EVOLUTION MINING LIMITED — Capital/Financing Update 2008

Oct 26, 2008

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27 October 2008

Dear Shareholder

OPERATIONS AND RIGHTS ISSUE UPDATE

ASX Announcement

Please refer to the attached announcement lodged with the ASX today. This significant upgrade to our mineable Reserves further highlights the Company’s progress towards our aim of bringing the Edna May Gold Project into production.

Gold Price

In the context of recent market uncertainty, gold prices have remained buoyant in Australian Dollar (A$) terms, and have remained above or around A$1,100 per ounce over the past few weeks. At the time of writing, the gold price was over A$1,180 per ounce. These gold price levels underpin the opportunity we have to develop the Edna May Gold Project.

Feasibility Study

Your Board has commenced reviewing the Edna May Gold Project Feasibility Study. In addition, the Company will further review geological interpretations and assay results from our current diamond drilling programme aimed at testing high-grade underground Edna May Reef structures.

Rights Issue

I refer you to the Prospectus and Rights application form mailed to you last week and I reiterate the closing date of the Rights Issue is on Friday 31 October 2008, this week. The Directors and Catalpa’s major shareholder Lion Selection Limited are supporting the Issue and participating for their entitlement.

We welcome your participation in this Rights Issue.

The Prospectus relating to this Rights Issue is available on the ASX website www.asx.com.au and also on the Company’s website www.catalparesources.com.au.

In summary, the Rights Issue is intended to raise approximately $3.5 million before costs, and offers existing Shareholders one new share and one free attaching option for every four shares held at an application price of 4 cents per share. The free attaching options have an exercise price of 10 cents each and expire on 31 October 2011.

The Rights Issue is fully underwritten by Patersons Securities Limited and the Company has incorporated a top up facility whereby eligible Shareholders may apply for additional shares and options in excess of their entitlement at the issue price, to the extent that other eligible Shareholders do not take up their entitlements under this offer.

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The funds raised will be used to continue the Company’s drilling programmes, and to provide for costs associated with further study on engineering and power for the Edna May Gold Project as well as general working capital.

As explained in the Prospectus, my fellow Directors and I would welcome your participation in the Rights Issue as it is a key foundation to progress the development of the Edna May Gold Project, the future growth of the Company and, enhancement to, and realisation of Shareholder value.

Should you have any questions in relation to the above matters, please do not hesitate to contact me on telephone (08) 9321 3088.

Yours Sincerely

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Bruce McFadzean Managing Director