EVOLUTION MINING LIMITED — Regulatory Filings 2011

Jun 27, 2011

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28 June 2011

Dear Fellow Shareholder

Catalpa-Conquest merger and concurrent acquisition of Newcrest assets

As you will be aware, on 15 June 2011 your Board was pleased to announce the proposed merger of Catalpa Resources and Conquest Mining and the concurrent acquisition of 70% of the Cracow gold operations and 100% of the Mt Rawdon gold mine from Newcrest Mining. For more information, please see our website at www.catalparesources.com.au.

Since announcing this company-transforming transaction, we have had discussions with a wide range of shareholders, institutional investors, brokers, analysts and the media. We are pleased to report that we have received very positive support from these stakeholders about the logic of the transaction and the growth prospects that the combined company offers.

As communicated when we announced the transaction, Catalpa, along with its financial, technical and legal advisers undertook a number of months of due diligence and detailed analysis on the transaction. Your Board is unanimously of the view that the combined company will have the assets, the people and the balance sheet to achieve our growth ambitions and will be well positioned to deliver sustained value growth to Catalpa shareholders.

More specifically, the transaction creates a leading growth‐focused Australian mid-cap gold producer with five Australian gold projects underpinned by a defined growth pathway. The combined company will:

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• Produce approximately 294,000 ounces of gold in FY11 (ranking the company as a top five Australian gold producer) increasing to 400,000 to 450,000 ounces of gold equivalent by 2013[1] ;

• Hold a substantial Reserve and Resource base as well as significant exploration potential;

• Be in a strong financial position (with cash post the proposed equity raising in excess of A$200 million and debt of approximately A$61 million)[1] ;

• Have a proven entrepreneurial and operational management team with highly complementary skills; and

• Have significant re-rating potential due to increased scale, investor appeal, liquidity, diversified asset base and improved access to capital.

Given your Board’s views on the merits of this transaction and the positive reaction from shareholders, investors and analysts alike, you may well be asking why the Catalpa share price has not responded in the same positive manner.

Your Board believes that the Catalpa share price is being affected by a number of short-term factors:

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• Event-driven investors – the announcement of the St Barbara proposal in mid-May 2011 attracted a number of short-term hedge fund and arbitrage investors onto the Catalpa register. These investors typically invest on the basis of the possibility of a subsequent higher offer. The transaction with Conquest and Newcrest reduced this possibility and led some of these eventdriven investors to sell, placing pressure on the share price.

1 Based on the parameters that were outlined in Catalpa’s joint announcement dated 15 June 2011.

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• General market sentiment – global equity markets are currently weak. A combination of factors has contributed to a general pull-back of investor demand – including macroeconomic issues like concerns over Greece’s sovereign risk and the slow economic recovery in the U.S. Notwithstanding this overall market weakness, the gold price remains near to all time highs and Catalpa remains positive about the longer term outlook.

• Gold equities – in addition to the weak general equity market sentiment and notwithstanding a strong gold price, junior and mid-cap gold equities have also faced share price weakness. Nineteen out of twenty-three of Catalpa’s ASX listed gold peers are trading lower than their closing prices on the day that the transaction was announced[2] .

• Time – a number of institutional investors that we have met with have indicated that while they understand and are supportive of the transaction, they await further information about the combined company to be contained in the transaction documentation and greater certainty that the transaction will be implemented before purchasing shares. Your Board expects that as we move closer to the time of a shareholder meeting to approve the transaction (currently expected to be held in September 2011), buying support from new institutional and other investors is likely to increase.

• Equity raising – as you may know, Catalpa and Conquest announced a proposed equity raising of $150 million as part of the transaction. The timing and structure of this equity raising is important in two key respects.

• Firstly, it is timed to be undertaken after the transaction is implemented. At that time, the combined company is expected to be more than three times Catalpa’s current size and the equity raising equivalent to only 10-20%[1] of the enlarged market capitalisation. Unfortunately, some investors have incorrectly assumed that Catalpa would be making this raising on the basis of its current market capitalisation.

• Secondly, the offer will be structured as a pro-rata renounceable entitlements offer to ensure that all eligible shareholders of both Catalpa and Conquest are able to participate (Conquest shareholders will at that time have been issued with new Catalpa shares in exchange for their Conquest shares pursuant to the merger). Any shareholders that do not wish to take up their entitlements will be able to realise value for their rights by selling them.

Your Board and senior management team remain focused on explaining the merits of the transaction and on taking all the required steps to implement the transaction as quickly as possible. Once we implement this transaction we anticipate that the potential of the combined company will be reflected in a stronger share price.

We look forward to sending you more information on this company-transforming transaction in the coming weeks. Catalpa shareholders will have the opportunity to vote on the transaction at a shareholder meeting which will be held around September 2011. We encourage both small and large shareholders to contact Catalpa if you would like any further information on the transaction.

Peter Maloney

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Chairman - Catalpa Resources Limited

2 Based on the sample of ASX listed gold companies set out on page 14 of the Catalpa/Conquest Investor Presentation released to the ASX on 15 June. From close of trade on 15 June 2011 to close of trade on 27 June 2011.

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