7 October 2009

EDNA MAY GOLD PROJECT PROGRESSING ON SCHEDULE, WITHIN BUDGET

Highlights

?         Mining fleet mobilised to site this week

?         Mine engineering and geological team employment complete

?         Over 1200m³ concrete poured or approximately 70% complete

?         Leach/absorption tank construction well advanced

?         Refurbishment of plant mechanical components 80% complete

?         Accommodation village being extended to 144 rooms to cover peak demand during construction

Perth based gold developer, Catalpa Resources Limited (ASX:CAH) today provided a market update on construction progress at its flagship Edna May Gold Project, at Westonia in WA.  The fully-funded $92 million project remains within budget, and is on schedule to commence first gold production in June 2010.

Mining Fleet Mobilised

Four 90 tonne trucks, one 120 tonne excavator and associated ancillary mining equipment are being mobilised to Edna May this week in preparation for the commencement of pre-stripping next week.

The fleet is scheduled to start operating on 15 October to commence earthworks for the mining equipment maintenance facility and construction of roads, stockpiles and dumps in preparation for 24 hour mining operations in early November 2009.

Employment of the mine?s management and technical team has been finalised as is the first phase of employment of the mine equipment operating teams. The full complement of mining engineers, geologists, surveyors and supervisory staff will commence employment next week.

Part of Catalpa?s Edna May Operations mining fleet now on site, ready to commence mining next week.

GR Engineering Services (GRES), the major contractor appointed to refurbish the Edna May Operations gold plant, continues to advance construction on schedule.

Process plant civil earthworks are virtually complete. The majority of the plant site earthworks including crusher dump pocket, crushed ore stockpile, grinding, leach and absorption, gold recovery area, raw and process water dams are now complete.

The process plant concrete civil works are also well advanced with the completion of the leach/absorption tank ring beams, workshop pad, MCC footings and pipe rack footings. The concrete rafts for both the SAG and ball mills are both complete as is the ball mill plinth as seen in the centre of the photograph below. The formwork for the SAG mill plinth is complete and concrete pouring to finalise the SAG plinth has commenced.

The MCC building (foreground of picture below) steel fixing is complete and ready for cladding. In addition the plant workshop and store construction are also complete.

Above: MCC building in foreground with Ball and SAG Mill plinths complete (centre) ready to receive the mills this month

Leach and absorption tank fabrication is also well advanced at the plant site. The concrete ring beams for the foundation of the tanks were poured mid August and are in situ below the absorption tanks, as can be seen in the photo above. The tank fabrication contractor was mobilised to site at the beginning of August to construct 2 x 2000 m³ leach tanks and 6 x 1,200 m³ absorption tanks.

Four of the six absorption tanks are now at full height and the remaining two are at half height.  Construction of the two larger leach tanks has now commenced and on schedule for construction to full height this month. Construction and welding of the tanks will continue as planned during October.

Above: Absorption tanks at full height and two larger leach tanks being constructed in foreground.

Above: view of plant site looking west with the plant workshop and store centre left and raw and process dams in the foreground.

The refurbishment of motors, pumps, steel and other mechanical equipment on site is well advanced and the steel and other refurbishment continues on schedule. The Perth-based mechanical and electrical refurbishment of equipment is approximately 80% complete.

The process plant construction remains on schedule and within budget.  

ENDS

For further enquiries contact:

Bruce McFadzean                                                                     

Managing Director                                                                     

Catalpa Resources Limited                                

Tel (08) 9321 3088                                                                                                                                                                                                                                                                                                                    

Warrick Hazeldine/Annette Ellis

Media and Investor Relations

Purple Communications

Tel: (08) 6314 6300

ABOUT CATALPA RESOURCES

Perth-based Catalpa Resources Limited (ASX: CAH) is on the cusp of a new phase of development, following the successful raising of more than $106 million in debt and equity to advance its A$92 million Edna May (open-pit gold) Operations to production by July 2010.

As part of the Edna May finance facility, Catalpa has sold forward 352,316 ounces of gold at an exceptional price of A$1,557 per ounce..

Catalpa plans to utilise Edna May?s solid annual cash operating margins to fund its growth and become Australia?s next mid tier gold producer.

In keeping with this strategy, Catalpa and its largest shareholder, Lion Selection Limited (ASX:LST), signed a Merger Implementation Agreement in June 2009 to bring together Lion Selection?s 47% shareholding in Catalpa?s 100% owned and operated 100 000+ oz pa Edna May Operations in Western Australia and Lion Selection?s 30% stake in the Newcrest managed, 100 000 oz pa Cracow Gold Operations in Queensland, under Catalpa?s experienced management team. As part of the merger, Catalpa will also acquire a pre-emptive right over Newcrest?s 70% stake in Cracow.

Following implementation of the merger, expected in the December quarter 2009, Catalpa will be a cashflow positive gold producer from its 30% stake in Cracow.  From mid 2010 when production commences at the Edna May Operations Catalpa will produce more than 130 000 oz pa.

Catalpa has an experienced Board and management team that is committed to realising a timely production and cash flow profile at the Edna May Operations.  With a buoyant outlook on the gold price, the Board believes that Catalpa Resources presents a sound investment opportunity with significant upside potential.

Catalpa Resources has adopted best practice standards across all its activities, including its social, health and safety, environmental management and corporate governance functions.

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