EVOLUTION MINING LIMITED — Interim / Quarterly Report 2011

Mar 8, 2011

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9 March 2011

Media Release/ASX Announcement

Catalpa Reports Maiden A$3 Million First‐Half Profit on Record Gold Production

Summary of Financial Results	Half Year to 31 Dec 10 A$’000s	Half Year to 31 Dec 09 A$’000s	Change
Gold sales1	69,541	3,633	+65,908
Operating profit	9,081	803	+8,278
Profit/(loss)before tax	3,017	(3,839)	+6,856
Profit/(loss)after tax	1,981	(3,679)	+5,660
EPS(centsper share)	1.22	(3.32)	+4.54

HIGHLIGHTS

• Maiden profit before tax of A$3.017 million on first full half production

• Group gold production from the Edna May[1] and Cracow Gold Projects of 46,082 ounces (up +40,000 ounces on previous half) with sales of 46,600 ounces[1] at an average realised gold price of A$1,492 per ounce

• Bank debt reduced to A$59.25 million

• At 31 December the gold hedge book supporting the Edna May Gold Project reduced to 317,789 ounces hedged at A$1,557 per ounce

• Average Group C1[2] cash costs of $769 per ounce.

• Well funded for ongoing development of Edna May Gold Project

• Maiden high grade underground Inferred Mineral Resource of 660,000 tonnes at 9.1 g/t for 195,000 contained ounces at Edna May

Events subsequent

• The Company successfully raised A$23.4 million before costs through an institutional share placement in February 2011 to fund projects at Edna May to improve plant reliability and fund ongoing exploration and underground development at the Edna May Gold Project

Catalpa Managing Director and CEO Mr Bruce McFadzean said: “Our maiden profit follows a period in which Catalpa has been transformed from an explorer and developer into one of Australia’s fastest‐growing gold miners. Our long life Edna May Project and our Cracow joint venture with Newcrest have created a solid production base from which to grow. We continue to increase our resource base with accelerated drilling programs and have commenced studies targeting the development of a high‐grade underground operation at Edna May to underpin the next phase of our expansion.”

Notes

1 Gold sales includes $21.481m capitalised during Edna May commissioning phase

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

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Catalpa Resources Limited ABN 74 084 669 036

Half-Year Report for the half-year ended 31 December 2010

CATALPA RESOURCES LIMITED HALF YEAR REPORT

CORPORATE INFORMATION

ABN 74 084 669 036

Directors

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

Company Secretary

Erik Palmbachs and Paul Mason (Joint Company Secretaries)

Registered Office

Level 1, 9 Havelock Street WEST PERTH WA 6005 Tel: (618) 6216 9700 Fax: (618) 9321 8804 Email: manager@catalparesources.com.au

Share Register

Security Transfer Registrars Pty Ltd 770 Canning Highway APPLECROSS WA 6153 Tel: (618) 9315 2333 Fax: (618) 9315 2233 Email: registrar@securitytransfer.com.au

Auditors

Deloitte Touche Tohmatsu Level 14, Woodside Plaza 240 St George’s Terrace PERTH WA 6000 Tel: (618) 9365 7000

Internet Address

www.catalparesouces.com.au

Stock Exchange Listing

Catalpa Resources Limited (CAH) shares are listed on the Australian Securities Exchange.

CATALPA RESOURCES LIMITED HALF YEAR REPORT

TABLE OF CONTENTS

Directors' Report	1
Auditor’s Independence Declaration	4
Condensed Consolidated Statement of Comprehensive Income	5
Condensed Consolidated Statement of Financial Position	6
Condensed Consolidated Statement of Changes in Equity	7
Condensed Consolidated Statement of Cash Flows	8
Notes to the Condensed Consolidated Financial Statements	9
Directors' Declaration	14
Independent Auditor’s Review Report	15
Competent Persons Statement	17

CATALPA RESOURCES LIMITED HALF YEAR REPORT

DIRECTORS’ REPORT

The directors of Catalpa Resources Limited submit the financial report of Catalpa Resources Limited and its subsidiaries (the Group) for the half-year ended 31 December 2010. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

DIRECTORS

The names of the directors of the Company during or since the end of the half-year are:

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

The above named directors held office during and since the end of the half-year.

REVIEW OF OPERATIONS

A maiden pre-tax profit of the Group for the half-year ended 31 December 2010 was $A3.017 million (December 2009: loss of A$3.839 million).

The profit after tax of the Group for the half-year ended 31 December 2010 was A$1.981 million (December 2009: loss of A$3.679 million).

