EVOLUTION MINING LIMITED — Interim / Quarterly Report 2011

Jan 26, 2011

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QUARTERLY ACTIVITIES REPORT
December 2010
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KEY HIGHLIGHTS

• Maiden Edna May underground Inferred Resource of 660,000t at 9.1g/t gold for 195,000 ounces; targeting high grade ore delivery early 2012

• Record gold production of 24,942 ounces achieved

• SAG mill liner wear issue resolved with liner life projected to exceed budget

• Within FY2011 group guidance of 105,000 to 120,000 ounces at a cash cost of A$745 to A$677/ounce

Overview

CRACOW GOLD PROJECT QLD (30% owned)

CORPORATE

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• Record consolidated gold production of 24,942 ounces with sales of 23,391 ounces at an average realised price of A$1,501 per ounce

• Cash position and gold stocks at 31 December 2010 of A$30 million (Sept 2010: A$39 million)

• Total bank debt reduced to A$59.25 million (Sept 2010: A$62.00 million)

• Average cash operating cost for the group was A$852 per ounce

• Corporate acquisition and growth opportunities continue to be assessed

• Total Mineral Resource now stands at 2.2 million ounces

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• Gold production of 7,794 ounces at a cash operating cost of A$533 per ounce

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• Production not materially affected by flooding in Queensland

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• Exploration success with the intersection of 7 metres at 5.9g/t gold peripheral to the historic Golden Plateau mine

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• Accelerated drilling to increase Mineral Resource and Ore Reserves at Cracow

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• Process plant upgrade to 550,000 tonnes per annum on schedule

PROGRAM FOR MARCH 2011 QUARTER

Edna May

EDNA MAY GOLD PROJECT W.A. (100% owned)

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• Underground potential firms with increased confidence in continuity of high grade mineralisation and new high grade gold zones discovered

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• High grade intersections included 2 metres at 64.4g/t gold, 5 metres at 33.3g/t gold, 7 metres at 25.5g/t gold and 12 metres at 7.5g/t

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• Maiden high grade underground Mineral Resource (JORC) of 660,000t at 9.1g/t for 195,000 contained ounces announced

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• Record gold production of 17,148 ounces at a cash operating cost of A$997 per ounce

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• Targeted reduction in cash costs from improved plant reliability, increased throughput and release of higher grades in 2H2011

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• Resource and grade control models continue to reconcile within 0.1g/t gold production

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• Edna May production being delivered into hedge book at A$1,557 per ounce

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• Plant upgrade through secondary crusher trials and studies to increase throughput and improve plant reliability

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• Second diamond rig planned to accelerate drill programs to further test the multi-million ounce Edna May gold system below existing Mineral Resources

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• Complete and publish Edna May underground Mineral Resource update

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• Commence Edna May underground mining study targeting high grade ore delivery early 2012

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• Undertake further drilling of regional targets and evaluation of high grade regional acquisition opportunities

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• Commence pilot plant test work to investigate the viability of recovering tungsten as a by-product of the gold CIL process

Cracow

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• Continue Mineral Resource expansion and regional exploration drilling

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• Practical completion of process plant upgrade project

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B.McFadzean

Managing Director and CEO 27 January 2011

Quarterly Report to 31 December 2010

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GROUP GOLD PRODUCTION SUMMARY

Record gold production was achieved with 24,942 ounces being produced during the December 2010 quarter. Catalpa has successfully demonstrated continued production growth since commissioning in May 2010, tabled and illustrated below.

Production	Production	Mar 2010 Qtr	Jun 2010 Qtr	Sep 2010 Qtr	Dec 2010 Qtr
Total Production	ounces	6,437	18,274	21,140	24,942
Edna May Production	ounces	-	9,808	13,413	17,148
Cracow Production (30%)	ounces	6,437	8,466	7,727	7,794
Group Production C1 Cash Cost	A$ ounce	610(1)	577(1)	550(1)	852
Group Achieved Gold Price	A$ ounce	1,225	1,427	1,493	1,501

( 1) Cracow only

Note: C1 Cash Cost represents the cost for mining, processing and administration, including accounting movements for 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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Group Gold Production
30,000 $1,600
25,000 $1,500
20,000 $1,400
15,000 $1,300
10,000 $1,200
5,000 $1,100
0 $1,000
Mar 2010 Qtr Jun 2010 Qtr Sep 2010 Qtr Dec 2010 Qtr
Group Ounces Realised Gold Price (A$/oz)
Ounces
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GUIDANCE FY2011

Catalpa remains in line to deliver into its Group production guidance of 105,000 to 120,000 ounces of gold at the upper end of cash cost guidance of A$745 to A$677 per ounce.

