18 February 2009

Catalpa drill programme finds new gold mineralised zones

hIGHLIGHTS

?       Step-out drill holes at Catalpa's Greenfinch Resource intercept new gold mineralised zones 700m from Edna May Gold Project

?       Significant intercepts received from the programme to-date:

GFRC062:    7m @ 4.8g/t Au from 69m to 76m (new zone), including

2m @ 12.2g/t Au from 69m to 71m (new zone), and

2m @ 3.6g/t Au from 74m to 76m (new zone)

GFRC064:    7m @ 6.7g/t Au from 91m to 98m (new zone), including

4m @ 11.0 g/t Au from 92m to 96m (new zone), and

1m @ 20.2 g/t Au from 92m to 93m (new zone)

GFRC066:    1m @ 13.1g/t Au from 4m to 5m

GFRC067:    4m @ 3.5g/t Au from 67m to 71m (new zone), including

1m @ 7.9g/t Au from 69m to 70m (new zone)

?       Reinforces opportunities to further improve already robust economics of Edna May Gold Project Feasibility Study

?       Greenfinch Resource and Reserve update on schedule for April 2009

Catalpa Resources (ASX:CAH), today announced promising assay results from step-out drill holes aimed at extending the existing Greenfinch Resource adjacent to the Edna May Reserve at its Edna May Gold Project in Western Australia.

Bruce McFadzean, Catalpa Resources Managing Director commented as follows:

"Initial assay results indicate that the first 7 holes in the close-spaced, 20x25m drill programme, have intercepted new gold mineralised zones just 700m from Catalpa's Edna May pit.  

The holes yielded several significant intercepts of the targeted host lithology, the Edna May Gneiss.

The Feasibility Study for the Edna May Gold Project completed in January excludes Greenfinch and outlines a viable project to realise an average annual operating cash margin in excess of $AU54 million at A$1,200 per ounce. Operating cash margins at today's gold price are exceptional.

"These results from the adjacent Greenfinch mineralisation can only improve the already robust economics of Project and extend the current 6.3 year life of mine.

While the results will be subject to further analysis and interpretation once the 50-hole programme is completed, the addition of new gold mineralised zones in such close proximity to the Edna May Project is an exciting development.

The Greenfinch drill programme is on schedule, with some 2800m drilled to date and 1700m to go.  We expect to have all the assay results back by the end of March to enable an update of the Greenfinch Resource and Reserve in early April.

 In the mean time, negotiations to finalise the Edna May Gold Project financing parameters are at a fairly advanced stage.

The challenging economic backdrop aside, from the outset we have been confident in our ability to secure the $92 million project funding to advance Edna May to production..   The economics of the Project at today's gold price speak for themselves."

Right now the world shares our positive outlook on the Australian gold price. The Edna May Feasibility Study assumes a gold price of A$1200 per ounce, today (17 February 2009) gold is trading at more than A$1500 per ounce. The Project timing is perfect.

We can achieve a production profile within twelve months of securing the necessary funding, so it's not unrealistic to aim for our first gold pour and early cash-flow by mid 2010."

The assay results for the Greenfinch Drill Programme to-date are tabled below.

ENDS

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) 6314 6300

 *new zones

Competent Persons Statement

The exploration data has been compiled according to the JORC Code for the reporting of Mineral Resources and Ore Reserves by Nick Winnall (Exploration Manager), a full-time employee of Catalpa Resources Limited.  Mr. Winnall is a Member of the Australasian Institute of Mining and Metallurgy (AUSIMM) 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 December 2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code).  Mr. Winnall consents to the inclusion in the report of the matters based upon his information in the form and context in which it appears.

ABOUT CATALPA

Catalpa Resources Limited (ASX: CAH) has finalised a bankable feasibility study (FS) to advance its $92 million Edna May gold Project towards production and is currently in the final stages of negotiating project finance terms.

The Edna May Project is conveniently positioned a few kilometres from the infrastructure of Westonia, an established town with a long mining history. The Project is just three hours or 300km by road from Perth; half way between Perth and Kalgoorlie and ideally situated to be serviced by both centres.

The Project has sound economics at a gold price of AUD$1200 per ounce, which will realise an average annual operating cash margin in excess of $AU54 million.  Catalpa's mine and processing schedule demonstrate average gold production in excess of 100,000 ounces recovered per annum for a life of mine of more than six years.

In preparation for planned production at Edna May, the Company relocated its 2.8 Mtpa Big Bell mill to site in 2007.  The process plant has a twelve month construction period scheduled to commence at the completion of project funding.

With its early cash flow profile, Catalpa aims to grow and develop the Company into Australia's next mid tier gold producer

Notably, the already robust economics of the FS exclude further extensions to the Project life following the planned release of additional Ore Reserves from western continuation of the Edna May Gneiss, Greenfinch.  Greenfinch is undergoing further infill drilling, the early results of which indicate new gold mineralisation zones in close proximity to the Edna May pit. A Greenfinch Resource update is scheduled to be finalised in April 2009.

With 64% of the Edna May Reserve already in the highest confidence, Proven JORC category, Catalpa has a sound Resource base with significant growth potential. This Reserve confidence, in conjunction with a Metallurgically uncomplicated and consistent Orebody with recovery greater than 91%, makes this project an attractive long term opportunity to grow a mid tier gold producer

Catalpa has amassed a management team with considerable technical, project and operational expertise and has the support of an experienced and innovative Board that is committed to using the continuing strength of the gold price, to realise value for Catalpa's shareholders.

Catalpa is pursuing parallel growth with a wide-ranging exploration programme underway on its 880km? of under-explored Westonia Greenstone Belt, and is also reviewing other regional opportunities.

The Company has adopted best practice standards across all its operating activities, including health and safety, environmental management, corporate governance functions and social responsibility.

With a buoyant outlook for the Australian gold price, the Board believes that Catalpa Resources presents a solid investment opportunity with attractive margins. 

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Purple Communications

Level 3, 28 Kings Park Road, WEST PERTH WA 6005

Ph: 08 6314 6300 Fax: 08 6314 6355

purple@purplecom.com.au