Total Comprehensive income after tax for the half year ended 31 December 2010 was A$2.471 million reflecting the after tax value gain of A$0.490 million on the investment in Renaissance Minerals. (December 2009: Loss A$3.679 million).

Corporate

The Group produced 46,082 ounces of gold (December 2009: 2,904) with sales of 46,600 ounces (December 2009: 2,930 ounces) at an average realised price of A$1,492 (December 2009: A$1,240) during the period.

Average Group C1[1 ] cash costs for the half-year were $769 per ounce which was higher than budget due to lower than forecast ounces produced at the Edna May Gold Project.

Bank debt reduced to A$59.25 million (June 2010: A$65 million) during the period.

The gold hedge book supporting the Edna May project had reduced to 317,789 ounces hedged at A$1,557 per ounce at 31 December 2010, and represents 29% of the Company’s total reserves.

Edna May Gold Project

Gold production for the period was 30,561 ounces (Dec 2009: nil). This includes 13,413 ounces produced during the commissioning phase which was completed at the end of September 2010. C1[1] cash costs for the period since commissioning was completed were A$997 per ounce. All gold sold from Edna May during the period was delivered into the Group’s hedge book at an average price of A$1,549 per ounce.

Edna May Gold Project C1[1] cash costs for the half year were higher than planned largely due to lower production caused by delays in accessing high grade ore, plant and utilities issues most of which are now largely resolved.

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CATALPA RESOURCES LIMITED HALF YEAR REPORT

Revenue from gold produced and sold during the commissioning phase has been offset against commissioning costs and the net cost capitalised. Revenue and expenses related to gold produced since 1 October 2010 has been recognised in the Income Statement.

During the period, the Group announced a maiden high grade underground Inferred Mineral Resource estimate (JORC) of 660,000 tonnes at 9.1 g/t for 195,000 contained ounces of gold at the Edna May Gold Project.

Results from resource definition drilling will be included in an update to the underground Mineral Resource planned in the March 2011 quarter. This will be followed by a mining study targeting the development of a maiden underground Ore Reserve and life-of-mine plan.

This strategy is in alignment with Catalpa’s vision to enhance the Edna May Gold Project with concurrent mining of high grade underground ore with existing open pit operations to considerably increase grade and annual gold production by 2012.

Cracow Joint Venture

The Group’s share of gold production for the period was 15,521 ounces at a C1 cash cost of A$518 per ounce. All gold sold from Cracow during the period was sold at spot price averaging A$1,380 per ounce.

Results from accelerated exploration drilling programs during the period indicated that additional mineralised vein structures exist in close proximity to the Cracow gold mine. Significant potential exists for these structures to provide opportunities for additional resources to extend the mine life. Drill programs are continuing to test high priority targets.

Operating Results

The consolidated profit of the Group after tax for the half-year ended 31 December 2010 is A$1.981 million (2009: loss of A$3.679 million).

Financial Position

The net assets of the Group increased from $138.728 million at 1 July to A$141.489 million at 31 December, reflecting the Group’s profit for the period.

Cash held reduced to A$28.910 million at period end (June 2010: A$35.113 million) reflecting repayment of debt and continued investment in plant and equipment, mine development and exploration.

During February 2011 the Company raised A$23.4 million before costs through an institutional share placement. The funds will be used to fund projects at Edna May to improve plant and utility reliability and fund ongoing exploration and underground development at the Company’s Edna May Gold Project.

Note

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

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CATALPA RESOURCES LIMITED HALF YEAR REPORT

AUDITOR’S INDEPENDENCE DECLARATION

The Auditor’s Independence Declaration is included on page 4 of the half-year report.

ROUNDING OFF OF AMOUNTS

The Company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the directors’ report and the half-year financial report are rounded to the nearest thousand dollars unless otherwise indicated.

Signed in accordance with a resolution of the directors made pursuant to s.306(3) of the Corporations Act 2001.

On behalf of the Directors

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Bruce McFadzean

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John Rowe

Managing Director Perth, 8 March 2011

Non-Executive Director

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Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

The Board of Directors Catalpa Resources Limited Level 1, 9 Havelock Street, WEST PERTH, WA, 6005

DX: 206 Tel: +61 (0) 8 9365 7000 Fax: +61 (8) 9365 7001 www.deloitte.com.au

8 March 2011

Dear Board Members

Catalpa Resources Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Catalpa Resources Limited.

As lead audit partner for the review of the financial statements of Catalpa Resources Limited for the financial half year ended 31 December 2010, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• (ii) any applicable code of professional conduct in relation to the review.