Edna May production guidance for FY2011 is revised down to 75,000 to 85,000 ounces of gold, largely due to delayed access to high grade ore and plant throughput issues. Consequently, cash cost guidance moves to the upper end of A$784 to A$730 per ounce. Delayed high grade ore is planned to be processed in the June and September 2011 quarters, impacting positively on gold production and costs in FY2012.

Cracow Gold Project is on target to produce at the upper end of FY2011 guidance of 25,000 to 30,000 attributable ounces of gold and at the lower end of cost guidance of A$622 to A$518 per ounce.

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“ Record Production, Underground Potential Firms”

Quarterly Report to 31 December 2010

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EDNA MAY GOLD PROJECT

BACKGROUND

Catalpa Resources Limited’s flagship Edna May Gold Project (100%) at Westonia, Western Australia, achieved first gold pour in April 2010 and continued production following ramp up in August 2010. Ore is sourced from the Edna May open pit with a current mine life of greater than 9 years.

The Company has a 5 year strategic growth plan to achieve gold production in excess of 150,000 ounces of gold per annum through near term organic growth from existing assets and acquisition growth from the Edna May’s significant cash flow.

The current exploration program is successfully targeting high grade reef extensions beneath the open pit within the under explored multi-million ounce Edna May gold system, with a view to establishing a concurrent underground operation by 2012. Regional acquisition targets continue to be assessed. These activities provide potential for additional high grade ore to the Edna May processing plant.

HEALTH & SAFETY

Edna May incurred the project’s first Lost Time Injury (LTI) in the December 2010 quarter. The All Injury Frequency Rate (AIFR) calculated as a rolling 12 month average increased marginally to 10.13 (Sept 2010: 9.95) and the number of LTI free days at the end of December 2010 is 76. Catalpa will continue to focus on safety performance to ensure a safe working environment for employees.

PRODUCTION

Gold production of 17,148 ounces at the Edna May Gold Project in the December 2010 quarter exceeded the previous quarter by 20% (Sept 2010: 13,413). The processing plant treated 595,053 dry tonnes of ore with a metallurgical recovery of 90% (Sept 2010: 568,224 dry tonnes).

Operating results at the Edna May Gold Project by quarter during and subsequent to commissioning and ramp-up are as follows:

Production	Production	June 2010 Qtr	Sep 2010 Qtr	Dec 2010 Qtr
Ore Tonnes Mined	tonnes	31,938	301,840	808,060
Ore Tonnes Milled	tonnes	379,308	568,224	595,053
Grade	g/t	0.82	0.83	1.00
Recovery	%	92	88	90
Recovered Gold	ounces	9,808	13,413	17,148
C1 Cash Cost	A$ ounce	-	-	997

Note: C1 Cash Cost represents the cost for mining, processing and administration, including accounting movements for 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.

C1 cash costs at A$997 per ounce for the Quarter were higher than budgeted (A$856 per ounce) due to higher unit costs resulting from lower than budgeted ounces produced. Actual operating costs were in line with budget assumptions.

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Quarterly Report to 31 December 2010

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Record mill throughput was achieved however gold production was below budget for the December 2010 quarter. Throughput was affected by plant reliability as a consequence of downtime associated with SAG liner maintenance, lower than budgeted grade and temporary process water restrictions.

The SAG liner wear issue has been resolved following optimisation of the lifter/liner arrangement. Liner life is now projected to exceed budget. A commitment to accelerate waste stripping to stabilise the north pit wall resulted in a change to the mining sequence which delayed the exposure of high grade ore zones. This high grade ore is scheduled for extraction in the June and September 2011 quarters. Minor mechanical issues which also reduced throughput from 2.8Mtpa are also being resolved. Catalpa’s water management strategy in conjunction with construction of the tailings thickener will improve water efficiency, water supply and reduce processing costs.

Positive results achieved during the Quarter include:

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• Record mill throughput;

• Resource and grade control estimates reconciled within 0.1g/t gold;

• Gold recovery remained on target at 90%;

• SAG liner wear issues resolved;

• Secondary crusher trials in preparation for a planned mill upgrade to 3.2Mtpa commenced;

• Construction of a new A$3.9 million tailings thickener commenced; and

• Construction of a A$0.6 million fine carbon screen commenced.

