picture [76 x 45] intentionally omitted <==

==> picture [96 x 45] intentionally omitted <==

Sign here: ............................................................ Date: 26 July 2010 (Compan y secretary)

Print name: GRAHAM D OUGLAS ANDERSON

• See chapter 19 for defined terms.

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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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