Yours sincerely

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DELOITTE TOUCHE TOHMATSU Chris Nicoloff Partner Chartered Accountants

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

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CATALPA RESOURCES LIMITED HALF YEAR REPORT

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

Notes Continuing Operations Gold sales revenue Cost of sales 3(a) Gross profit Exploration and evaluation costs expensed as incurred Operating profit Other revenue Administrative costs Business combination expenses Finance costs 3(b) Profit/(loss) before income tax Income tax (expense)/benefit Profit/(loss) for the period attributable to owners of the parent Other comprehensive income Value gain on available for sale financial asset net of tax Total comprehensive income for the period attributable to owners of the parent Earnings per share - basic (cents per share) - diluted (cents per share)	Consolidated Half-year ended 31 December 2010 31 December 2009 $’000s $’000s
	48,060 3,633 (36,853) (2,749)
	11,207 884 (2,126) (81)
	9,081 803 647 296 (4,809) (2,863) - (2,056) (1,902) (19)
	3,017 (3,839) (1,036) 160
	1,981 (3,679) 490 -
	2,471 (3,679)
	1.22 (3.32) 1.17 (3.32)

Notes to the condensed consolidated financial statements are included on pages 9 to 13

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CATALPA RESOURCES LIMITED HALF YEAR REPORT

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2010

Notes	Consolidated 31 December 2010 30 June 2010 $’000s $’000s
CURRENT ASSETS Cash and cash equivalents Other receivables Prepayments Inventories Mine development TOTAL CURRENT ASSETS NON CURRENT ASSETS Other financial assets 4 Property, plant and equipment Mine development Deferred tax asset TOTAL NON CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Income tax payable Interest bearing liabilities 5 Provisions TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES Interest bearing liabilities 5 Provisions TOTAL NON CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 6 Reserves Accumulated losses TOTAL EQUITY	28,910 35,113 1,681 1,114 578 244 10,461 10,117 2,498 1,619
	44,128 48,207
	1,260 560 96,909 85,006 59,567 68,919 17,752 19,325
	175,488 173,810
	219,616 222,017
	14,967 15,697 - 289 24,565 22,566 2,242 1,564
	41,774 40,116
	31,546 38,612 4,807 4,561
	36,353 43,173
	78,127 83,289
	141,489 138,728
	162,705 162,613 5,272 4,584 (26,488) (28,469)
	141,489 138,728

Notes to the condensed consolidated financial statements are included on pages 9 to 13

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CATALPA RESOURCES LIMITED HALF YEAR REPORT

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

Consolidated	Share- based Investment Ordinary payments revaluation Accumulated Total shares reserve reserve losses equity $’000s $’000s $’000s $’000s $’000s
Balance at 1 July 2009 Loss for the period Total comprehensive income for the period Issue of shares Recognition of share-based payments Balance at 31 December 2009 Balance at 1 July 2010 Profit for the period Other comprehensive income for the period: Fair value gain on available for sale financial asset Related income tax Total comprehensive income for the period Issue of shares Recognition of share-based payments Balance at 31 December 2010	74,101 4,526 - (34,016) 44,611
	- - - (3,679) (3,679)
	- - - (3,679) (3,679)
	67,082 - - - 67,082 - 14 - - 14
	141,183 4,540 - (37,695) 108,028
	162,613 4,584 - (28,469) 138,728
	- - - 1,981 1,981 - - 700 - 700 - - (210) - (210)
	- - 490 1,981 2,471
	92 - - - 92 - 198 - - 198
	162,705 4,782 490 (26,488) 141,489

Notes to the condensed consolidated financial statements are included on pages 9 to 13

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CATALPA RESOURCES LIMITED HALF YEAR REPORT

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

Notes Cash from operating activities Receipts from sales of gold Payments to suppliers and employees Interest received Interest paid Income tax paid Net cash provided by/(used in) operating activities Cash flows from investing activities Gold sale receipts capitalised Payments to suppliers and employees capitalised Interest paid and capitalised Purchase of property, plant and equipment Payment for exploration, evaluation and development Transfer from term deposits Payment of business combination expenses Cash acquired as part of business combination Net cash used in investing activities Cash flows from financing activities Proceeds from issue of ordinary shares net of expenses Proceeds from borrowings Payment of facility fee Repayment of borrowings Net cash provided by financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period	Consolidated Half-year ended 31 December 2010 31 December 2009 $’000s $’000s
	48,060 3,633 (33,235) (3,881) 577 296 (1,612) (19) - (272)
	13,790 (243)
	21,481 - (21,874) - (1,921) (532) (8,562) (43,590) (3,561) (6,981) - 3,533 - (2,056) - 2,896
	(14,437) (46,730)
	92 14 - 20,000 - (1,100) (5,648) (23)
	(5,556) 18,891
	(6,203) (28,082) 35,113 32,297
	28,910 4,215

Notes to the condensed consolidated financial statements are included on pages 9 to 13

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CATALPA RESOURCES LIMITED HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The half-year report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report.

Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

The company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the directors’ report and the half-year financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the company’s 2010 annual financial report for the financial year ended 30 June 2010, except for the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

New or revised Standards and Interpretations that are first effective in the current reporting period

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current reporting period.

New and revised Standards and amendments thereof and Interpretations effective for the current reporting period that are relevant to the Group include:

• Amendments to AASB 5, 8, 101, 107, 117, 118, 136 and 139 as a consequence of AASB 20095 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project

AASB 2009-5 Introduces amendments into Accounting Standards that are equivalent to those made by the IASB under its program of annual improvements to its standards. A number of the amendments are largely technical, clarifying particular terms, or eliminating unintended consequences. Other changes are more substantial, such as the current/non-current classification of convertible instruments, the classification of expenditures on unrecognised assets in the statement of cash flows and the classification of leases of land and buildings. The adoption of these amendments has not resulted in any changes to the Group’s accounting policies and have no affect on the amounts reported for the current or prior periods.

.

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CATALPA RESOURCES LIMITED HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. SEGMENT INFORMATION

Description of segments

The Group’s operations are all conducted in the mining industry in Australia.

The group has identified its operating segments based on the internal reports that are reviewed and used by the Managing Director and the management team (the chief operating decision makers) in assessing performance and in determining the allocation of resources.

The Group’s two mine sites are each treated as separate operating segments. Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment.

Segment performance is evaluated based on operating profit or loss, which is measured on the same basis as profit or loss in the consolidated financial statements.

Half-year ended 31 December 2010 Revenue External sales Total segment revenue Interest revenue Total revenue per the statement of comprehensive income Segment result Interest revenue Corporate expenses Finance costs Net profit before tax per the statement of comprehensive income 31 December 2010 Segment assets Deferred tax asset Total assets per the statement of financial position Segment liabilities Deferred tax liability Total liabilities per the statement of financial position	Edna May Gold Project Cracow Joint Venture Unallocated items $’000s $’000s $’000s	Total $’000s
	25,763 22,297 -	48,060
	25,763 22,297 -	48,060 647
	4,295 4,786 -
		48,707
		9,081 647 (4,809) (1,902)
	128,764 56,920 16,180
		3,017
		201,864 17,752
	71,474 5,451 1,202
		219,616
		78,127 -
		78,127

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CATALPA RESOURCES LIMITED HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. SEGMENT INFORMATION (continued)

Half-year ended 31 December 2009 Revenue External sales Total segment revenue Interest revenue Total revenue per the statement of comprehensive income Segment result Interest revenue Corporate expenses Expense of business acquisition Finance costs Net loss before tax per the statement of comprehensive income 30 June 2010 Segment assets Deferred tax asset Total assets per the statement of financial position Segment liabilities Deferred tax liability Total liabilities per the statement of financial position	Edna May Gold Project Cracow Joint Venture Unallocated items $’000s $’000s $’000s	Total $’000s
	- 3,633 -	3,633
	- 3,633 -	3,633 296
	(320) 964 -
		3,929
		644 296 (2,704) (2,056) (19)
	119,139 64,121 19,432
		(3,839)
		202,692 19,325
	77,771 4,372 1,146
		222,017
		83,289 -
		83,289

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CATALPA RESOURCES LIMITED HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3. RESULTS FOR THE PERIOD (a) Cost of sales Cost of sales Mining Processing Amortisation and depreciation Royalty Other (b) Finance cost Interest costs: Interest on loan Finance leases Facility fees and other costs Less: capitalised borrowing costs 4. OTHER FINANCIAL ASSETS Non-current Available for sale investments carried at fair value Shares in Renaissance Minerals Limited	Consolidated December 2010 December 2009 $’000s $’000s
	10,783 628 12,811 221 8,900 1,555 1,625 97 2,734 248
	36,853 2,749
	3,193 144 50 19 580 388
	3,823 551 (1,921) (532)
	1,902 19
	December 2010 June 2010 $’000s $’000s 1,260 560
	1,260 560

The movement in the carrying value of other financial assets during the period of $0.700 million represents the change in fair value of the investment. The value of the gain after tax recognised in comprehensive income is $0.490 million.