In line with historical tungsten production from Edna May, encouraging results have been returned from laboratory test work on the recovery of tungsten as a by-product of the gold CIL process. Catalpa plans to commence pilot plant testing to generate a coarse gravity concentrate for further assessment. The Company is targeting the production of a scheelite concentrate at Edna May where early test work indicates the potential to provide in excess of A$50 per ounce cost benefit through a tungsten credit and higher gold recoveries.

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Edna May Gold Production
20,000
15,000
10,000
5,000
0
Jun 2010 Qtr Sep 2010 Qtr Dec 2010 Qtr
Ounces Produced
Edna May Mill Throughput
340
320
300
280
260
240
220
200
Jun 2010 Qtr Sep 2010 Qtr Dec 2010 Qtr
Ounces
Tonnes per hour
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Edna May Processing
700,000 1.10
600,000 1.00
500,000 0.90
400,000 0.80
300,000 0.70
200,000 0.60
100,000 0.50
- 0.40
Jun 2010 Qtr Sep 2010 Qtr Dec 2010 Qtr
Tonnes Milled Feed Grade
Edna May AIFR
4 12
3 9
2 6
1 3
0 0
Jun 2010 Qtr Sep 2010 Qtr Dec 2010 Qtr
Number Als AIFR
Tonnes
Grade Milled g/t Au
Number of Als
AIFR - Als per Million Hours
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“ Record Production, Underground Potential Firms”

Quarterly Report to 31 December 2010

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EDNA MAY UNDERGROUND POTENTIAL

The Company continued to expand its total Mineral Resources at Edna May with the addition of the maiden high grade underground Mineral Resource estimated at 660,000t at 9.1g/t gold for 195,000 contained ounces. Importantly, high grade mineralisation remains open at depth and along strike (Appendix 1). Through a commitment to drilling and technical assessment, Catalpa has increased the Edna May Mineral Resource by 40% to 1.87 million ounces since 2007 illustrated in the graph below and the Company is targeting further resource growth following the implementation of 2011 drill programs.

Exploration Success and Resource Growth at Edna May (Ounces)

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2,000
1,900
1,800
1,700
1,600
1,500
1,400
1,300
1,200
1,100
1,000
2007 2008 2009 2010
Ounces (000's)
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During the December 2010 quarter, underground development potential firmed following exploration success from a A$3.2 million diamond drilling program which increased confidence in the continuity of high grade mineralisation and identified multiple new high grade zones beneath the open pit.

Results from this resource definition drilling will be included in an update to the underground Mineral Resource planned in March/April 2011. 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 in 2012.

Catalpa is targeting the following development timetable:

	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Edna May Underground Potential -	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable	Indicative Timetable
	2010									2011											2013 2012
UG Evaluation Maiden UG Resource Infill Drilling Mineral Resource Update UG Mining Study	Sept Qtr			Dec Qtr				Mar Qtr		Jun Qtr			Sept Qtr			Dec Q		tr	Mar Q		tr	Jun Qtr			Sept Qtr			Dec Qtr			Mar Qtr
Ore Reserve Estimate Borefield Establishment Decline Rehabilitation UG Infill Drilling Trial Mining and UG Dev Ramp up UG Ore Production Full Scale Production

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Quarterly Report to 31 December 2010

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UNDERGROUND EXPLORATION AND RESOURCE DEFINITION

During the December 2010 quarter, a further 10 holes for 3,811.5 metres of a 28 hole diamond drilling program targeting high grade mineralisation in an area immediately below the current open pit design were drilled. This highly successful drill program returned numerous high grade intersections confirming strong continuity of high grade mineralisation within the Edna May gold reef system. Drilling also identified new high grade zones in the hanging wall of the Edna May Gneiss.

Drill results are anticipated to improve Mineral Resource confidence to the Indicated category in a significant portion of the area targeted and demonstrate the potential to increase resource ounces per vertical metre. All holes from this program have been previously reported to the ASX in announcements dated up to and including 25 January 2010 and are presented in Appendix 1.

