EVOLUTION MINING LIMITED — Capital/Financing Update 2010

Jan 4, 2010

5 January 2010

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EDNA MAY GOLD PROJECT CONSTRUCTION CONTINUES ON SCHEDULE AND WITHIN BUDGET

HIGHLIGHTS

• Production blasting and in-pit mining has commenced

• Crusher retaining wall complete with crusher installed

ASX Code*: CAH

Tradable shares on issue*: *144,648,277 Share Price Current*: $1.40 (4 January 2010)

• Coarse ore stockpile, tunnel and conveyors well advanced

• Ball and SAG mills installed

• Concrete works complete

• Leach and absorption tanks, top of tank structural steel and painting complete

• Gold room and elution circuits structural steel complete

• Electrical and piping commenced on schedule

• Cyanide and oxygen facilities well advanced

• • Power contract finalised

Catalpa Resources, today provides an update on construction progress at its A$92 million Edna May Gold Project in WA, where construction remains on schedule and within budget to commence commissioning in May 2010. Managing Director Bruce McFadzean made the following comments;

“We consider the perceived construction deadlines and capital cost risks that plagued many projects over the past few years have been significantly reduced at Edna May. We do not have any long lead items outstanding, refurbishment is essentially complete, we have ore on the ROM pad, our people and systems are in place, we have power and water, a supportive community and the project is well advanced and on schedule. We are presently less than 4 months from commencing ore commissioning.

Our first blast was fired on schedule, on Monday 14 December 2009 successfully removing a remnant overhang from the north face of the open-pit. Mining continues on schedule and stockpiling of high and low grade ore has commenced on the ROM pad.

The crusher dump pocket retaining wall was also finalized in December 2009 with the primary crusher now installed. The crusher apron feeder structural steel installation continues on schedule.

The coarse ore stockpile and conveyor tunnel is well advanced with erection of conveyor structural steel and belt feeders almost complete.

12 month range $1.98 (high) - $0.20 (low)

Board of Directors

Mr Peter Maloney Non Exec Chairman Mr Bruce McFadzean Managing Director Mr John Rowe Non Exec Director Mr Murray Pollock Non Exec Director Mr Barry Sullivan Non Exec Director Mr Graham Freestone Non Exec Director Mr Graham Anderson Company Secretary Mr Leonard Math Company Secretary

Senior Management

Erik Palmbachs CFO Stuart Pether GM Operations Nick Winnall Manager Exploration Adrian Pelliccia Manager Geology

Major Shareholders*

HSBC Custody Nominees 8.72% National Nominees Limited 7.27% Citicorp Nominees P/L 3.41% ANZ Nominees Limited 3.27% Lion Manager P/L 3.04% Cogent Nominees 2.90% Creasy Mark Gareth 1.57% Reneagle P/L 0.89% Goldrich Holdings 0.75% Nefco Nominees P/L 0.62%

• Total issued capital of 194,570,980 shares, including 50M shares held by Auselect Limited (a wholly-owned owned subsidiary of Catalpa) which, subject to shareholder approval, Catalpa intends to cancel within 12 months from the date of the merger with Lion Selection Limited

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Both mills are now installed with structural steel in the grinding area now complete. Lubrication systems are installed and cyclone structural steel is ready to receive the cyclones.

Concrete contractors have finished and departed site whilst fabrication and refurbishment at the Edna May Gold Processing Plant is approximately 95% complete. Structural works are approximately 85% complete and mechanical, piping and electrical installations are well underway.

The gold room and elution circuit structural steel is almost complete and cabling and piping has commenced. Work is also well advanced on the cyanide, oxygen and RO plants.

Negotiations with power suppliers have been finalised. We are pleased to announce our power supply partner is Perth Energy for a 4 year supply contract. The onsite power lines and transformers are installed. We are on schedule to have power into the plant site in February 2010.

More importantly, we have achieved this progress without any lost-time injuries since project construction commenced. This is a significant achievement on a compact site operating at peak construction phase when we have up to 180 employees and contractors working on-site. This is a positive reflection on Catalpa and Contractor focus on safety. I commend all employees and contractors associated with the project for their safety performance.

We will continue to focus on advancing the project safely, within budget and on schedule to achieve the mine’s first gold production in June 2010.”

ENDS

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First production blast on the northern crest of the pit on 14 December 2009.

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View from crusher dump pocket showing coarse ore conveyor with process plant in background

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View to west from grinding circuit showing ball mill installed with coarse ore stockpile in the background

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Gold room and elution circuit

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Grinding area and tank structural steel in readiness for installation of cyclones, piping and cables

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For further enquiries contact:

Bruce McFadzean Warrick Hazeldine/Annette Ellis Managing Director Media and Investor Relations Catalpa Resources Limited Purple Communications Tel (08) 9321 3088 Tel: (08) 9485 1254

ABOUT CATALPA RESOURCES

Catalpa Resources Limited (ASX: CAH) has two exciting gold assets; a 30% interest in the 100,000 ounce per annum Cracow Gold Operations - a producing gold mine in Queensland (70% Newcrest Mining Limited); and the 100,000 ounce per annum Edna May Gold Operations in Western Australia (100%) - an advanced gold project on schedule to commence production in June 2010.

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 Operations alone.

With a combined Mineral Resource of more than 1.9 million ounces and a combined Ore Reserve of more than a million ounces of gold (refer announcement dated 2 December 2009), the Cracow and Edna May Operations will provide a sustainable cash flow to fund Catalpa’s growth strategy.

Catalpa is confident that both the Cracow and Edna May Gold Operations offer further Reserve and Resource growth potential, with ongoing exploration programmes at both operations. In parallel, the Company continues to proactively identify and assess other production growth opportunities.

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.

EDNA MAY OPERATIONS (100%)

Catalpa’s wholly-owned Edna May Gold Operations is conveniently positioned just two kilometers from the infrastructure of Westonia, on the eastern edge of WA’s Wheatbelt region. The mine is half way between Perth and Kalgoorlie and ideally situated to be serviced by either of these major mining centres.

With its robust economics, geologically and metallurgically well defined ore-body, high Ore Reserve confidence and excellent recovery rate of more than 92%, Catalpa’s Edna May Gold Operations offers an attractive, long-term platform to grow a mid tier gold producer.

Catalpa’s mine and processing schedule demonstrate average gold production at Edna May in excess of 100,000 ounces of gold recovered per annum for a life of mine of more than nine years, with production planned to commence in June 2010.

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CRACOW GOLD OPERATIONS (30%)

Catalpa owns 30% of the Cracow Gold Operations in Queensland with Newcrest Mining Limited, and also has a preemptive right over Newcrest’s 70% stake in the asset. The Cracow Gold Project is well managed and operated by Newcrest, allowing Catalpa to remain focused on constructing the Edna May Gold Project on time and within budget.

The Cracow Gold Project has a history of steady gold production of over 100,000 ounces per annum for the past four years and it is considered to have considerable exploration upside.

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