EVOLUTION MINING LIMITED — M&A Activity 2011

Jun 14, 2011

15.JUN.2011 11:44

Media Release / ASX Announcement

15 June 2011

UPDATE ON ST BARBARA PROPOSAL

Further to today's announcement regarding Catalpa's proposed all scrip merger of equals with Conquest Mining Limited ("Conquest")(ASX:CQT) and the concurrent acquisition of assets from Newcrest Mining Limited ("Newcrest")(ASX:NCM) ("the Conquest/Newcrest Transaction") Catalpa advises that it has formally terminated discussions with St Barbara Limited ("St Barbara")(ASX:SBM) in relation to the proposed unsolicited takeover proposal announced by St Barbara to the market on 13 May 2011 (the "St Barbara Proposal").

In the process of considering whether to support the Conquest/Newcrest Transaction, the Board of Catalpa gave careful consideration to the St Barbara Proposal and the short and longer term potential it offered.

For a range of reasons, including those outlined in the announcement of the Conquest/Newcrest Transaction, the Catalpa Board unanimously resolved that the best interests of Cataipa shareholders would be served by proceeding with the Conquest/Newcrest Transaction.

In addition to the reasons outlined in the Conquest/Newcrest Transaction announcement, the Catalpa Board notes that in its response to the St Barbara proposal 13 May 2011, the Catalpa Board stated that it believed "...St Barbara has taken the opportunity to make this unsolicited proposal public at a time when the Catalpa share price has underperformed its peers..." and that the Catalpa Board "...believes that this relative underperformance is a reflection of short term operational challenges that have now been largely resolved..."

Catalpa is pleased to advise its processing plant at Edna May has achieved steady state operation during the month of May resulting in a record month of gold production. Gold production of 8,026 ounces exceeded forecast of 7,154 ounces by ~12% as the plant operated consistently at a throughput rate of 2.8Mtpa for the month. After factoring in planned shutdowns and other events, Catalpa is now confident Edna May gold production for the June 2011 quarter is anticipated to be approximately 20,000 ounces and Catalpa's full FY2011 guidance (including 30% of Cracow) is anticipated to be in line with our previous production guidance of 92,000 to 99,000 ounces.

TELEPHONE: +61 & 6216 9700 Faosimile: +61 B 9321 8004 EMAIL: manager@catalparesources.com.au

The Transaction Implementation Deed ("TID") entered into by Catalpa (and released to the market today) contains customary deal protection mechanisms in favour of each of Catalpa, Conquest and Newcrest. These apply to prevent either Catalpa or Conquest from soliciting alternative proposals. Accordingly, Catalpa has today formally advised St Barbara that it will not be continuing its discussions in relation to the St Barbara Proposal.

Under the TID, Catalpa has reserved the right to consider any unsolicited superior proposal that may be made by St Barbara or any other party in accordance with its fiduciary and other duties to Catalpa shareholders.

Under the terms of the TID (as released to the market today) a break fee of \$3.2 million (equivalent to approximately 1% of Catalpa's equity value) will be payable by Catalpa to Newcrest and Conquest in certain circumstances, including in the event a superior proposal is announced and completes. Full details of the possible break fees are included in the TID.

For further enquiries contact:

Bruce McFadzean Managing Director and Chief Executive Officer Catalpa Resources Limited Tel +61 8 6216 9700

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Michael Ashforth Executive Director Head of Resources - Australia Macquarie Capital Advisers Limited Tel +61 8 9224 0644

John Gardner Managing Director MAGNUS Investor Relations and Corporate Communication +61 2 8999 1010 +61 413 355 997

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 Operations in Western Australia and a 30% interest in the 100,000 ounces per annum Cracow Gold Operations in Queensland (70% Newcrest Mining Limited).

The Company recently announced an updated high grade underground Resource of 700,000 tonnes at 7.4g/t gold for 166,000 ounces. Mining studies are in progress with a view to establishing an underground operation concurrent with existing open pit operations in 2012. Resource definition and expansion drilling programmes are fully funded and on-going through 2011.

The Cracow Gold Operations 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.

With a combined Mineral Resource of more than 2 million ounces and a combined Ore Reserve of more than one million ounces of gold, the Cracow and Edna May Gold 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 programmes 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 highlyexperienced and supportive Board, committed to realising shareholder value from the Company's asset portfolio.