Best intersections returned during the quarter included:

7.07m @ 25.5g/t gold from 390.06m in EMD028	5.96m @ 5.3g/t gold from 345.04m EMD015
12.20m @ 7.5g/t gold from 344.50m in EMD029	3.87m @ 17.2g/t gold from 329.56m EMD021
4.93m @ 33.3g/t gold from 297.30m in EMD028	5.70m @ 4.1g/t gold from 333.20m EMD029
5.25m @ 5.5g/t gold from 296.45m in EMD020	2.20m @ 26.7g/t gold from 210.70m EMD016A
2.10m @ 64.4g/t gold from 223.70m in EMD020	3.03m @ 12.8g/t gold from 298.42m EMD027

Catalpa has demonstrated continued resource growth from the under-explored multi-million ounce Edna May gold system. The significant potential of this gold belt is planned to be further tested in the March 2011 quarter by drill programs targeting further depth and strike extensions to the maiden underground Mineral Resource. Additionally in 2011, drill programs will test the under-explored Golden Point and Greenfinch mineralisation corridors where previous drilling has been constrained to the top 120 metres (Appendix 1).

REGIONAL EXPLORATION

Evaluation of regional targets continued with a total of 85 aircore and reverse circulation holes for 4,171 metres being drilled to test seven targets comprised of historical workings, geophysical and soil geochemical anomalies. Positive results were returned and follow up drill testing is planned.

CRACOW GOLD PROJECT

BACKGROUND

The Cracow Gold Project is located in central Queensland, Australia, approximately 4 kilometres from the township of Cracow and approximately 500 kilometres northwest of the city of Brisbane. Catalpa owns 30% of this asset with a pre-emptive right over Newcrest Mining Limited’s 70% stake. The Cracow Gold Project is well managed and operated by Newcrest.

Underground mine development commenced in December 2003 and first gold was poured in November 2004. Ore throughput capacity is being increased from 400,000 tonnes per annum to 550,000 tonnes per annum by the current mill upgrade project expected to be completed in the March quarter. Ore is currently being sourced from the Royal, Sovereign, Klondyke, Kilkenny, Phoenix and Crown mineralised zones. The 30% share of Cracow is unhedged and continues to be fully exposed to the currently high Australian dollar gold price providing a strong cashflow stream.

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Quarterly Report to 31 December 2010

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Existing Mineral Resources and Ore Reserves attributable to Catalpa are 305,000 ounces and 70,000 ounces respectively. The Cracow Gold Project produces between 95,000 to 105,000 ounces of gold per annum and has outstanding potential to add substantially to the mine life through exploration success.

Exploration indicates that additional mineralised vein structures exist in close proximity to the mine. The Phoenix, Empire, Sterling, Kilkenny, Klondyke and Roses Pride structures provide opportunities for additional resources to extend the mine life. All of these structures have yielded drilling intercept grades in excess of 10g/t gold.

HEALTH & SAFETY

No Lost Time Injuries (LTI’s) occurred during the December quarter with site extending its LTI free days at the end of December 2010 to 585.

PRODUCTION

During the Quarter, mining was undertaken at Kilkenny, Phoenix, Sovereign, Crown and Royal with mine development continuing to drive the Kilkenny decline. Gold production increased slightly over the previous quarter associated with higher gold feed grades and recoveries, partly offset by lower mill throughput as heavy rainfall and flooding hampered mill throughput rates during December.

Operating results by quarter are as follows:

Production	Production	Mar 2010 Qtr	Jun 2010 Qtr	Sep 2010 Qtr Dec 2010 Qtr
Ore Tonnes Mined	tonnes	37,476	37,678	35,069 36,420
Ore Tonnes Milled	tonnes	35,555	38,732	36,613 35,342
Grade	g/t	6.15	7.47	7.19 7.40
Recovery	%	91.6	92.2	91.2 92.6
Recovered Gold	ounces	6,437	8,466	7,727 7,794
C1 Cash Cost	A$ ounce	610	578	550 562

Note: C1 Cash Cost represents the cost for mining, processing and administration, including accounting movements for stockpiles and goldin-circuit. It does not include costs for exploration, royalties, mine development or processing mill capital works. It includes net proceeds from by-product credits.