5. INTEREST BEARING LIABILITIES

Repayments of bank loans during the period totalled $5.75 million (2009: nil) and were made in accordance with repayment terms agreed with Macquarie Bank Limited.

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CATALPA RESOURCES LIMITED HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6. ISSUANCES OF EQUITY SECURITIES

During the half-year reporting period the Company issued 83,596 ordinary shares for $91,956 on exercise of 83,596 listed share options. There were no other movements in the ordinary share capital in the current half-year reporting period.

The Company issued 679,000 share options and 1,104,000 performance rights over ordinary shares under its Employee Share Option and Performance Rights Plan during the half-year reporting period. These share options had a fair value ranging from $0.89 to $1.06 per share option and the performance rights had a fair value ranging from $0.72 to $0.92 per performance right. No share options or performance rights were issued in the prior half-year reporting period.

7. COMMITMENTS AND CONTINGENCIES

The Group had committed plant and equipment expenditure of $4.500 million at period end (30 June 2010: $0.629 million) all of which is due to be spent within one year.

There were no other material changes to commitments or contingent liabilities to those disclosed in the Company’s annual report for the year ended 30 June 2010.

8. EVENTS AFTER THE BALANCE SHEET DATE

During February 2011 the Company issued of 15,121,448 ordinary shares to raise $23.438 million (before expenses) at a price of $1.55 per ordinary share.

No other matter or circumstance has arisen since 31 December 2010 that has significantly affected, or may significantly affect, the operations of Catalpa Resources Limited and its controlled entities, or the state of affairs of Catalpa Resources Limited and its controlled entities in subsequent periods.

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CATALPA RESOURCES LIMITED HALF YEAR REPORT

DIRECTORS’ DECLARATION

The directors declare that:

• (a) In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and

• (b) In the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001 , including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity.

Signed in accordance with a resolution of the directors made pursuant to s303(5) of the Corporations Act 2001.

On behalf of the Directors

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Bruce McFadzean

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John Rowe

Managing Director Perth, 8 March 2011

Non-Executive Director

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Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Independent Auditor’s Review Report to the members of Catapla Resources Limited

DX: 206 Tel: +61 (0) 8 9365 7000 Fax: +61 (8) 9365 7001 www.deloitte.com.au

We have reviewed the accompanying half-year financial report of Catalpa Resources Limited, which comprises the statement of financial position as at 31 December 2010, and the statement of comprehensive income, the statement of cash flows and the statement of changes in equity for the half-year ended on that date, selected explanatory notes and, the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year as set out on pages 5 to 14.

Directors’ Responsibility for the Half-Year Financial Report

The directors of Catalpa Resources Limited are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of Catalpa Resources Limited’s financial position as at 31 December 2010 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Catalpa Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Auditor’s Independence Declaration

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , provided to the directors of Catalpa Resources Limited, would be in the same terms if given to the directors at the date of this auditor’s review report.

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Catalpa Resources Limited is not in accordance with the Corporations Act 2001 , including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2010 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

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DELOITTE TOUCHE TOHMATSU

Chris Nicoloff Partner Chartered Accountants Perth, 8 March 2011

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COMPETENT PERSONS STATEMENT

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 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.

About Catalpa Resources Limited

Catalpa Resources Limited (ASX: CAH) is a fast growing mid tier gold producer with 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 Gold Project boasts a nine year mine life with a forward sold position of 318,000 ounces of gold at A$1,557.50 per ounce. The Company recently confirmed an impressive high grade underground Resource of 660,00 ounces at 9.1g/t gold for 195,000 ounces set to be upgraded in March 2011. Mining studies are planned to be undertaken with a view to establishing an underground operation concurrent with existing open pit operations by early 2012.

The Cracow Gold Project has a history of steady underground gold production of over 100,000 ounces per annum for the past five years and it is considered to have considerable exploration upside. Catalpa has a pre‐ emptive right over Newcrest’s 70% stake in the asset.

With a combined Mineral Resource of 2.2 million ounces and a combined Ore Reserve of more than one million ounces of gold, the Cracow and Edna May Operations provide a sustainable long life cash flow to fund Catalpa’s growth strategy and provide shareholder returns.

Catalpa is confident that both Edna May and Cracow offer further Reserve and Resource growth potential, with ongoing exploration programs at both operations. In parallel, the Company strives 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 asset portfolio.

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

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For further enquiries contact:

Bruce McFadzean Managing Director & CEO Catalpa Resources Limited Tel +61 8 6216 9700

Adrian Pelliccia Manager Business Development Catalpa Resources Limited Tel +61 8 6216 9700