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Cracow Gold Production
10,000 $700
8,000 $600
6,000 $500
4,000 $400
2,000 $300
0 $200
Mar 2010 Jun 2010 Sep 2010 Dec 2010
Ounces Produced 30% C1 Cash Cost/oz
Ounces
A$ per ounce
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Cracow Processing
39,000 12
38,000 10
37,000 8
36,000 6
35,000 4
34,000 2
33,000 -
Mar 2010 Jun 2010 Sep 2010 Dec 2010
Tonnes Milled 30% Feed Grade
Tonnes g/t Au
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Quarterly Report to 31 December 2010

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EXPLORATION

The December 2010 quarter exploration program at Cracow was accelerated and focused on targeting high grade epithermal gold mineralisation in the western Cracow Goldfield and included first pass regional RC drilling at Golden Plateau, Walhalla and Cracow South.

A key achievement of the program to date is the extension of the western epithermal field by several hundred metres to the south, confirming the prospectivity of this region. Drilling focused on following up the intersection of 1.3 metres at 7.82g/t gold, 250g/t silver returned in CBK295W1 on the Kilkenny South East structure at approximately 200 metre spacing to the north, south and below.

All follow up diamond holes intersected a number of gold-silver anomalous epithermal structures, but to date have not identified a zone of increased quartz vein volume or high grade gold mineralisation. These intersections do not preclude the possibility of a plunging high grade shoot in the vicinity of CBK295W1, but have downgraded the potential in the immediate area.

The projected southerly strike extension of the structure is a primary target for step-out drill testing of a fertile epithermal system that is largely untested. A revised geological interpretation is underway that will be tested by further drilling in the current quarter.

Another significant program conducted during the December 2010 quarter included RC drilling at Golden Plateau, designed to test extensions of the historical Golden Plateau mine mineralisation. Encouraging alteration assemblages have been intersected including a mineralised gold intersection of 7 metres @ 5.9g/t gold from 225 metres in CGP023. Results are pending from exploration programs at Walhalla and Cracow South.

Resource definition drilling continued at Cracow to validate the Kilkenny, Phoenix, Tipperary and Empire shoots. Results at Kilkenny and Empire were in line with expectations. Results at Tipperary were also encouraging, with well developed lodes intersected. Significant results received during the quarter (showing estimated true width in brackets) include:

27.4m (21.1) @ 3.8g/t gold from 340m in KKU051 19.0m (10.6) @ 13.0g/t gold from 119m in KKU054 27m (9.7) @ 11.0g/t gold from 278m in KKU062 3.0m (2.0) @ 20.0g/t gold from 101m in KKU053

6.3m (4.8)@ 7.7g/t gold from 179.7m in KKU060

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APPENDIX 1

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Edna May Longitudinal Section Showing Maiden UG Mineral Resource and Target Areas
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Edna May Cross Section 9635N

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Edna May Cross Section 9645N
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Edna May Cross Section 9655N

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Edna May Cross Section 9665N
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Edna May Cross Section 9670N
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Edna May Cross Section 9685N

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Edna May Significant Intersections

Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts
Hole	Mine East	Mine North	RL	Dip	Azi Mine Grid	From (m)	To (m) Width (m)	Gold (g/t)
EMD016A	11599	9683	1340	-79	096	173.15	176.10 2.95	4.3
EMD016A	11599	9683	1340	-79	096	210.70	212.90 2.20	26.7
EMD016A*	11599	9683	1340	-79	096	279.75	280.75 1.00	3.1
EMD016A*	11599	9683	1340	-79	096	313.70	314.45 0.75	4.4
EMD016A	11599	9683	1340	-79	096	318.65	319.70 1.05	7.3
EMD018	11562	9652	1340	-65	094	180.55	182.30 1.75	6.1
EMD018	11562	9652	1340	-65	094	327.25	328.30 1.05	6.5
EMD018	11562	9652	1340	-65	094	353.55	354.55 1.00	18.9
EMD018	11562	9652	1340	-65	094	358.45	360.15 1.70	23.8
EMD018	11562	9652	1340	-65	094	364.55	365.70 1.15	3.5
EMD019	11570	9634	1340	-65	094	226.50	227.47 0.97	3.1
EMD019	11570	9634	1340	-65	094	231.38	232.56 1.18	6.9
EMD019	11570	9634	1340	-65	094	282.90	283.75 0.85	12.9
EMD019	11570	9634	1340	-65	094	290.65	291.65 1.00	3.1
EMD019*	11570	9634	1340	-65	094	310.15	311.15 1.00	18.1
EMD019*	11570	9634	1340	-65	094	313.47	314.55 1.08	3.2
EMD019*	11570	9634	1340	-65	094	327.75	328.75 1.00	4.7

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Quarterly Report to 31 December 2010

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Edna May Diamond Drilling Significant Drill Intercepts

Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts
Hole	Mine East	Mine North	RL	Dip	Azi Mine Grid	From (m)	To (m) Width (m)	Gold (g/t)
EMD019*	11570	9634	1340	-65	094	340.20	341.07 0.87	4.2
EMD019*	11570	9634	1340	-65	094	343.40	344.05 0.65	55.5
EMD019*	11570	9634	1340	-65	094	356.30	357.00 0.70	36.4
EMD019*	11570	9634	1340	-65	094	364.00	364.90 0.90	7.3
EMD019*	11570	9634	1340	-65	094	383.70	384.90 1.20	3.7
EMD020	11567	9652	1340	-73	090	305.00	305.50 0.50	9.0
EMD020	11567	9652	1340	-73	090	314.00	315.15 1.15	3.3
EMD020	11568	9652	1340	-73	90	223.70	225.80 2.10	64.4
EMD020	11568	9652	1340	-73	90	230.00	232.30 2.30	3.6
EMD020	11568	9652	1340	-73	90	236.90	238.05 1.15	13.0
EMD020	11568	9652	1340	-73	90	283.90	285.95 2.05	4.0
EMD020	11568	9652	1340	-73	90	288.25	289.40 1.15	4.0
EMD020	11568	9652	1340	-73	90	296.45	301.70 5.25	5.5
EMD021	11557	9652	1340	-78	092	241.45	242.30 0.85	5.4
EMD021	11557	9652	1340	-78	092	250.33	251.45 1.12	45.0
EMD021	11557	9652	1340	-78	092	283.70	284.85 1.15	7.4
EMD021	11557	9652	1340	-78	092	292.25	294.23 1.98	23.7
EMD021	11557	9652	1340	-78	092	329.56	333.43 3.87	17.2
EMD021	11557	9652	1340	-78	092	382.10	383.25 1.15	5.5
EMD022	11572	9654	1340	-70	091	201.75	202.85 1.10	38.0
EMD022	11572	9654	1340	-70	091	211.80	212.70 0.90	3.3
EMD022	11572	9654	1340	-70	091	230.84	233.10 2.26	4.1
EMD022	11572	9654	1340	-70	091	268.65	269.85 1.20	3.9
EMD022	11572	9654	1340	-70	091	289.75	290.90 1.15	3.7
EMD022	11572	9654	1340	-70	091	294.15	296.05 1.90	4.5
EMD022	11572	9654	1340	-70	091	352.00	353.27 1.27	8.0
EMD023	11570	9637	1340	-67	096	178.5	179.6 1.10	5.0
EMD023	11570	9637	1340	-67	096	187.2	190.2 3.00	3.3
EMD023	11570	9637	1340	-67	096	225.1	226.3 1.20	7.5
EMD023	11570	9637	1340	-67	096	244.68	245.7 1.02	3.3
EMD023	11570	9637	1340	-67	096	277.28	279.8 2.52	9.4
EMD023	11570	9637	1340	-67	096	317.15	319 1.85	4.3
EMD023	11570	9637	1340	-67	096	325.7	326.75 1.05	24.3
EMD023	11570	9637	1340	-67	096	331.75	332.4 0.65	5.0
EMD024	11570	9634	1340	-71	094	260.9	261.8 0.90	19.0
EMD024	11570	9634	1340	-71	094	341.5	343.9 2.40	5.4
EMD024	11570	9634	1340	-71	094	353.5	354.6 1.10	4.8
EMD024	11570	9634	1340	-71	094	358.2	359.4 1.20	9.5
EMD027	11569	9664	1340	-71	95	221.06	222.06 1.00	6.2
EMD027	11569	9664	1340	-71	95	224.20	225.30 1.10	17.8
EMD027	11569	9664	1340	-71	95	247.86	248.96 1.10	17.5
EMD027	11569	9664	1340	-71	95	255.90	256.73 0.83	11.8

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Quarterly Report to 31 December 2010

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Edna May Diamond Drilling Significant Drill Intercepts

Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts	Edna May Diamond Drilling Significant Drill Intercepts
Hole	Mine East	Mine North	RL	Dip	Azi Mine Grid	From (m)	To (m) Width (m)	Gold (g/t)
EMD027	11569	9664	1340	-71	95	283.92	285.04 1.12	22.1
EMD027	11569	9664	1340	-71	95	298.42	301.45 3.03	12.8
EMD027	11569	9664	1340	-71	95	334.96	336.90 1.94	6.3
EMD027	11569	9664	1340	-71	95	353.16	353.80 0.64	3.6
EMD027	11569	9664	1340	-71	95	365.80	366.80 1.00	3.3
EMD027	11569	9664	1340	-71	95	374.63	375.26 0.63	169.1
EMD027	11569	9664	1340	-71	95	394.78	397.20 2.42	3.6
EMD028	11580	9670	1340	-77	91	230.60	231.65 1.05	9.7
EMD028	11580	9670	1340	-77	91	264.32	265.52 1.20	8.0
EMD028	11580	9670	1340	-77	91	271.03	272.20 1.17	7.5
EMD028	11580	9670	1340	-77	91	290.20	291.30 1.10	8.2
EMD028	11580	9670	1340	-77	91	297.30	302.23 4.93	33.3
EMD028	11580	9670	1340	-77	91	335.15	335.87 0.72	4.4
EMD028	11580	9670	1340	-77	91	362.34	363.43 1.09	17.8
EMD028	11580	9670	1340	-77	91	390.06	397.13 7.07	25.5
EMD029	11581	9675	1340	-68	093	264.70	265.50 0.80	4.2
EMD029	11581	9675	1340	-68	093	280.88	282.08 1.20	8.4
EMD029	11581	9675	1340	-68	093	291.67	292.70 1.03	3.1
EMD029	11581	9675	1340	-68	093	333.20	338.90 5.70	4.1
EMD029	11581	9675	1340	-68	093	344.50	356.70 12.20	7.5
EMD030	11571	9644	1340	-75	097	211.55	212.65 1.10	3.7
EMD030	11571	9644	1340	-75	097	226.05	227.08 1.03	4.7
EMD030	11571	9644	1340	-75	097	248.5	249.15 0.65	6.2
EMD030	11571	9644	1340	-75	097	256.9	258.1 1.20	4.7
EMD030	11571	9644	1340	-75	097	262.5	263.6 1.10	5.7
EMD030	11571	9644	1340	-75	097	339.2	341.55 2.35	2.3

Note: Sampling conducted between geological features or 1m intervals down hole. All samples assayed using a total digest of a 40g charge by fire assay method.

• Denotes intersections previously presented in Catalpa’s September 2010 quarterly activities report.

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Quarterly Report to 31 December 2010

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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).

CORPORATE DIRECTORY

ASX Code: CAH

Shares on issue: 162,832,907 Share Price Current: A$1.84 (25 January 2010) 12 month range: A$2.27 (high) - A$1.18(low) Market Capitalisation: A$300 million ABN: 74 084 669 036

Board of Directors

Catalpa’s flagship Edna May Gold Project boasts an impressive forward sold position of 318,000 ounces of gold at A$1,557.50 per ounce.

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.

Mr Peter Maloney Non Exec Chairman Mr Bruce McFadzean Managing Director & CEO

Mr John Rowe Non Exec Director Mr Barry Sullivan Non Exec Director Mr Graham Freestone Non Exec Director Mr Murray Pollock Non Exec Director

Senior Management

Erik Palmbachs CFO & Company Secretary Stuart Pether COO Nick Winnall Manager Exploration Adrian Pelliccia Manager Bus Dev John Winterbottom Manager Geology Raelene Wyatt Manager HR John Fraser GM – Edna May

Principal and Registered Office

Level 1, 9 Havelock Street

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:

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

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

West Perth, Western Australia 6005 Telephone: +61 (0)8 6216 9700 Facsimile: +61 (0)8 9321 8804

Email: manager@catalparesources.com.au Website : www.catalparesources.com.au

Auditor

Deloitte Touche Tohmatsu Level 14, Woodside Plaza 240 St George’s Terrace Perth Western Australia 6000 Telephone: +61 (0)8 9365 7000 Facsimile: +61 (0)8 9365 7001

Share Registry

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross, Western Australia 6153 Telephone: +61 (0)8 9315 2333 Facsimile: +61 (0)8 9315 2233

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Quarterly Report to 31 December 2010

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Competent Person Statement

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

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

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

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

The information in this report that relates to the Cracow Ore Reserve is based on work completed by Mr Justin Woodward. Mr Woodward is a Member of the Australian Institute of Mining and Metallurgy and an employee of Newcrest. He has sufficient experience, 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 ‘Australasian Code for Reporting of Exploration Results, 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. Newcrest gives Catalpa Resources Limited consent to use this estimate for reporting purposes.

Abbreviations

t=tonnes, mm=millimetre, m=metres, km=kilometres, ozs=ounces, %=percent, g/t=grams per tonne, Au= gold, @=at, ppm=parts, per million, ppb=parts per billion, RC=Reverse Circulation, RAB=Rotary Air Blast, RL=Reduced Level, JORC=Joint Ore Reserves Committee

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Appendix 5B Mining exploration entity quarterly report

Rule 5.3

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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

CATALPA RESOURCES LIMITED

ABN 74 084 669 036	Quarter ended (“current quarter”)
74 084 669 036	31 December 2010

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from gold sales 1.2 Payments for (a) production (b) administration (c) exploration 1.3 Interest and other items of a similar nature received 1.4 Interest and other costs of finance paid 1.5 Income taxes paid 1.6 Other (provide details if material) Net Operating Cash Flows	Current quarter $’000	Year to date (6 months) $’000
	36,765 (32,004) (3,019) (191) 348 (2,253) -	48,060 (36,690) (5,520) (504) 716 (2,256) -
	(354)	3,806
Cash flows related to investing activities 1.7 Payment for purchases of: (a) Gold sale receipts capitalised (b) Interest paid and capitalised (c) Processing and mining costs capitalised (d) project development 1.8 Proceeds from sale of: (a) prospects 1.9 Loans to other entities 1.10 Loans repaid by other entities 1.11 Other 1.12 Other Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	- - - (2,465) - - - - -	21,481 (1,554) (16,677) (6,941) - - - - -
	(2,465)	(3,691)
	(2,819)	115

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	Current quarter $’000	Year to date (6 months) $’000
1.13 Total operating and investing cash flows (brought forward)	(2,819)	115
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from borrowings 1.16 Repayment of loan 1.17 Repayment of other borrowings 1.18 Dividends paid 1.19 Other Net financing cash flows	30 - (2,750) (461) - -	43 - (5,750) (543) - -
	(3,181)	(6,250)
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	(6,000) 34,978 -	(6,135) 35,113 -
	28,978	28,978

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 $'000
		522
		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 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

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Appendix 5B Mining exploration entity quarterly report

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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
$’000	$’000
59,250	59,250
NIL	NIL

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$’000
	880
	7,100
	23,781
	3,198
Total	34,959

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 $’000	Previous quarter $’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	12,681	18,814
	16,297	16,164
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	28,978	34,978

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 ofquarter	Interest at end of quarter
	-	-	-	-
	-	-	-	-

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Appendix 5B Mining exploration entity quarterly report

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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	162,832,907	162,832,907		Fully Paid
	71,861	71,861	$1.10	Fully Paid
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	-	-	-	-
	- -	- -	- -

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Appendix 5B Mining exploration entity quarterly report

			Appen Mining exploration entity quarterly	Appen Mining exploration entity quarterly	Appen Mining exploration entity quarterly
		Total 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) 7.8 Issued during quarter* 7.9 Exercised during quarter 7.10 Expired during quarter	5,319,009 375,004 375,004 397,731 340,912 56,819 113,637 113,637 113,637 113,637 6,060,606 595,000	5,319,009 - - - - - - - - - - -	Exercise price $1.10 $0.867 $1.087 $1.307 $1.527 $0.647 $0.647 $0.867 $1.087 $1.307 $0.83 $1.69	Expiry date 31/10/2011 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 30/6/2015
		595,000	-	$1.69	30/6/2015
		71,861	71,861	$1.10	31/10/2011
		18,182	-	$1.137	22/11/2010
	7.11 Debentures (totals only)	-	-
	7.12 Unsecured notes(totals only)	-	-
	7.13 Performance rights* 7.14 Issued during quarter 7.15 Exercised during quarter 7.16 Expired during quarter	197,500 197,500	- -	- -	30/6/2012 30/6/2013
		197,500 197,500	- -	- -	30/6/2012 30/6/2013
		-	-	-	-
		-	-	-	-

• Issued under the employee options and performance rights plan approved by shareholders at the AGM on 23 November 2010.

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Appendix 5B Mining exploration entity quarterly report

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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 5).

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

Sign here: (Company secretary)

Date: 27 January 2011

Print name: ERIK PALMBACHS

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.

== == == == ==

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